(Bloomberg) – Singapore lenders are taking advantage of the recent weakness in share prices to buy shares, forming the largest total number of corporate buybacks in the city’s country in four years.
Singapore’s largest bank, DBS Group Holdings Ltd., has a buyback value of nearly half of all Singapore stock buybacks, from April 1 to April 23, followed by United Aksopeas Bank Ltd., with 25% share purchases from foreign-Chinese banking companies, and more than 8% were pooled by Bloomberg.
Singapore Bank is the most capital-rich bank in the region, pledging in recent months to hand over billions of surplus capital to investors behind record earnings. Such action came in handy during a global stock sell-off triggered by tariffs by U.S. President Donald Trump.
Elsewhere, banks have become the biggest contributor to European buybacks, and the stock buyback plans announced this month in China have the most since the stock crash in February 2024.
Despite recent deals and consolidation of these deals, Singapore lenders have been carrying capital for some time, said Thilan Wickramasinghe, a Mayan analyst. However, he noted that given the increased uncertainty in the operating environment, there may be a risk of reassessing the return on capital.
DBS, UOB and OCBC stocks joined a game of global stocks earlier this month, joining multiple month lows of global stocks before cutting losses. However, investors are concerned that weak economic growth will lead to lower interest rates and affect banks’ lending margins.
Despite this, lenders appear to be less vulnerable to U.S. tariffs as supply chain shifts are designed to facilitate cross-border operations, the Bloomberg Intelligence Agency said in a report this month. Bank of Singapore reported quarterly reports in May.
Southeast Asian analysts at Morgan Stanley, led by Nick Lord, cut Singapore lenders’ revenue estimates by 2025, which is as high as 11% in 2026, compared to 8%-11% in 2026. The bank said in the report that the main driver of the main estimate of the estimated economic variable is the main estimate of the estimate, based on the estimate of the decline in McCross economic variables. ”
Despite the cuts in earnings forecasts, Morgan Stanley has not changed its capital return forecast as it expects the bank’s “full load” common equity level 1 ratio to remain healthy, partly due to lower loan growth and lower equity returns.
Meanwhile, Goldman Sachs maintained a buy rating on three banks, saying it favors “strong and sustainable profitability and the ability to increase capital returns.” Given that lenders are still capital-generated, it expects the trio to accumulate too much capital in 2027.
Jefferies analyst Sam Wong said that given that all three lenders’ transactions are higher than their book value, buybacks are not a form of value-added value for shareholder returns. “That is, the buyback authorization will allow banks to provide some stability in an uncertain environment and develop a stickier investor base (relative to any one-time special Div)” Wong said in an email.
– Assistance with Julie Chien.
(Added Bloomberg Intelligence comments in paragraph 7, updated the chart.)
More stories like this are available Bloomberg.com
