Singapore, Jan 19, 2026, 14:53 (SGT) — Regular session
- DBS shares slipped roughly 0.8% in afternoon trading, underperforming amid mixed results from local bank rivals
- CGS International downgrades DBS to “hold,” citing margin pressure from a weaker SORA and a softer Q4 outlook
- Attention shifts to Feb. 9 earnings for clues on margins, fee income, and capital returns
Shares of DBS Group Holdings (DBSM.SI) dropped roughly 0.8% Monday afternoon following a broker downgrade ahead of next month’s earnings. The stock traded at S$58.66, down S$0.46 from Friday’s close. OCBC slipped around 0.5%, while UOB inched up about 0.2%. 1
CGS International cut DBS to “hold” from “add,” keeping its target at S$60.50, citing concerns that “a lack of earnings growth could limit upside” amid record-high valuations. Analyst Tay Wee Kuang pointed to a seasonally weak Q4, which may weigh on flow-related income and trim net interest margin by around five basis points, as the Singapore Overnight Rate Average (SORA) dropped to 1.16% in Q4 from 1.44% in Q3. He also warned of downside risks to FY2026 earnings if margins tighten further, fee growth slows, or credit costs rise. Still, DBS offers a forecast dividend of S$3.30 per share—roughly a 5.6% yield—and retains S$2.6 billion under its S$3 billion buyback plan. 2
Net interest margin measures the difference between a bank’s earnings on loans and its costs on deposits, typically shown as a percentage of interest-earning assets. One basis point equals one-hundredth of a percentage point, meaning five basis points correspond to 0.05 percentage points.
SORA serves as a crucial benchmark for Singapore dollar interest rates, influencing both loan pricing and deposit competition. When it dips, banks typically push volume growth, boost fee income, or rely on hedges to protect their margins.
DBS has benefited from a solid surge in Singapore bank stocks, fueled by capital returns and the ongoing search for yield. This momentum leaves investors with lower expectations ahead of earnings season.
Tay noted that wealth management might still provide a buffer, with assets under management up in the first nine months of 2025 and guidance pointing to mid-teens fee growth in FY2026. But markets and treasury income remain uncertain, prompting a cautious tone in the note.
Credit still plays a key role. CGSI highlighted DBS’ ties to car leasing firm Autobahn, noting recovery chances could get a boost after Autobahn dropped its appeal against creditor protection.
However, increased provisions — funds reserved for potential loan losses — could take a toll if macroeconomic conditions weaken. This remains the fastest route for a high-valuation stock to slide down.
DBS will release its full-year 2025 financial results before markets open on Monday, Feb. 9, according to a filing. 3
Investors are watching for updated guidance on margins, fee momentum, and credit costs, along with any signs that management might speed up buybacks. Dividend comments will also be key, given the stock’s popularity as an income option.
The risk cuts both ways. If rates stabilize or 2025 ends stronger than expected, the downgrade’s effect could ease. But a wider margin squeeze or a spike in credit charges would make things worse.
