Singapore, Jan 25, 2026, 14:51 SGT — Market closed
- UOB shares closed Friday at a record high of S$39.50 following a strong rally late in the week
- Broker upgrades and changes in the rate outlook have brought Singapore banks back into the spotlight
- UOB’s FY2025 results, due Feb. 24, are the next key event to watch
United Overseas Bank Ltd (UOB) shares ended Friday at a record S$39.50, gaining 5%. Investors will be watching closely on Monday to see if the rally sticks or loses steam. 1
The surge sent Singapore’s Straits Times Index to a new all-time high, with OCBC Bank also hitting a record close. Morningstar equity analyst Kathy Chan noted that banks, “especially UOB,” were making gains after lagging behind DBS, as markets pushed back expectations for U.S. rate cuts. SGX strategist Geoff Howie highlighted a jump in turnover last January across the three lenders. 2
Macquarie’s Jayden Vantarakis upgraded UOB to “outperform,” raising his target price to S$41. He described the stock as a “relative-value catch-up play” amid easing headwinds this earnings season. Vantarakis pointed to provisions—funds set aside for potential bad loans—as likely to normalise after a Q3 spike. He also cautioned that lower rates remain a “double-edged sword” for bank earnings. 3
UOB’s recent surge reflects a wider shift among Singapore’s top three banks, which heavily influence the local index. OCBC wrapped up Friday at S$21.29, while DBS closed at S$58.65. DBS is set to report earnings on Feb. 9, followed by UOB on Feb. 24 and OCBC on Feb. 25. 4
Traders now face a key question: will the record close attract new buyers, or prompt some to cash out after the recent surge? Much hinges on net interest margin — the gap between what banks earn on loans and what they pay on deposits and other funding — especially as rate forecasts shift.
Fitch Ratings has given UOB’s A$1.25 billion senior unsecured notes maturing in 2031 an “AA-” rating. This highlights that funding costs and market access remain key factors for investors when evaluating banks. 5
Macquarie highlighted improving loan momentum but still sees 2026 growth as likely soft by some metrics. That puts the onus on UOB to lean more on fee income and cost control if lending spreads tighten.
UOB, the third-largest bank in Southeast Asia by assets, faced a setback in Q3 after allocating S$615 million for pre-emptive general provisions. The bank also cautioned that its 2026 net interest margins would fall short of the 2025 forecast. 6
Still, the optimistic outlook depends on credit costs coming down. If collateral values slide again or pressure on Hong Kong’s commercial property worsens, the bank may have to continue adding to provisions, which would hit profits.
Rates pose another risk. If cuts come faster than expected, loan yields usually fall before funding costs adjust, tightening margins—even if loan demand stays steady.
Investors will be looking out for new broker calls on Singapore’s banks in the coming week, along with U.S. rate cues that could affect Singapore dollar funding and asset prices. Following a record close, even small moves in broader markets could shake up the current momentum trade and lead to choppy action.
UOB’s FY2025 fourth-quarter results drop on Feb. 24, with investors keen on clues around provisions, margins, and if fee growth can counteract weaker rate support. 7
