Third-quarter net profit rises 32% to SGD 2.24 billion while return on equity reaches 16.3%, both at new highs | 繁體
Singapore, Hong Kong, Indonesia, India, China, Taiwan, Regional.03 Nov 2022
Nine-month net profit up 8% to SGD 5.85 billion
Singapore, Hong Kong, Indonesia, India, China, Taiwan, Regional, 03 Nov 2022 - DBS Group’s third-quarter 2022 net profit rose 32% from a year ago to a record SGD 2.24 billion. Return on equity reached a new high of 16.3%. Total income grew 28% to a record SGD 4.54 billion as net interest margin recovered to pre-pandemic highs and business momentum was sustained during the quarter. The cost-income ratio improved seven percentage points to 40%. Asset quality continued to be resilient as the NPL ratio improved to 1.2% and specific allowances were minimal. General allowances of SGD 153 million were set aside. Compared to the previous quarter, net profit rose 23%.
Nine-month net profit increased 8% to a new high of SGD 5.85 billion. Total income rose 10% to SGD 12.1 billion as a higher net interest margin and loan growth more than offset lower fee income. Expenses grew 7%, resulting in profit before allowances rising 12% to SGD 6.96 billion. Specific allowances halved to eight basis points of loans, while general allowances of SGD 18 million were taken compared with a SGD 413 million write-back a year ago.
Third-quarter net profit up 23% from previous quarter and 32% from a year ago
For the third quarter, net interest income rose 23% from the previous quarter to SGD 3.02 billion. Net interest margin climbed 32 basis points to 1.90%, accelerating from increases of three basis points and 12 basis points in the first and second quarters, from further increases in interest rates. Underlying loan momentum was strong. Excluding trade loans, loans increased SGD 7 billion or 2% in constant-currency terms. Non-trade corporate loans grew SGD 8 billion or 3%, faster than in the first two quarters, with the growth broad-based across the region. Housing loan growth also picked up, rising SGD 1 billion or 2%. These gains were moderated by a decline of SGD 5 billion or 10% in trade loans as maturing exposures were not replaced due to unattractive pricing. Including trade loans, overall loans rose to SGD 429 billion. Compared to a year ago, net interest income was 44% higher driven by a 47-basis-point expansion in net interest margin and loan growth of 6%.
Fee income of SGD 771 million was little changed from the previous quarter. Wealth management fees declined 4% to SGD 323 million and investment banking fees fell 17% to SGD 25 million as financial market conditions remained weak. These declines were offset by growth in card and loan-related fees. Card fees rose 10% to SGD 223 million on record overall spending with travel spending continuing to recover towards pre-pandemic levels. Loan-related fees grew 7% to SGD 122 million. Transaction service fees were stable at SGD 230 million. Compared to a year ago, fee income declined 13% as lower wealth management and investment banking fees more than offset increases in card and loan-related fees.
Other non-interest income rose 32% from the previous quarter to SGD 753 million from higher Treasury Markets non-interest income, treasury customer income and investment gains. Compared to a year ago, other non-interest income was 32% higher.
Expenses rose 10% from the previous quarter and 9% from a year ago to SGD 1.83 billion led by higher staff costs.
Nine-month net profit up 8%
For the nine months, net interest income was 22% higher at SGD 7.66 billion on the back of a 20-basis-point expansion in net interest margin and loan growth of 6% from a year ago. Fee income fell 10% to SGD 2.43 billion as a decline in wealth management and investment banking fees more than offset growth in other fee activities. Other non-interest income was little changed at SGD 1.99 billion. Expenses grew 7% to SGD 5.13 billion, and profit before allowances rose 12% to SGD 6.96 billion.
Asset quality resilient, balance sheet strong
Asset quality was resilient. New non-performing asset formation remained low during the quarter and was more than offset by higher upgrades and repayments. Non-performing assets fell 5% to SGD 5.60 billion and the NPL ratio declined from 1.3% to 1.2%. Specific allowances were at SGD 25 million or two basis points of loans for the third quarter. General allowances of SGD 153 million were taken. Allowance coverage stood at 120% and at 216% after considering collateral.
Liquidity remained healthy. Deposits were stable from the previous quarter and 8% or SGD 39 billion higher than a year ago in constant-currency terms at SGD 533 billion. The liquidity coverage ratio of 133% and the net stable funding ratio of 114% were both above regulatory requirements of 100%.
The Common Equity Tier-1 ratio declined from 14.2% in the previous quarter to 13.8% due to loan growth and the marked-to-market impact on FVOCI securities. The leverage ratio of 6.1% was twice the regulatory minimum of 3%.
The Board declared a quarterly dividend of SGD 36 cents per share for the third quarter, bringing the dividend for the nine months to SGD 1.08 a share.
