Singapore, Jan 16, 2026, 15:09 SGT — Regular session.
Shares of Singapore’s United Overseas Bank Ltd (UOB) edged up 0.5% to S$36.59 as of 3:09 p.m. local time, after closing at S$36.40 previously. DBS Group and Oversea-Chinese Banking Corp also saw gains. UOB’s trading range today was between S$36.28 and S$36.71. (Google)
The boost arrives amid investor focus on new capital moves. An exchange filing on Thursday revealed UOB repurchased and cancelled 38,000 shares, paying between S$36.23 and S$36.45 each, totaling roughly S$1.38 million including costs. Since April 2025, when the mandate started, it has bought back 19.16 million shares. (SGX Links)
UOB has priced S$850 million of 3.00% perpetual capital securities, callable first in 2033, under its global medium term note programme. These securities will qualify as Additional Tier 1 capital — designed to absorb losses — featuring non-cumulative distributions that the bank can cancel. A write-down triggers if the Monetary Authority of Singapore declares the bank non-viable. The coupon will reset to a floating rate tied to the seven-year Singapore Overnight Rate Average overnight indexed swap (SORA-OIS) plus 0.94 percentage points. UOB plans to issue the securities on Jan. 21, with expected ratings of Baa1 from Moody’s and BBB+ from Fitch. (ShareInvestor)
These disclosures refocus attention on a well-known dilemma for bank investors: balancing cash returns to shareholders against the cost of regulatory capital. Buybacks typically boost earnings per share, whereas AT1 instruments strengthen capital buffers but come with equity-like risks during periods of stress.
Perpetual bank capital tends to reprice fast when credit spreads widen or interest rates move, and equity investors often see this as a signal of funding stress. This effect can ripple through Singapore banks, which frequently move together in response to rate and credit cues.
UOB’s recent buyback was modest in scale. Yet, steady repurchases can make a difference, especially in a market that favors clear signals of capital discipline.
The next phase hinges on the data. If net interest margins show signs of peaking or loan-loss provisions have to climb, bank shares could come under pressure, potentially slowing capital return plans.
For now, investors must weigh two signals: management pushing buybacks, while the bank raises loss-absorbing capital in Singapore dollars.
UOB is set to unveil its full-year 2025 financial results on Feb. 24 before the market opens, according to an exchange notice. Investors will be watching closely for updates on margins, credit quality, and capital strategy as the report is viewed as the next key driver for UOB’s share price. (SGX Links)
