MONEY MASTER

DBS Group  posted weaker-than-expected fourth-quarter earnings, underscoring the growing impact of lower interest rates on Singapore banks and flagging  continued profit headwinds into 2026 . The lender reported  4Q net profit of S$2.26 billion , down  10% year-on-year , missing analysts’ estimates of nearly  S$2.55 billion . The decline was driven mainly by a  sharp drop in net interest margin (NIM)  as domestic interest rates eased. DBS’  group NIM fell to 1.93% , from  2.15% a year earlier , dragging net interest income lower.  Return on equity slipped to 13.5% , compared with  15.8%  in the prior year. Looking ahead, CEO  Tan Su Shan  said  2026 net interest income and net profit are expected to come in slightly below 2025 levels , assuming: Singapore overnight rate (SORA) averages  ~1.25% Two US Federal Reserve rate cuts A  stronger Singapore dollar On asset quality,  loan-loss provisions jump...

Singapore’s banking sector may still look attractive for  income-seeking investors , but  shrinking interest margins and rich valuations  are set to cap upside in 2026, according to RHB Securities. After delivering  double-digit total returns in 2025 , Singapore banks are entering a more challenging phase where  dividend strength remains, but growth momentum fades . The Big Picture RHB expects  more modest returns for Singapore banks in 2026 , despite a supportive macro backdrop. What supports the sector Stable macroeconomic environment Strong wealth management inflows Sound asset quality High dividend yields What holds it back Net interest margin (NIM) compression Elevated sector valuations Limited room for valuation re-rating without higher ROEs “In the absence of a meaningful rise in ROEs, headroom for further valuation expansion may be limited.” Dividend Yields Still Attractive (FY26F) Despite margin pressure, dividends remain a key draw: DBS :  6....