Sterling results: A pedestrian passes an advertisement outside a DBS Bank branch in Singapore. Net income increased 69% to S$2.34bil (RM7.65bil) in the three months ended Dec 31, South-East Asia’s biggest lender said. — Bloomberg
SINGAPORE: DBS Group Holdings Ltd’s fourth-quarter profit topped estimates, helped by lending gains as a strong capital base allowed the bank to deliver a special dividend.
Net income increased 69% to S$2.34bil (RM7.65bil) in the three months ended Dec 31, South-East Asia’s biggest lender said in a statement.
That beat an average estimate of S$2.17bil (RM7.09bil) from four analysts surveyed by Bloomberg.
A special dividend of 50 Singapore cents a share for the period will take the year’s total payout to S$2 (RM6.50) a share, according to the statement.
DBS, led by chief executive officer Piyush Gupta, joins lenders getting a lift from rising global interest rates after stock market volatility led to a leaner period for dealmaking and fees from advising rich clients.
The bank is set to benefit from an eventual uptick in wealth-management net flows and rising credit card fees as travel picks up, Bloomberg Intelligence analyst Sarah Jane Mahmud wrote in a note Feb 8.
Gupta sees rate increases moderating and doesn’t envisage rate cuts this year.
He maintained the lender’s full-year guidance for mid-single digit loan growth, and signalled that fee income is set to expand at a double-digit rate as China’s border reopening benefits the region.
“Our business pipelines are healthy and asset quality robust,” Gupta said in the statement. “We expect confidence to return to markets in the coming year as interest rate increases ease and China reopens.”
Still, the CEO said there’s a downside risk of five to seven basis points to the bank’s peak net interest margin guidance of 2.25% because of outflows to treasury bills, a stronger local currency and higher funding costs.
Competitors Oversea-Chinese Banking Corp and United Overseas Bank Ltd are due to report results next week. — Bloomberg
