Week 33 equity strategy: Singapore banks delivered better-than-expected 2Q26 results. Their combined net profit grew 13% YoY to S$6bn (1Q26: +1%). At the operating level excluding provisioning, earnings expanded 10%. Wealth management fee growth was the star performer, surging 40% YoY. Transactional income related to equities, sales of equity structured products and increased volatility were major drivers of fee growth. Wealth fees are cyclical and a function of the capital market. SGX cash equities revenue was up 40% YoY in 1HC26. The main negative was an increase in non-performing assets (NPA) coming from China. UOB was hardest hit. The other positives from the results were: 1) 2% QoQ recovery in net interest income. Despite the low rates, NII is bottoming out due to the jump in loans and deposits; 2) Net new money for wealth jumped 31% to S$21bn, with OCBC growing by 50% to S$6bn. 3) Banks raised dividends by an average of 9%, led by OCBC’s 15% increase. Among the three banks, OCBC was the most impressive with earnings jumping 22%. UOB disappointed as underlying operating income only nudged up 2%. Investors were particularly concerned about the low provisioning for China after a ~S$600mn NPA from a mixed development. UOB also lowered its fee income guidance for 2026 due to credit cards. Looking ahead, we think bank earnings are on a high single-digit growth trajectory in 2H26, with fee support from the spike in AUM and vibrant capital markets. Loan growth continues to build momentum. OCBC and DBS may slow down on their share buybacks in favour of special dividends.

Paul Chew
Head Of Research
paulchewkl@phillip.com.sg

The Singapore market was closed on Monday.

In the US, the S&P fell 0.1% to 7,753.11, the Dow Jones slipped 0.1% to 53,975.98, and the NASDAQ declined 0.3% to 26,605.36.

SG

ST Engineering bags new contracts worth S$2.9 billion in Q2 2026.

Geo Energy‘s 1HFY2026 earnings down by 28% to US$14.2 million; declares dividend of 0.1 cents per share for 2QFY2026.

Ever Glory United posts 177.5% y-o-y surge in 1HFY2026 earnings to S$12.7 million.

NetLink NBN Trust records profit after tax of S$18.1 mil for 1QFY2027, down 22.4% y-o-y.

Ho Bee Land H1 profit rises 3% to S$51.1 million on higher development sales.

Beng Kuang‘s PATMI rises 20.8% y-o-y although net profit declines 15.5% y-o-y for 1HFY2026.

Aspial Lifestyle reports 89% y-o-y rise in net profit to S$55 million on record S$464.2 million revenue for 1HFY2026.

Soon Hock Enterprise‘s 1HFY2026 NPAT reverses to S$19.3 million earnings after completion of Stellar@Tampines.

Nordic Group reports earnings of S$10 million for 1HFY2026, up 21% y-o-y.

F&N nine-month net profit up 10.4% at S$130.6 million despite revenue drag.

Singapura Finance reports 76.2% y-o-y increase in earnings to S$5.86 million.

US

Nvidia partnered with six major financial institutions to launch compute financing platforms targeting over US$500 billion in third-party capital for AI infrastructure.

Intel announced a US$15 billion common stock offering to support AI demand, with an option for underwriters to buy an additional US$2.25 billion.

Meta launched Muse Glimmer, a highly efficient, 30-billion-parameter AI model capable of running on a single GPU.

JP Morgan managed part of a US$12.3 billion bond sale for BlackRock, a partner with Meta on a data center project in El Paso, Texas facing some resident opposition.

Rocket Lab Q3 gross margin guidance significantly below expectations.

AST SpaceMobile posts wider quarterly loss after BlueBird 7 satellite incident.

Trump Media posts US$238 million second-quarter loss as crypto declines.

Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, The Edge Singapore, PSR

DBS Group Holdings Ltd – Wealth fees outrun the rate drag

Recommendation: ACCUMULATE; TP S$79.00; Last close: S$76.3300; Analyst Glenn Thum

• DBS’ 2Q26 earnings of S$3.1bn were above our estimates, with 1H26 at 53% of our FY26e forecast. Wealth and treasury customer sales more than offset lower NII. Loan and deposit growth of 8% and 11% YoY held the NII decline to 2% despite SORA halving. Expenses grew 3% against 6% income growth, lifting PPOP 8% to a record S$3.75bn. 2Q26 DPS rose 8% YoY to 81 cents (66 cents ordinary, 15 cents capital return); we estimate FY26e DPS of S$3.30.
• NII fell 2% YoY to S$3.58bn as NIM compressed 18bps YoY to 1.87%. WM fees rose 42% YoY to a record S$919mn on higher sales of equity products, while commercial book other non-II rose 30% to a record S$681mn on treasury customer sales. DBS raised FY26 guidance: total income to exceed FY25, group NII to close the gap to FY25, and commercial book non-II growth to mid-teens (prev. high single digit).
• Maintain ACCUMULATE with a higher target price of S$79.00 (prev. S$76.00) as we raise our FY26e earnings by 7% from higher wealth management and lower provisions estimates. We assume a 3.25x FY26e P/BV and an 18.6% ROE estimate in our GGM valuation. We expect wealth and treasury customer sales to stay the primary growth driver while NII stabilises. We continue to prefer DBS among the Singapore banks given its capital return plan (until FY27), fixed DPS policy, and high dividend payout ratio (dividend yield FY26e: 4.3%, FY27e: 4.6%). Its peers follow a floating payout ratio tied to earnings performance.

