DBS is expected to benefit the most among its Singapore banking peers from a lift in short-term funding rates, Nomura said in a report on Thursday.

This comes with the surprise move by Singapore's central bank on Wednesday to ease the appreciation of the Singapore dollar.

"One of the by-products of this exchange rate policy is the increase in interest rates," said Nomura. "This benefits the Singapore banks, in particular DBS, because its assets get repriced faster and in a bigger magnitude than liabilities."

DBS has the lion's share of Singapore-dollar deposits, of around 25 per cent. Banks make money by pricing their loans higher to reflect higher rates, before raising rates on deposits. Approximately 40 per cent of DBS's Singapore-dollar loans are pegged to the swap offer rate (SOR), another 40 per cent to the Singapore Interbank Offered Rate (Sibor), and the remaining are set to fixed rates, said Nomura.

The three-month Sibor - which is used frequently to price mortgage loans on floating rates - rose again on Thursday. It stood at 0.668 per cent, up 1.47 basis points from a day ago. Since the start of the year, Sibor has spiked by about 20 basis points.

The three-month SOR also gained on Thursday. It stood at 0.804 per cent, up 22 basis points.