DBS first-quarter earnings rise 16% from year ago to record SGD 933 million

Singapore, China, Hong Kong, India, Indonesia, Taiwan.27 Apr 2012

Quarterly income crosses SGD 2 billion on sustained momentum across all businesses

Singapore, China, Hong Kong, India, Indonesia, Taiwan, 27 Apr 2012 - First-quarter 2012 net profit rose to a record SGD 933 million, up 16% from a year ago and 28% from the previous quarter. Total income crossed SGD 2 billion for the first time from sustained loan volumes, improved net interest margins, broad-based fee income growth and higher customer flows for treasury products. Return on equity rose to 12.8%, compared to 11.0% for full-year 2011.

Net interest income increased 4% from the previous quarter to a record SGD 1.34 billion. Net interest margins increased four basis points to 1.77% from higher loan yields. Loans rose 3% excluding currency translation effects to SGD 198 billion, with Singapore-dollar loans leading the increase. While loan growth moderated from recent quarters, it is in line with market trends and the loan pipeline remains healthy. Deposits grew 4% excluding currency effects to SGD 232 billion mainly from US dollar, Hong Kong dollar and Singapore dollar deposits. DBS’ liquidity remained healthy with the loan-deposit ratio easing to 85%.

Non-interest income increased 31% from the previous quarter to a new high of SGD 820 million. Fee income rose 19% to SGD 406 million from higher contributions across a wide range of businesses led by wealth management, lending, stockbroking and trade and remittances. Trading income more than doubled to SGD 292 million from higher customer flows and more favourable market conditions. Income from customer flows rose 71% to SGD 256 million, accounting for 39% of total Treasury net interest and non-interest income.

Total income of SGD 2.16 billion was 13% higher than the previous quarter. Expenses were little changed at SGD 898 million as higher staff costs were offset by lower technology and other costs. The cost-income ratio was healthy at 42%. Profit before allowances reached a record SGD 1.26 billion.

Asset quality continued to be strong. Non-performing assets were unchanged from the previous quarter at SGD 2.91 billion, with the non-performing loan rate stable at 1.3%. Specific allowances for loans amounted to SGD 43 million or nine basis points of loans, similar to recent quarters. General allowances of SGD 85 million were taken in line with a prudent provisioning policy. Allowance coverage remained strong at 128%.

DBS also continued to be well capitalised. The core Tier 1 ratio of 12.7% (with phased-in deductions), Tier 1 ratio of 12.7% and total capital adequacy ratio of 16.4% were above regulatory requirements.

DBS CEO Piyush Gupta said, “We continued to extend our solid performance of the past eight quarters into 2012. Strong business momentum, with key earnings drivers and strategic initiatives kicking in, propelled the bank’s first-quarter earnings this year to yet another record high. DBS’ exceptional showing was underpinned by sustained loan growth, broad-based non-interest income, as well as higher contributions from all our markets. Our funding capacity is robust, our asset quality remains sound and we believe we are well placed to seize opportunities in the months ahead.”

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 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 four consecutive years, from 2009 to 2012.

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 18,000 staff, representing over 30 nationalities. For more information, please visit www.dbs.com.