DBS profit surges 17% to $1.6b in Q2

Income hit a record $3.71b.

DBS sustained its earnings momentum after profits rose 17% YoY to $1.60b in Q2, according to its financial statement. Total income grew 16% YoY to $3.71b to outpace the 9% growth in expenses. In the first half of the year, profit rose 12% YoY to $3.25b with return on equity standing at 13.7%.  

In Q2, net interest income increased 9% to $2.43b as loans grew 5% in constant-currency terms and net interest margin, a common measure of profitability, improved six basis points to 1.91%.

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Net fee income rose 9% to a new high of $767m during the quarter. Wealth management fees grew 11% to $332m from higher investment product sales. Card fees increased 16% to $198m from higher activities across the region. Investment banking fees rose 44% to $56m from higher debt and equity capital market income.

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Other non-interest income rose 88% to $513m, with trading income and gains on investment securities hitting $357m and $131m respectively.

Asset quality remained stable with non-performing assets rising 3% QoQ to $5.82b and non-performing loan (NPL) rate unchanged from the previous quarter at 1.5%. For the first half, specific allowances amounted to $369m, up 45% from a year ago.

Deposits declined 1% in constant-currency terms from the previous quarter to $391b in Q2 as higher-cost deposits were replaced by less expensive commercial paper. The liquidity coverage ratio and net stable funding ratio hit 137% and 109% respectively.

The Common Equity Tier-1 ratio declined from 14.1% in the previous quarter to 13.6% as the payment of the final 2018 and Q1 2019 dividends in May and an increase in risk-weighted assets during the quarter were partially offset by retained earnings. 

The Board declared a second-quarter dividend of $30 cents per share, unchanged from the previous quarter. 

“We achieved a record half-year performance despite heightened economic uncertainty and geopolitical tensions. The results reflect the strengths of an entrenched broad-based franchise that is well placed to nimbly navigate market volatility and capture opportunities as they arise,” DBS CEO Piyush Gupta said in a statement.