DBS Q1 profit surges 72% to record S$2 billion, flags strong growth

DBS Q1 profit surges 72% to record S$2 billion, flags strong growth

DBS bank Singapore
Workers on gondola clean the glass panels of the DBS building in Singapore on August 5, 2015. (File photo: AFP/Roslan Rahman)

SINGAPORE: DBS Group trumped market estimates with a 72 per cent rise in quarterly net profit to a record high, as the bank benefited from strong loan growth, improved asset quality and a robust wealth management business.

DBS, Southeast Asia's largest bank, flagged bullish prospects in a recovering global economy and said its new non-performing assets formation was below pre-pandemic levels.

"Results are in line with recent optimistic outlook given by Singapore's three banks, but importantly, the low credit costs were to reverse previously very prudent aggressive front loading last year, that helped too," said senior analyst Kevin Kwek at Stanford C. Bernstein.

DBS reported profit of S$2 billion for the January to March period, compared with the S$1.43 billion average of three analyst estimates compiled by Refinitiv, and versus S$1.16 billion in the same period a year earlier.

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"This has been an extraordinary quarter for our business as we fired on all cylinders. Loan and deposit growth were robust, fees were strong and treasury had a record performance," said chief executive Piyush Gupta.

Analysts forecast profit to rebound at Singaporean banks on sustained growth in wealth management. But lenders are still bearing the impact of low market interest rates that have crimped net interest margins - a key gauge of profitability.

The net interest margin at DBS fell to 1.49 per cent in the latest quarter from 1.86 per cent a year earlier but was stable from the previous quarter. 

Source: Reuters