In addition, based on geopolitical tensions, weaker capital market activity is likely, with IPOs and secondary fund raisings possibly reconsidered. These could weigh on wealth management fees as as well as ECM/ DCM and investment banking revenues, JP Morgan cautions.
Nonetheless, the US banking behemoth believes that net new money growth (which was $77 billion in FY2025) should remain a bright spot for OCBC and DBS.
JP Morgan has raised its forecasts to the upper end of guidance for OCBC’s and DBS’s credit costs which could impact net profit.
In its view, OCBC has re-rated on the back of growth outlook by the incoming CEO, as well as by growth at a reasonable price or GARP vs peers since DBS is expensive, and JP Morgan believes UOB has asset quality risks.
See also: MetaOptics is metalens player ‘with scalable growth’, says UOB Kay Hian in unrated report
“OCBC is now trading at levels above fair, hence our tactical downgrade. We expect the bank to focus on capital conservation, rather than increasing payout this year; which will be a catalyst for underperformance in the near term,” JP Morgan says. It has lowered OCBC’s price target to $20 by end-2026 from $20.50 previously and downgraded the bank from neutral to underweight.
Elsewhere SGX is trading below its mean dynamic price-to-earnings ratio, hence JP Morgan has increased its price target to $22 by end-2026 with an overweight rating.
DBS is likely to keep up its generous dividend payments till 2028, JP Morgan suggests. Despite DBS’s recent tech disruption, JP Morgan has retained its overweight rating for Singapore’s largest corporate, but it has reduced DBS’s end-2026 price target to $63 from $70 previously.
