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 half of 2025. As net interest income declines, fee-based income remained healthy, bolstered by sustained wealth management activity and card spending.

DBS posted the strongest revenue momentum, with total income rising 5.0% year-on-year, followed by UOB at 2.0%. OCBC contracted at -1.0%, reflecting slower growth across both net interest and non-interest segments. When it came to profit before allowances, DBS led with a 5.0% gain, slightly ahead of UOB at 3.4%, while OCBC slipped by -3.0%, as rising operating expenses offset topline gains.

On the net profit front, UOB’s earnings were at 3.0%, while DBS reported a modest 1.0% growth—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 1H 2025 showed clear divergence among the three major Singapore banks. OCBC delivered the strongest expansion at 9.0% year-on-year, fuelled by growth in residential mortgages and corporate lending across key industries like transport and communications. UOB followed with 4.0% growth, supported by robust regional lending activity across ASEAN. DBS, meanwhile, registered a more modest 3.0% 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 2.08%, down just 5 basis points (bps) from 1H 2024 and 6 bps from the previous half-year. OCBC, is in the middle with its NIM at 1.98%, faced the steepest compression, with an 11 bps year-on-year drop and a 5 bps sequential decline—largely due to declining asset yields in a softening interest rate environment. UOB’s NIM came in at 1.98%, down 7 bps half-on-half and down 8 bps year-on-year from 2.03% in 1H 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 1H 2025, the leaderboard has shifted. DBS remains the most efficient bank, delivering a CIR of 38.5%, a slight improvement from 41.3% a year earlier. This reflects its ability to scale revenue while keeping costs under control.

OCBC’s CIR increased to 38.9%, up from 37.5%, 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 38.9% from 41.9% last year. This reflects disciplined expense management and steady income growth.

UOB's CIR remained steady at 43.5%, a slight increase from 43.1% in the last half year, though down from last year's 44.4%. 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 1H 2025, DBS once again topped the chart with a robust ROE of 17.0%, slightly down from 18.8% 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 12.6%, down from 14.5% a year earlier and down from the last half-year's 14.2%. UOB’s ROE, meanwhile, stood at 12.3%, a slight dip from both the prior half-year 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 1H 2025. This was unchanged from the previous half-year (2H 2024) and 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 1.0%, a slight improvement from the last half-year's (2H 2024) 1.1% and the same period a year ago (1H 2024) 1.1%. Although the bps improvement is marginal, this 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 1H 2025. This represented a 0.1 percentage point increase from both 2H 2024 and 1H 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, UOB offers the highest trailing 12-month (TTM) dividend yield at 5.11%, followed by DBS at 4.96% and OCBC at 4.89%. This makes UOB the most attractive option for investors prioritizing yield.

In terms of trailing 12-month dividend amounts, DBS leads with an impressive payout of $2.64 SGD per share, slightly higher than UOB's $2.64 SGD and significantly higher than OCBC’s $0.82 SGD.

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.

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Valuation

Premium remains with DBS

DBS still commands the richest valuations across most metrics. Its P/B of 2.19 and P/S of 5.57 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 13.21, 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 1.16, a P/S of 4.07, and the cheapest forward P/E at 9.66. 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$75.59 and market cap of S$75.59 billion put it between its local peers. Its P/B of 1.25 is the lowest in the trio, reflecting a modest discount to book, yet its P/S of 5.30 and forward P/E of 10.45 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.

What do analysts say

Sources: TipRanks, MarketScreener

OCBC stands out as the only bank with potential upside, showing a 1.33% difference between its current share price of $16.77 SGD and the average analyst target price of $16.99.

DBS follows with a -0.48% potential downside, as its current share price of $53.23 SGD is trading near its 12-month target of $52.98 SGD. 

OCBC has a larger downside at -0.65%, with a current share price of $34.65 SGD and an average target of $34.43 SGD. 

In terms of analyst recommendations, sentiment has turned more cautious. None of the three banks currently carry a “Strong Buy” rating. UOB has no "Buy" calls and only 4 "Hold" calls and 2 "Sell" calls. OCBC has 1 “Buy” and 9 “Hold” calls, while DBS leads with 9 “Buy” and 4 “Hold” ratings with 3 "Sell" calls, signalling caution.

These figures point to steady fundamentals but limited near-term upside as valuations are largely priced in after recent gains. UOB continues to be seen as the best value play, DBS retains its growth premium, and OCBC remains a stable, income-friendly option.

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