The three banks drove the STI’s 23.5% total return in 2024 but were outpaced by Yangzijiang Shipbuilding.

The combined weightage of DBS, OCBC, and UOB in the Straits Times Index (STI) has risen to 54.3%, up from 39.6% in 2019, SGXGroup reported.

It said the banks' influence in regional markets has also grown, with their weight in the FTSE APAC Ex-Japan Index increasing by 20% to 1.6%.

Despite their large weightage, the three banks drove the STI’s 23.5% total return in 2024 but were outpaced by Yangzijiang Shipbuilding. Additionally, OCBC and UOB trailed Hongkong Land, reflecting mixed performance within the broader market.

DBS, OCBC, and UOB are set to release their 4QFY24 and FY24 earnings reports in February. DBS will report on 10 February, followed by UOB on 19 February, and OCBC on 26 February, with all reports coming before the market opening.

Analysts are expected to closely examine the impact of lower interest rates in 4Q24, especially in contrast to expectations of higher-than-anticipated rates in 2025.

Net Interest Income remains the primary revenue driver, accounting for two-thirds of total income for the three banks. However, 4QFY24 Net Interest Margins may be pressured by a decline in Singapore’s Overnight Rate Average from 3.49% to 3.07%.

On a positive note, loan growth in Singapore has picked up, with total business loans rising to $511b, the highest level since April 2022.

Dividend yields remain strong, with DBS, OCBC, and UOB offering 4.75%, 4.98%, and 4.64%, respectively. In addition, DBS has initiated a $3b share buyback program, marking the first time it has canceled shares after buybacks.