DBS Raises Guidance After Profit Beat — Update

By Amanda Lee

Singapore banking heavyweight DBS Group raised guidance and reported a quarterly profit beat, helped by record fee income and the consolidation of former Citibank assets in Taiwan.

Second-quarter net profit climbed 6.1% from a year earlier to 2.79 billion Singapore dollars, equivalent to US$2.11 billion, the lender said Wednesday. The result, which it said was boosted by growth in loans and deposits following its acquisition of Citi Taiwan, beat a S$2.69 billion consensus estimate from analysts surveyed by FactSet.

Total income rose 9% to S$5.48 billion. Net interest income grew 5% to S$3.77 billion, while net fee and commission income climbed 27% to S$1.05 billion. The Citi deal also helped boost wealth-management fees and card fees by 37% and 32%, respectively, DBS said.

The nonperforming loan ratio was 1.1%, unchanged from a year ago, while allowances for credit and other losses more than doubled to S$148 million.

Its board declared an interim dividend of S$0.54 a share for the second quarter.

For the first half of the year, the bank's net profit rose 10% from a year earlier to S$5.74 billion, while total income rose 11% to S$11.04 billion.

The bank, one of Southeast Asia's largest by assets, raised its total income growth guidance to a high single digit. It also forecast net profit growth in the mid-to-high single digit range, a change from "above 2023 levels" previously.

It said it had taken steps to mitigate the risks of an economic slowdown and lower interest rates, adding that the net interest income sensitivity had been reduced to S$4 million per basis point of the U.S. Fed funds rate from S$18 million to S$20 million in 2021.

DBS was the last of Singapore's major lenders to report quarterly earnings, with rivals United Overseas Bank and Oversea-Chinese Banking Corp. posting net profit growth of about 1% and 14%, respectively, last week.

Shares in DBS ended 2.7% higher at S$33.65, bringing year-to-date gains to 11%.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

August 07, 2024 05:47 ET (09:47 GMT)

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