Singapore prides itself on being a financial hub with access to high-quality banking, finance, investment, insurance and Fintech companies and talent within the space. Our trio of local banks – DBS (SGX: D05); UOB (SGX: U11); and OCBC (SGX: O39) – are also the biggest banks in South East Asia. They are often cited as among the best, safest, strongest, and most innovative banks in the world.
Apart from boosting Singapore’s banking and finance hub credentials, DBS, UOB and OCBC are also among the largest companies listed on the Singapore Exchange (SGX). Together, they comprise about 46% of the Straits Times Index (STI) – Singapore’s benchmark index.
| Banks | Market Cap |
| DBS (SGX: D05) | $86.2 billion |
| OCBC (SGX: O39) | $58.6 billion |
| UOB (SGX: U11) | $47.1 billion |
| Total | $191.9 billion |
(As of 1 March 2024)
This means that when we invest in the STI, nearly half of our portfolio would be exposed to just the three local banks. Apart from this, the three local banks are known for also paying relatively good and stable dividends to investors.
An increase in market interest rates over the past two years appears positive for the three local banks and will likely increase their net interest margins. As interest rates rise, banks can charge more for lending and financing. Of course, it also means they may have to pay higher interest on deposits. In general, the additional income they get from lending should be higher than the interest they pay on money deposited in their bank accounts.
| Banks | Share Price (as of 1 March 2024) | Dividends Per Share In FY2023 | Dividend Yield Based On Current Share Price |
| DBS (SGX: D05) | $33.55 | FY2023: $1.92 1Q2023: $0.42 2Q2023: $0.48 3Q2023: $0.48 4Q 2023: $0.54 |
5.7% |
| OCBC (SGX: O39) | $13.08 | FY2023: $0.82
1H2023: $0.40 2H2023: $0.42 |
6.3% |
| UOB (SGX: U11) | $28.98 | FY2023: $1.70
1H2023: $0.85 2H2023: $0.85 |
5.9% |
Information is accurate as of 1 March 2024. Do note that DBS pays quarterly dividends while OCBC & UOB pay dividends semi-annually.
Read Also: Complete Guide To Investing In The Straits Times Index (STI) ETFs In Singapore
DBS (SGX: D05)
DBS (SGX: D05) is the largest bank in Singapore and Southeast Asia. It operates in 18 markets, including Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Philippines, Taiwan, Thailand, UEA, UK, USA and Vietnam.
Currently, DBS is trading at $33.55, giving it a market capitalisation of about $86.2 billion.
In FY2023, DBS achieved a net profit of $10.3 billion and a return on equity of 18.0%, a record high. Total income grew 22%, exceeding $20 billion for the first time, driven by a higher net interest margin, a rebound in fee income and record treasury customer sales.
OCBC (SGX: O39)
OCBC also has a strong regional and global presence in Australia, China, Hong Kong, Indonesia, Japan, Myanmar, South Korea, Taiwan, Thailand, UK, USA and Vietnam.
Currently trading at $13.08, OCBC has a market capitalisation of $58.6 billion.
For FY2023, OCBC reported that its net profit grew 27% to a new high of $7.02 billion. This was largely driven by higher net interest income and lower allowances.
Total income for FY23 rose to a new high of S$13.5 billion, lifted by growth across the Group’s diversified income streams, with net interest income at a record high. OCBC’s ROE is at 13.7%.
Read Also: Why Regular Savings Plans (RSP) Makes Sense If You Are Starting Your Investment Journey In 2024
UOB (SGX: U11)
UOB (SGX: U11) also operates regionally and in major global financial centres, including Australia, Brunei, Canada, China, France, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, Philippines, South Korea, Taiwan, Thailand, UK, USA and Vietnam.
Currently trading at $28.98, UOB has a market capitalisation of about $47.1 billion.
For FY2023, UOB reported a record core net profit of $6.1 billion, an 18% increase compared to the year before. Including the one-off Citigroup integration costs, net profit was at $5.7 billion, also a record high.
Net interest income rose 16% to $9.7 billion, on the back of strong margin expansion of 23 basis points and a loan growth of 2% in constant currency.
Read Also: History Of Banking In Singapore: How We Ended Up With The 3 “Big” Banks For Consumers
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