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DBS Posts Record Profit On Interest Income, Property Sale
Corporate Digest | 27 April 2015
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DBS Group Holdings, Southeast Asia’s largest lender, posted first-quarter profit that beat analysts’ forecasts on higher net interest income and a one-time gain from selling a property investment in Hong Kong.

Net income rose 3 percent to a record $1.27 billion (US$953 million) for the three months ended 31 March from $1.23 billion a year earlier, the Singapore-based bank reported Monday. That compares with the average forecast of $1.05 billion in a Bloomberg survey of five analysts.

Rising domestic interest rates, which climbed to a six-year high in the first quarter, give Singaporean banks scope to impose greater charges on borrowers. That may help offset any slowdown in lending as the economy cools in a city that generated 62 percent of DBS’ revenue last year.

“Considering the still-weak macro environment in the region and especially Singapore, the numbers were strong,” Kevin Kwek, a Sanford C. Bernstein analyst who’s based in the city, said Monday in an e-mailed reply to questions.

Net interest income rose 14 percent to $1.7 billion as loans rose 11 percent from a year earlier. The net interest margin, a measure of lending profitability, increased three basis points to 1.69 percent, DBS said.

Lenders “will benefit from the rising interest-rate environment,” Ivan Tan, a Standard & Poor’s analyst in Singapore, said before the results. “Impacts will be much more prominent from the second quarter.”

Wealth Management
The three-month Singapore interbank offered rate, or Sibor, more than doubled in the first quarter to exceed 1 percent for the first time since 2008.

Selling the property investment in Hong Kong allowed DBS to book a one-time gain of $136 million, it said. Net fee and commission income advanced 10 percent to $560 million as wealth-management income jumped 43 percent.

DBS is the first Singaporean bank to release first-quarter earnings. Oversea-Chinese Banking Corporation and United Overseas Bank are due to report their results Thursday.

Shares of DBS gained 2.3 percent this year, following a 20 percent rally in 2014, which was the stock’s third consecutive annual increase. The benchmark Straits Times Index advanced 4.4 percent since December.

DBS is expanding its presence in Asia to reduce its reliance on its home turf, where gross domestic product grew an annualised 1.1 percent in the three months through March from the previous quarter. That compares with a 4.9 percent rate in the preceding quarter.

Greater China contributed 30 percent of the lender’s revenue in 2014, while 8 percent was from other parts of Asia and the rest of the world, according to its annual report.

DBS Group Hldgs  25.050 +0.05 +0.20%   
Business: [FY18 Total Income] Institutional banking (43.7%), consumer banking/wealth management (42.9%), treasury markets and others (13.4%).

Insight: Apr-19, 1Q19 net profit rose 9% to a record $1.7b.... Read More
Oversea-Chinese Banking Corp  10.780 -- --   
Business: [FY18 Turnover] Global corporate/investment banking (35%), global consumer/private banking (34.8%), OCBC Wing Hang (11.5%), insurance (11%), global treasury & mkts (7.7%).

Insight: May-19, 1Q19 total income rose 14.7% driven by str... Read More
United Overseas Bank  26.100 -0.02 -0.08%   
Business: [FY18 Turnover] Group retail (43.3%), group wholesale (43.2%), global markets & investment management (5.1%), others (8.4%).

Insight: May-19, 1Q19 total income rose 7.8% to $2.4b due t... Read More

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