DBS profit balloons 72% to $1.41b in Q3

Strong lending and fee income figures boosted quarterly earnings.

DBS maintained its strong earnings momentum after profits surged 72% YoY to $1.41b in Q3 on the back of sustained loan figures, fee income trends and progression in net interest margin (NIM), according to a press release. Net profit which includes one-time items surged 76% YoY over the same period.

The bank took accelerated allowances for weak oil and gas support service exposures in 2017.

DBS' loans rose 8% to $340b in Q3 on the back of steady expansion in consumer and non-trade corporate lending. NIM, a common measure of profitability, correspondingly rose 13 basis points to 1.86% in line with higher interest rates in Singapore and Hong Kong. 

Net fee income inched up by 1% to $695m as other segments were able to pull up a softening investment banking business.

In particular, card fees surged 33% to $185m in Q3 from higher customer transactions and the consolidation of the retail and wealth management business of ANZ. Wealth management fees and transaction service fees also grew 7% to $292m and 5% to $162m respectively.

Also read: Are banks turning to loans to boost earnings as wealth income weakens?

Other non-interest income was 2% higher at $407m. Net trading income also picked up 34% to $354m as Treasury Markets trading gains improved from a low base; treasury customer income was also higher.

DBS expenses correspondingly increased by 18% to $1.48b.

The bank’s non-performing assets held steady at $5.90b whilst NPL rate was unchanged QoQ at 1.6%. Deposits were also 7% YoY higher at $388b. The Common Equity Tier-1 ratio declined 0.3% points QoQ to 13.3% due to the interim dividend payout. The leverage ratio of 7.1% was more than twice the regulatory requirement of 3%.

“Third-quarter business momentum was sustained amidst heightened geopolitical and economic headwinds. Year-to-date earnings per share is the highest in our history while return on equity is the best in more than a decade,” DBS CEO Piyush Gupta said in a statement.