To The Moon

$United Overseas Bank( $UOB(U11.SI)$ )$ $DBS Group Holdings( $DBS Group Holdings(D05.SI)$ )$ $Oversea-Chinese Banking Corp( $ocbc bank(O39.SI)$ )$

United Overseas Bank (UOB) just sent a shiver through Singapore’s banking sector. Its Q1 2025 earnings missed estimates with a stable net profit of S$1.49 billion against expectations of S$1.52 billion, and it scrapped its 2025 guidance, blaming uncertainties from U.S. tariffs. The result? A nearly 2% drop in its stock price as investors hit the panic button. With DBS Group Holdings reporting earnings on Thursday and Oversea-Chinese Banking Corp (OCBC) following on Friday, the spotlight is on: Will they echo UOB’s woes, or can they chart a different course? Let’s dive into the trends, risks, and opportunities ahead.

UOB’s Warning Shot: What Happened?

UOB’s Q1 net profit held steady at S$1.49 billion, but falling short of forecasts signaled trouble. Net interest income ticked up 2% to S$2.41 billion, yet rising credit costs (35 basis points) and a cautious outlook overshadowed the gains. The bank pointed to U.S. tariffs as a wildcard, disrupting trade flows and clouding its 2025 projections—so much so that it pulled its guidance entirely. Investors didn’t take it well, and the stock slid nearly 2%. Is this a one-off stumble, or a sign of deeper cracks in the sector?

DBS and OCBC: Same Storm, Different Ships?

DBS and OCBC are up next, and the stakes are high. Both face the same headwinds as UOB—rate cuts shrinking net interest margins (NIMs) and tariff-driven uncertainty. Analysts predict DBS’s Q1 net income will dip 4.4% to S$2.95 billion, while OCBC’s could fall 5.7% to S$1.98 billion. The three-month SORA rate has already dropped from 3.02% to 2.55% in 2025, squeezing NIMs across the board. UOB’s NIM slipped to 2.00%, and DBS and OCBC are projected to see declines to 2.09% and 2.56%, respectively.

But it’s not all doom and gloom. Loan growth is holding strong at 5.3% in January and 4.9% in February, fueled by consumer and corporate demand. Fee income is another lifeline—DBS (+7.7%), OCBC (+11.3%), and UOB (+10.5%) are riding a wave of wealth management and trading gains. The question is: Can these buffers shield DBS and OCBC from UOB’s fate, or will they too signal caution?

Are Declining NIMs Already Baked In?

The market’s been on edge about NIM compression since the Fed’s rate cuts kicked off in 2024. Year-to-date, DBS, OCBC, and UOB have lagged the Straits Times Index (STI), each down over 3% while the STI gained 0.8%. This underperformance hints that investors have already priced in some pain. UOB’s guidance drop added fresh fuel to the fire, but if DBS and OCBC stick to their forecasts—or exceed them—their stocks could stabilize or even bounce. A worse-than-expected guidance miss, though, might trigger another sell-off.

Can DBS Shine Amid the Gloom?

DBS has a knack for standing out, and this earnings season could be no different. Its diversified income—think robust wealth management and trading revenue—gives it an edge over UOB’s narrower focus. DBS’s CET1 ratio sits at a solid 15.1%, just shy of UOB’s 15.4% and on par with OCBC’s 15.3%, offering room to maneuver. Plus, a steady 60-cent quarterly dividend and a new 15-cent Capital Return Dividend could reassure investors. Still, a projected 63% jump in loan loss provisions to S$135 million shows it’s not immune to tariff jitters. A strong earnings beat could make DBS the sector’s beacon.

Comparing the Big Three: A Snapshot

Here’s a table to track the key metrics post-earnings:

Note: DBS and OCBC figures are estimates; updates pending earnings.

Graphing the Slide: Stock Performance

UOB’s latest dip stands out, while DBS and OCBC are treading water—earnings will decide their next move.

Trading Plays: Ride the Wave or Brace for Impact?

Optimistic on DBS

• Buy DBS (D05.SI): Enter at S$39.67, stop at S$38.80, target S$41.50. Its resilience could spark a rally if earnings impress.

Neutral on OCBC

• Hold OCBC (O39.SI): Buy on a dip to S$14.80, stop at S$14.30, target S$15.80. Solid fee income offers hope, but tariff risks linger.

Defensive on UOB

• Short UOB (U11.SI): Enter at S$32.58, stop at S$33.50, target S$31.20. More downside looms if sentiment sours further.

Watch Out For

• Guidance Shock: A pullback like UOB’s could sink all three stocks.

• NIM Crunch: Bigger-than-expected drops could spook the market.

• Tariff Fallout: Trade disruptions might hit loan quality harder than expected.

My Take: I’m leaning 60% into DBS for its strength, 20% OCBC for upside potential, and 20% cash to pounce if UOB oversells. Earnings day is D-day—stay sharp!

The Verdict: A Make-or-Break Week

UOB’s miss has cast a shadow, but DBS and OCBC have a shot to defy the trend. NIM pressures are real, yet loan growth and fee income might soften the blow. If DBS delivers, it could emerge as the sector’s rock. Guidance will be the dealbreaker—brace for volatility. What’s your move? Bullish on DBS, wary of OCBC, or fading UOB? Drop your thoughts below—let’s hash it out!

📢 Like, repost, and follow for daily updates on market trends and stock insights.

📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

📌@Daily_Discussion @Tiger_comments @TigerStars @TigerEvents @TigerWire