{"id":30087,"date":"2023-05-02T06:00:04","date_gmt":"2023-05-02T06:00:04","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/singapore-bank-dbs-reports\/"},"modified":"2023-05-02T06:06:00","modified_gmt":"2023-05-02T06:06:00","slug":"singapores-dbs-posts-record","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/singapores-dbs-posts-record\/","title":{"rendered":"Singapore’s DBS posts record Q1 profit, expects margins to decline as rates peak"},"content":{"rendered":"

By Yantoultra Ngui<\/p>\n

SINGAPORE (Reuters) -DBS Group posted record first-quarter profit, with Singapore’s biggest bank saying it had benefited from inflows from depositors seeking a safe haven amid the global banking turmoil, and uncertainty over the world economy and geopolitics.<\/p>\n

Results released on Tuesday showed the bank’s January-March net profit rose a stronger-than-expected 43% to S$2.57 billion ($1.9 billion) from S$1.8 billion a year ago, beating a mean estimate of S$2.44 billion from five analysts polled by Refinitiv.<\/p>\n

But DBS said it expected a gradual decline in margins as rate hike cycle nears an end.<\/p>\n

“We delivered a record performance and benefited from safe-haven deposit inflows during a quarter marked by increased market volatility,” DBS Chief Executive Officer Piyush Gupta said in a statement. <\/p>\n

Customer deposits rose 2% in constant-currency terms to S$529.2 billion during the first quarter from S$519.7 billion in the year-ago period. The quarterly rise in deposits came on the back of a 5% surge in 2022. <\/p>\n

“Some of these inflows are from North Asia, some of those inflows are from other banks, including the troubled banks in the U.S. and Credit Suisse,” Gupta told reporters.<\/p>\n

Singapore’s status as a financial safe haven became a bigger draw for depositors after the closure of Silicon Valley Bank and Signature Bank in the United States, and the UBS rescue of Credit Suisse in March.<\/p>\n

On Monday, U.S. regulators seized First Republic Bank and sold its assets to JPMorgan Chase & Co, in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis.<\/p>\n

Regional rival HSBC also on Tuesday reported a more than tripling in quarterly profit, beating estimates, as it benefited from higher interest rates around the world.<\/p>\n

Smaller Singaporean peer United Overseas Bank on Thursday posted a 74% surge in core net profit in the first quarter on the back of strong net interest and non-interest income growth.<\/p>\n

Shares in DBS rose 0.3% to S$32.92 on Tuesday, in line with the broader Straits Times Index.<\/p>\n

MARGIN PRESSURE <\/p>\n

The Southeast Asia’s largest lender by assets however said its net interest margin likely peaked in the first quarter and there would be a gradual decline as Gupta said the rate hike cycle was “pretty much done”. <\/p>\n

DBS reported a net interest margin, a key gauge of a bank’s profitability, of 2.12% for the first quarter, up from 1.46% in the same period a year earlier. And the bank expected full-year net interest margin of between 2.05% and 2.10%.<\/p>\n

DBS also said its housing loan bookings may see some impact from the government’s latest cooling measures.<\/p>\n

DBS’ return on equity rose to a new high of 18.6% in the first quarter from 13.1% the same period a year earlier. Full-year return on equity was likely to be above 17%, it said.<\/p>\n

DBS, which earns most of its profit from Singapore and Hong Kong, declared a dividend of 42 Singapore cents per share for the first quarter.<\/p>\n

Meanwhile, Gupta said DBS clients held about S$140 million worth of Additional Tier 1 (AT1) bonds of Credit Suisse, which is a “tiny percentage” of the total investment portfolio of its clients.<\/p>\n

Investors have been rocked by a Swiss authorities’ decision to wipe out $17 billion of Credit Suisse’s AT1 debt under its takeover by UBS, in a move that hit AT1 holders harder than shareholders.<\/p>\n

($1 = 1.3362 Singapore dollars)<\/p>\n

(Reporting by Yantoultra Ngui; Editing by Sumeet Chatterjee, Sonali Paul, Stephen Coates and Simon Cameron-Moore)<\/p>\n

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By Yantoultra Ngui SINGAPORE (Reuters) -DBS Group posted record first-quarter profit, with Singapore’s biggest bank saying it had benefited from inflows from depositors seeking a safe haven amid the global banking turmoil, and uncertainty over the world economy and geopolitics. Results released on Tuesday showed the bank’s January-March net profit rose a stronger-than-expected 43% to […]<\/p>\n","protected":false},"author":8,"featured_media":30088,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1213],"tags":[1223],"class_list":["post-30087","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-business","tag-updated"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ400W6-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/30087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=30087"}],"version-history":[{"count":3,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/30087\/revisions"}],"predecessor-version":[{"id":30524,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/30087\/revisions\/30524"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/30088"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=30087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=30087"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=30087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}