DBS Group - UOB Kay Hian 2023-11-07: 3Q23 Resilient NIM & Net Profit; Pondering Capital Management

• DBS’ 3Q23 net profit of S$2,593m (+16% y-o-y) was slightly above expectations. NIM expanded 29bp y-o-y and 3bp q-o-q, while net interest income grew 16% y-o-y. Other non-interest income expanded by a robust 21% y-o-y to S$845m.
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• DBS will consider capital management by potentially returning surplus capital of S$3b or S$1.20 per share to shareholders.

DBS' 3Q23 Results

• DBS Group (SGX:D05) reported net profit of S$2,593m for 3Q23, up 16% y-o-y but down 1% q-o-q. The results were slightly above our net profit forecast of S$2,532m despite incurring one-time integration costs of S$40m for Citibank Taiwan.

Continued NIM expansion.

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• Net interest income grew 16% y-o-y.

Loans contracted 2% y-o-y.

• Loans grew 1% q-o-q on a constant-currency basis in 3Q23. Corporate loans contracted 1% q-o-q due to higher prepayments. Trade loans contracted 3% q-o-q due to unattractive pricing.
• Citibank Taiwan contributed loans of S$10b.

Broad-based growth in fee income.

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Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-11-07 SGinvestors.io

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