DBS first-quarter earnings reach record SGD 950 million

Singapore, China, Hong Kong, India, Indonesia, Taiwan.02 May 2013

Earnings underpinned by 18% increase in total income from previous quarter to record SGD 2.32 billion

Singapore, China, Hong Kong, India, Indonesia, Taiwan, 02 May 2013 - DBS Group Holdings’ net profit for first-quarter 2013 reached a record SGD 950 million, rising 25% from the previous quarter and 2% from a year ago. Total income rose 18% from the previous quarter to a new quarterly high of SGD 2.32 billion from loan and deposit volume growth as well as a broad-based increase in non-interest income. Return on equity rose to 12.0% compared to 11.2% for full-year 2012.

Net interest income grew 3% from the previous quarter to SGD 1.33 billion. Loans rose 6% or SGD 13 billion during the quarter to SGD 224 billion, which included SGD 4 billion of short-term financing for a corporate client. Underlying loan growth of 4% was led by trade finance. Net interest margin increased two basis points to 1.64% as underlying margin trends were stable from the previous quarter.

Non-interest income increased 49% from the previous quarter to a record SGD 990 million. Fee income rose 36% to a new high of SGD 507 million. Contributions from annuity businesses such as wealth management and trade and transaction services continued to grow while loan-related fee income was also higher. In addition, stockbroking and investment banking benefited from stronger capital market activities during the quarter.
Other non-interest income increased 64% from the previous quarter to SGD 483 million. Customer income from cross-selling treasury products doubled to a quarterly high of SGD 299 million and accounted for 48% of total Treasury income. Trading gains were also higher due to more favourable market conditions.

Total income rose 18% from the previous quarter to a record SGD 2.32 billion. Expenses were little changed at SGD 952 million as an increase in staff costs in line with higher income was offset by a decline in computerisation and general costs. The cost-income ratio was at 41%. Profit before allowances rose 34% to a new high of SGD 1.37 billion.

Asset quality remained healthy. General allowances more than doubled from the previous quarter to SGD 110 million in line with the stronger loan growth. Specific allowances for loans rose from 15 basis points of loans to 21 basis points and amounted to SGD 114 million. The non-performing loan rate was unchanged at 1.2% while allowance coverage was maintained at 142%.

DBS had ample liquidity to support business growth and meet contingencies. Deposits grew 3% from the previous quarter to SGD 251 billion, bringing the loan-deposit ratio to 89%. DBS continued to tap cost-efficient wholesale funding such as commercial papers and medium-term notes to supplement deposits. Wholesale funding remained prudent and was less than 10% of total funding sources.

Strong capital adequacy ratios were maintained. DBS had a Common Equity Tier 1 ratio of 12.9%, Tier 1 ratio of 12.9% and total capital adequacy ratio of 15.5% based on the Basel III capital framework implemented in Singapore on 1 January 2013. The ratios were comfortably above the standards prescribed by the Monetary Authority of Singapore.

DBS CEO Piyush Gupta said, “After a slower second half in 2012, we started the year on a very solid note. Business momentum is strong, and growth has been broad-based, showing the impact of our investments across all lines of business. We also benefited from favourable market conditions, enabling us to turn in yet another quarter of record earnings.”

About DBS
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 has a growing presence in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's capital position, as well as "AA-" and "Aa1" credit ratings, is among the highest in Asia-Pacific. DBS has been recognised as “Asia’s Best Bank” by The Banker, a member of the Financial Times group, and “Best Managed Bank in Asia-Pacific” by The Asian Banker. The bank has also been named “Safest Bank in Asia” by Global Finance for five consecutive years from 2009 to 2013.

DBS provides a full range of services in consumer, SME and corporate banking activities across Asia. As a bank born and bred in Asia, DBS also understands the intricacies of doing business in the region’s most dynamic markets. These market insights and regional connectivity have helped to drive the bank’s growth as it sets out to be the Asian bank of choice. DBS 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 18,000 staff, representing over 30 nationalities. For more information, please visit www.dbs.com .