DBS Group Holdings has reported net profit of $1.70 billion for the 3QFY2021 ended September, 31% higher than net profit of $1.30 billion in the same period the year before.
In a bourse filing on Nov 5, the bank also reported that total income during the quarter dipped 0.45% y-o-y to $3.56 billion, from the $3.58 billion in the 3QFY2020.
3QFY2021 net interest income (NII) slid 3% y-o-y to $2.10 billion. On a q-o-q basis, NII stood 1% up as the bank’s 2% loan growth was moderated by the 2-basis point (bp) decline in net interest margin (NIM).
Fee income in the 3QFY2021 grew 11% y-o-y and 2% q-o-q to $888 million, with sustained momentum across all activities, making it the second highest on record for the bank.
Wealth management fees rose 15.5% y-o-y and 8.2% q-o-q to $461 million due to higher activity across a range of the investment products within the bank.
Due to growth in cash management and trade finance, transaction service fees grew 18.3% y-o-y and 6.69% q-o-q to $239 million.
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In 3QFY2021, card fees increased 12.5% y-o-y and 9.1% q-o-q to $180 million as consumer spending continued to recover towards pre-Covid-19 levels.
Other non-interest income fell 6% y-o-y and 10% q-o-q to $569 million as a decline in investment gains more than offset the higher trading gains during the 3QFY2021.
In the 9MFY2021, DBS reported a record net profit of $5.41 billion, up 46% y-o-y on the back of broad-based growth.
During the period, net interest income fell 9% y-o-y to $6.30 billion and loan growth of 9% more than offset the NIM decline of 22 basis points.
In the 9MFY2021, net fee and commission income increased 17% y-o-y to $2.71 billion, making it a record for the bank in the nine-month period. The new high was attributable to the growth led by wealth management, investment banking, transaction services and cards.
Other non-interest income fell 3% y-o-y to $2 billion as record trading income was offset by a decline in investment gains due to more favourable market opportunities a year ago.
In the 3QFY2021, the bank had a general allowance write-back of $138 million, bringing the amount to $413 million for the 9MFY2021.
General allowance reserves stood at $3.92 billion, $0.6 billion higher than the requirements from the Monetary Authority of Singapore (MAS).3.92 billion, $0.6 billion higher than the requirements from the Monetary Authority of Singapore (MAS).
Together with specific allowance reserves, total allowance reserves stood at $7.06 billion.
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As at end-September, current and savings accounts (CASA) accounted for 75% of customer deposits.
The bank’s liquidity coverage ratio of 131% and net stable funding ratio of 127% stood above the regulatory requirements of 100%.
DBS’s common equity tier-1 (CET1) ratio remained unchanged q-o-q at 14.5% as profit accretion was offset by risk-weighted asset growth.
The ratio is above DBS’s target operating range as well as regulatory requirements.
As at end-September, DBS’s leverage ratio stood at 6.8%, which was more than double the regulatory minimum of 3%.
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For the 3QFY2021, DBS has declared a quarterly dividend of 33 cents per share, unchanged from the previous quarter, and higher than the 18 cents declared in the 3QFY2020.
“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,” says DBS CEO Piyush Gupta.
“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. With a franchise recently recognised once again as the world’s best bank, we are ready to put the pandemic behind us and are in a strong position to capture opportunities and deliver shareholder value,” he adds.
Shares in DBS closed 11 cents higher or 0.34% up at $32.21 on Nov 3.
Photo: Bloomberg
