DBS shares rise 1.9% to hit all-time intraday high as sentiment improves

[SINGAPORE] Shares of DBS hit an all-time high on Tuesday (Jul 7) as the stock rose as much as 1.9 per cent, with the other two Singapore banks also making gains.

Its counter climbed to S$68.20 as at 10.35 am, having added S$1.29 from its closing price on Monday. Over one million shares had changed hands, with the bank’s market capitalisation rising nearly S$3.5 billion.

As at the mid-day trading break, OCBC shares jumped 1.9 per cent, while UOB rose around 1.3 per cent. DBS shares were 1.4 per cent up from Monday at S$67.85.

The share price increases come after a Citi note on Tuesday that lifted target prices for all Singapore banks, with a leading preference and “buy” calls for DBS, followed by OCBC and a neutral call on UOB.

Citi analyst Tan Yong Hong said he expects about a 10 per cent earnings growth in the 2027 and 2028 financial years on loans growth recovery. This lending boost will increase the bank’s profit margins on loans and bring in higher everyday service fees, he said.

According to the report, the turnaround is heavily driven by structural shifts in system liquidity. During the recent US rate cut cycle, the local one-month Singapore Overnight Rate Average (Sora) benchmark interest rate plunged 2.7 percentage points peak-to-trough to around 1 per cent by mid-2026.

This drop significantly outpaced the 1.75 percentage point decline in US rates due to flushed liquidity in the Singapore system.

However, banking dynamics are reversing. Banking system data from May 2026 showed that loan growth grew 8.7 per cent year on year, outstripping deposit growth of 6.8 per cent. This pushed the loan-to-deposit ratio back up to 68.7 per cent, while the current account savings account ratio slid 50 basis points to 54 per cent.

Citi noted that Sora rates will find strong support as long as consumer and corporate lending continue to soak up excess system liquidity. Consequently, Citi upgraded its net interest margin forecasts by up to five basis points, targeting a recovery closer to 2019 levels.

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The brokerage also lifted its sector loan growth forecast to between 6 and 7 per cent, up from 5 per cent previously, which is expected to boost non-wealth fees such as trade and loan-related services.

Clear preferences

Citi highlighted DBS’ strong dividend per share visibility and its position as a premier Asia wealth proxy as the key reasons for its preference over the other Singapore banks.

Driven by net interest income upgrades, Citi’s earnings estimates for DBS stand 5 to 8 per cent ahead of consensus expectations.

OCBC is still favoured, though, with Citi positioning the stock for growth and a return on equity (ROE) catchup with DBS. The brokerage’s estimates for OCBC sit 2 to 5 per cent ahead of the street, noting that the current price-to-book valuation gap presents a buying opportunity if the ROE gap narrows.

Meanwhile, UOB remains a “neutral” hold. Investors are continuing to monitor its wealth and loan growth trajectories, which currently lag behind its peers.

Citi noted that UOB’s earnings projections remain strictly in line with street expectations, reflecting a wider valuation gap relative to its competitors.