DBS Q3 profit climbs 15% to S$1.6b, beats estimates

DBS Group's net profit for its third quarter climbed 15 per cent, boosted by loan growth, record fee income and higher trading gains, it said on Monday.

Net profit for the three months ended Sept 30 stood at S$1.63 billion, up from S$1.41 billion for the year-ago period.

Annualised earnings per share stood at S$2.50 for the quarter, up 15.7 per cent from S$2.16 a year ago.

The earnings for South-east Asia's largest bank was higher than the S$1.57 billion consensus forecast in a Refinitiv survey of five analysts.

The lender declared an interim one-tier tax-exempt dividend of 30 Singapore cents for the third quarter. It will be paid on Nov 29 after books closure on Nov 19.

Net interest income for Q3 grew 8 per cent on the year to S$2.46 billion from S$2.27 billion, on a 4 per cent growth in loans in constant-currency terms to S$353 billion.

Net interest margin was four basis points (bps) higher at 1.9 per cent for the quarter, from 1.86 per cent a year ago.

Net fee and commission income rose 17 per cent to S$814 million from broad-based growth. Wealth management fees increased 22 per cent to S$357 million from higher investment product sales, card fees grew 9 per cent to S$202 million from increased transactions across the region, and investment banking fees more than doubled to S$55 million as equity and debt capital market activities increased. Transaction fees grew 7 per cent to S$190 million as both cash management and trade finance fees were higher.

Meanwhile, other non-interest income surged 35 per cent to S$549 million for the quarter.

The bank's non-performing loans (NPL) ratio was 1.5 per cent, down from 1.6 per cent for the same period a year ago.

However, the strong operating performance was moderated by additional general allowances of S$61 million taken during Q3 as a prudent measure given the ongoing political and economic uncertainty, DBS said. Specific allowances amounted to S$193 million for the quarter, which was in line with recent quarters' levels.

This resulted in total allowances growing by 8 per cent to S$254 million for Q3, and rising by 15 per cent to S$581 million for the nine months ended Sept 30.

DBS chief executive Piyush Gupta said: "Our transformed franchise, nimble execution and balance sheet strength will put us in good stead to deliver healthy shareholder returns despite the prevailing macroeconomic and geopolitical headwinds."

Shares of DBS were trading down nine Singapore cents or 0.3 per cent at S$26.52 as at 9.35am on Monday, after the results were announced.