DBS shares may climb after earnings beat forecasts

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DBS shares may climb after earnings handily beat analysts’ forecasts.

The stock is already up nearly 20 percent year-to-date, partly as expectations that interest rates would begin to rise has boosted the earnings outlook. Shares closed at S$30.00 on Friday, and appeared set to break that high, which is the record high, according to DZHI data.

The bank reported first quarter net profit surged 26 percent to a record S$1.52 billion. Its net interest income rose 16 percent on-year to S$2.13 billion on higher loan volumes and its net interest margin increased by 9 basis points to 1.83 percent on higher interest rates, the bank said in a filing to SGX before the market open.

Nomura had forecast net profit of S$1.43 billion, net interest income of S$2.083 billion and a net interest margin of 1.80 percent. Daiwa had forecast net profit of S$1.372 billion, net interest income of S$2.118 billion and a net interest margin of 1.81 percent. CGS-CIMB had forecast net profit of S$1.443 billion, net interest income of S$2.20 billion and net interest margin of around 1.8 percent.

Analysts have previously pointed to other factors that can help boost DBS shares.

Daiwa, for one, noted in March that it viewed DBS as a compelling yield play, saying the dividend yield was around 4.3 percent.