DBS profits up 26% to $1.52b in Q1

Net interest margin rose 9 bps due to a strong Singapore dollar.

DBS Bank’s profits jumped 26% YoY from $1.21b to $1.52b in the first quarter of 2018.

According to its financial statement, net interest income rose 16% YoY and 4% on a day-adjusted basis from the previous quarter to $2.13b. Net interest margin (NIM) rose 9 bps YoY and 5 bps QoQ to 1.83% from higher Singapore dollar as well as US and Hong Kong dollar interest rates.

Fee and commission income jumped 17% QoQ, with wealth management income hit a quarterly high of $331m. It also rose 12% YoY to $744m. “Card fees rose from higher credit and debit card transactions as well as the consolidation of the retail and wealth management business acquired from ANZ,” the bank added.

RHB Research analyst Leng Seng Choon noted that the cost-to-income ratio of 41.6% was “a clear improvement” over last quarter 44.4%, as expenses grew slower than total income.

Meanwhile, credit costs at 20 bps were lower than Q4’s 25 bps. Loans grew 13% over the past year and 2% during the quarter in constant-currency terms as corporate, trade, and consumer loans increased.

Net profit in Singapore jumped 10% to $938m, whilst in Hong Kong, it surged 91% to $436m. In the rest of Greater China, net profit doubled to $74m, whilst in Southeast Asia, it crashed 50% to $22m. For the rest of the world, DBS’ net profit was stable at $51m.