Monday Wrap: Bank wealth inflows, STI risks, and AI job gaps

Singapore banks gain from safe-haven flows as firms and markets face rising uncertainty.

Last week in Singapore Business Review, Singapore’s big three banks are turning to wealth management as lending margins weaken, whilst US-Iran tensions drove volatile moves in the Straits Times Index with analysts warning it could fall to 4,300 in the worst-case scenario.

Singapore’s big three banks are shifting focus to wealth management as net interest margins and lending growth weaken, with CreditSights noting different regional strategies across the Development Bank of Singapore (DBS), Oversea-Chinese Banking Corporation (OCBC), and United Overseas Bank (UOB) amidst expectations of softer net interest income in the financial year 2026.

DBS warned the Straits Times Index (STI) could fall to 4,300 in a worst-case US-Iran conflict scenario, whilst maintaining a 5,250 year-end target if regional tensions ease and oil flows recover. 

The STI briefly crossed the 5,000 mark in April before retreating, as Middle East tensions, inflation concerns, and supply disruptions weighed on investor sentiment. 

Accenture said 46% of firms have not redesigned jobs for AI, limiting gains from their technology investments despite the country’s push for AI-driven growth. 

UOB said Singapore banks are seeing stronger wealth inflows as Middle East tensions push investors towards safer financial centres like Singapore. Higher wealth management and fee income have helped offset softer net interest income at DBS, OCBC, and UOB.

Kaspersky said Singapore recorded more than 2.7 million Remote Desktop Protocol attacks and over 70,000 exploit attacks in 2025, as hackers used remote-access tools and unpatched software vulnerabilities to target businesses. 

CGS International said new US pharmaceutical tariffs could push future biomedical investments away from Singapore, especially in patented drug manufacturing, as firms move production to the US for tariff benefits.