Cheering DBS’ stellar performance and Temasek’s dominance in economy, stock market

[SINGAPORE] Of late, Singapore’s largest company by market capitalisation DBS Group Holdings has been reporting a string of impressive results.

For the second quarter, DBS’ net profit rose 9 per cent to a record S$3.08 billion, beating the S$2.88 billion consensus forecast in a Bloomberg survey of five analysts. 

The bank raised its full-year guidance after record earnings in the first half, betting that strong momentum in wealth management and other fee-generating businesses will help offset pressure from lower interest rates. 

DBS has been notching strong return on equity (ROE) and raising its dividend. Total dividend per share (DPS) of S$0.81 in Q2 is up from S$0.75 in Q2 2025. For H1, ROE was 17.5 per cent.

The bank’s share price on Aug 26 at S$76.24 is up 35 per cent versus that of S$56.36 at end-2025.

Benefiting locals

DBS’ strong performance benefits Singapore and Singaporeans greatly.

One, DBS’ robust share price drives a positive wealth effect among its many local retail shareholders. This helps support domestic consumption, especially in light of cost of living concerns and economic uncertainties.

The bank’s rising DPS puts more cash in the pockets of its many individual shareholders. In particular, retirees holding DBS shares will be happy to receive consistently growing dividends.

Two, when a local-listed group like DBS does well, this helps to grow the Republic’s public equities market. Possibly, large institutions scanning for investable opportunities of scale globally will find in DBS a good reason to raise exposure to the Singapore bourse. 

DBS’ investment story can also help spur more locals to buy Singapore equities as part of investing for their retirement financial adequacy amid rising life expectancy. Indeed, Singaporeans may get superior investment returns from owning shares in DBS than a condo unit.

Three, DBS is a Singapore-headquartered business with extensive operations in the Republic. When the bank does well, its many Singapore-based employees, spanning senior management to other levels, prosper. 

Also, a thriving company can support its existing headcount as well as invest in training and growing headcount.

Four, crucially DBS is a key part of investment company Temasek’s portfolio. Arguably, the bank is the star in Temasek’s Singapore portfolio.

There are good reasons to cheer DBS outperforming peers OCBC and UOB . When OCBC and UOB do well, a large part of the gains accrue to members of tycoon families namely descendants of the late Lee Kong Chian and the late Wee Cho Yaw respectively.

On the other hand, Temasek gains when companies in which it has large exposure fly high. And how Temasek, which has a long-term focus, fares with its investments matters to Singaporeans as its returns contribute to funding of government spending.

The net investment returns contribution (NIRC) allows the government to spend up to 50 per cent of expected returns on reserves, supporting sustainable budgets. The NIRC comprises up to 50 per cent of the net investment returns on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek; and up to 50 per cent of the net investment income derived from past reserves from the remaining assets.

The Republic and her people stand to gain should various Temasek portfolio companies shine brightly like DBS. Think of the likes of Singtel , Keppel , Singapore Airlines , ST Engineering , Sembcorp Industries , CapitaLand Group, Mapletree Investments and PSA International among others.

Impact on small businesses

However, could Temasek-linked companies be stifling the growth of private businesses here? Perhaps entrepreneurs and owners of small and medium enterprises (SMEs) may find it harder to access opportunities at home because of the presence and dominance of Temasek portfolio companies in diverse sectors.

On reflection, I think there are substantial benefits from having Temasek-linked companies lead in different sectors, especially if such companies are public-listed, so individuals can easily invest in them. 

When Temasek portfolio companies thrive, this helps create rather than remove opportunities for entrepreneurs and small businesses.

Think of how a large Singapore-based company procures goods and services from a wide range of SMEs and professionals.

Across many sectors, competition is intensifying and the pace of disruption will pick up with the rising adoption of artificial intelligence.

For one, while DBS is growing strongly in wealth management, many other players are keen to grab a significant share of this lucrative business such as big foreign banks, other Asian giants and so forth. And the wealth management business may see AI disrupting its economics and business model.

As Singapore works hard to find new economic drivers, counting on Temasek portfolio companies to grow and transform their businesses successfully can be a good strategy.

A Temasek portfolio company can leverage Temasek’s backing to enjoy credibility with investors, lenders, suppliers, customers and governments. Companies in the stable can benefit from exchanging ideas and collaborating with one another. 

Ambitious executives may choose to build careers at a Temasek company as they need not compete with family members for top jobs unlike in many tycoon-owned companies.

I invest in Temasek-linked and non-Temasek-linked entities which are listed on the local bourse. As an investor, I am agnostic on whether companies linked with Temasek or those outside its stable do better.

However, as a Singaporean, I root for Temasek portfolio companies to soar like DBS. When Temasek-linked companies prosper, Singaporeans gain. Importantly, Singapore-headquartered Temasek portfolio companies may offer the Republic its best bet to grow local corporations which can compete effectively on the world stage. 

The writer owns shares in DBS