DBS - Stock Analyst Research
| Target Price* | 79.00 |
| Recommendation | ACCUMULATE› ACCUMULATE |
| Market Cap* | - |
| Publication Date | 11 Aug 2026 |
*At the time of publication
DBS Group Holdings Ltd – Wealth fees outrun the rate drag
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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.
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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).
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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.
The Positives
+ Wealth and treasury sales replaced seven times the income lost to rates. Net fee income
rose 25% YoY to S$1.46bn, and commercial book other non-interest income rose 30% to a
record S$681mn, together adding S$452mn against a S$67mn NII decline. WM fees jumped
42% YoY to a record S$919mn as clients rotated into equities and equity-structured products,
with double-digit growth also in funds, mandates, and pre-IPO deals. Wealth AUM hit a
record S$516bn (+17% YoY) on S$11bn of net new money. Institutional banking non-interest
income also grew double digits.
+ Corporate drawdowns lifted loans while Hong Kong repayments released provisions.
Loans grew 5% YoY to S$475bn, of which around S$6bn was deal financing: the Sembcorp
bridge for Alinta, Singapore GLS projects and short-term TMT lending in Taiwan. Deposits
rose 11% YoY to S$638bn. Repayment of close to S$1bn of weaker credits, mostly Hong Kong property borrowers selling assets, drove a S$75mn GP writeback and cut total allowances
15% YoY to S$113mn. SP of S$188mn was 16bps, and the NPL ratio held at 1.0%.
About the author
Glenn Thum
Research Analyst
PSR
Glenn covers the Banking and Finance sector. He has had 3 years of experience as a Credit Analyst in a Bank, where he prepared credit proposals by conducting consistent critical analysis on the business, market, country and financial information. Glenn graduated with a Bachelor of Business Management from the University of Queensland with a double major in International Business and Human Resources.
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About the author
Glenn Thum
Research Analyst
PSR
Glenn covers the Banking and Finance sector. He has had 3 years of experience as a Credit Analyst in a Bank, where he prepared credit proposals by conducting consistent critical analysis on the business, market, country and financial information. Glenn graduated with a Bachelor of Business Management from the University of Queensland with a double major in International Business and Human Resources.


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