DBS Q2 profit rises 1% to S$2.82 billion
Net interest income was higher, supported by strong deposit growth and proactive balance sheet hedging; fee income and treasury customer sales rose to their second highest quarterly levels, while markets trading performance strengthened, it said on Thursday (Aug 7).
The earnings slightly beat the S$2.79 billion consensus forecast in a Bloomberg survey of 6 analysts.
The lender declared an ordinary dividend of 60 Singapore cents per share and a capital return dividend of 15 cents per share for the period.
This brings the quarter's total dividend payout to 75 cents per share, compared with the 54 cents in the year-ago period.
For the commercial book, total income was flat on the year at S$5.3 billion.
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Net interest income for the segment fell 4 per cent to S$3.63 billion, due to a 28 basis-point decline in net interest margin (NIM) to 2.55 per cent from US Fed rate cuts and lower Singapore overnight rate average (Sora) and Hong Kong interbank offered rate (Hibor).
Commercial book net fee and commission income was up 11 per cent at S$1.17 billion, largely due to higher wealth management fees, while investment banking fees were higher from increased debt and equity capital market activity.
Commercial book other non-interest income increased 9 per cent to S$522 million. Excluding non-recurring items a year ago, it rose 18 per cent, driven by strong treasury customer sales to both wealth management and corporate customers.
Meanwhile, its markets trading income more than doubled to S$418 million from higher contributions across a range of activities, benefiting from lower funding costs and a more conducive trading environment.
Overall, group NIM stood at 2.05 per cent for the quarter, from 2.14 per cent in the previous corresponding period.
The bank's non-performing loans ratio fell to 1 per cent, from 1.1 per cent the same period a year ago, as new non-performing asset formation stayed low and was more than offset by higher repayments and write-offs.
DBS chief executive Tan Su Shan said: 'While external uncertainties remain, we have opportunities ahead of us. Our proactive management of the balance sheet puts us in a good position to navigate the interest rate cycle, while strong capital and liquidity ensure we are well placed to support customers.'
DBS shares closed 1.3 per cent higher at S$48.85 on Thursday, before the results were released.
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