DBS achieved net profit of S$2,571m (+43% y-o-y) in 1Q23. NIM expanded 7bp q-o-q, while net interest income grew 50% y-o-y. Asset quality improved with NPL ratio stable at 1.2% and ample management overlay for general provisions of S$2.1b. Management expects CIR to fall below 40% and ROE to rise above 17% in 2023.
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DBS' 1Q23 Results
DBS Group (SGX:D05) reported net profit of S$2,571m for 1Q23, up 43% y-o-y and 10% q-o-q. The results were above our net profit forecast of S$2,446m. See DBS' announcement dated 02 May 2023.
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Fees & commissions rebounded 29% q-o-q. Wealth management fees and loan-related fees recovered 39% and 80% q-o-q respectively. Contribution from cards increased 21% y-o-y due to resumption of business and leisure travel.
Other non-interest income expanded 35% y-o-y to S$814m in 1Q23, driven by both customer flows and treasury market activities.
Improved cost efficiency. Operating expenses increased 14% y-o-y, driven by higher staff cost. Cost-to-income ratio (CIR) improved 6.6ppt y-o-y to 38.1% in 1Q23.
Asset quality remains stable. Non-performing loan (NPL) formation was benign at S$218m in 1Q23. NPL balance dropped 3% q-o-q and NPL ratio was stable 1.1% in 1Q23. General provisions of S$99m were made to strengthen loan-loss coverage to 127%. There is ample management overlay for general provisions at S$2.1b.
Delivering record performance. DBS' ROE reached a new record high of 18.6%. CET-1 CAR remains robust at 14.4%. Quarterly dividend was maintained at S$0.42. See DBS' dividend date.
NIM peaked in 1Q23.
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Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
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