The market narrative for 2026 was supposed to be a straightforward downtrend for global interest rates. Many people predicted that aggressive cuts by the US Federal Reserve would send the Singapore Overnight Rate Average (SORA) off a cliff, dragging down the net interest margins (NIM) and plunging earnings for our big three lenders:
DBS,
OCBC and
UOB.
Yet, if you look at the Q1 2026 earnings reports that just cleared the tape, the catastrophic collapse simply didn’t happen. NIMs have compressed from their peaks, but the panic over banks has completely fizzled out. I discussed recently about the Q1 earnings from
DBS,
OCBC and
UOB, about how each bank defended their net interest income and even grew their businesses under adverse conditions in Q1.
The changing macro environment could signal that earnings are done playing defense, and could be going back on offence with higher growth. Here's why I think so.
SORA Finding A Trough?...
