Singapore bank wealth fees surge 44% to defy NIM squeeze

Overall fee income is expected to expand at a double-digit rate of 31% this quarter.

Banks are expected to report stable financial performance for the fourth quarter of 2025 (Q4 2025) due to factors such as stabilising profit margins, and steady investment fee income.

“We expect Q4 2025 to be characterised by moderation in NIM [net interest margin] compression, sustainable growth in wealth management fees and benign asset quality,” said UOBKH analyst Jonathan Koh in a new sector report.

Specifically, UOBKH expects a net profit of $2.523b for DBS Group Holdings, which is flat year-on-year (YoY), and a loan growth of 2.5% YoY, with muted expansion of corporate loans and residential mortgages. NIM is seen to compress 5bp qoq to 1.91% in Q4.

“We expect contribution from wealth management to increase 44% YoY but pull back moderately by 6% quarter-on-quarter to $750m in Q4 2025. The mild seasonal pullback was cushioned by still buoyant equity market sentiment and continued expansion of AUM [Assets Under Management],” the report read.

“Fees from transaction services and loans-related activities are likely to be seasonally softer but offset by seasonal strength from cards. Overall, fee income could expand at a double-digit rate of 31% YoY in Q4 2025,” it added.

For OCBC, UOBKH expects a 4% increase in OCBC’s net profit to settle at $1.747b in Q4, which is similar to the projection made by CGS International (CGSI).

“We expect muted loan growth of 1.3% qoq and 3.8% yoy in Q4 2025 due to a high base last year in Q4 2024, although loan/deposit ratio recovered back to 80% as OCBC deployed surplus deposits to productive loan” the UOBKH report said.

CGSI said in its analysis that OCBC is likely to see NIM decline to 1.8% for the quarter, which will be offset by non-interest income’s expected 28.5% YoY growth.

“We forecast contributions from wealth management registering a substantial growth of 40% yoy to $345m. The continued expansion of its team of relationship managers has started to bear fruits with its an enlarged AUM increasingly deployed in investments,” UOBKH said.

“Loans and trade-related fees could be flat yoy at $130m. Overall, we expect fee income to grow 23% YoY to $635m in Q4 2025,” it added.

Key growth drivers seen in the coming months include sustainable GDP growth, which continues to fuel healthy loan demand and fee income. Furthermore, the sector benefits from stable asset quality and manageable credit costs.

However, UOBKH warns that an unexpected escalation in geopolitical tensions remains a primary risk to the sector.