(Bloomberg) — DBS Group Holdings Ltd.’s Chief Executive Officer Piyush Gupta expects another year of record profit after Singapore’s biggest lender delivered better-than-expected results thanks to strong lending and wealth fees.
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With income from these key areas predicted to continue to be robust, total income growth may be one to two percentage points above the previous guidance of mid-single digit, Gupta said Thursday in an earnings statement. DBS shares rose as much as 3.2%, taking this year’s gains to about 18%.
The first quarter is traditionally the bank’s strong period and performance may ease later, Morgan Stanley’s analysts led by Nick Lord said in a note published after results.
DBS is the first among major Singapore banks to report results and lifted its 2024 projections despite a backdrop of the city-state’s slower-than-forecast economic growth in the first three months. Its outlook signals how tailwinds that buoyed global lenders’ income in recent years could be sustained as expectations turn to a higher-for-longer global rates environment.
Net income, excluding one-time items, expanded 15% to S$2.96 billion ($2.2 billion) in the three months ended March 31, according to the statement. That surpassed the S$2.48 billion average estimate by analysts surveyed by Bloomberg News.
Last year, the bank recorded its highest-ever profit that exceeded S$10 billion.
For the first quarter, net interest income for DBS’ commercial book gained almost 8% to S$3.65 billion as margins expanded and its loan book grew.
Wealth management fees surged 47% to S$536 million because of higher assets under management and more clients’ trading activities.
The Monetary Authority of Singapore this week lifted a six-month pause on DBS acquiring new business ventures and cutting its branch and ATM networks in the country. The regulator had imposed the ban following repeated and prolonged disruptions of DBS’ online banking services last year.
Rivals United Overseas Bank Ltd. and Oversea-Chinese Banking Corp report results next week.
Other earnings highlights from DBS:
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Net interest margin widened to 2.14% for the group, one basis point from the preceding quarter
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Cost-income ratio dropped to 37.4%, lower compared to a year and a quarter ago
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Return on equity surged to 19.4%
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Allowances for credit and other losses fell 16% to S$135 million
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Dividend at 54 Singapore cents per share
(Updates with CEO comments, earnings details throughout)
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