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SINGAPORE: A surge in income from wealth management and other fee revenue helped Singapore’s top three banks to cushion the impact of low interest rates, as lenders bet the region’s fast-growing affluent population will continue to underpin growth this year.
The results underscore the strength of Asia’s wealth boom, which continues to drive regional lenders’ earnings despite geopolitical uncertainty and volatility in global markets, as inflows into safe-haven financial hubs like Singapore and booming regional equity markets swell the ranks of Asia’s rich.
OCBC, Singapore’s second-largest bank, said yesterday its April-June net profit jumped 22% to S$2.22 billion (RM7.1 billion), well above estimates, while UOB’s net profit was up 10% to S$1.5 billion, beating forecasts.
Shares of OCBC climbed 3% to a record high of S$30.19, while UOB’s fell more than 2% at one point. The benchmark stock index rose 0.7%.
Wealth management income for OCBC rose to a record high of S$3.29 billion in the first half, while UOB’s hit an all-time peak of S$717 million, mirroring a trend seen across results from Singapore’s biggest bank DBS, and Asia-focused rivals HSBC and Standard Chartered earlier this week.
For the Singapore banks, that helped offset pressure from lower interest rates on their core lending operations.
All three banks reported lower second-quarter net interest margins, a key measure of lending profitability that reflects the difference between what banks earn on loans and pay for deposits and other funding.
In its annual report released last month, the Monetary Authority of Singapore (MAS) said total assets under management in Singapore rose 10.1% to S$6.7 trillion as at the end of 2025, helped in part by the country’s status as a “trusted and attractive wealth management centre”.
UOB cut its fee-income growth guidance for the year to the low single digits from high single digits the previous quarter, bucking the more upbeat momentum its peers DBS and OCBC expect for the rest of the year.
Chief financial officer Leong Yung Chee attributed the revision to the delay of some “sizeable deals” and lower-than-expected credit card fee income.
Trading and investment income for Singapore’s third-largest bank also declined 8% year-on-year to S$379 million, owing to lower trading and liquidity management activities.
UOB’s growth in its key Southeast Asian markets of Malaysia, Indonesia, Thailand and Vietnam cushioned its bottom line, as customer flows and intra-regional business activity continue to gather pace.
“We see healthy trade and investment flow, stronger connectivity with Greater China and ongoing supply chain shifts into the region, as businesses look to Asean for growth and diversification,” said CEO Wee Ee Cheong at a media briefing.
“Asean is our home ground, our competitive advantage and our engine of growth.”
OCBC’s non-interest income rose 51% to S$1.91 billion in the second quarter, driven by a 28% rise in fees, an 85% jump in trading income and a 68% increase in insurance income.
However, CEO Tan Teck Long warned the Middle East conflict continues to cast a cloud over the global economic outlook.
“A lot will depend on how the energy crisis triggered by the US-Iran war pans out. We continue to see K-shaped economic growth across major economies,” he said in an earnings briefing.
Still, following strong loan growth in the first half, OCBC now expects high-single-digit to low-double-digit loan growth this year, up from a previous mid-single-digit forecast.
OCBC increased its interim dividend to 47 Singapore cents from 41 Singapore cents, while UOB raised its interim dividend to 88 Singapore cents per share from 85 Singapore cents. – Reuters
