“Wealth management income had already been growing strongly since 2022 without triggering a sustained re-rating. Notably, a Sept 2025 SCMP report flagged that Chinese family office applications to Singapore had already dropped some 50% versus 2022 peak, yet the banks posted record wealth management income through 2025 and into 1Q2026. DBS also recently discussed how 30% or less of the net new money flows in recent quarters came from China,” UBS points out.
In a report dated June 10, UBS points out that the concern over China’s new cross-border investment regulation for the local banks is real but limited. UBS looks at the extent where wealth management (wealth) was responsible for the recent re-rating for DBS and OCBC, and the impact of a moderation in wealth growth on the ROE trajectory. “Both suggest some adjustment is warranted, but neither supports a dramatic de-rating,” UBS says.
According to the research done by UBS, meaningful compression in implied cost of equity only began in mid-2024, coinciding with the equity development programme (EQDP) and Singapore capital market reform rather than with wealth management acceleration.
