DBS to focus on tech resilience and grow fee income in 2026: analyst

The bank should balance increased distributions and M&As, an analyst said.

DBS is expected to continue focusing on ensuring system resilience, and should see excess capital grow barring further acquisitions, according to Morningstar.

Singapore’s biggest bank by asset-size is expected to focus on ensuring the resilience of the systems it has already built.

This strategy might mean delays to launching new services, but should help consolidate the efficiency gains it has already achieved, said Kathy Chan, associate equity analyst, Morningstar.

DBS experienced tech disruptions in March 2025, with customers unable to access digital services, ATM services, and even NETS payments, according to local media reports.

In May 2023, its digital banking services were unavailable for about six hours following a software bug. ATM services were also affected during the period.

Its high return on equity means that its excess capital should grow provided it does not make further acquisitions, Chan said.

In recent years, DBS has purchased Lakshmi Vilas Bank in India, Citi’s Taiwan operations, and a 19.4% stake in Shenzhen Rural Commercial Bank.

“DBS has a strong track record of managing past acquisitions, such as Societe Generale's Asian private banking business and ANZ's retail and private wealth assets in five Asian regions, but we would prefer a balance of increased distributions and mergers and acquisitions, rather than more of the excess capital going toward expansive acquisitions,” Chan said.

In 2026, DBS is expected to log high single-digit growth in fee income, driven by wealth management fee growth from the bank’s assets under management and net new money growth.

It will see margin pressure, however, specifically 2-basis point decline in net interest margin (NIM) for every quarter-point cut in the federal funds rate, Chan said.

“DBS is mitigating margin pressure by deploying surplus deposits into high-quality liquid assets,” she wrote.