(Singapore) – Singapore banking group, DBS Group Holdings, has tabled a lower-than-expected second quarter profit, effected by weak loan demand and higher provisions.Southeast Asia’s largest bank has produced S$253.4 million (US$146 million) in net profit for the three months to June 30, a fall of nine percent from the first quarter’s S$278 million.
For the half year to June, profit has dropped 15.6 percent to S$531.4 million compared with S$629.5 million in the first half of 2001.
Net interest income fell three percent in this second quarter to S$651 million reflecting a continued contraction in the bank’s loan book.
Operating expenses were, however, stable at S$460 million producing a reduced cost to income ratio of 45.5 percent (49.2 percent last year). Provisions climbed in this second quarter to S$105 million from S$95.8 million in the first quarter, reflecting the weaker property values in its major markets of Singapore and Hong Kong.
Goodwill provisions of S$136.5 million in its the Group’s Dao Heng acquisition (mid-2001) also hurt its bottom line, although the unit’s operating profit grew 23.6 percent to S$963.5 million in the period.