DBS ups dividend payout to 81 cents per share as Q1 profit comes in better than expected

SINGAPORE – DBS Group will pay shareholders 81 cents per share in dividends for the first quarter of 2026, as its net profit for the period grew 1 per cent on record wealth management fees.

The latest dividend payout is up from 75 cents per share in the year-ago period. It comprises an ordinary dividend of 66 cents and a capital return dividend of 15 cents. The payout is expected to cost Singapore’s biggest bank about $2.3 billion.

DBS Bank shares jumped after its results’ announcement, surging 3.43 per cent to close at $58.50.

The rally extended to its local rivals, with OCBC Bank shares climbing 1.11 per cent to $21.90 and UOB up 1.03 per cent to $36.15.

DBS made a $2.93 billion net profit for the January to March quarter, up from $2.90 billion a year ago, beating a $2.88 billion forecast by analysts in a Bloomberg poll.

DBS chief executive Tan Su Shan said in a statement that the bank had a strong start to the year despite continued rate headwinds and heightened geopolitical uncertainty.

She noted that the bank’s credit portfolio remains sound even as the Iran war and its potential second-order effects have added uncertainty to the outlook.

Speaking at a results briefing on April 30, Ms Tan reiterated that DBS has “very limited” exposure to the ongoing Middle East conflict and holds ample general provision reserves to manage “unexpected scenarios”.

Its chief financial officer Chng Sok Hui said the bank now expects 2026 profit to come in around 2025 levels. The outlook is “slightly more positive” from a quarter ago when it had guided for earnings to fall below that, she noted.

Ms Tan noted that DBS has been aggressively growing its wealth footprint onshore and offshore, by launching new wealth centres in China, Hong Kong and Taiwan.

“We’ve also refreshed our Treasures Private Client offering in places like Indonesia, Singapore, Taiwan, and we’re seeing the fruits,” she said.

She said the bank’s consumer banking and wealth management businesses in Taiwan are performing well.

“Taiwan’s GDP (gross domestic product) growth is so strong – the whole semiconductor industry, the spillover of the supply chain and the mid-cap SME (small and medium-sized enterprises) guys are also growing their wealth. The stock market has been great, so there’s a lot of organic growth to capture,” said Ms Tan.

The Hong Kong and China wealth management business is also growing strongly, she noted.

For the first quarter, total income grew 1 per cent year on year to $5.95 billion, led by robust wealth management performance. Deposit growth momentum was strong, while markets trading income rose.

These more than offset the impact of lower interest rates and a stronger Singapore dollar, DBS said.

Group net interest income declined 5 per cent as net interest margin narrowed 23 basis points from lower interest rates and a stronger Singapore dollar. But rate pressures were mitigated by hedging and balance sheet growth.

Overall, group net interest margin (NIM) fell to 1.89 per cent for the quarter, from 2.12 per cent in the year-ago period.

NIM refers to the difference between what banks earn on interest-earning assets such as loans, and what they pay on interest-bearing liabilities such as deposits. This is squeezed when interest rates fall.

The bank now assumes US Federal Reserve interest rates to remain at current levels, from an expectation of two rate cuts previously.

Ms Tan said: “We’re not expecting any rate cuts from the US because of the (Iran) war and the high price of oil caused by the war.”

The impact of greater rate headwinds on group net interest income will be largely mitigated as DBS continues to capture hedging opportunities and deposit growth is expected to be in high single-digit range, Ms Tan said.

DBS maintained its fixed-rate assets at $210 billion as part of a proactive balance sheet hedging strategy.

Commercial book non-interest income growth is expected to be high single digits given a strong start to the year and there is potential for upside if market sentiment improves, she added.

Ms Tan said: “We feel good about the fundamentals, but the macros are very hard to call, because the market is volatile. Interest rate volatility is the highest we’ve seen. So when the interest rates are in our favour, we hedge what we can. When it goes against us, well, we were expecting it, right?

“It’s very hard to pinpoint with a crystal ball, just because we don’t know when the war will end.”