Elite UK REIT – Out with the old, in with the new

Recommendation: BUY; TP S$0.41; Last close: S$0.3150; Analyst Hashim Osman

• 1H26 DPU rose 0.6% YoY to 1.55 pence, forming 51% of our FY26e forecast. Distributable income increased 3.6% YoY to £10.1mn. The increase was driven by lower net finance costs (down 47% YoY, inclusive of derivative fair value gain of £1.2mn), and lower one-off other property expenses (down 74% YoY to £289k, related to vacant units/repositioning costs).
• Net gearing is down 6.1 ppts YoY to 34.6% as of 1H26, and 99% of debt is now on fixed-rate (prev. 85%). There is limited refinancing risk as refinancing discussions are underway for £77.9mn of debt maturing in 2027, and lender consent is obtained for a 2-year extension to 2029 for £132.3mn of debt.
• We maintain BUY with unchanged DDM-based TP of £0.41. There are no changes to our forecast. Elite is trading at a 9.6% FY26e dividend yield, and a P/NAV of 0.8x. With capital management strengthened, any DWP non-renewals present an opportunity for Elite to fund conversions of vacated assets into higher-yielding repositioning such as PBSA or co-living. The conversion of Lindsay House, Dundee into PBSA is on track for a September 2027 opening, with planning approved, strip-out works completed, and a university nomination agreement verbally agreed but not yet formalised. Cambria House, Cardiff is earlier-stage, with pre-planning consultation completed for 350 beds.

Grab Holdings -Growth momentum intact despite near-term headwind

Recommendation: BUY; TP US$7.00; Last close: US$3.70; Analyst Helena Wang

• 2Q26 revenue was in line with our estimates, while 2Q26 PATMI outperformed due to a US$307mn gain recognised upon consolidating Superbank. Excluding this gain, 1H26 revenue/PATMI accounted for 47%/23% of our FY26 forecasts. We expect earnings to be back-end loaded, supported by financial services reaching profitability in 2H26.
• Revenue growth remains strong, +22% YoY to US$997mn in 2Q26, driven by continued strong momentum across delivery services (+21% YoY) and Financial Services (+60% YoY). Grab reiterated confidence in valuation with an additional US$750mn share repurchase authorisation.
• We maintain our BUY recommendation, with an unchanged target price of US$7.00. Our FY26e forecast, terminal growth, and WACC assumptions remain unchanged. With elevated fuel prices, Grab has demonstrated resilience, maintaining robust underlying demand and stable margins. Its ecosystem continues to strengthen, with emerging growth opportunities across groceries and financial services. We continue to view Grab as a long-term structural winner in the region.

Oversea-Chinese Banking Corp Ltd – Trading and wealth deliver a record quarter

Recommendation: ACCUMULATE; TP S$31.70; Last close: S$30.3000; Analyst Glenn Thum

• 2Q26 earnings of S$2.22bn were above our estimates, with 1H26 at 53% of our FY26e forecast. Earnings rose 22% YoY on three drivers: 1) trading income jumped 85% YoY to a record S$695mn on customer flow and S$191mn of GEH investment income, 2) wealth fees rose 44% YoY to a record S$470mn on a 13% larger AUM base, and 3) insurance income rose 68% YoY on GEH’s NBEV margin expansion to 49.8%. Interim DPS of 47 cents was up 15% YoY at a 50% payout.
• NII fell 1% YoY to S$2,264mn as NIM compressed 22bps YoY to 1.70%, with 12% average asset growth covering most of the drag. Part of the margin fall is self-inflicted, due to its own buildup of low-yielding treasury assets. Non-II rose 51% YoY to a record S$1.91bn, 46% of income against 36% a year ago. OCBC raised FY26e loan growth guidance to high single-digit to low double-digit (prev. mid-single-digit), narrowed the NII decline to slight (prev. slight to moderate) and now expects credit costs at the lower end of the 20-25bps range.
• Maintain ACCUMULATE with a higher target price of S$31.70 (prev. S$28.50) as we raise FY26e earnings by 8% due to higher trading income and lower provisions. We assume a 2.31x FY26e P/BV and a 14.5% ROE estimate in our GGM valuation. We expect NIM to stabilise in 2H26 as OCBC slows treasury asset growth and SORA firms, leaving wealth to carry income growth. We like OCBC for the change in income mix. Non-II is 44% of 1H26 income and wealth 41%, both driven by customer volume rather than rates. Banking wealth AUM of S$350bn is growing 13% YoY, and the HSBC Indonesia deal adds onshore scale from 2027.

The Walt Disney Company – Flywheel monetisation on full display

Recommendation: BUY; TP US$130.00; Last close: US$100.42; Analyst Helena Wang

• Both 3Q26 revenue and adj.PATMI were in line with our expectations. Revenue grew 7% YoY, led by strong Experiences (+10% YoY) and Entertainment (+6% YoY). 9M26 revenue/adj. PATMI was at 76%/72% of our FY26e estimates.
• Experiences business remains resilient despite macro uncertainties, with management continuing investment across parks and cruise lines (Capex +12% YoY). Toy Story 5 also performed strongly, surpassing US$1bn at the global box office and driving higher merchandise sales and engagement on Disney+.
• We maintain our BUY recommendation, with an unchanged target price of US$130. Our FY26e forecast, terminal growth, and WACC assumptions remain unchanged. DIS’s competitive advantage remains its IP ecosystem and proven ability to repeatedly monetise successful franchises across multiple platforms. With continued investment in parks and cruise capacity to strengthen the ecosystem, we believe DIS is well positioned to sustain long-term earnings growth.

United Overseas Bank Limited – Gains and lower provisions lift e