SINGAPORE — Shares of Singapore’s top banks jumped in the lead-up to their third-quarter earnings release this week as the global economic recovery gains momentum.

OCBC, UOB and DBS are expected to launch the third-quarter earnings season of Singapore-listed banks on Wednesday.

DBS Group HoldingsThe largest bank listed in Singapore, HSBC, reached a new 52-week peak on Thursday. As of Friday, the stock had risen 25.9% in this year.

Other banks Oversea-Chinese Banking Corp United Overseas BankThey are also closer to 52-week highs. OCBC has seen a 17.3% increase, while UOB saw an 18.4% rise.

The benchmark was beat by all three banks Straits Times IndexThis year, it rose by 12.5%.

According to Geoff Howie (market strategist, Singapore Exchange), banks have performed well in global stock market markets this year.

Howie stated in a mid-October report that “Interest Rate Expectations have been a major driver of international banks stocks in 2021.”

This yield 10-year U.S. Treasury As a result, the number of people who have been diagnosed with cancer has increased over the past month. markets started pricing in more interest rate hikesMore than the Federal ReserveIt has stated. Inflation is triggered by a rebound in the U.S. economic and disruptions to global supply chain chains.  

Banks that have higher interest rates generally enjoy better profit margins. A stronger economy may also be reflected in rising rates, which can lead to lower default rates.

Singapore’s central bank manages monetary policy through setting the exchange rate — instead of interest rate. Therefore, global rates influence domestic interest rates.

Three banks in Singapore have published reports improved earnings in the last few quartersAs the world economy heals from the Covid-19 pandemic. According to analysts, the momentum is likely to continue.

These are the expectations of analysts based on estimates by Refinitiv, as at Monday.

David Lum, analyst at brokerage Daiwa Capital Markets, stated, “As in previous quarters, we expect all bank to report robust earnings growth(YoY), on lower credit cost,”

The amount that banks reserve in advance of losing loans is known as credit costs.

Like many banks globally, the Singapore lenders made those provisions last year when Covid weighed down economic activity — but the banks started winding down the provisions this year as the global economy bounced back.  

Lum reported in October that Singapore Banks could be successful in managing wealth, although trading and market-related income may face pressure in the 3rd quarter.