Singapore’s major banks are capitalizing on the growing appetite of wealthy clients to shift assets and engage in trading within the region. On August 7, DBS Group Holdings announced a 37% increase in wealth management fees, reaching S$518 million, which outpaced the growth of its lending income.

This trend is also evident among competitors Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB), reflecting a broader shift in the banking landscape. As Singapore continues to position itself as a prominent Asian wealth hub, these banks have been expanding their wealth management services to compete with global firms like UBS Group.

DBS attributed the rise in wealth management fees to a migration from deposits to investments and bancassurance, alongside a surge in assets under management (AUM), which hit a record S$396 billion. Similarly, OCBC reported a 13% increase in non-interest income driven by robust performance in wealth management, trading, and insurance, as its private banking unit expanded its team of relationship managers.

UOB also benefited from strong fee income from wealth management and loans, which helped mitigate a decline in its core lending income. Looking ahead, DBS CEO Piyush Gupta expressed optimism for continued profit growth in 2024, predicting a mid- to high-single-digit percentage increase in net income due to both lending and fee income.

DBS reported a 4.2% increase in quarterly profit, reaching S$2.8 billion for the three months ending June 30, exceeding analysts’ expectations. The positive results led to a 3.9% increase in shares as the bank worked to recover losses from recent market declines.

As investors remain vigilant regarding interest income amid anticipated US rate cuts, banks are also adjusting their expectations. Citigroup recently downgraded bank stocks, highlighting the potential impacts of significant rate cuts on profitability.