OCBC vs DBS vs UOB Singapore's Leading Bank Stocks for 2025

Singapore’s banking heavyweights—DBS Group (SGX: D05), United Overseas Bank (SGX: U11), and OCBC Ltd (SGX: O39)—are capturing attention as their stock prices soar to new highs. Their robust earnings, driven by elevated interest rates, have put them in the spotlight.

However, with the US Federal Reserve hinting at a potential interest rate cut, the dynamics could shift. Investors are left asking: which of these blue-chip banks is best positioned to navigate the changing landscape and deliver sustainable growth? A closer look at their recent performances and financial metrics might provide the answer.

Total income and net profit growth

Singapore’s top three banks—DBS, OCBC, and UOB—delivered a mixed set of financial results in the first quarter of 2025. The high-interest-rate environment continued to support strong net interest income, while fee-based income remained healthy, bolstered by sustained wealth management activity and card spending.

DBS posted the strongest revenue momentum, with total income rising 6.0% year-on-year, followed by UOB at 4.0%. OCBC trailed at 1.0%, reflecting slower growth across both net interest and non-interest segments. When it came to profit before allowances, UOB led with a 7.0% gain, slightly ahead of DBS at 6.0%, while OCBC slipped by -2.0%, as rising operating expenses offset topline gains.

On the net profit front, UOB’s earnings held flat, while DBS reported a modest -2.0% decline—partly due to the implementation of a new global minimum tax. OCBC, however, saw a sharper drop of -5.0%, pulled down by higher cost growth and investment spending. These figures reflect the diverging fundamentals among the three banks, highlighting how macroeconomic headwinds, tax policies, and cost discipline are playing an increasingly important role in shaping bottom-line performance.

Net interest margins (NIM) and loan growth

Loan growth trends in 1Q 2025 showed clear divergence among the three major Singapore banks. OCBC delivered the strongest expansion at 7.0% year-on-year, fuelled by growth in residential mortgages and corporate lending across key industries like transport and communications. UOB followed closely with 6.0% growth, supported by robust regional lending activity across ASEAN. DBS, meanwhile, registered a more modest 2.0% increase in customer loans, signalling a more measured approach to loan book expansion amid a cautious economic outlook.

In terms of net interest margins (NIM), DBS proved the most resilient. Its NIM stood at 2.12%, down just 2 basis points (bps) from 1Q 2024 and 3 bps from the previous quarter. OCBC, while still posting the highest NIM at 2.04%, faced the steepest compression, with a 23 bps year-on-year drop and an 11 bps sequential decline—largely due to declining asset yields in a softening interest rate environment. UOB’s NIM came in at 2.00%, flat quarter-on-quarter but down 2 bps year-on-year from 2.02% in 1Q 2024.

This data underscores DBS’s margin strength, with disciplined balance sheet management helping to buffer against the effects of peaking interest rates. UOB’s stable margin performance shows sound liability management despite a slight decline, while OCBC’s sharp NIM erosion may weigh on future interest income, though strong loan growth could partially offset this pressure over time.

Cost-to-income ratio (CIR)

The cost-to-income ratio (CIR) remains a critical indicator of operational efficiency, and in 1Q 2025, the leaderboard has shifted. DBS emerged as the most efficient bank, delivering a CIR of 37.5%, a slight improvement from 37.4% a year earlier. This reflects its ability to scale revenue while keeping costs under control.

OCBC’s CIR increased to 38.7%, up from 37.1%, as higher investments in digital infrastructure and human capital contributed to a rise in operating expenses. UOB, however, recorded the most significant improvement, bringing its CIR down to 42.6% from 44.6% last year. This reflects disciplined expense management and steady income growth.

While DBS continues to lead in cost efficiency, UOB is closing the gap with consistent improvements. OCBC’s higher CIR suggests it is still in the midst of a spending cycle aimed at long-term digital transformation. For investors, the CIR data indicates that DBS and UOB are currently better positioned to deliver operating leverage as cost pressures grow more sensitive in a lower-rate environment.

Return on equity (ROE)

Return on equity (ROE) is a vital profitability metric, revealing how well a bank turns equity into earnings. In 1Q 2025, DBS once again topped the chart with a robust ROE of 17.3%, slightly down from 19.4% a year ago but still a strong result amid tightening global financial conditions. This reflects DBS’s consistent ability to generate shareholder value through a high-quality, diversified earnings base.

OCBC’s ROE came in at 13.0%, down from 14.7% a year earlier, but notably improved from 11.8% in 4Q 2024. This suggests early gains from cost-optimisation efforts and a potential rebound in earnings quality. UOB’s ROE, meanwhile, stood at 12.3%, a slight dip from both the prior quarter and a year ago, driven by relatively flat net profits and higher capital buffers.

Among the three, DBS continues to demonstrate clear leadership in return on equity, a key driver of its premium market valuation. OCBC is showing signs of stabilisation, while UOB will need to reignite earnings momentum to lift shareholder returns in the coming quarters.

