SINGAPORE (Aug 4): DBS Group achieved record earnings of $2.35 billion for first-half 2017, up 4% from a year ago as total income reached a half-year high of $5.81 billion, expenses decline with digitalisation and with lower allowances.
For the second quarter, earnings rose 8% to $1.14 billion. Total income of $2.92 billion was just shy of a quarterly high as loans grew 2% over the quarter and fee income trends were sustained. Total allowances were 17% lower.
Net interest income was 3% higher than a year ago at $1.89 billion. Loan growth of 6% more than offset the impact of a 13 basis point decline in net interest margin to 1.74%.
Net fee income rose 1% to $636 million. An increase in annuity fee income streams, led by double-digit growth in wealth management, was offset by a decline in investment banking and loan-related fees. Other non-interest income fell 13% to $400 million from lower trading income and gains on investment securities as well as an absence of gains on fixed assets.
Total income was slightly higher at $2.92 billion. With expenses declining 1% to $1.27 billion, the cost-income ratio improved one percentage point to 43%. Profit before allowances increased 1% to $1.66 billion.
The amount of non-performing assets was little changed from the previous quarter at $4.85 billion as non-performing loan formation was offset by write-offs and recoveries.
Specific allowances amounted to $304 million for the second quarter, bringing the half-year amount to $504 million. Allowance coverage of non-performing assets was at 100% and at 234% when collateral was considered.
The Common Equity Tier-1 ratio was at 14.4%. The leverage ratio of 7.9% was more than twice the minimum of 3% currently envisaged by the Basel Committee.
DBS has declared a first-half dividend of $33 cents per share, up 10% from the recent half-yearly payouts. The scrip dividend scheme will apply.
Shares in DBS closed 11 cents lower at $22.08 on Thursday.
