Singapore banks deliver resilient Q1 earnings and reaffirms capital mgmt plans

Exposure to clients exporting to the US accounted for just 2% of loans.

Singaporean banks delivered resilient earnings in Q1 2025 and should be able to manage direct impact from vulnerable sectors.

Corporations adjudged as coming from “vulnerable” sectors make up just 2% to 3% of total loans, according to estimates by UOB Kay Hian (UOBKH).

DBS’ exposure to large corporations in the automobile, metals & mining and discretional customer goods sector accounted for 1%-2% of its total loans.

OCBC’s exposure to manufacturing, international transport & logistics, and metals & mining industries is estimated at 3% of total loans.

UOB’s corporate customers exporting to the US market accounted for just 2% of total loans.

“Managements of the three local banks have assessed the first-order direct impact of reciprocal tariffs to be manageable. They are more concerned about the second-order negative impact from a broader slowdown in business investment and domestic consumption,” said UOBKH analyst Jonathan Koh.

All three banks also reaffirmed their capital management plans, particularly their commitment to return excess capital to shareholders.

DBS is expected to maintain a capital return dividend of 15 Singaporean cents per quarter, to be paid out over three years through 2027.

OCBC intends to return excess capital of S$2.5b to shareholders over the next two years.

UOB also has a S$3b capital management plan, consisting of a special dividend of 50 Singaporean cents per share over two tranches in 2025. It will also embark on a new share buyback program of S$2b through 2027.