DBS and OCBC seen lifting buffers as credit costs rise

Both banks’ managements will review macroeconomic variables related to the Middle East.

DBS and OCBC are expected to top up their general provisions by around S$100m in Q1 2026.

DBS is expected to top up general provisions by S$113m in Q1 2026, whilst OCBC may top-up general provisions by S$103m.

DBS has limited exposure in the Middle East region, whilst OCBC “did not see any material deterioration in asset quality” in the Q1 period, according to UOB Kay Hian.

Both banks’ managements will review macroeconomic variables related to the Middle East conflict.

DBS’ credit cost, meanwhile, is expected to be at 25 basis points (bp) in Q1, from 19 bp in Q4 2025. For OCBC, total credit costs are expected to be at around 32 bp, exceeding its guidance of 20 bp to 25 bp.