Non-performing loans (NPL) ratio

The overall asset quality across Singapore’s major banks remained resilient in the first quarter of 2025, supported by prudent lending standards and ongoing risk management. Non-performing loan (NPL) ratios remained low by historical standards, although there were small movements across the board that reflect differences in portfolio mix and risk exposure.

OCBC continued to lead in credit quality, reporting an NPL ratio of 0.9% in 1Q 2025. This was unchanged from the previous quarter (4Q 2024) and slightly improved from 1.0% a year ago. The bank’s steady asset quality reflects its conservative underwriting standards and a diversified loan portfolio that has so far weathered macroeconomic headwinds well.

DBS’s NPL ratio came in at 1.1%, matching both the previous quarter (4Q 2024) and the same period a year ago (1Q 2024). Contrary to earlier suggestions, there was no improvement year-on-year, but the stability still indicates effective credit monitoring, particularly across its trade-related and regional exposures.

UOB recorded the highest NPL ratio among the three, at 1.6% in 1Q 2025. This represented a 0.1 percentage point increase from both 4Q 2024 and 1Q 2024, where the ratio stood at 1.5%. The rise is marginal but reflects UOB’s greater exposure to regional SME lending and property-related segments, which are more vulnerable to cyclical pressures.

All three banks have continued to maintain healthy general allowance buffers and conservative coverage ratios, suggesting a proactive stance in preparing for any potential credit deterioration. For investors, this means that OCBC continues to offer the strongest credit profile, DBS maintains consistent stability, and UOB remains cautious with a more regionally exposed book that requires close monitoring.

Dividend yield

Dividend yield is a critical metric for income-focused investors, as it reflects the annual return from dividends relative to the stock price.

Among the three banks, OCBC offers the highest trailing 12-month (TTM) dividend yield at 5.16%, followed by UOB at 4.75% and DBS at 4.93%. This makes OCBC the most attractive option for investors prioritizing yield.

In terms of trailing 12-month dividend amounts, DBS leads with an impressive payout of S$2.16 per share, significantly higher than OCBC’s S$0.86 and UOB’s S$1.73.

It’s worth noting that DBS pays dividends quarterly, providing more frequent cash flow to investors, while OCBC and UOB distribute dividends on a semi-annual basis. This could make DBS more appealing to those who value a steady and regular income stream.

Valuation

Premium remains with DBS

DBS still commands the richest valuations across most metrics. Its P/B of 1.88 and P/S of 5.52 exceed those of OCBC and UOB, underscoring investors’ willingness to pay up for its industry-leading profitability and scale . The bank’s forward P/E has crept to 11.94, suggesting the market anticipates continued earnings resilience even as rates plateau.

UOB: the relative value play

UOB trades on the lowest ratios almost across the board: a P/B of 1.30, a P/S of 4.29, and the cheapest forward P/E at 10.17 . Combined with its healthy loan growth and improving cost efficiency, these metrics keep UOB attractive for value-focused investors looking for a margin of safety.

OCBC sits in the middle

OCBC’s share price of S$16.71 and market cap of S$74.8 billion put it between its local peers . Its P/B of 1.26 is the lowest in the trio, reflecting a modest discount to book, yet its P/S of 5.19 and forward P/E of 10.40 suggest it is not as deeply discounted as UOB . The bank’s wide NIM but softer earnings trajectory help explain this balanced valuation.

This comparison underscores a clear valuation hierarchy: DBS commands a premium, UOB offers relative affordability, and OCBC presents a balanced proposition for investors weighing growth, value, and income.Ask ChatGPT

What do analysts say

Sources: TipRanks, MarketScreener

UOB stands out with the highest potential upside, showing a 3.01% difference between its current share price of S$36.59 and the average analyst target price of S$37.69. This reflects ongoing confidence in its fundamentals and valuation appeal, particularly given its low forward P/E and strong loan growth momentum.

DBS follows with a 1.25% potential upside, as its current share price of S$45.64 remains slightly below the average target of S$46.21. Although upside is limited, analysts continue to back its earnings resilience and high ROE, maintaining its status as the premium play among local banks.

OCBC has the smallest upside at 1.41%, with a current share price of S$17.07 and an average target of S$17.31. While not as bullishly rated as its peers, OCBC’s strong asset quality and stable dividend yield continue to attract steady investor interest.

In terms of analyst recommendations, sentiment has turned more cautious. None of the three banks currently carry a “Strong Buy” rating. UOB and OCBC both have 3 “Buy” and 3–4 “Hold” calls, while DBS leads with 5 “Buy” and 3 “Hold” ratings. No “Sell” or “Underperform” ratings were reported for any of the banks.

These figures highlight a more measured outlook across the board. UOB continues to be seen as the best value play, DBS retains its growth premium, and OCBC remains a stable, income-friendly option, though analysts are holding off on aggressive upgrades ahead of upcoming quarterly results.

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