OCBC’s net profit is likely to be higher q-o-q based on analysts’ forecasts of $1.71 billion in 1QFY2024. UOB’s 1QFY2024 net profit is forecast as $1.51 billion, higher q-o-q but lower y-o-y.
On the funding front, trends this year are somewhat different from a year ago when people were moving into higher-cost fixed deposits. With the anticipation of a rate cut, albeit shallower and later than expected, funding costs are unlikely to rise much. As such, net interest margins may remain stable since loan and asset yields are likely to stay at stable levels. The main negative is the lack of loan growth.
Elsewhere, fee income could recover as the year wears on. Other trends include caution in North Asia. Despite Chinese growth being higher than expected, the underlying economy remains subdued. Asean on the other hand, continues to attract both investment inflows and trade flows.
Since the banks are committed to paying out 50% of their earnings, with DBS stating that it would like to increase absolute dividend payouts in a year, the Singapore banks are likely to be yield plays analysts have said.
See also: Singapore bank bonds can stand tall in 2H2025 on flight to quality
As the year wears on, all eyes and ears are likely to be fixed on the Federal Reserve and the messaging that comes out of wherever the Fed governors are likely to be.
