SingFinance Delivers Record Profit Despite Falling Interest Rates In 1H FY2026

SingFinance Reaches Record Highs

Sing Investments & Finance Limited (SingFinance) has delivered a masterclass in navigating volatility, reporting a record-breaking net profit after tax of $25.2 million for 1H FY2026. This performance is particularly striking when contextualized against a backdrop of escalating geopolitical tensions in the Middle East and global market instability. For investors, these results represent more than just a balance sheet victory; they signal a highly resilient business model capable of extracting value even as external shocks disrupt energy supplies and global trade.

A New Milestone in Profitability

The Group’s net profit grew by 16% year-on-year, primarily fueled by a record Net Interest Income (NII) of $41.6 million, a 17% surge from 1H 2025. Achieving these “new highs” in what management describes as a “highly competitive market environment” is significant. It demonstrates that SingFinance is not merely riding market tides but is actively capturing market share and optimizing its core revenue streams against larger incumbents.

As detailed in the Group’s Performance Review:

“In the first half (“1H”) of 2026, the Group achieved a record net profit of $25.2 million, 16% higher than the previous record achieved in the same period last year. The performance was underpinned by strong net interest income (“NII”) which grew by 17% to $41.6 million, setting a new high.”

The Strategy of Liability-Driven Margin Expansion

The most compelling strategic takeaway from the 1H report is the expansion of the Net Interest Margin (NIM) to 2.44%, up from 2.15% in 1H 2025. While the period was characterized by a “softer interest rate environment,” SingFinance achieved margin growth through sophisticated treasury management. Profitability was driven by liability management heroics: the cost of deposits fell significantly faster than loan yields.

However, investors must distinguish between this past performance and the forward-looking horizon. While liability management carried 1H 2026, the MAS and management warn that Singapore interest rates are expected to trend upwards for the remainder of the year. This transition suggests that the era of “easy” margin expansion via falling deposit costs may be closing, shifting the strategic burden back toward pricing power in a competitive lending market.

Visualizing Growth: Net Interest Income Performance

The following table highlights the interest dynamics that defined the Group’s record half, specifically the 49% reduction in interest expenses that fortified the bottom line.

Robust Loan Growth and Pristine Asset Quality

SingFinance successfully expanded its customer loan book by 10% year-on-year, reaching $2.89 billion. What characterizes this growth as “intelligent” rather than “aggressive” is the pristine asset quality maintained throughout the expansion. The Non-Performing Loan (NPL) ratio stood at a best-in-class 0.3%, actually improving from the 0.4% seen in the preceding half (2H 2025).

Furthermore, the Group demonstrated impressive operational leverage. The cost-to-income ratio improved to 34.2% from 36.6%. This efficiency gain is particularly notable because it occurred despite a 12% rise in staff costs—a direct result of the inflationary pressures and “higher costs across sectors” cited by the MAS. The Group’s ability to absorb these personnel costs while improving overall efficiency suggests strong internal cost discipline.

Navigating the Geopolitical and Macro Fog

The outlook for the latter half of 2026 remains clouded by external risks. With the Middle East conflict disrupting energy costs, the MAS projects Singapore’s inflation to hover between 1.5% and 2.5%. The central bank has already moved to appreciate the Singapore Dollar nominal effective exchange rate to maintain price stability, a move that SingFinance is watching closely.

From a strategic perspective, SingFinance is adopting a “cautious approach.” The Group’s Capital Adequacy Ratio (CAR) stands at 14.4%. While this is a decrease from 15.2% in December 2025—reflecting the deployment of capital to support the 10% loan growth—it remains robust and comfortably above regulatory minimums. This position provides a strategic defensive buffer that allows the Group to remain vigilant without stifling its growth trajectory.

Dividend Summary

The Group’s financial health is undeniable, yet the Board has maintained its policy of not recommending an interim dividend. For the sophisticated investor, this is a clear strategic signal: management is prioritizing capital preservation to fund organic loan growth and maintain its healthy 14.4% CAR buffer amidst global uncertainty.

By choosing to retain earnings during a record-breaking period, SingFinance is positioning itself to weather potential “supply shocks” and rising funding costs expected in late 2026. This report confirms a company that is not just profitable, but one that is being steered with a long-term view toward resilience and sustainable shareholder returns.

Related stories: iFAST Dividend Guidance Raised After Record 2Q FY2026 Growth