DBS’ net profits jump 31% to $1.7b in Q3

The non-performing loans rate remained unchanged at 1.5% during the quarter.

DBS Group’s net profits in the third quarter (Q3) hit S$1.7b, its highest-ever for a third-quarter period and a 31% rise from the same period in 2020, the bank said in its latest trade update. 

The bank’s nine-month (9M) net profit now totals S$5.41b, 46% higher than the bank's 9M 2020 profits. All three of its quarters broke past records to post their highest-ever profits in their respective quarters, according to DBS.

Overall, the bank’s loans grew 8% over the nine months. Specific allowances, halved to 14 basis points, were below pre-pandemic levels, whilst general allowances of S$413m were written back, the bank said, adding that this decline in allowances helped offset the impact of lower interest rates. 

For Q3, non-performing asset formation was more than offset by repayments, resulting in a 1% decline in non-performing assets from the previous quarter to S$6.57b, DBS said. The NPL rate remained unchanged at 1.5%.

During the same period, net interest income inched up 1% from the previous quarter to S$2.1b. Loans also grew steadily by S$6b—or 2% in constant-currency terms—to S$405b. 

Breaking down by type, non-trade corporate loans jumped S$5b, with the growth led by drawdowns in Singapore and Greater China. Housing loans continued to rise by S$1b, a similar pace as the first two quarters of 2021, with DBS noting that bookings continued to be strong.

Other consumer loans grew S$2b due to wealth management.

However, these increases were offset by a S$2b decline in trade loans from higher repayments. As a result of lower market interest rates, the net interest margin fell two basis points to 1.43%.

Fee income also exhibited steady growth, posting an 11% rise compared to Q3 2020, to reach S$888b. Wealth management fees rose 8% quarter-on-quarter (QoQ) to S$461m with higher activity across a range of investment products, DBS observed. 

Transaction service fees reached a new high of S$239m, 7% higher than in Q2, thanks to increases in cash management and trade finance. Card fees also rose 9% QoQ to S$180m 

But increases in fee income were moderated by declines in investment banking fees from a high base and in loan-related fees.