Singapore Banks Rise Amid US Rate Hike

The US Federal Reserve's rate hike on Sept 16 boosted Singapore banks' earnings potential by supporting local interest rates and slowing net interest margin compression.

UOB rose 1.26 per cent to $41.78, while DBS Bank slipped 0.18 per cent to $76.86 and OCBC Bank fell 0.7 per cent to $31.38.

The Fed raised its benchmark rate by 25 basis points to a target range of 3.75 per cent to 4 per cent for the first time since 2023, citing elevated inflation and a resilient US economy.

Analysts expect further rate hikes in the coming months, with RHB forecasting one more 25-basis-point hike and UOB anticipating two more hikes in December 2026 and the first quarter of 2027, followed by a pause for the remainder of 2027.