DBS, OCBC and UOB shares have fallen. Is it a good time to buy?

Shares of Singapore banks DBS, OCBC and UOB have fallen recently, prompting investors to question whether it is a good time to buy. OCBC saw the steepest decline, with its stock price dropping more than 5% on Oct 7 after Citi downgraded the company's stock to "sell" due to softer-than-expected earnings expectations for the third quarter of 2026.

DBS and UOB also experienced declines, with DBS shares falling 1.36% to $77.49 and UOB shares dropping 2.93% to $42.44. These stocks had recently hit record highs, with DBS and OCBC in early September and UOB in July. The recent pullback may be a result of profit-taking after recent gains, as the banks' share prices have done well this year, particularly OCBC.

Analysts suggest that expectations and valuation are now more important than fundamentals, as the sector has had a strong run. While Jefferies remains positive on DBS and recommends a "buy" rating, OCBC is rated "hold" with a target price of $35. UOB is also rated "buy" with a target price of $48. Analysts advise investors to closely monitor the banks' third-quarter earnings, as loan growth and wealth should stay supportive, while net interest margin pressure is expected to decrease due to rising benchmark rates.