Singapore's three largest banks tracked by EUR 10Y and PMI. 45% of STI weight — the most important sector for SGX investors.
Singapore banks are among the most rate-sensitive in Asia. Net interest margin (NIM) — the spread between lending and deposit rates — expands when EUR 10Y rises, directly boosting earnings. The 2020–2022 cycle saw DBS, OCBC and UOB all more than double as rates normalised from historic lows.
PMI is the secondary driver — above 52 indicates strong loan demand across Southeast Asia; below 48 signals credit quality deterioration and potential NPL increases.
EUR 10Y at 2.93% places all three banks in neutral territory. The Hormuz crisis has added credit risk to their shipping loan books, but with the strait reopening today (17 April), this risk is moderating. The banks enter Q1 2026 earnings season (late April–early May) in solid shape.
For informational purposes only. Not financial advice. See disclaimer.