Singapore bank stocks have pulled back. Why we're not adding more for now

Beansprout Pro in brief

• Singapore bank stocks have pulled back from highs following a surge in global bond yields. Between 6 and 8 October, DBS declined approximately 6%, OCBC 10% and UOB 8%, raising the question of whether the correction presents a buying opportunity after years of strong gains.
• But a key uncertainty is whether the pressure from the bond market has run its course. Even if bank earnings remain resilient, further movements in US Treasury yields could continue to influence their valuations.
• With Singapore banks set to report their 3Q26 earnings, investors will be watching whether their results can meet market expectations. Consensus earnings forecasts for DBS and OCBC have risen over the past year, raising the bar for positive surprises.
• The outlook for DBS, OCBC and UOB also differs, with each bank facing its own opportunities and risks. Differences in funding costs, fee income and credit risks could affect their earnings and dividend prospects in the coming quarters.
• In this article, we assess the outlook for Singapore banks following the correction, compare the three banks, and share how we are managing our Model Portfolio holdings, including what could lead us to increase or reduce our exposure.