With interest rates falling (and more to come in the coming quarters), the question is whether the decline in net interest margin can be offset by improvements in loans growth, leading to a stable net interest income.
Another area of concern will be whether or not a bank’s 2 other reportable business segment, its net fee and commission income as well as its other non-interest income, can continue its growth.
Last but not least, in terms dividends, are the banks able to improve on the payout last year?
All 3 Singapore-listed banks have already reported their results for the 2nd quarter, as well as for the 1st half of FY2025 ended 30 June, starting off with OCBC last Friday (01 August), followed by DBS and UOB yesterday (07 August). I have shared my reviews about their key financial figures and ratios, and their dividend payouts in separate posts, as follows:
DBS (SGX: D05) – My Review of DBS’ 2Q & 1H FY2025 Performance
UOB (SGX: U11) – UOB’s 2Q & 1H FY2025 Performance: What Investors Need to Know
OCBC (SGX: O39) – How did OCBC Fare in 2Q & 1H FY2025?
Just like in the previous quarters, after all the 3 banks have released their results, I will write a separate post to put the numbers side-by-side to find out which one had the strongest results (in terms of growth in percentage terms). Additionally, I will also put the current valuations of the 3 banks side-by-side to find out which is the ‘cheapest’ and the ‘most expensive’.
This quarter is no exception – in this post, you’ll find out which of the 3 Singapore banks had the strongest growth in the 2nd quarter, as well as in the 1st half of FY2025, as well as which is currently the ‘cheapest’ and the ‘most expensive’:
Financial Figures (2Q FY2024 vs. 2Q FY2025)
In this section, you’ll find a comparison of the 3 banks’ net interest income, net fee & commission income, other non-interest income, and net profit attributable to shareholders reported for the 2nd quarter:
Net Interest Income:
| DBS | UOB | OCBC | |
| Net Interest Income | Up +1.5% 2Q FY2024: S$3,594m 2Q FY2025: S$3,648m | Down -2.7% 2Q FY2024: S$2,401m 2Q FY2025: S$2,336m | Down -6.0% 2Q FY2024: S$2,430m 2Q FY2025: S$2,283m |
Only DBS saw an improvement in its net interest income (which can be attributed to a broad-based growth that more than offset a 0.09 percentage point decline in its net interest margin), while the other 2 banks saw a decline.
Net Fee & Commission Income:
| DBS | UOB | OCBC | |
| Net Fee & Commission Income | Up +11.4% 2Q FY2024: S$1,048m 2Q FY2025: S$1,167m | Up +2.9% 2Q FY2024: S$618m 2Q FY2025: S$636m | Up +24.5% 2Q FY2024: S$466m 2Q FY2025: S$580m |
While all 3 banks saw an improvement in their net fee & commission income, but OCBC recorded the strongest growth (in percentage terms) in this business segment, at 24.5%.
Other Non-Interest Income:
| DBS | UOB | OCBC | |
| Other Non-Interest Income | Up +9.2% 2Q FY2024: S$840m 2Q FY2025: S$917m | Up +7.9% 2Q FY2024: S$457m 2Q FY2025: S$493m | Down -6.7% 2Q FY2024: S$733m 2Q FY2025: S$684m |
DBS and UOB saw year-on-year improvements in their other non-interest income for the 2nd quarter, but the former edged out for having a slightly higher percentage gain (by 9.2%, compared to UOB’s 7.9%), which can be attributed to an increase in treasury customer sales, as well as in its market trading income.
Net Profit Attributable to Shareholders:
| DBS | UOB | OCBC | |
| Net Profit Attributable to Shareholders | Up +1.3% 2Q FY2024: S$2,789m 2Q FY2025: S$2,824m | Down -6.1% 2Q FY2024: S$1,425m 2Q FY2025: S$1,338m | Down -6.6% 2Q FY2024: S$1,944m 2Q FY2025: S$1,816m |
Only DBS saw a small improvement in its net profit attributable to shareholders (by 1.3%), while the other 2 banks saw a mid-single digit percentage decline.
Financial Figures (1H FY2024 vs. 1H FY2025)
DBS was the clear winner in terms of improvements in its results for the 2nd quarter (as it had the highest percentage improvements in its net interest income, other non-interest income, as well as in its net profit attributable to shareholders).
What about for the 1st half of FY2025? Let us find out in this section:
Net Interest Income:
| DBS | UOB | OCBC | |
| Net Interest Income | Up +3.2% 1H FY2024: S$7,099m 1H FY2025: S$7,329m | Down -0.4% 1H FY2024: S$4,763m 1H FY2025: S$4,745m | Down -4.9% 1H FY2024: S$4,867m 1H FY2025: S$4,628m |
Once again, only DBS saw a low-single digit percentage improvement in its net interest income on a year on year basis for the 1st half of FY2025 (which can be attributed to loan growth), while the other 2 banks saw a low single-digit percentage dip.
