SINGAPORE ⸺ DBS Group Holdings Ltd trumped market estimates with a 72% rise in quarterly net profit to a record high, as Southeast Asia’s largest bank benefited from strong loan growth, improved asset quality and a robust wealth management business.
The Singapore-based lender flagged bullish prospects in a recovering global economy and said its new non-performing assets formation was below pre-pandemic levels.
“Results are in line with recent optimistic outlook given by Singapore’s three banks, but importantly, the low credit costs were to reverse previously very prudent aggressive front loading last year, that helped too,” said senior analyst Kevin Kwek at Stanford C. Bernstein.
DBS reported profit of S$2.0 billion ($1.1 billion) for January-March, compared with the S$1.43 billion average of three analyst estimates compiled by Refinitiv, and versus S$1.16 billion in the same period a year earlier.
“This has been an extraordinary quarter for our business as we fired on all cylinders. Loan and deposit growth were robust, fees were strong and treasury had a record performance,” said Chief Executive Piyush Gupta.
Analysts forecast profit to rebound at Singaporean banks on sustained growth in wealth management. But lenders are still bearing the impact of low market interest rates that have crimped net interest margins – a key gauge of profitability.
The net interest margin at DBS fell to 1.49% in the latest quarter from 1.86% a year earlier but was stable from the previous quarter.
($1 = 1.3265 Singapore dollars)
Reporting by Anshuman Daga; Editing by Himani Sarkar; Editing by Christopher Cushing; Reuters