DBS wealth management fees to contract 1.3% in 4Q18

The decline is attributed to high net worth clients continuing to be risk averse.

DBS’ wealth management fees are expected to slow 1.3% YoY to $627m in 4Q2018 as market sentiment remains weak in light of the heightened US-China trade dispute.

The bank suffered a decline in wealth management fees as high-net worth clients have become more risk averse and turned to less risky income streams.

“Contribution from investment banking fees was also lacklustre. Healthy growth from loans related fees (+6.0% yoy) and credit cards (+25.8% yoy) could not offset the steep decline in wealth management fees,” said Jonathan Koh, chartered financial analyst of UOB Kay Hian.  

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On the other hand, double digit growth in DBS’ net interest income of 10.1% YoY could counter the bank’s decline in wealth management fees. Its NIM will continue to expand of 1 bp QoQ to 1.87% due its strong deposit franchise for the Singapore dollar.

Koh expects DBS’ profit to rise 8% to $1.29b for 4Q18, representing a 8.8% QoQ slip and a 8.0% YoY rise. Loan growth would be up 6.6% YoY whilst net trading income fell 47.4% YoY to S$120m, attributed to its unexpected shift in yield curve.