DBS Group - Maybank Research 2023-11-06: Growth Is Peaking; Focus On Yield

• DBS (SGX:D05) reported 9M23 core-earnings ahead of expectations. Net interest income continues to be robust from supportive net interest margins.

Dividends growth sustainable

• While margins seem to have peaked, higher for longer rates should continue to support net interest income, while green-shoots in wealth management could boost non-interest income.
• - Read this at SGinvestors.io -

Stable net interest income

• DBS's 3Q23 net interest income (NII) expanded 16% y-o-y – the slowest pace since 2Q22. This was mostly supported by higher net interest margins (NIMs) (+29bps y-o-y). The pace of growth is decelerating (+3bps 3Q23, +4bps 2Q23, +7bps 1Q23) as interest rate hikes slow.
• - Read this at SGinvestors.io -
• We expect these trends to persist into 2024E from a slower China and higher for longer interest rates.
• We lower 2023-25E loans by 3-6%. Overall 2024E net interest income should be at similar levels to 2023E.

Improving non-interest income

• Read more at SGinvestors.io.

Thilan Wickramasinghe Maybank Research | https://www.maybank-ke.com.sg/ 2023-11-06 SGinvestors.io

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