In today’s uncertain market, income remains a powerful tool to smooth returns and build wealth. For investors already using margin lending—or considering it—a strategic opportunity exists to amplify dividend income without disrupting your long-term equity holdings.
For illustration purposes, let’s walk through how it works using DBS, one of Singapore’s largest and most stable dividend-paying stocks.
Imagine you have SGD 5,000 in available capital and already have an active margin lending account. You want to buy DBS, which currently offers a 12-month dividend yield of around 5.5%.
With DBS shares offering 75% collateral value, you can use SGD 5,000 to purchase up to SGD 20,000 worth of DBS stock. But let’s say you take a slightly more conservative approach and opt for 3x leverage instead – using your SGD 5,000 and borrowing SGD 10,000 via margin lending at a 3% interest rate to buy a total of SGD 15,000 worth of DBS stock.
Here’s how the math works:
This approach allows you to turn DBS’ already solid dividend into a double-digit income generator, using margin as a strategic enhancer.
While the math is compelling, margin lending is not free money. Here are a few important caveats:
This is a strategy best suited for experienced investors who monitor their portfolios and are comfortable with short-term volatility.
For income-seeking investors already using margin lending—or thinking about it—this is an opportunity to rethink your capital efficiency. Used wisely, it’s a way to supercharge your dividend strategy while staying invested in quality stocks like DBS.
Note: Companies in the Straits Times Index (STI) with indicated dividend yields greater than 4%, based on Bloomberg's latest indicated yield figures as of July 29, 2025. Indicated yield is calculated by dividing the next expected annual dividend per share by the current share price. Yields are estimations and may vary due to changes in dividend policies, market conditions, or Bloomberg’s forecasts.
Source: Bloomberg, Saxo
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Saxo Group
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Global Head of Macro Strategy