SINGAPORE: Singapore's DBS Group reported a one-third fall in quarterly net profit, in line with estimates, as it booked higher loan losses in pandemic-hit markets but gave an optimistic view for this year.
Piyush Gupta, CEO of Southeast Asia's biggest lender, said latest economic data supported a strong economic rebound for 2021. DBS' strong performance in January provided a head start to the year, he said in a presentation on the bank's business outlook.
"Business momentum was sustained in the fourth quarter and our pipeline for loans and fee income is healthy," Gupta said.
Analysts expect strong revenue from wealth business to drive a rebound in Singapore banks' full-year profits, with improving economic prospects also expected to cushion the impact on their interest margins hovering near record lows.
DBS, the first local lender to kick off results, posted net profit of S$1 billion for the quarter ending December, versus an average estimate of S$1.02 billion (US$769.6 million) from four analysts, according to Refinitiv data.
Peers OCBC and UOB report results later this month.
DBS' net interest margin, a key gauge of profitability, dipped to 1.49 per cent in the quarter from 1.86 per cent a year earlier and 1.53 per cent in the third quarter.
DBS said allowances for loan losses surged to S$577 million in the fourth quarter from S$122 million a year earlier but rose only slightly from the third quarter.