Record-breaking year for shares of Singapore's three local banks

Analysts see further growth in 2025, with buybacks, strong wealth-management ops

- Sheila Chiang

Shares of Singapore's three local banks enjoyed a record-breaking year in 2024, but there could still be room for growth in 2025, with share buybacks on the cards and wealth-management operations going from strength to strength, analysts said.

DBS, OCBC and UOB shares hit all-time highs in December, thanks to higher wealth-management fee income, strong trading income and management's updates on capital management, analysts noted.

DBS rose the most in 2024, racking up gains of around 44 per cent since January. The stock hit an all-time high of $44.95 on Dec 5.

OCBC hit a record of $17 on Dec 16, and is up by some 28 per cent in the year to date. UOB, meanwhile, hit an all-time high of $37.42 on Dec 13. Its shares are up by 27 per cent in 2024.

Despite trading at their current lofty levels, some analysts said the banks' shares have room to appreciate further in 2025.

"We remain bullish on the sector's long-term prospects, given the strong commitment to capital return and resilient return on equity (ROE)," Jefferies analysts noted on Dec 3, citing the positive results logged by the three banks during the third quarter ended Sept 30.

ROE shows how effectively a company is using its equity base to generate profits.

The three banks announced record profits in the quarter ended Sept 30, with DBS growing its earnings by 15 per cent to $3.03 billion, compared with the same quarter in 2023.

Over the same period, UOB's net profit rose 16 per cent to $1.61 billion, while OCBC's net profit was up 9 per cent to $1.97 billion.

Dividend payouts to shareholders have risen as a result.

For the third quarter, DBS paid 54 cents per share in dividends, unchanged from the first and second quarters of the year and representing an annual yield of around 5 per cent at the current level.