DBS surprise leads quarter of stellar performances for Singapore’s banking triumvirate

Net profits exceeded analyst estimates.

Singapore’s top 3 banks, DBS, UOB, and OCBC, exhibited resilience this quarter, with operating income edging up to a combined S$7.01b from S$6.98b, buttressed by a growth in net interest income.

According to analysts from SNL Financial, however, the growth in operating income was outweighed by a 9.07% increase in expenses that totalled S$4.13b in the third quarter.

“Asset write-downs expanded to S$488 million from S$436 million, while operating costs grew to S$3.09 billion from S$2.79 billion,” SNL Financial said.

Meanwhile, aggregate net profit also fell by 9% to S$2.83 billion for the three months through September from S$3.11 billion for the prior-year period, SNL Financial added.

The performances were capped by an unexpected 6% growth in net profit for DBS, capping a 25th straight quarter of gains, due to a growth in net interest income.

On the other side, OCBC posted the worst headline result among the three, with net profit sliding 27%.

“But the mood after the release was not so bearish. Excluding a one-time gain in the 2014 third quarter, net core profit actually increased 7% to S$902 million in the July-September period, surpassing Macquarie Research's estimate of S$865 million. The gain was driven by a 25% increase in earnings from banking operations, which offset a decline in insurance contributions,” SNL Financial said.