DBS shocks peers with 2 basis point expansion in net interest margin

Everyone else is suffering 6bp dip.

According to CIMB, despite peers experiencing a 6bp NIM decline in 1Q13, DBS bucked the trend by expanding NIMs by 2bp.

While the yield on interest-bearing assets declined by 2bp in the quarter, DBS was able to lower funding costs (down 4bp) by taking advantage of cheap wholesale funding from the money market and reducing its reliance on high-cost fixed deposits. 

Here's more from CIMB:

At first glance, the increasing reliance on wholesale funding to finance its loan book appears to be a risky move as it holds DBS ransom to sudden rate spikes.

However, we believe the interest rate risk is mitigated, as DBS is matching its short-term trade financing loan book with short-term commercial papers, thereby reducing duration risks.