The three largest banks—DBS, OCBC, and UOB—account for the majority of the sector's asset base, with broad-based growth exceeding MAS ITM targets.

Banking Sector Growth Outpaced MAS Targets

Singapore's banking sector recorded total asset growth at a compound annual growth rate (CAGR) of 6.8% from 2021 to 2024, according to the Monetary Authority of Singapore's (MAS) Annual Report 2024/2025. This pace of expansion exceeds the trajectory implied by the sector's average annual growth rate of 4.7% over the same period, which already placed the industry on track to meet—and in some years surpass—the ITM 2025 target of 4% to 5% per annum across 2021–2025.

The sector's growth translated directly into employment gains. MAS data show average annual net jobs created from 2021 to 2024 stood at 4,400, exceeding the ITM 2025 target of 3,000 to 4,000 net jobs per annum. More than 90% of these new positions went to local hires, underscoring the industry's role in domestic labor market absorption.

MAS managing director Chia Der Jiun, in remarks accompanying the annual report, described the growth as "broad-based," spanning banking, insurance, fund management, and foreign exchange activities. The insurance sector's total assets climbed 3.6% in 2024 to S$456.4 billion, while Singapore's FX average daily trading volume surpassed S$1.5 trillion in 2024, reinforcing the city-state's status as Asia's leading FX hub.

CAGR (%)Source: Orionmano Industries

The 6.8% CAGR for 2021–2024 is notably higher than the 5.5% CAGR recorded over the 2018–2023 period, indicating an acceleration in asset accumulation during the post-pandemic recovery and the subsequent high-interest-rate environment.

DBS, OCBC, and UOB Dominate the Sector

The three largest Singaporean banks—DBS Bank Ltd, Oversea-Chinese Banking Corp Ltd (OCBC), and United Overseas Bank Limited (UOB)—collectively account for a dominant share of the banking system's total assets and nearly 75% of its foreign lending, according to analysis by the ASEAN+3 Macroeconomic Research Office (AMRO). Their foreign lending is concentrated in the region: 46% within Singapore, 24% in North Asia, 16% in South and Southeast Asia, and 14% in the rest of the world.

DBS, the largest of the three, reported total assets of S$827 billion as of end-2024, with net profit of S$11.4 billion and a return on equity (ROE) of 18.0%, according to its 2024 annual report. The bank's income reached S$22.3 billion, supported by over 280,000 institutional banking customers and 18.4 million consumer banking and wealth management clients across Asia.

All three banks carry Moody's Ratings of Aa1/Aa1 with stable outlooks. Their strong profitability in 2024 was largely driven by robust fee income, particularly from wealth management, and higher trading income, according to a Moody's Ratings report. Net interest income remained broadly stable as declining net interest margins were offset by a rebound in loan growth.

Capital buffers remain robust. As of 31 December 2024, the banks' average Common Equity Tier 1 (CET1) ratio on a fully phased-in basis stood at 15.3%, up from 14.6% a year earlier, reflecting significant retained profits and the capital-positive impact of Singapore's final Basel III rules. Liquidity positions are equally strong: all-currency liquidity coverage ratios (LCR) ranged from 140% to 147%, well above the minimum regulatory requirement of 100%. Current and savings account (CASA) deposits averaged 52% of total deposits, up from 50% in 2023, as deposit outflows to higher-yielding fixed deposits and treasury bills moderated.

Asset quality remains sound. The banking system's overall non-performing loan (NPL) ratio declined to 1.7% in Q4 2023 from 1.8% in Q4 2022, with low NPL levels across most sectors. The construction sector remained an outlier, with its NPL ratio rising to 6.8% from 6.5% over the same period, though absolute exposure remains manageable within the context of the banks' strong provisioning and capital positions.

Broader Financial Sector Context and Outlook

The banking sector's performance sits within a broader financial services expansion that saw the sector grow 6.8% in 2024—double the 3.1% growth recorded in 2023—and account for approximately 14% of Singapore's GDP. Growth was broad-based across segments, including fund management and insurance, with assets under management crossing S$6 trillion for the first time in 2024.

MAS deputy managing director for markets and development Leong Sing Chiong noted that new jobs were created across a spectrum of roles, from technology-related positions to non-tech functions including business development, portfolio management, and relationship management.

Despite the strong recent performance, the outlook carries notable caveats. In its annual report released on 15 July 2025, MAS chairman Gan Kim Yong warned that the pace of growth observed in the last few years is unlikely to persist. The central bank cited headwinds from slower global growth and uncertainties stemming from tariff policies, which could dampen trade flows and investment activity across the region.

The banking sector's resilience, however, remains underpinned by strong capital buffers, ample liquidity, and a diversified business model that extends beyond net interest income into wealth management, treasury, and fee-based activities. The NPL ratio, while low, bears monitoring as the lagged effects of high interest rates and global economic deceleration work their way through corporate and retail portfolios.

For the three major local banks, capital deployment strategies will continue to influence shareholder returns. DBS and OCBC raised their dividend payout ratios to 55% and 60%, respectively, in 2024, while UOB maintained its payout. Moody's expects capital levels to decrease moderately in 2025 due to higher capital distributions and potential acquisitions, though from elevated levels that provide a substantial buffer against adverse scenarios.