Singapore bank DBS Q4 net profit misses forecasts, flags rate headwinds in 2026
DBS CEO Tan Su Shan said net profit for the year is expected to come in lower than in 2025.
A DBS company signage is seen on a building facade at the central business district in Singapore on Mar 14, 2025. (File photo: AFP/Roslan Rahman)
SINGAPORE: Singapore's biggest bank DBS Group on Monday (Feb 9) maintained its expectation that net profit this year will dip slightly from 2025, after posting a 10 per cent drop in fourth-quarter earnings that was weighed down by a lower net interest margin.
DBS, which is also Southeast Asia's largest bank by assets, said October-December net profit dropped to S$2.26 billion (US$1.78 billion) from S$2.52 billion a year earlier.
That missed the mean estimate of nearly S$2.55 billion from two analysts, according to LSEG data.
"The key driver for the underperformance in 4Q25 was weaker-than-expected markets trading income," CGS International analysts Tay Wee Kuang and Lim Siew Khee wrote in a note on Monday.
Shares of DBS closed 1.87 per cent lower in Monday's session at S$58.19. The domestic benchmark index was up 0.54 per cent at the close.
For the period, overall group net interest margin, a key profitability gauge, stood at 1.93 per cent as compared to 2.15 per cent the previous year, with net interest income impacted by lower domestic rates. Return on equity declined to 13.5 per cent from 15.8 per cent a year ago.
The lender's wealth segment's assets under management, meanwhile, grew 19 per cent in constant-currency terms to a new high of S$488 billion in the fourth quarter.
At the bank's results briefing on Monday, Tan said that despite a "perfect storm" last year in terms of rates and a strong Singapore dollar, she was pleased that DBS delivered record pre-tax profit and deposit growth in 2025, among other things.
For the year ahead, the bank is forecasting net profit to come in "slightly below 2025 levels".
"I tell all our clients 'buckle up, it's going to be a volatile year' ... I hope that DBS will continue to be a beneficiary of these global volatile winds," said Tan.
According to the bank's financial statement, provisions for bad loans jumped 81 per cent to S$415 million in the fourth quarter, mainly due to real-estate exposure, while DBS wrote back S$206 million in general allowances, including amounts previously set aside for that exposure.
ONE-TIME BONUS OF S$1,000 FOR JUNIOR EMPLOYEES
DBS also announced a one-time bonus of S$1,000 for junior-ranked employees as a reward for their contributions.
The bank has set aside S$18 million for the payout, which would benefit more than 23,000 employees globally, including nearly 6,800 staff members in Singapore.
“In spite of a difficult environment, DBS delivered a resilient set of results and we wanted to specially recognise the contributions of our junior staff," said Tan.
Last year, the bank awarded a total of S$32 million in S$1,000 one-time bonuses to all staff members except senior managers.
The bank declared an ordinary dividend of S$0.66 per share and a capital return dividend of S$0.15 per share for the fourth quarter.
DBS added that it plans to continue the capital return dividends for financial years 2026 and 2027, barring unforeseen circumstances.
CGS International reiterated its "hold" call on DBS, saying the dividend outlook helps support the stock.
DBS is the first Singapore lender to start this earnings season. United Overseas Bank and Oversea-Chinese Banking Corp are due to announce their results on Feb 24 and 25, respectively.
