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DBS, OCBC report record profits in Q1

Two out of the three Singapore banks have reported record profits in their first quarter financial results released on Wednesday.

SINGAPORE: Two out of the three Singapore banks have reported record profits in their first quarter financial results released on Wednesday.

DBS Group Holdings booked a record net profit of S$1.03 billion for the first three months of this year.

It is the first time its quarterly net profit exceeded the billion-dollar mark.

Market analysts had been expecting DBS to book a slight dip in earnings.

But Singapore's biggest bank by assets saw its first quarter earnings climb by 9 per cent year-on-year.

This came on the back of record income.

Higher net interest margin, loan volumes and customer non-interest income more than offset a decline in market-related income.

The group's total income rose 6 per cent to a new high of S$2.45 billion.

In the same quarter a year ago, DBS also saw an earnings boost from its role as a financial adviser for the sale of Fraser and Neave to Thai Beverage.

Piyush Gupta, CEO of DBS Group Holdings, said: "For us, (in) the first quarter this year, we not only had to replace that elephant deal, but we also had to make up for the fact that the markets in the first quarter this year were relatively unfavourable, compared to the same time last year.

“As you know, most of the global Western banks that declared results showed a shortfall in fixed income for this quarter of 15-20 per cent. And therefore, there were two strong challenges for us to overcome, in trying to drive results this quarter." 

Separately, Singapore's second-largest bank by assets, OCBC Bank, also posted record profit in the three months ended March 31.

Net profit came in at S$899 million - a jump of 29 per cent compared to the same period a year ago.

OCBC said it saw sustained growth momentum across all customer-related businesses, contributing to record total income of S$1.89 billion, up 19 per cent from the year before.

Robust asset growth and higher margins helped to boost net interest income by 19 per cent year-on-year to S$1.09 billion, while customer loans rose 18 per cent from a year ago to S$175 billion.

OCBC said it expects loan demand to continue seeing low double-digit growth in the year ahead.

Net interest margins (NIMs) improved to 1.7 per cent from 1.64 per cent a year ago, following stable performance throughout the year before.

It expects to see NIMs continue to stabilise this year or perform slightly better than last year.

Meanwhile, non-interest income rose 18 per cent year-on-year to S$800 million, on the back of record high fee and commission income which grew by 12 percent year-on-year to S$353 million.

Earlier this month, OCBC offered to acquire Hong Kong-based Wing Hang Bank as part of its strategy to expand their footprint in greater China.

The lender said it remains positive about its position in China, despite the recent slowdown in the economy.

Samuel Tsien, group CEO of OCBC, said: "Our exposure in China is not representative of the Chinese economy. We are only selecting those sectors that we know, companies that we know well. I think our risk management is able to avoid majority of those issues that you will continue to see.

“I think the Chinese economy will continue to see these challenges, and there probably will be a bit more of these companies publicly acknowledging they are in financially difficult situation, but it does not mean we are banking with them so comprehensively that OCBC Bank will be affected by it."

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