Robust business activity helped DBS Group Holdings lift earnings in the second quarter, it reported yesterday.

Net profit rose 17 per cent to $1.6 billion - beating an average estimate of $1.47 billion from three analysts. Net profit, including one-time items, jumped 20 per cent in the three months to June 30 to $1.6 billion.

One-off items of $38 million included ANZ integration costs and a remeasurement of deferred taxes due to a change in the applicable tax rate arising from the conversion of the bank's India branch to a wholly-owned subsidiary.

Earnings per share (EPS) stood at $2.47, up from $2.12 a year ago. A dividend of 30 cents a share has been declared, unchanged from the previous quarter. DBS is paying dividends on a quarterly basis instead of semi-annually from this year to provide shareholders with a more regular income stream.

Total income rose 16 per cent to $3.71 billion in Q2, led by loan growth, net interest margin progression and higher fee income.

Net interest income, which mainly reflects how much more the bank collects on loan interest than from paying interest to depositors, increased 9 per cent to $2.43 billion.

This was due to loans growing 5 per cent in constant-currency terms. Net interest margins improved six basis points to 1.91 per cent from 1.85 per cent a year earlier.

Net fee income rose 9 per cent to "a new high" of $767 million, driven by investment banking, wealth management and cards. Wealth management fees grew 11 per cent to $332 million on higher investment product sales, card fees rose 16 per cent to $198 million, thanks to higher activities in the region, while investment banking fees were up 44 per cent to $56 million on the back of higher debt and equity capital market income.

Net profit before one-off items for the first half rose 12 per cent to a record $3.25 billion. If one-offs of $48 million from the previous year are included, half-year earnings would be up 14 per cent from $2.85 billion.

EPS stood at $2.52, up from $2.25.

Total income was up 11 per cent to $7.26 million, thanks in part to corporate loan growth, a higher net interest margin and record fee income, along with an improved trading performance.

Chief executive Piyush Gupta said: "The results reflect the strengths of an entrenched broad-based franchise that is well placed to nimbly navigate market volatility and capture opportunities as they arise."

DBS shares closed down 0.9 per cent to $26.64 after the results were released yesterday.