DBS Group - Phillip Securities 2023-05-25: Dividends To Increase By S$0.24 Per Year

• We attended DBS’ Investor Day on 22 May 2023 where management shared their digital-led strategy in growth markets, how new businesses with potential have evolved from the previous Investor Day in 2017 and addressed some of the questions from investors and analysts.
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• Technology has transformed the way they manage with the use of a hybrid multi-cloud strategy with in-house infrastructure as a service. Other business segments such as Consumer and SME, Private banking, Global transaction services, and Treasury markets have also benefited from the digital transformation.

DBS' Group Financials

Medium-term ROE of 15-17%, dividends to increase by S$0.24 per year.

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• increasing ROE with scale in growth markets such as transaction banking, wealth management, SME lending and unsecured retail lending, and;
• capital headroom to support profitable growth and higher distributions.
• Notably, DBS' ordinary dividends would be lifted by S$0.24 to S$1.68 in 2023. There is also a further upside of S$3bn based on the optimal CET-1 operating range of 12.5-13.5% (1Q23: 14.1%), which could be distributed in further ordinary dividend step-up, special dividend or share buyback. See DBS' dividend history.

Group ROE structurally improved by 250bps.

• Read more at SGinvestors.io.

Glenn Thum Phillip Securities Research | https://www.stocksbnb.com/ 2023-05-25 SGinvestors.io

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