DBS Posts Record Income as First-Quarter Profit Edges Higher
DBS Group reported a modest rise in first-quarter earnings, as strong growth in wealth management and fee-based businesses helped offset pressure from lower interest rates and currency headwinds.
Net profit for the three months ended March climbed 1% year-on-year to SGD 2.93 billion, while total income reached a record SGD 5.95 billion. The performance was driven by robust wealth management activity, which lifted fee income and treasury customer sales to new highs, alongside stronger markets trading income.
Compared with the previous quarter, net profit surged 24%, supported by a sharp rebound in non-interest income. Fee income and treasury customer sales both posted double-digit gains, while markets trading income more than doubled amid improved trading conditions and lower funding costs.
Chief Executive Officer Tan Su Shan (Picture below) said the bank delivered «a strong start to the year”»despite ongoing macroeconomic challenges. «Record wealth management performance, alongside robust deposit growth and stronger markets trading income, reflects the resilience of our franchise,» she said.
(Picture: DBS)
Interest Margin Pressure Persists
Net interest income declined 5% from a year earlier as the net interest margin narrowed by 23 basis points, weighed down by lower global interest rates and a stronger Singapore dollar. However, loan growth and hedging strategies helped cushion the impact.
Loans expanded 6% in constant-currency terms, led by corporate lending, while deposits rose 12%, with more than two-thirds of the increase coming from low-cost current and savings accounts (CASA).
Fee income in the commercial banking segment grew 16%, driven primarily by wealth management, with additional support from investment banking, transaction services and card-related fees. Other non-interest income rose 10% on record treasury customer sales.
Costs, Asset Quality and Capital Remain Stable
Expenses increased 4% year-on-year due to higher staff costs, though they declined 3% from the previous quarter. The bank’s cost-to-income ratio stood at 39%.
Asset quality remained resilient. Non-performing assets fell 3% quarter-on-quarter to SGD 4.72 billion, while the non-performing loan (NPL) ratio held steady at 1.0%. Specific allowances were 14 basis points of loans, and overall allowance coverage remained strong at 131%, or 200% including collateral.
Liquidity and capital positions continued to exceed regulatory requirements. The liquidity coverage ratio was 151%, while the net stable funding ratio stood at 117%. DBS reported a Common Equity Tier-1 ratio of 16.9% on a transitional basis.
Dividend Declared
The bank’s board declared an ordinary dividend of SGD 0.66 per share and a capital return dividend of SGD 0.15 per share for the quarter.
Tan noted that geopolitical risks, including tensions linked to the Iran conflict, could weigh on the outlook, but said internal stress tests indicate the bank’s credit portfolio remains sound. She added that DBS will continue investing in technology and other long-term growth initiatives to strengthen its competitive position.
