DBS Q4 net profit rises 10% to S$1.32 billion

An increase in total income from loan and fee income growth as well as higher net interest margin, were offset by weaker treasury markets income.

Singapore’s largest bank DBS Group posted a 10% increase in net profit after including one-off items for the fourth quarter, at S$1.32 billion, higher than the S$1.19 billion a year ago. Business momentum was maintained over the course of the year despite increased economic uncertainty and financial market volatility in the second half of the year, the bank said.

An increase in total income from loan and fee income growth as well as higher net interest margin, were offset by weaker treasury markets income, the bank added.

Total income was at S$3.25 billion, 6% higher compared to a year ago. Net interest income rose 11% from S$2.10 billion a year ago to S$2.33 billion. Higher interest rates in Singapore and Hong Kong helped the bank’s net interest margin rise by 9 basis points to 1.87%.

Annualized earnings per share (EPS) was at S$2.01 for the quarter, compared to S$1.85 a year ago. Net book value was at S$18.12, higher than the S$17.85 a year ago.

The company is giving a final dividend of 60 Singapore cents per share, which brings total pay-out for the year at S$1.20 per share.

The bank’s total expenses were at S$1.50 billion for the quarter, 11% higher than a year ago.

DBS’ 2018 full-year net profit up by 28%

For the full financial year, net profit rose 28% to a record S$5.63 billion, up from S$4.39 billion a year ago. EPS for the year was at S$2.15, higher than S$1.69 a year ago.

The group’s total income for the year was at S$13.2 billion, 11% higher than the S$11.9 billion a year ago. Net interest income was 15% higher, at S$8.96 billion, while net interest margin was at 1.85%, up from 1.75% a year ago.

Single-digit income growth for 2019: DBS CEO

For 2019, DBS’ chief executive officer (CEO) Piyush Gupta said he expects a high single-digit income growth on the back of a mid-single-digit loan growth and continued improvement in the bank’s net interest margin.

Continued improvements in return of equity (ROE) are expected this year, Mr Gupta said, as he noted that the ROE of 12.1% for 2018 was near the historical high of 2007 when interest rates were twice the levels today and capital requirements were less stringent.

'The structural improvements we have made to the profitability of our franchise – a shift towards higher-returns businesses, deeper customer relationships and more nimble execution – put us in good stead to navigate the challenges of the coming year,' Mr Gupta said.

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