UPDATE: DBS reports 3Q19 net profit climbed 15 percent, beating analysts’ forecasts

DBS Bank branchDBS Bank branch

This article was originally published on Monday, 11 November 2019 at 7:11 A.M. SGT; it has since been updated with more details.

Correction: An earlier version of this article misstated the third-quarter net fee and commission income; the correct figure is S$814 million.

DBS reported Monday its third quarter net profit climbed 15 percent on-year to S$1.629 billion, beating forecasts from Daiwa and UOB KayHian, on record fee income and higher trading gains.

Daiwa had forecast net profit of S$1.483 billion, while UOB KayHian had tipped S$1.496 billion.

“The record operating results for the quarter once again attest to the strength of our business,” Piyush Gupta, CEO of DBS, said in the statement. “Our transformed franchise, nimble execution and balance sheet strength will put us in good stead to deliver healthy shareholder returns despite the prevailing macroeconomic and geopolitical headwinds.”

Net interest income for the quarter ended 30 September increased 8 percent on-year to S$2.46 billion, Southeast Asia’s largest bank said in a filing to SGX. UOB KayHIan had forecast net interest income of S$2.43 billion, while Daiwa had projected S$2.486 billion.

The net interest margin, or the difference between the interest rate banks charge to lend and their cost of funds, came in at 1.90 percent, compared with 1.86 percent in the year-ago quarter, DBS said. Both Daiwa and UOB KayHian had forecast NIM at 1.89 percent.

Loans increased 4 percent on-year, led by non-trade corporate loans from broad-based activities around the region, DBS said.

“Consumer loans were little changed as a continued decline in housing loans was offset by growth in other consumer loans,” DBS said.

Net fee and commission income jumped 17 percent on-year to S$814 million, the bank said. Daiwa had forecast fee and commission income of S$733 million, while UOB KayHian had estimated S$780 million.

Wealth management fees increased 22 percent on-year to S$357 million on higher investment product sales, DBS said. UOB KayHian had forecast wealth management fees of S$320 million.

Additional general allowances of S$61 million were taken as “a prudent measure given the ongoing political and economic uncertainty,” DBS said.

DBS declared a dividend of 30 Singapore cents a share.

For the nine-month period, DBS reported net profit of S$4.88 billion, up 13 percent on-year, with net interest income of S$7.20 billion, up 9 percent on-year and net fee and commission income of S$2.31 billion, up 8 percent on-year.

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