The three largest banks in Southeast Asia warn against macroeconomic winds after a mixed neighborhood
The biggest banks in Singapore are preparing for macroeconomic uncertainty as a result of mixed quarterly results.
DBS, the largest bank in Southeast Asia, has delivered a good quarter. On Thursday, the bank announced profits of $ 2.82 billion in Singapore ($ 2.2 billion) for the quarter ending in June 2025, a 1% increase of one year on the other which beat consensual estimates. Robust loan and management fees have increased the total DBS income by 5% in annual shift, reaching $ 5.8 billion in Singapore ($ 4.47 billion).
However, the Singaporean Bank Uob, which published its quarterly results on the same day, said a 6% drop in quarterly profit to $ 1.34 billion in Singapore ($ 1.04 billion) as the net interest has weakened.
The OCBC, which said last week, also achieved its quarterly profit from 6% to $ 2.34 billion in Singapore ($ 1.82 billion). As with UOB, the drop in net interest income weighed on the performance of the OCBC.
The three banks, the largest income in Southeast Asia, are not only struggling with declining interest rates, but also warning against more uncertain economic prospects.
In a press release, the CEO of UOB, Wee ee Cheong, expressed his confidence in the long-term perspectives of Southeast Asia despite global polarization. UOB has the largest exhibition to Southeast Asia among the three main Singaporean banks.
“While the global landscape passes to a global multipolar order, the ASEAN continues to demonstrate resilient growth. With regional integration, the diversification of exchanges and the increase in foreign direct investment, the ASEAN is well positioned to prosper in the evolving global economy,” said weekend in the press release.
However, the CEO of UOB also warned that new American rates could alleviate consumers’ feeling and investment activity.
The outgoing CEO of the OCBC, Helen Wong, also underlined a difficult macroeconomic perspective in its results statement last week. “The evolution of trade and monetary policies, and persistent geopolitical tensions should weigh on growth prospects,” she said.
The CEO of DBS, Tan Su Shan, speaking after his first complete quarter as a new CEO of the Bank, recognized “external uncertainty”, although added that the “proactive management” of the balance sheet will help DBS to navigate in the interest rates cycle.
Prices and interest rate
The interest rate increases that started in 2021 are now working. The American federal reserve has reduced the rates of a percentage point on the second half of 2024 and could reduce rates more after low employment growth in the United States
The European Union and China also began to alleviate their monetary policies last year. The monetary authority of Singapore, the de facto central bank of the city-state, has also loosened its monetary policy earlier this year.
Banks benefit from higher interest rates by gaining more on loans and attracting additional deposits.
Beyond the drop in interest rates, the three Singapore banks must also navigate higher American rates. Trump’s new prices on American trade partners come into force today. Singapore has escaped the flood of new taxes, its exports obtaining the reference rate of 10% on all exports linked to the United States.
However, the neighboring savings of Singapore has worsened. The economies of Southeast Asia such as Thailand, Indonesia and Vietnam have obtained prices of around 19 to 20%.
Other Asian savings has worsened. China, a major market for DBS and OCBC, is now faced with a 55%combined American rate, although some of these taxes are interrupted to allow commercial negotiations. India, another target market for the DBS, also faces a steep rate of 50%.
Although prices do not directly affect DBS, UOB or OCBC, a wider economic slowdown focused on prices will slow down consumers’ feeling and limit investment activity, reducing commercial opportunities for the banking sector connected to Singapore.
