DBS Group posts record Q3 earnings, forecasts 2025 profit dip due to new corporate tax

SINGAPORE: Singapore’s largest bank, DBS Group, announced a record quarterly profit of S$3.03 billion for the third quarter of 2024 on 7 November, rising 15% from a year ago and 8% from the previous quarter.

However, the bank tempered expectations, warning that its 2025 net profit could dip below 2024 levels due to the introduction of a global minimum corporate tax rate in Singapore.

As the first of Singapore’s local banks to disclose third-quarter results, DBS’s performance set a new record for the group, surpassing its previous high of S$2.96 billion achieved in the first quarter of 2024.

This strong result came despite a decline in its net interest margin (NIM)—a critical profitability measure—from 2.19 per cent a year ago to 2.11 per cent.

DBS attributed this robust growth to record fee income driven by wealth management, stronger treasury customer sales, and increased markets trading income.

In recent years, local banks have benefitted from higher global interest rates, as well as a steady influx of wealth into Singapore due to its political stability.

However, analysts caution that interest rate cuts by major central banks and unpredictable market conditions amid global geopolitical and economic concerns may hinder growth.

DBS’s outlook for 2025 anticipates pre-tax profit and group net interest income to be on par with 2024 levels, according to Chief Executive Officer Piyush Gupta’s slides that accompanied the results.

However, the bank’s net profit after tax is expected to fall in 2025 due to the 15 per cent minimum global corporate tax that Singapore will impose on multinational corporations from January 2025, impacting firms such as DBS.

As Southeast Asia’s largest bank, DBS also declared a third-quarter dividend of 54 cents per share, a rise from 48 cents the previous year, which will be distributed on or around 25 November.

In addition, DBS unveiled a new S$3 billion share buyback programme, the first of its kind where repurchased shares will be permanently cancelled.

This buyback, to be executed at management’s discretion in response to market conditions, is expected to boost the bank’s earnings per share and return on equity.

“The new buyback programme we announced today is underpinned by our strong capital position and ongoing earnings generation, and it is another affirmation of our commitment to capital management,” said Mr Gupta.

Deputy CEO Tan Su Shan, set to succeed Mr Gupta in March 2025, added, “The buyback programme expands our toolkit for capital management. ”

“The considerable amount of capital we have returned in recent years has been a distinguishing hallmark that remains well supported by our financial strength.”