DBS fires on all cylinders, as Q1 profit leaps 72% to record $2b
18-cent dividend after strong growth in loans and fee income
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DBS has upgraded its outlook on full-year loan growth to a mid-to-high single digit. The lender racked up record fee income from broad-based growth, largely boosted by wealth management and transaction services, and CEO Piyush Gupta notes that this has been an "extraordinary quarter for our business".
ST PHOTO: LIM YAOHUI
DBS Group has trumped market forecasts with a 72 per cent jump in first-quarter earnings as business forged ahead on all fronts with faster loan growth and record fee income.
Net profit for the three months to March 31 rose to $2.01 billion from $1.17 billion a year ago, the first time quarterly earnings have crossed the $2 billion mark, and the first growth in more than a year. Earnings also blew past the $1.44 billion average estimate of six analysts polled by Bloomberg.
CEO Piyush Gupta said: "This has been an extraordinary quarter for our business as we fired on all cylinders. Loan and deposit growth was robust, fees were strong and treasury had a record performance. At the same time, we remained disciplined on costs while asset quality was resilient.
"The global economic rebound is strengthening and DBS is bullish about prospects for the coming year."
The bank upgraded its outlook on full-year loan growth to a mid-to-high single digit.
Mr Gupta noted that DBS has been enhanced by new growth platforms, including stakes in Shenzhen Rural Commercial Bank and the blockchain-based platform Partior. He added: "We are in a position of strength to support customers and deliver shareholder returns as the economic recovery takes hold."
DBS racked up record fee income from broad-based growth, largely boosted by wealth management and transaction services.
Wealth management fees rose 24 per cent to a record $519 million as strong investor sentiment drove demand across a wide range of investment products amid low interest rates.
Transaction service fees increased 10 per cent to $230 million - also a new high - as trade finance and cash management fees grew.
The board declared an interim dividend of 18 cents a share, to which the bank's scrip dividend scheme will be applied. This compares with 33 cents a year ago, before the Monetary Authority of Singapore issued guidance for local banks to moderate their dividends amid the Covid-19 pandemic.
Net interest income dipped 15 per cent year on year to $2.11 billion. A 37-basis point decline in net interest margins to 1.49 per cent - due to global interest rate cuts - was moderated by loan growth of 7 per cent.
The bank's non-performing loan ratio strengthened to 1.5 per cent from 1.6 per cent a year ago.
Annualised earnings per share for the first quarter stood at $3.14, up from $1.80 a year earlier.
The lender's net profit almost doubled from the $1 billion recorded in the previous quarter.
Delinquencies remain low despite tapering of loan moratoriums, with formation of new non-performing assets below pre-pandemic levels, noted Mr Gupta.
DBS is the first local bank to announce first-quarter results. UOB will do so on Thursday, with OCBC following on Friday.
DBS shares closed 1.77 per cent higher at $29.91 yesterday.
