Singapore’s largest bank DBS sees profit soar 72% to a record $1.5 billion

• DBS Group Holdings said net profit nearly doubled from the previous quarter and reached a historic high of 2.01 billion Singapore dollars ($1.52 billion) in the January to March period, thanks to accelerating business momentum.
• “Asset quality was healthy, with new non-performing asset formation and specific allowances at pre-pandemic levels,” DBS said in its earnings release.
• CEO Piyush Gupta said in a statement that the global economic rebound is strengthening, and the bank is “bullish” on its prospects for the coming year.

Singapore’s largest bank DBS reported Friday that net profit soared 72% from a year ago to an all-time high in the first quarter of 2021.

DBS Group Holdings said net profit nearly doubled from the previous quarter and reached a historic high of 2.01 billion Singapore dollars ($1.52 billion) in the January to March period, thanks to accelerating business momentum.

It said loans grew 3% and deposits rose 2% from the previous quarter. “Asset quality was healthy, with new non-performing asset formation and specific allowances at pre-pandemic levels,” DBS said in its earnings release.

That allowed DBS to release 190 million Singapore dollars that was previously set aside for bad loans.

Here are the other financial metrics that investors looked for:

• Total income fell by 4% year-over-year to 3.85 billion Singapore dollars ($2.9 billion)
• Net interest margin, a key gauge of lending profitability, was at 1.49% — 37 basis points lower than the first quarter of 2020, due to global interest rate cuts
• Non-performing loans fell to 1.5% of total outstanding loans from 1.6% in the first quarter of last year

Tighter margins were partially offset by loan growth, but net interest income in the first quarter fell 15% year-on-year to 2.1 billion Singapore dollars.

“This has been an extraordinary quarter for our business as we fired on all cylinders. Loan and deposit growth were robust, fees were strong and treasury had a record performance,” CEO Piyush Gupta said in the statement.

He said the global economic rebound is strengthening, and the bank is “bullish” on its prospects for the coming year.

“We are in a position of strength to support customers and deliver shareholder returns as the economic recovery takes hold,” Gupta said.

Shares of the bank rose more than 2% in Asia, and hit a 52-week high of 30.12 Singapore dollars.

Abigail Ng

source:cnbc.com