Are Singapore's Big Banks Still a Buy at All-Time Highs? The Wealth-Management Engine
If 2023 was the year of soaring net interest margins and 2024 the year of record buybacks, then 2026 is shaping up to be the year the market finally asks a harder question: when a stock is sitting at an all-time high, what exactly are you paying for?
We get this question almost every week from Singapore investors, and DBS sits right at the centre of it. The STI is hovering near its own record, around the 5,200 region, and DBS has done a lot of the heavy lifting to get it there. So let us walk through what the business is actually doing, why the wealth engine matters more than people realise, and whether we would buy, hold, or trim at these levels.
The business: it is no longer just a net-interest-margin story
For years the bull case for Singapore banks was simple. Rates went up, margins widened, profits followed. That tailwind is fading as rate cuts come into view, and yet DBS keeps printing strong numbers. The reason is the part of the business that does not depend on where rates sit: wealth management. In the first quarter, DBS pulled in net new money of nearly S$100 billion. Read that again. That is not assets that bounced with the market, that is fresh client money flowing onto the platform, money that generates fees year after year regardless of the rate cycle. As Asia's wealth keeps concentrating in Singapore, DBS is one of the most direct ways to own that structural shift. This is what we mean when we say the bank has quietly rebuilt itself from a rate play into a fee-and-flow compounder.
The financials: quality, but priced for it
DBS remains the largest bank in Singapore, with a return on equity that comfortably leads the local pack and a dividend policy that has rewarded patient holders for years. The dividend yield is still respectable even at record prices, and that yield, paid in SGD into a CPF-conscious investor base, is a big part of why locals keep holding through the noise. Here is the balance. The fundamentals are excellent. The valuation is no longer cheap. When a quality business trades near the top of its historical price-to-book range, your future return leans more on the dividend and steady growth than on any re-rating. You are buying a wonderful business at a full price, not a bargain.
A cross-market frame: how do SG banks stack up globally?
For Singapore investors the key consideration is opportunity cost. Compared to the large US banks, our local trio carries lower leverage, cleaner balance sheets, and a more conservative regulatory backdrop, which has historically meant lower volatility and a more reliable dividend. The trade-off is that US peers often offer more cyclical upside when the credit cycle turns in their favour. Against European banks, our names look outright premium, and deservedly so given the consistency. OCBC tells a similar story, up strongly this year to records on the back of double-digit wealth income growth, and UOB rounds out a trio that has rarely looked stronger as a group. The point is that you are not choosing between a great bank and a bad one. You are choosing between three high-quality SGD income machines at elevated valuations.
The risks we are watching
Rate cuts compressing margins. A slower wealth inflow if regional sentiment cools. And the simplest risk of all, which is that buying at an all-time high leaves no margin of safety if the macro picture sours. None of these break the long-term thesis, but they do shape how much you should pay today.
Our stance: hold the core, be disciplined about adding
We remain cautiously optimistic on DBS. This is a quality business at a reasonable-to-full price, and position sizing matters more than ever. If you already hold, we would hold for the dividend and the wealth-engine compounding rather than chase. If you are starting fresh, averaging in on weakness beats buying the full position at the record. Trimming a little to rebalance an oversized position is sensible, not bearish. In the short term, bank stocks at record highs feel either unstoppable or terrifying depending on your mood. In the long term, quality and dividends do the work. Here is the question we want to put to you: at today's prices, are Singapore banks a buy, a hold, or a trim for your portfolio?
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