Singaporean banks are well-positioned to achieve robust net interest income (NII) growth in fiscal year 2027, driven by elevated US interest rates. According to a June 2026 report by CGS International (CGSI), higher US rates allow these financial institutions to reinvest excess capital into higher-yielding assets, laying a strong foundation for future NII expansion.
CGSI analysts Tay Wee Kuang and Tan Jie Hui note that this trend, alongside the continuous structural expansion of Singapore’s wealth management sector, will likely drive a sector-wide increase in return on equity (ROE). This shift toward wealth management is becoming increasingly vital for Singapore’s top three banks, who are relying on the sector to sustain revenue growth as shrinking interest margins squeeze traditional lending profitability.
Recent data from the Monetary Authority of Singapore (MAS) highlights this strong capital base, showing that deposits grew 7.3% year-on-year in April, representing a 0.21% uptick from the prior month. CGSI emphasizes that this sustained influx of liquidity has kept NII resilient, cushioning a minor first-quarter dip of 0.9% to 3.2% across the sector. Furthermore, a resurgence in lending activities—marked by an 8% year-on-year increase in loans this past April—is expected to further boost asset yields moving forward.
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