Singapore bank DBS Q2 net profit soar to record high at 48%; declares S$0.48 dividend

Singapore’s biggest bank DBS Group Holdings Ltd’s net profit for the second quarter ended June in 2023 (Q2”23) rose a forecast-beating 48% from a year ago to S$2.69 billion with return on equity reaching 19.2%, both at new highs.

The latest quarter’s net profit also beat the S$2.4 billion consensus estimate from analysts polled by Bloomberg.

Its total income increased 35% to exceed S$5 billion for the first time.

While commercial book net interest margin (NIM) rose 96 basis points (bps), including 12 bps during the quarter.

Fee income grew 7%, the first year-on-year (y-o-y) increase in six quarters, led by wealth management and cards, while treasury customer sales and other income rose 21%.

A 34% decline in treasury markets trading income partially offset the gains in the commercial book. The cost-income ratio improved six percentage points to 38%.

Its net profit for the first half of 2023 (H1’23) rose 45% to a record S$ 5.26 billion and return on equity climbed to a new high of 18.9%.

Total income increased 34% to S$10 billion, driven by the commercial book from a higher NIM as well as improved card fees and treasury customer income. The performance was moderated by lower treasury markets trading income.

The bank declared a dividend of S$0.48 per share for Q2, to be paid on or before Aug 24, an increase of S$0.06 per share from the previous payout.

The increase is in line with guidance and reflects the stronger earnings prospects for the year.

Together with the first-quarter dividend, the total dividend for H1’23 amounted to 90 cents per share.

In a statement today (3 Aug), DBS CEO Piyush Gupta said the bank had achieved another set of record results as its Q2’23 and first-half earnings reached new highs with return on equity at
19%.

“The commercial book benefited from higher interest rates and broad-based growth in non-interest income activities, which was moderated by higher funding costs for Treasury Markets.

“During the quarter, we commenced work to strengthen the resilience of our technology while awaiting completion of the independent review into the recent digital disruptions.

“While there is some macroeconomic uncertainty, our prospects for the rest of the year are anchored on a franchise with a proven ability to capture business opportunities.

“Our longstanding prudence in building general allowance reserves and maintaining strong capital ratios will position us well to withstand headwinds,” he said.

Shares of DBS at 9.39 am on 2 Aug up S$0.28 or 0.83%t at S$34.12 with a market capitalisation of S$88.29 billion.