DBS reports 3Q21 net profit rose 31 percent, beating analyst forecasts

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DBS Group reported Friday its third quarter net profit climbed 31 percent on-year to S$1.70 billion, beating forecasts from UOB Kay Hian and Daiwa.

Net interest income fell 3 percent on-year in the third quarter to S$2.10 billion, as the net interest margin (NIM) fell 10 basis points on-year to 1.43 percent on lower market interest rates, the bank said in a filing to SGX.

The decline in the NIM was moderated by broad-based loan growth of 9 percent, DBS said.

“Broad-based business momentum was sustained in the third quarter and our pipelines remain healthy into next year. A progressive normalisation of interest rates in the coming quarters will be beneficial to earnings,” Piyush Gupta, CEO of DBS, said in the statement.

“Asset quality continues to be resilient and total allowances are likely to remain low. These positives will offset expected cost pressures as the economic recovery takes hold,” Gupta added. “We are ready to put the pandemic behind us and are in a strong position to capture opportunities and deliver shareholder value.”

Daiwa had forecast net profit of S$1.55 billion and net interest income of S$2.20 billion, with a NIM of 1.46 percent, while UOB Kay Hian had estimated net profit of S$1.62 billion, net interest income of S$2.11 billion and NIM at 1.43 percent.

DBS reported net fee and commission income of S$888 million for the quarter, up 11 percent on-year and other non-interest income of S$569 million, down 6 percent on-year.

The bank said it made a general allowance writeback of S$138 million in the quarter, bringing the January-to-September writeback to S$413 million.

For the nine-month period, DBS posted net profit of S$5.41 billion, up 46 percent on-year. Before the third quarter results were announced, UOB Kay Hian forecast full year net profit at S$6.74 billion.

DBS declared an interim dividend of 33 Singapore cents, compared with 18 Singapore cents in the year-ago period.

Read DBS’ filing to SGX on its earnings.