DBS Q1 profit surges 72% to record $2.01 billion; flags strong year ahead

DBS saw record fee income from broad-based growth, largely boosted by wealth management and transaction services.
DBS saw record fee income from broad-based growth, largely boosted by wealth management and transaction services.ST PHOTO: KELVIN CHNG

SINGAPORE - DBS Group on Friday (April 30) 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 end-March rose to $2.01 billion from $1.17 billion a year ago - the first time quarterly earnings crossed the $2 billion mark and the first growth in more than a year. The earnings also blew past the $1.44 billion average estimate of six analysts polled by Bloomberg. 

DBS chief executive 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. 

DBS shares closed up 52 cents or 1.8 per cent at $29.91 on Friday, after touching $30.11 in the morning.

Mr Gupta noted that the bank's franchise has been enhanced by new growth platforms, including stakes in Shenzhen Rural Commercial Bank and in blockchain-based platform Partior.

"We are in a position of strength to support customers and deliver shareholder returns as the economic recovery takes hold," the bank chief said.

DBS saw 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 in a low interest rate environment.

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 for the year-ago quarter, before the Monetary Authority of Singapore issued guidance for local banks to moderate their dividends amid the Covid-19 pandemic.

DBS' net interest income dipped 15 per cent year on year to $2.11 billion.

A 37 basis point decline in net interest margin 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.

Earnings per share for the first quarter stood at $3.14, up from $1.80 a year ago.

Compared with the previous quarter, the lender's net profit almost doubled from $1 billion.

Delinquencies remained 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 its first-quarter results. Peers UOB and OCBC Bank will release theirs on May 6 and May 7 respectively.