DBS FIRST-QUARTER EARNINGS RISE 52% FROM YEAR AGO
TO A RECORD SGD 807 MILLION
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Results underpinned by broad-based business
growth as total income reaches new high
SINGAPORE, 29 April 2011 – DBS Group Holdings’ first-quarter 2011 net profit rose to a record SGD 807 million, up 52% from a year ago and 19% from the previous quarter. Total income reached a new high of SGD 1.91 billion as the implementation of DBS’ strategic initiatives gained momentum, and DBS was able to capture opportunities across the region. Sustained loan expansion and stable margins resulted in higher net interest income, while stronger contributions from customer-related Treasury sales, Capital Markets and Wealth Management boosted non-interest income.
Net interest income rose 1% from the previous quarter to SGD 1.12 billion. Loans grew 4% during the quarter to SGD 157.5 billion as corporate borrowing in Singapore, Hong Kong and other Asian markets remained strong in line with the region’s continued economic expansion. While the interest rate environment remained soft, balance sheet management efforts helped net interest margins to remain stable from the previous quarter at 1.80%.
Non-interest income grew 26% from the previous quarter to SGD 787 million. Fee income increased 16% to SGD 416 million as contributions from a range of activities improved. Income from trade and remittances and wealth management grew as initiatives to expand these businesses gained momentum. Significant IPO activity during the quarter boosted investment banking fees, while loan-related income registered strong growth.
Trading income increased 57% from the previous quarter to SGD 258 million. Income from customer flows rose 28% as treasury product cross-selling to corporate and consumer customers increased. Customer flows also contributed to a larger proportion of total Treasury income than the previous year. Gains from the sale of investment securities and fixed assets were little changed at SGD 90 million.
Total income rose 10% from the previous quarter to SGD 1.91 billion. Expenses fell 1% to SGD773 million. The cost-income ratio of 40% was similar to the quarterly average of 41% during the previous year.
Asset quality continued to improve. The NPL rate fell from 1.9% in the previous quarter to 1.8% as non-performing assets fell 4% to SGD 3.1 billion. Allowances declined 20% to SGD 125 million, with specific allowances falling from 25 basis points of average loans in the previous quarter to nine basis points. General allowances of SGD 61 million were set aside in line with the quarter’s loan growth. Allowance coverage improved to 103%. If collateral was included, it would amount to 134%.
Return on equity reached 12.1% while return on assets rose to 1.14%, compared to 10.2% and 0.96% respectively in the previous quarter. DBS remained well capitalised, with a total capital adequacy ratio of 17.2%, a Tier 1 ratio of 14.2% and a core Tier 1 ratio of 11.5%.
DBS CEO Piyush Gupta said, “DBS’ core earnings have been on a consistent, upward trajectory over the past year. This quarter, we delivered yet another record set of results with every income line showing the impact of execution against our underlying strategies.
“Going forward, while the global economy remains fraught with uncertainty, and the interest rate climate continues to provide headwinds, we believe that efforts to strengthen our franchise in Asia will continue to bear fruit.”
DBS. Living, Breathing Asia
DBS is a leading financial services group in Asia, with over 200 branches across 15 markets. Headquartered and listed in Singapore, DBS is a market leader in Singapore with over four million customers and also has a growing presence in the three key Asian axes of growth, namely, Greater China, Southeast Asia and South Asia. The bank’s strong capital position, as well as “AA-” and “Aa1” credit ratings that are among the highest in the Asia-Pacific region, earned it Global Finance‘s “Safest Bank in Asia” accolade for two consecutive years, in 2009 and 2010.
DBS provides the full range of services in consumer, SME and corporate banking activities across Asia and the Middle East. As a bank born and bred in Asia, DBS also understands the intricacies of doing business in the region’s most dynamic markets. This market insight and regional connectivity have helped to drive the bank’s growth as it sets out to be the Asian bank of choice. The bank believes that building lasting relationships with its customers is an integral part of banking the Asian way.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. The bank acknowledges the passion, commitment and can-do spirit in all of our 15,000 plus staff, representing over 30 nationalities. For more information, please visit www.dbs.com.