DBS Group - RHB Invest 2023-11-07: ASEAN & India The Bright Spots Ahead

• DBS (SGX:D05)'s 3Q23 results were in line, with a sequential rise in loan provisioning damping better operating income. The latest round of action by the Monetary Authority of Singapore (MAS) on DBS following various service disruptions may not impact its financials meaningfully nor, more importantly, adversely affect its deposit franchise.
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3Q23 results in line

• DBS's 3Q23 results in line with 9M23 net profit of S$7.8bn (+33% y-o-y) making up 75% of ours and 77% of consensus’ FY23F PATMI. ROE improved to 18.6% (9M22: 14.3%) while CET-1 was stable q-o-q at 14.1%.
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Net profit flat Q-o-q

• Q-o-q, reported net profit was flat with stronger operating income (+3% q-o-q on +3bps NIM expansion and 7% rise in other Non-II) offset by higher opex (+4% q-o-q) and loan allowances (3x higher).
• DBS set aside higher specific allowances (SP) in 3Q with S$100m (almost full provision) relating to property loan exposures linked to a recent money laundering case. DBS also made some SP for property-related exposures in China.

Loan growth subdued

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Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2023-11-07 SGinvestors.io

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