DBS CEO Piyush Gupta said, “The record earnings we achieved amidst challenging market conditions in the third quarter reflected the strength of our franchise. Business momentum was maintained, asset quality was resilient and the inherent value of our deposit franchise was more fully realised. The record return on equity of 16.3% demonstrates the significant structural improvements we have made, including from our digital transformation. We enter the coming year with leverage to rising interest rates, a strong balance sheet and proven ability to capture growth, which will enable us to continue delivering shareholder returns.”
About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 14 consecutive years from 2009 to 2022.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting social enterprises: businesses with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping communities with future-ready skills and building food resilience.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com
Nine-month net profit increased 8% to a new high of SGD 5.85 billion. Total income rose 10% to SGD 12.1 billion as a higher net interest margin and loan growth more than offset lower fee income. Expenses grew 7%, resulting in profit before allowances rising 12% to SGD 6.96 billion. Specific allowances halved to eight basis points of loans, while general allowances of SGD 18 million were taken compared with a SGD 413 million write-back a year ago.
Third-quarter net profit up 23% from previous quarter and 32% from a year ago
For the third quarter, net interest income rose 23% from the previous quarter to SGD 3.02 billion. Net interest margin climbed 32 basis points to 1.90%, accelerating from increases of three basis points and 12 basis points in the first and second quarters, from further increases in interest rates. Underlying loan momentum was strong. Excluding trade loans, loans increased SGD 7 billion or 2% in constant-currency terms. Non-trade corporate loans grew SGD 8 billion or 3%, faster than in the first two quarters, with the growth broad-based across the region. Housing loan growth also picked up, rising SGD 1 billion or 2%. These gains were moderated by a decline of SGD 5 billion or 10% in trade loans as maturing exposures were not replaced due to unattractive pricing. Including trade loans, overall loans rose to SGD 429 billion. Compared to a year ago, net interest income was 44% higher driven by a 47-basis-point expansion in net interest margin and loan growth of 6%.
Fee income of SGD 771 million was little changed from the previous quarter. Wealth management fees declined 4% to SGD 323 million and investment banking fees fell 17% to SGD 25 million as financial market conditions remained weak. These declines were offset by growth in card and loan-related fees. Card fees rose 10% to SGD 223 million on record overall spending with travel spending continuing to recover towards pre-pandemic levels. Loan-related fees grew 7% to SGD 122 million. Transaction service fees were stable at SGD 230 million. Compared to a year ago, fee income declined 13% as lower wealth management and investment banking fees more than offset increases in card and loan-related fees.
Other non-interest income rose 32% from the previous quarter to SGD 753 million from higher Treasury Markets non-interest income, treasury customer income and investment gains. Compared to a year ago, other non-interest income was 32% higher.
Expenses rose 10% from the previous quarter and 9% from a year ago to SGD 1.83 billion led by higher staff costs.
Nine-month net profit up 8%
For the nine months, net interest income was 22% higher at SGD 7.66 billion on the back of a 20-basis-point expansion in net interest margin and loan growth of 6% from a year ago. Fee income fell 10% to SGD 2.43 billion as a decline in wealth management and investment banking fees more than offset growth in other fee activities. Other non-interest income was little changed at SGD 1.99 billion. Expenses grew 7% to SGD 5.13 billion, and profit before allowances rose 12% to SGD 6.96 billion.
Asset quality resilient, balance sheet strong
Asset quality was resilient. New non-performing asset formation remained low during the quarter and was more than offset by higher upgrades and repayments. Non-performing assets fell 5% to SGD 5.60 billion and the NPL ratio declined from 1.3% to 1.2%. Specific allowances were at SGD 25 million or two basis points of loans for the third quarter. General allowances of SGD 153 million were taken. Allowance coverage stood at 120% and at 216% after considering collateral.
Liquidity remained healthy. Deposits were stable from the previous quarter and 8% or SGD 39 billion higher than a year ago in constant-currency terms at SGD 533 billion. The liquidity coverage ratio of 133% and the net stable funding ratio of 114% were both above regulatory requirements of 100%.
The Common Equity Tier-1 ratio declined from 14.2% in the previous quarter to 13.8% due to loan growth and the marked-to-market impact on FVOCI securities. The leverage ratio of 6.1% was twice the regulatory minimum of 3%.
The Board declared a quarterly dividend of SGD 36 cents per share for the third quarter, bringing the dividend for the nine months to SGD 1.08 a share.
DBS CEO Piyush Gupta said, “The record earnings we achieved amidst challenging market conditions in the third quarter reflected the strength of our franchise. Business momentum was maintained, asset quality was resilient and the inherent value of our deposit franchise was more fully realised. The record return on equity of 16.3% demonstrates the significant structural improvements we have made, including from our digital transformation. We enter the coming year with leverage to rising interest rates, a strong balance sheet and proven ability to capture growth, which will enable us to continue delivering shareholder returns.”
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About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 14 consecutive years from 2009 to 2022.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting social enterprises: businesses with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping communities with future-ready skills and building food resilience.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com
