On July 7, 2026, shares of Singapore's three major banks DBS Group Holdings Ltd (DBS), Oversea-Chinese Banking Corporation Limited (OCBC), and United Overseas Bank Limited (UOB) reached record highs, reflecting a positive shift in market sentiment.
**DBS Group Holdings Ltd (DBS)**
DBS's stock price surged by 2.7%, reaching an intraday peak of S$68.72. This increase was accompanied by a trading volume exceeding 3.8 million shares, elevating the bank's market capitalization by over S$5 billion. The rally followed a report from Citi, which raised its target price for DBS and maintained a "buy" rating. Citi analyst Tan Yong Hong projected a 10% earnings growth for DBS in the 2027 and 2028 financial years, attributing this to a recovery in loan growth. He highlighted that the bank's profit margins on loans are expected to improve, bolstered by higher everyday service fees. This optimism is rooted in structural shifts in system liquidity, with the Singapore Overnight Rate Average (SORA) benchmark interest rate declining by 2.7 percentage points during the recent U.S. rate cut cycle, significantly outpacing the 1.75 percentage point drop in U.S. rates. The reversal in banking dynamics is evident, as loan growth in May 2026 rose by 8.7% year-on-year, surpassing the 6.8% increase in deposits. This trend has led to a higher loan-to-deposit ratio of 68.7% and a decrease in the current account savings account ratio by 50 basis points to 54%. Citi also upgraded its net interest margin forecasts by up to five basis points, anticipating a recovery closer to 2019 levels. The brokerage raised its sector loan growth forecast to between 6% and 7%, up from the previous 5%, expecting this to boost non-wealth fees such as trade and loan-related services.
**Oversea-Chinese Banking Corporation Limited (OCBC)**
OCBC's shares climbed 3.4%, reaching a high of S$26.37. Citi maintained a "buy" rating for OCBC, positioning the stock for growth and a return on equity (ROE) catch-up with DBS. The brokerage's estimates for OCBC are 2% to 5% ahead of consensus expectations, noting that the current price-to-book valuation gap presents a buying opportunity if the ROE gap narrows. OCBC has outperformed its peers in 2026, with its share price rising above S$22 at the end of March and touching a fresh record high of S$22.83 on April 2, 2026, taking its market capitalization above S$100 billion for the first time. This performance is attributed to strong loan growth and a robust wealth management business.
**United Overseas Bank Limited (UOB)**
UOB's stock price rose by 2.7%, reaching a record high of S$41.60. Citi maintained a "neutral" rating for UOB, citing the need for more clarity on its wealth and loan growth trajectories, which currently lag behind its peers. UOB's earnings projections remain in line with street expectations, reflecting a wider valuation gap relative to its competitors. In January 2026, UOB's shares surged to a record high of S$39.14, up 4% from the previous day, as Macquarie Capital upgraded it to "outperform" with a S$41 target. However, UOB's performance has been more volatile compared to DBS and OCBC.
**Market Sentiment and Outlook**
The positive performance of DBS, OCBC, and UOB reflects improved market sentiment, driven by expectations of a recovery in loan growth and favorable interest rate dynamics. Analysts remain optimistic about the banks' prospects, citing strong fundamentals and growth potential. However, some caution that valuations may appear stretched, and investors should monitor developments in the banking sector and broader economic indicators.
In summary, the record-high share prices of DBS, OCBC, and UOB underscore a positive shift in market sentiment, supported by strong financial performance and favorable economic conditions. Investors are encouraged to stay informed and consider both the opportunities and risks associated with the banking sector.