Singapore’s banks are increasingly relying on non-interest income streams, particularly in wealth management, to offset declining interest income due to a rate-cut cycle. DBS Group Holdings reported a 22.5% increase in net fee and commission income, while net interest income slightly decreased. With lending rates dropping as the US Federal Reserve eases, banks like DBS and OCBC have experienced a contraction in net interest margins (NIM).
Analysts expect further declines in NIM as additional rate cuts are anticipated. However, banks are optimistic about loan growth and are expanding their non-lending income, particularly in wealth management, which has seen significant growth due to a rising affluent client base in Asia.
Source: S&P Analysis
AS INTEREST EARNINGS FALL, BANKS REFOCUS ON FEE INCOME
Singapore’s banks are increasingly relying on non-interest income streams, particularly in wealth management, to offset declining interest income due to a rate-cut cycle. DBS Group Holdings reported a 22.5% increase in net fee and commission income, while net interest income slightly decreased. With lending rates dropping as the US Federal Reserve eases, banks like DBS and OCBC have experienced a contraction in net interest margins (NIM).
Analysts expect further declines in NIM as additional rate cuts are anticipated. However, banks are optimistic about loan growth and are expanding their non-lending income, particularly in wealth management, which has seen significant growth due to a rising affluent client base in Asia.
Source: S&P Analysis