SINGAPORE: Singapore's largest lender DBS' first-quarter net profit rose 26 per cent from the same period a year ago to a record S$1.52 billion on the back of strong loan and non-interest income growth, as well as a higher net interest margin.
In a media statement released on Monday (Apr 30), DBS said that quarterly net interest income rose 16 per cent to S$2.13 billion compared to a year ago. Net interest margin increased nine basis points to 1.83 percent in line with higher interest rates.
Net fee income rose 12 per cent to S$744 million, contributed largely by the growth in wealth management fees, which grew 31 per cent from higher investment product and bancassurance sales.
Other non-interest income increased 25 per cent to S$488 million, helped by a one-off Hong Kong property disposal which helped gain S$86 million.
Overall, total income increased 16 per cent to S$3.36 billion. Return on equity also rose to 13 per cent, the highest in a decade.
Non-performing assets declined 4 per cent from the previous quarter to S$5.82 billion , while the non-performing loan rate fell from 1.7 per cent to 1.6 per cent. Total allowances decline 18 per cent from a year ago to S$164 million.
DBS CEO Piyush Gupta said that the normalisation of interest rates and allowance charges has helped drive this quarter's strong performance.
“With interest rates and allowance charges reverting to more normalised levels, and our capital base streamlined with the finalisation of regulatory requirements, the structural profitability of our franchise has been more clearly demonstrated with this quarter’s results," he said.
He added: "While we are keeping a watchful eye on how geopolitical trade tensions play out, the region’s economic fundamentals remain sound.
"Our pipeline is healthy and we expect to continue capturing business opportunities and delivering shareholder returns in the coming year."