Banks and insurers in Singapore have turned slightly more cautious on profitability prospects for 2026, with their sentiment index slipping to 54.3 in Q4 2025 from 58.0 in the previous quarter.
This continues a gradual decline from 59.1 in Q1 and 57.4 in Q2, pointing to steadily weakening sentiment throughout the year.
According to the Singapore Business Federation’s National Business Survey, index readings between 40 and 59 indicate a broadly neutral outlook, where firms are inclined to maintain current operations with minimal changes.
While the index remains above the neutral 50 mark, the downward trend signals softening confidence in near-term profitability.
This contrasts with broader business sentiment, where the overall profitability index rose to 52.1 in Q4 from 48.5 in Q3, suggesting improving expectations across the wider economy.
Several sectors recorded notable gains. IT and related services saw one of the strongest rebounds, jumping to 54.4 from 42.6. Manufacturing also improved to 52.7 from 46.2, while hotels, restaurants, and accommodation climbed to 50.8 from 41.5. Other services surged to 59.5 from 48.6, and logistics and transportation edged up to 50.3 from 46.5.
Financial segments outside core banking showed some resilience, with other financial and insurance activities rising slightly to 57.1 from 55.5, indicating that the weakening sentiment is more concentrated among traditional banks and insurers.
Meanwhile, some sectors remained subdued despite modest improvements. Retail trade increased to 44.1 from 39.7, and education edged up to 46.0 from 45.1—both still below neutral levels. Administrative and support services also rose to 49.4 from 46.0 but remained under the 50 threshold.
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