DBS Forecasts Lower Profit From Global Minimum Tax
Due to a newly introduced global minimum tax for multinationals in Singapore, DBS recorded a lower net profit in the first quarter and expects this trend to persist for the rest of 2025.
DBS’ net profit fell 2 percent year-on-year to S$2.9 billion ($2.2 billion) in the first quarter of 2025, according to the bank’s financial results, driven by higher tax expenses from the newly implemented global minimum tax rate of 15 percent for large Singapore multinational enterprises – a move that is aligned with an initiative led by the Organization for Economic Co-operation and Development said to be aimed at tax transparency.
Before tax, the bank achieved a record profit of S$3.4 billion as total income grew 6 percent to a new high of S$5.9 billion. This included a 4 percent increase in commercial book income to S$5.5 billion and a 48 percent increase in market trading income to S$363 million. Expenses were up 6 percent to S$2.2 billion from higher staff costs. Expected credit losses (ECL) were significantly higher at S$325 million.
Challenging Outlook
According to a presentation by the bank’s new CEO Tan Su Shan, the tariffs imposed by the US will cause challenges including trade disruption, growth slowdown, interest rate uncertainty, weaker market sentiment and credit stresses. As a result, DBS increased its general provisions by nearly ten-fold year-on-year to S$205 million. The bank also forecasted that net profit will be below 2024 levels – estimated to be nearly S$400 million lower – due to the global minimum tax.
On the other hand, she also highlighted tariff-related opportunities including trade shifts, new growth corridors and sectors, current and savings account growth if rates fall, continued wealth inflows, trading opportunities and client hedging demand.
«Recent escalations in trade tensions have heightened macroeconomic risks and market volatility,» Tan commented. «As uncertainty persists, we will stay nimble to capture opportunities while prudently managing risks. We have strengthened our general allowance reserves, and together with our strong capital and liquidity positions, we have a solid foundation to continue supporting customers.»
