UOB share (SGX: U11) versus DBS Group Holdings (SGX: D05)

It’s time for Royal Rumble! On 16 September 2026, the US Federal Reserve raised interest rates for the first time in three years. The move was significant as it could set the pace for further interest rate hikes in 2026 as the US battles persistent inflation caused by ongoing geopolitical tensions in the Middle East. Naturally, local investors are asking: What will be the impact on UOB share (SGX: U11)?

Most Singaporean investors who buy UOB shares (SGX: U11) also hold shares in DBS Group Holdings (SGX: D05) or OCBC Bank (SGX: O39). Personally, I have only invested in DBS and OCBC. Among our local banking trio, UOB stands out as the only bank that remains family-owned and family-managed.

The Wee family maintains a tight grip on UOB through investment vehicles like Wee Investments, alongside listed entities. Haw Par holds an 8% stake while UOL holds about 4% in UOB. In turn, UOB holds strategic stakes in both listed companies. Because UOB is family-owned and family-managed, the Wee family tends to adopt a conservative approach toward the bank’s balance sheet and capital management.

UOB also remains the only bank that sells physical gold. During the sharp run in gold prices that lasted from late 2025 to early 2026, UOB’s gold business must have been robust. However, data on UOB’s bullion business was not disclosed in the Annual Report nor the audit statement. Furthermore, during the AGM held earlier this year, the Chairman and CEO remained tight-lipped over UOB’s bullion business, saying that the information is “commercially sensitive”. Due to this lack of transparency and also the business structure of UOB, I have been hesitant to invest in UOB all these years.

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In my assessment, the gold business of UOB should be classified under the Group’s wealth management fees which rose 15% year-on-year in 1H to $462 million.  Whilst the data is certainly impressive, this is nothing compared to the mammoth DBS’ wealth management fees which stood at $1.83 billion.

Year-to-date, UOB share (SGX: U11) has risen by 22% at the point of writing. While that stock performance is certainly decent, it pales in comparison to the explosive surge of OCBC shares (60%) and DBS Group Holdings (37%). Similar to DBS, UOB has announced a $3 billion capital return programme in 2025. The programme comprises of $2 billion worth of shares buybacks and special dividend of 50 cents paid over two tranches in 2025. However, the way UOB implements its capital return programme appears to be vastly different from DBS.

Whilst DBS has temporarily halted its shares buybacks since July 2025, UOB had been relentlessly buying back its shares. For the last financial year ended 30 April 2026, the bank brought back a staggering 20.7 million of UOB shares while 5.8 million of shares were bought back since early May 2026. An interesting thing worth noting is that UOB tends to cancel half the shares bought back while transferring the other half to treasury, presumable for its employees’ incentives programme. The cancellation of shares would help to increase earnings per share.

In this article, I share my insights on UOB’s performance and evaluate how it measures up against the leader of the pack, DBS Group Holdings.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in UOB share (SGX: U11) before. Whether UOB share price will surge or collapse has no impact on me. However, I do own some shares in DBS Group Holdings and my views may be biased. This article is not meant to induce readers to make any form of investment decisions.

UOB share (SGX: U11) could make a comeback?

The past few years have been intriguing as local banks navigated the winds of fortune arising from a higher-for-longer interest rate environment. The global landscape has also altered as US tariffs upended the entire global trade order. For this reason, the script for UOB share price has to change as the counter endures significant turbulence in the wake of geopolitical tensions.

Between 2022 and 2024, both DBS and UOB rode the interest rate boom as they repriced their loan portfolios faster than their savings deposits. However, a deeper dive into their operating performance reveals a clear winner.

As shown above, DBS consistently maintained a superior NIM profile over UOB across the three-year stretch. But the real divergence lies in Return on Equity (ROE).

While DBS achieved peak ROEs of 18.0% in FY2023 and FY2024 before settling at 16.2% in FY2025, UOB’s ROE tumbled from 13.4% down to 9.6% over the same period.

ROE is a critical metric because it reflects how effectively management generates profits from equity capital. In this regard, institutional investors naturally flocked to DBS, as the bank beat UOB hands down in capital efficiency and profitability. On the surface, the narrative seems to be straightforward: UOB lost the three-horse race due to inferior ROE. However, there is actually more than meet the eyes to the unfolding battle between the banking titans.

The key reason for UOB’ subpar financial performance in comparison to DBS should be attributed to [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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