Net Fee & Commission Income:
| DBS | UOB | OCBC | |
| Net Fee & Commission Income | Up +16.8% 1H FY2024: S$2,091m 1H FY2025: S$2,442m | Up +11.0% 1H FY2024: S$1,198m 1H FY2025: S$1,330m | Up +19.2% 1H FY2024: S$945m 1H FY2025: S$1,126m |
Just like for the 2nd quarter, OCBC recorded the highest improvement (in percentage terms) for its net fee and commission income for the 1st half of FY2025 compared to a year ago, contributed by continued growth momentum in wealth-related fees.
Other Non-Interest Income:
| DBS | UOB | OCBC | |
| Other Non-Interest Income | Up +0.9% 1H FY2024: S$1,849m 1H FY2025: S$1,866m | Up +0.9% 1H FY2024: S$1,038m 1H FY2025: S$1,047m | Up +0.3% 1H FY2024: S$1,443m 1H FY2025: S$1,448m |
All 3 banks saw a small increase (in percentage terms) for its other non-interest income. However, it is a “tie” between DBS and UOB, where both banks recorded a 0.9% year-on-year gain.
Net Profit Attributable to Shareholders:
| DBS | UOB | OCBC | |
| Net Profit Attributable to Shareholders | Down -0.3% 1H FY2024: S$5,740m 1H FY2025: S$5,721m | Down -2.9% 1H FY2024: S$2,912m 1H FY2025: S$2,828m | Down -5.8% 1H FY2024: S$3,926m 1H FY2025: S$3,699m |
While all 3 banks saw a low- to mid-single digit decline in their net profit attributable to shareholders for 1H FY2025, but comparatively, DBS saw the smallest percentage of drop, at just 0.3%.
Key Financial Ratios (1Q FY2025 vs 2Q FY2025)
When it comes to key financial ratios, I always look at these 3 – net interest margin, return on equity, and non-performing loans ratio. How did the 3 banks fare in terms of improvements for the current quarter under review (i.e., 2Q FY2025 ended 30 June 2025) compared against the previous quarter (i.e., 1Q FY2025 ended 31 March 2025)? Let us find out below:
Net Interest Margin:
| DBS | UOB | OCBC | |
| Net Interest Margin | Down -0.07pp 1Q FY2025: 2.12% 2Q FY2025: 2.05% | Down -0.09pp 1Q FY2025: 2.00% 2Q FY2025: 1.91% | Down -0.12pp 1Q FY2025: 2.04% 2Q FY2025: 1.92% |
In light of the falling interest rate environment, no surprises to see the net interest margin of all 3 banks recording a further decline. However, out of the 3 banks, DBS saw the smallest rate of decline (by just 0.07pp), as well as having the highest net interest margin at the same time (at 2.05%).
Return on Equity:
| DBS | UOB | OCBC | |
| Return on Equity | Down -0.6pp 1Q FY2025: 17.3% 2Q FY2025: 16.7% | Down -1.2pp 1Q FY2025: 12.3% 2Q FY2025: 11.1% | Down -0.7pp 1Q FY2025: 13.0% 2Q FY2025: 12.3% |
Once again, all 3 banks saw a decline in their return on equity. However, DBS is the ‘winner’ here, as it has the smallest decline (by 0.6pp), and having the highest return on equity at the same time (at 16.7%).
Non-Performing Loans Ratio:
| DBS | UOB | OCBC | |
| Non-Performing Loans Ratio | Down -0.1pp 1Q FY2025: 1.1% 2Q FY2025: 1.0% | No Change 1Q FY2025: 1.6% 2Q FY2025: 1.6% | No Change 1Q FY2025: 0.9% 2Q FY2025: 0.9% |
Only DBS saw a slight improvement in its non-performing loans ratio, where it inched down by 0.1pp to 1.0%. However, among the 3 banks, OCBC’s non-performing loans ratio remains the lowest, at just 0.9%.
Dividend Payouts to Shareholders (1H FY2024 vs 1H FY2025)
Only DBS pays out a quarterly dividend to the shareholders, with the other 2 banks pays out a dividend on a half-yearly basis.
For the first half of FY2025, both DBS and UOB had special dividends, as part of the ‘Capital Return’ announced last year, while OCBC will only pay out the special dividend when it reports its year-end results.
