DBS is making headlines again — surging toward the SGD$50 mark as investors cheer its strong capital position, digital growth, and dividend momentum. But beneath the surface, there’s a key risk developing for the broader sector: Net Interest Margin (NIM) compression. So while DBS flies, will OCBC (and even UOB) be dragged down?

DBS Still the Star

DBS has managed to outperform thanks to its diversified earnings, tech investments, and cross-border growth. Despite a softening NIM, its fee income and wealth management segments continue to support earnings. The stock’s momentum shows investors still trust its long-term story.

But OCBC Feels the Pressure

OCBC, more sensitive to pure lending margins, might feel a deeper impact from falling NIMs as rates peak and loan growth slows. Its China exposure and more traditional banking mix also raise questions about resilience if credit spreads tighten.

Sector Divergence Coming?

Singapore banks have been a reliable defensive play — but with the NIM cycle turning and market sentiment chasing growth, we could see a divergence in performance. DBS may keep pushing higher, while OCBC could underperform unless it surprises with new growth drivers.

Final Thought

DBS’s strength is hard to ignore — but with NIM declines hitting the headlines, OCBC might need more than just solid numbers to keep pace. Investors chasing growth may need to be more selective going forward.