Singapore banks lean on wealth and higher global yields to revive growth

Elevated US rates will let banks deploy excess capital into higher-yielding assets, CGSI says.

Singapore banks have the potential to see stronger net interest income (NII) growth in FY2027 thanks to higher US interest rates.

Higher US interest rates could present the banks with opportunities to deploy excess capital into higher-yielding instruments, which in turn can help to support NII growth in FY2027F, according to CGS International (CGSI).

“We believe the sector will experience ROE (return on equity) expansion driven by NII growth due to the aforementioned factors as well as ongoing structural growth of the wealth management business within Singapore across the banks,” CGSI analysts Tay Wee Kuang and Tan Jie Hui wrote in a June 2026 report.

Singapore’s three biggest banks are said to be increasingly relying on wealth management to support income growth as falling interest margins pressure their traditional lending businesses.

Deposits grew 7.3% year-on-year (YoY) in April, and 0.21% compared to the previous month, according to data from the Monetary Authority of Singapore (MAS).

Continued liquidity flows through deposits, meanwhile, supported resilient NII, which declined 0.9% to 3.2% across the banks in Q1 2026, CGSI said.

Asset yields could also improve with the re-acceleration of loan growth in April, CGSI said. Singapore banks’ loans grew 8% YoY during the month.