DBS posts 5% dip in Q1 profit to $1.2b on one-off item

A logo of DBS is pictured outside an office in Singapore.
A logo of DBS is pictured outside an office in Singapore. PHOTO: REUTERS

SINGAPORE - DBS Group reported on Tuesday morning (May 3) that net profit dipped 5 per cent to S$1.2 billion for the first quarter ended March 31, from the same period a year ago.

But excluding a one-time item of S$136 million from the disposal of a property investment in the year-ago period, the earnings were a record and 6 per cent higher than a year ago.

Total income also reached a new high, rising 5 per cent to S$2.87 billion as net interest income grew 8 per cent to S$1.83 billion.

Despite heightened risk aversion during the quarter, non-interest income of S$1.03 billion was comparable to the quarterly high a year ago, when financial market activities were boosted by favourable central bank policy actions, said the bank.

DBS said its asset quality continued to be sound. Its non-performing loan rate rose to 1 per cent while specific allowances increased 6 per cent to S$170 million, both of which were in line with earlier guidance.

The bank said its results "demonstrated the resilience of the DBS franchise as it continued to be nimble in capturing opportunities and rigorous in managing risks in a challenging operating environment."

Total income growth of 5 per cent from year ago underpins 6 per cent increase in net profit

Net interest income rose 8 per cent to S$1.83 billion. Loans declined 1 per cent in constant currency terms to S$274 billion. A 23 per cent contraction in trade loans was offset by a 3 per cent increase in non-trade loans from corporate borrowing and a 13 per cent increase in Singapore housing loans.

Net interest margin improved 16 basis points to 1.85 per cent in line with higher Singapore dollar interest rates.

Non-interest income declined 2 per cent to S$1.03 billion. While fee income rose to a new high, trading income was affected by financial market volatility during the quarter.

DBS is the last of Singapore's Big Three lenders to announce first quarter results.

Last week OCBC reported a 14 per cent fall in earnings to S$856 million on lower insurance income and higher allowances, while UOB said net profit slipped 4.4 per cent to S$766 million on lower earnings from wealth management, trading and investment.