DBS Group Holdings on Thursday reported record quarterly earnings as higher interest rates continued to lift its margins despite muted loan growth. Wealth management and card fees also rebounded after an extended dry spell.
Net profit of the largest lender in Singapore and South-east Asia stood at $2.69 billion in the Q2 – up 48 per cent from a year ago. It topped the $2.41 billion forecast by analysts in a Refinitiv poll.
The board declared a dividend of 48 cents a share for Q2 – an increase of 6 cents a share from Q1. The growth reflects the bank’s stronger earnings prospects for the year and is in line with its guidance for a baseline annual increase of 24 cents a share, said DBS.
Together with the Q1 dividend, the total dividend for 2023 H1 amounts to 90 cents a share.
Q2 return on equity – a measure of how efficiently a company generates its profits – climbed to a new high of 19.2 per cent.
DBS chief executive Piyush Gupta said the commercial book benefited from higher interest rates and broad-based growth in non-interest income activities, which was moderated by higher funding costs for treasury markets.
“During the quarter, we commenced work to strengthen the resilience of our technology while awaiting completion of the independent review into the recent digital disruptions,” he added.
“While there is some macroeconomic uncertainty... our long-standing prudence in building general allowance reserves and maintaining strong capital ratios will position us well to withstand headwinds,” he said, adding that the bank will continue to capture business opportunities.
The DBS commercial book Q2 net interest income rose 54 per cent year-on-year to $3.58 billion.
The Straits Times
