- Second quarter net profit of S $ 1.7 billion, up 37% year on year; beats estimates
- Singapore banks benefit from economic rebound
- DBS takes full-year loan growth to high single-digit level
- DBS CEO expects business momentum to be sustained
SINGAPORE, Aug.5 (Reuters) – Singaporean company DBS Group Holdings (DBSM.SI) reported strong loan growth and lower credit costs after announcing a 37% increase in quarterly net profit, the largest Southeast Asian lender having benefited from a rebound in its main domestic market. .
The bank joined local counterparts OCBC (OCBC.SI) and United Overseas Bank (UOBH.SI) in beating market estimates, but the sector’s sequential performance slowed sharply, highlighting challenges to sustaining growth. Read more
Global banks HSBC (HSBA.L) and Standard Chartered (STAN.L) also cut credit losses as part of a global economic recovery after posting huge provisions last year in the face of the coronavirus pandemic .
“Business momentum and asset quality have both been better than expected as the economic recovery from the pandemic sets in,” DBS CEO Piyush Gupta said in a statement.
“While risks remain, our pipeline remains healthy and we expect business momentum to continue over the next few quarters.”
DBS reported last April-June profit of S $ 1.7 billion, up from S $ 1.25 billion a year earlier. That compares to an average estimate of S $ 1.42 billion from five analysts, according to data from Refinitiv. Profit fell 15% from a record first quarter.
The bank’s provisions for potential loan losses fell to S $ 79 million from S $ 849 million a year earlier.
DBS increased its dividend payout after Singapore’s central bank last week lifted ceilings on dividends paid by banks, citing improving global economic prospects. Read more
As Singapore’s economy recovers from its worst recession, demand for mortgages and home loans has improved, while booming markets have supported banks’ wealth management activities. This helped cushion the impact of low net interest margins in a low interest rate environment.
DBS raised its forecast for full-year loan growth to single-digit highs from medium to high and Gupta said the bank’s asset quality was better than expected.
($ 1 = 1.3512 Singapore dollars)
Reporting by Anshuman Daga; Editing by Sonya Hepinstall and Sonali Paul
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