Singapore has benefited from strong inflows of wealth from Asia, including China, as well as Europe and the Americas, drawn in by the city-state’s political stability in recent years.
The quarterly results showed return on equity hit a record high of 19.4 per cent, up from 18.6 per cent a year ago. Net interest margin, a key profitability gauge, edged up to 2.14 per cent from 2.12 per cent a year earlier.
The bank pumped up its first-quarter dividend, giving 54 Singapore cents per share compared with 42 cents in the same quarter last year.
DBS is also projecting total income growth to be 1 to 2 percentage points above previous guidance of “mid-single-digits” according to slides accompanying the results.
“DBS’ results have delivered a positive surprise, with earnings coming in way above estimates which helped to soothe initial concerns that earnings momentum may slow ahead,” Yeap Jun Rong, market strategist at IG, said in a note to clients.
“Asset quality remains healthy and investors can look forward to higher dividends. It is hard to find fault with the recent set of numbers,” he said.
Singapore rivals United Overseas Bank and Oversea-Chinese Banking Corporation report results next week.
TECH IMPROVEMENTS FOLLOWING SERVICE OUTAGES
On Tuesday, Singapore’s central bank ended DBS’s six-month pause from acquiring new businesses or making non-essential IT changes after DBS made “substantive progress” in addressing problems related to the disruptions to its digital banking services last year.
Mr Gupta said the bank has been working on improving service availability, better monitoring, and recovering services more quickly in the event that something goes wrong.
“We’ve done a lot of the heavy lifting, but in truth, we still have more work to do,” he said.
In response to a question from the media, the CEO said DBS has completed around 90 per cent of what needs to be done, but there are still some things to be addressed.
“If I were to hazard a guess in terms of what we need to get done, it’s going to take us most of this year,” he said.
