DBS reports record first quarter net profit of SG$ 1.27 billion
(5 May 2015 – Singapore) DBS Group’s net profit for the first-quarter of 2015 increased to a record SG$1.27 billion (A$1.21 billion), with all business units achieving record income.
Excluding one-time items of SG$136 million, net profit increased 10 percent to SG$ 1.13 billion while total income grew 12 percent to SG$2.74 billion which the bank ascribed to net interest income and non-interest income both reaching new highs.
Net interest income increased 14 percent to SG$1.69 billion. Loans grew by a reported 11 percent to SG$281 billion; in constant-currency terms, loan growth was 6 percent.
An increase in regional corporate borrowing and secured consumer loans was partially offset by a decline in trade loans.
Net interest margin increased three basis points to 1.69 percent.
Non-interest income crossed SG$1 billion for the first time, rising 9 percent to SG$1.05 billion. Fee income increased 10 percent to SG$560 million.
Wealth management contributions rose 43 percent from higher unit trust and insurance sales while fees from credit and debit cards increased 23 percent, reflecting a continuing strengthening of the wealth management and consumer banking franchises.
Other non-interest income grew 7percent to SG$486 million as DBS was well positioned during a quarter marked by monetary easing by various central banks. While trading income of SG$356 million was similar to first-quarter 2014, it was significantly higher than recent quarters as a result of favourable positions in foreign exchange and interest rates.
Consumer Banking/Wealth Management income rose 29 percent to SG$ 861 million, with the Wealth Management segment growing 41 percent to SG$ 365 million.
Institutional Banking income was 5 percent higher at SG$1.35 billion while Treasury income increased 38 percent to SG$386 million.
Total expenses increased 13 percent, in line with income growth, to SG$1.18 billion.
The cost-income ratio was at 43 percent. Profit before allowances rose 10 percent to SG$1.56 billion.
Total allowances were 20 percent higher at SG$181 million.
Specific allowances for loans of SG$151 million or 22 basis points of loans were higher than a year ago but similar to recent quarters.
General allowances of SG$21 million were lower than a year ago.
There was a one-time gain of SG$136 million during the quarter from the disposal of a property investment in Hong Kong.
Asset quality remained healthy, and the non-performing loan rate was unchanged from the previous quarter at 0.9 percent.
Allowance coverage of non-performing assets of 161 percent was around historical highs and was at 294 percent if collateral was considered.
Liquidity remained ample to support growth and meet contingencies.
Deposits rose 2 percent during the quarter and 8 percent over the previous 12 months to SG$ 324 billion.
The loan-deposit ratio was at 87 percent.
The SG$ and all-currency liquidity coverage ratios were at 424 percent and 131 percent, above the respective regulatory requirements of 100 percent and 60 percent.
DBS said it was also well-capitalised, the Common Equity Tier-1 ratio of 13.4 percent and total capital adequacy ratio of 15.3 percent were both above regulatory requirements.
The leverage ratio of 7.1 percent was more than twice the minimum of 3 percent currently envisaged by the Basel Committee.
DBS chief executive Piyush Gupta said; “DBS started the year on a solid footing, with strong all-round performance yet again.
“Despite a slowdown in trade volumes, the bank’s first-quarter earnings reached a record high.
“This is testament to the strength and resilience of the DBS franchise. We will continue to grow our business, while keeping a watchful eye on the economy.”
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