- DBS (SGX:D05)'s 3Q23 adjusted PATMI of S$2.63bn was above our estimates due to higher NII, fee income and other non-interest income offset by higher allowances. 9M23 adjusted PATMI is 78% of our FY23e forecast.
- - Read this at SGinvestors.io -
- NII rose 16% y-o-y on NIM expansion of 29bps despite loan growth dipping slightly. Fee income rose 9% y-o-y, while other non-interest income grew 21% y-o-y. DBS has maintained its FY23e guidance.
- DBS provided FY24e guidance of double-digit fee income growth (from wealth management and credit card fees), stable NII as higher NIMs from higher-for-longer rates will be offset by lower loan growth and total allowances to normalise to 17-20bps of loans. FY24e PATMI to be maintained at around the current levels in FY23.
- - Read this at SGinvestors.io -
The Positives
NIM and NII continue to increase y-o-y.
- DBS's NII rose 16% y-o-y to S$3.5bn due to a 29bps NIM increase to 2.19% (2Q23: 2.16%) as interest rates continue to remain high, despite loan growth dipping 2% y-o-y.
- Loan growth dipped due to a decline in customer and trade loans due to unattractive pricing while non-trade corporate loans were lower due to higher repayments. Nonetheless, the Citi Taiwan consolidation contributed S$10bn to loans.
Fee income continues to grow.
- Read more at SGinvestors.io.
