Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Singapore's DBS bets on post-pandemic recovery, profit up on lower credit costs

Stock MarketsAug 05, 2021 01:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A logo of DBS is pictured outside an office in Singapore January 5, 2016. REUTERS/Edgar Su

By Anshuman Daga

SINGAPORE (Reuters) -Singapore's DBS Group (OTC:DBSDY) Holdings flagged strong loan growth and lower credit costs ahead after a rebound in its mainstay home market fuelled a better-than-expected 37% jump in quarterly net profit for Southeast Asia's biggest lender.

The bank joined local peers OCBC and United Overseas Bank (OTC:UOVEY) in reporting strong results, but the sector's sequential performance slowed sharply, underscoring challenges to maintaining growth.

"Overall numbers were OK considering net interest margins have fallen over 40 basis points from pre-COVID levels as rates fell, with the fee side largely expected," said Kevin Kwek, a senior analyst at Stanford C. Bernstein, commenting on DBS.

DBS shares rose as much as 1.2% on Thursday to a record S$30.95 in a weak market. The stock is up 23% so far this year.

HSBC and Standard Chartered (OTC:SCBFF) have also reduced credit losses in a global economic recovery after booking huge provisions last year in the face of the coronavirus pandemic.

"It was a strong first half of the year and we go into the back end of the year with a fairly high degree of confidence," DBS CEO Piyush Gupta, 61, told an online news conference.

The bank raised its dividend payout after Singapore's central bank last week removed caps on bank dividends, citing the improving global economic outlook.

As Singapore's economy rebounds from its worst-ever recession, demand for home mortgages and loans has improved, while booming markets have bolstered banks' wealth management businesses. This helped them cushion the impact of weak net interest margins in a low interest rate environment.

DBS reported profit for April-June rose to S$1.7 billion from S$1.25 billion a year earlier and beat an average estimate of S$1.42 billion from five analysts, according to Refinitiv data. Profit fell 15% from a record first quarter.

This was the 10th consecutive quarter that the bank has reported higher-than-expected profit.

Under Gupta, who took charge in 2009, DBS has broken into the ranks of the top wealth managers in Asia, acquired two banks, in India and China, over the past year, and is making forays into businesses such as a digital exchange and a global carbon exchange as it seeks new revenue streams amid low interest rates.

Provisions for potential loan losses declined to S$79 million from S$849 million a year earlier, and DBS reduced its forecast for full-year credit costs.

($1 = 1.3512 Singapore dollars)

Singapore's DBS bets on post-pandemic recovery, profit up on lower credit costs
 

Related Articles

Wall Street set for strong open as taper fears fade
Wall Street set for strong open as taper fears fade By Reuters - Sep 23, 2021 1

By Ambar Warrick (Reuters) - Wall Street was set to rise on Thursday after investors largely brushed off concerns over the Federal Reserve's plans for tapering, while forecast...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email