Singapore bank DBS flags strong growth after Q3 profit jumps 31%

Written by on November 4, 2021

November 5, 2021

By Anshuman Daga

SINGAPORE (Reuters) -DBS Group expects to report higher profit before allowances next year after Southeast Asia’s largest bank beat estimates with a 31% rise in quarterly net profit, aided by growth in fee income and improving asset quality.

Friday’s result rounded up a strong quarter for Singapore banks such as OCBC and United Overseas Bank, in line with global lenders strengthening their recovery in markets hit by the COVID-19 pandemic and amid improved economic activity.

“A progressive normalisation of interest rates in the coming quarters will be beneficial to earnings,” DBS Chief Executive Officer Piyush Gupta said in a statement. “Asset quality continues to be resilient and total allowances are likely to remain low,” he said.

DBS reported a quarterly net profit of S$1.7 billion ($1.26 billion) for the July-September period versus S$1.30 billion from a year earlier and the S$1.57 billion average forecast from four analysts compiled by Refinitiv.

The bank wrote back credit allowances of S$70 million in the quarter, helping boost profits, compared with credit charges of S$554 million booked in the year-ago period.

Profit before allowances fell 7% to S$1.89 billion in the quarter. DBS’ net interest margin, a key gauge of profitability, dipped to 1.43% from 1.53% a year earlier.

Singapore, rebounding from last year’s record recession, is beginning to re-open its borders with 84% of its population fully vaccinated against the COVID-19 virus. The city-state’s economy is expected to grow 6%–7% this year.

($1 = 1.3512 Singapore dollars)

(Reporting by Anshuman Daga; Editing by Chris Reese and Sam Holmes)

Current track