Singapore-listed companies are buying back their own shares at a pace not seen in years.
In the first quarter of 2026 (1Q2026), close to 50 primary-listed companies collectively repurchased nearly S$560 million worth of shares – up sharply from S$330 million in 1Q2025 and S$232 million in 1Q2024.
Three blue-chip names – Singapore Telecommunications Limited (SGX: Z74), Oversea-Chinese Banking Corporation (SGX: O39), and Keppel Ltd. (SGX: BN4) – accounted for almost three-fifths of the total.
But while the buyback headlines may look similar, the sustainability of each company’s capital return story is quite different.
Oversea-Chinese Banking Corporation (OCBC): Dividends backed by a diversifying income engine
OCBC’s S$116 million in 1Q2026 buybacks is part of a well-defined S$2.5 billion capital return programme announced in February 2025, to be delivered through a combination of special dividends and share buybacks by the end of FY2026.
What underpins this generosity? Record total income of S$14.6 billion for FY2025.
While net interest income fell 6% year on year (YoY) as margins compressed, non-interest income surged 16% to S$5.5 billion.
Wealth management fees alone jumped 33%, and insurance income from Great Eastern grew 17%.
The result came in the form of FY2025 total dividends at S$0.99 per share, representing a 60% payout ratio.
At a recent share price of around S$22.47, that translates to a trailing yield of approximately 4.4%.
Crucially, asset quality remains rock-solid, with the non-performing loan ratio holding at 0.9% for seven consecutive quarters.
For dividend investors, OCBC’s growing fee and insurance income provide a cushion that makes the payout less dependent on the direction of interest rates.
The primary concern is a 2% YoY drop in net profit, dragged by higher tax expenses from global minimum tax rules — a headwind that is unlikely to reverse.
Keppel: A tale of two dividend engines
Keppel’s S$94 million in buybacks during 1Q2026 forms part of a broader capital recycling strategy.
The group proposed a total FY2025 distribution of approximately S$0.47 per share – a 38% jump from FY2024’s S$0.34.
But the composition tells a more nuanced story.
The ordinary dividend of S$0.34 is funded by operations, while the special dividend of approximately S$0.13 is linked to asset monetisation proceeds.
Keppel announced S$2.9 billion in asset deals during 2025, bringing cumulative monetisation since October 2020 to S$14.5 billion.
The good news for dividend sustainability is in its operating cash flow, which surged to S$662 million from just S$200 million a year ago.
Recurring income also grew 21% YoY to S$941 million, driven by stronger performances across asset management and operations.
At a recent share price of around S$12.13, Keppel’s trailing yield stands at approximately 3.9%.
However, as the non-core portfolio – valued at S$13.5 billion – is progressively monetised by 2030, special dividends will eventually need a new funding source.
The ordinary dividend’s sustainability hinges on whether recurring income can continue to scale.
Singapore Telecommunications Limited, or Singtel: Buybacks funded by asset recycling
Singtel led the buyback tally with S$123 million in 1Q2026.
The bulk – 21.2 million shares in March alone – was conducted under a new S$2 billion value realisation share buyback programme, funded by excess capital from asset recycling.
This is a deliberate strategy.
During 3QFY2026, Singtel sold a 0.8% direct stake in Airtel for net proceeds of S$1.5 billion.
Underlying net profit grew 9.5% YoY to S$744 million, boosted by a 15.4% increase in the share of associates’ post-tax profits.
For 1HFY2026, the interim dividend rose 17.1% YoY to S$0.082 per share, comprising a core dividend of S$0.064 and a value realisation dividend of S$0.018.
At a recent share price of around S$4.88, and with the interim dividend annualised, the indicative yield is approximately 3.4%.
One key risk to note is that Singtel Singapore’s mobile service revenue declined 11% YoY due to intense price competition.
The dividend structure itself acknowledges the distinction – core dividends are funded by operations, while value realisation dividends depend on continued asset sales.
Once the recycling pipeline is exhausted, the growth in total dividends could slow.
Get Smart: Buybacks and dividends are two sides of the same capital return coin
All three companies can comfortably afford their current dividends and buybacks.
But investors should look beyond the headline figures to ask: where is the money coming from?
OCBC’s dividend is backed by a diversifying income base that is less sensitive to rate cycles. Keppel and Singtel, meanwhile, are partly funding returns through asset monetisation – a strategy that works well today but has a finite runway.
Investors should enjoy the current yield, but keep a close eye on whether these firms can pivot back to earnings growth before the asset well runs dry.
When the market is unpredictable, where can you park your money with confidence? Our latest FREE report reveals 5 Singapore dividend-payers built to withstand global storms. Get it now and see what’s still worth holding.
Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses!
Disclosure: The Smart Investor owns shares of OCBC.