So, in this section, you will find a comparison of the 3 banks’ dividend payout growth with, and without special dividends:
with Special Dividends:
| DBS | UOB | OCBC | |
| Dividend Per Share (with Special Dividends) | Up +38.9% 1H FY2024: S$1.08/share 1H FY2025: S$1.50/share | Up +25.0% 1H FY2024: S$0.88/share 1H FY2025: S$1.10/share | Down -6.8% 1H FY2024: S$0.44/share 1H FY2025: S$0.41/share |
In terms of the growth of its dividend payout for 1H FY2025, compared to the amount paid out a year ago, DBS saw the strongest improvement, at 38.9%.
Without Special Dividends:
| DBS | UOB | OCBC | |
| Dividend Per Share (Without Special Dividends) | Up +11.1% 1H FY2024: S$1.08/share 1H FY2025: S$1.20/share | Down -3.4% 1H FY2024: S$0.88/share 1H FY2025: S$0.85/share | Down -6.8% 1H FY2024: S$0.44/share 1H FY2025: S$0.41/share |
Excluding the impact of special dividends, among the 3 banks, only DBS saw an improvement (by 11.1%), while the other 2 banks saw a decline.
Which Bank had the Strongest Set of Results (in Terms of Improvement) for 2Q & 1H FY2025?
The ‘winner’ is obvious here – DBS – where it stood out in having the strongest percentage improvement in its 2nd quarter and 1H FY2025 results.
At the same time, in terms of the key financial ratios, the bank also had the highest net interest margin, and return on equity.
Finally, on dividend payouts, with and without special dividends, it’s also DBS that came up on top in terms of improvements (in percentage terms).
Between DBS, UOB, and OCBC, Which Bank is Currently the ‘Cheapest’, and the ‘Most Expensive’?
To best answer this question, let us take a look at their valuations below (based on market close on Thursday, 07 August), and their dividend payouts for FY2024 (for DBS, it is at S$2.22/share, for UOB, it is at S$2.05/share, and for OCBC, it is at S$1.01/share), as follows:
| DBS | UOB | OCBC | |
| Share Price | S$49.75 | S$35.81 | S$17.09 |
| P/E Ratio | 12.59 | 10.30 | 10.58 |
| P/B Ratio | 2.02 | 1.22 | 1.27 |
| Dividend Yield | 4.5% | 5.7% | 5.9% |
No surprises there – DBS’ price is not only the most expensive (in monetary terms), but in terms of valuations, it is also the ‘most expensive’ – as its P/E and P/B ratios are the highest among the 3, with its dividend yield the lowest.
At the other end of the spectrum, this time round, it is UOB that is the ‘cheapest’ in terms of its valuations – as its P/E and P/B ratios are both lower compared to OCBC’s.
Closing Thoughts
In my opinion, it’s a standout quarter for DBS – the bank is the only one out of the 3 that have managed to maintain a year-on-year improvement in its net interest income for both the 2nd quarter as well as for the first half of FY2025, as well as in its dividend payout (excluding special dividends). Even if special dividends are included, the growth of its dividend payout is also the highest.
To add on, DBS have also set new records on several fronts – particularly in its loan-related fees as well as its total income for 1H FY2025. The bank also had a record assets under management as at the end of 1H FY2025.
Needless to say, with such a solid set of results, in terms of its share price, its also the ‘most expensive’ (in terms of its numerical value and current valuations compared with the other 2 banks).
To sum up, its really a great start for Ms Tan Su Shan, where this quarter’s results was her first as the CEO of the bank.
With that, I have come to the end of my comparison post on the 3 Singapore banks’ latest results for 2Q and 1H FY2025. As much as I hope you have found the information presented in this post useful, do take note that all the opinions scattered within are meant for educational purposes only. They do not constitute any buy or sell calls for the banks’ shares. You should always do your own due diligence before making any investment decisions.
Disclaimer: At the time of writing, I am a shareholder of all 3 banks – DBS, UOB, and OCBC.
Are You Worried about Not Having Enough Money for Retirement?
You're not alone. According to the OCBC Financial Wellness Index, only 62% of people in their 20s and 56% of people in their 30s are confident that they will have enough money to retire.
But there is still time to take action. One way to ensure that you have a comfortable retirement is to invest in real estate investment trusts (REITs).
In 'Building Your REIT-irement Portfolio' which I've authored, you will learn everything you need to know to build a successful REIT investment portfolio, including a list of 9 things to look at to determine whether a REIT is worthy of your investment, 1 simple method to help you maximise your returns from your REIT investment, 4 signs of 'red flags' to look out for and what you can do as a shareholder, and more!
You can find out more about the book, and grab your copy (ebook or physical book) here...
Comments (0)