DBS Group - OCBC Investment 2024-02-07: Record Profits; Strong Dividend Yield Angle

• DBS (SGX:D05) posted a 2% y-o-y rise in 4Q23 net profits of S$2.39b. This benefited from a higher net interest income and fee income. However, net interest margin of 2.13% was lower than the 2.19% enjoyed in 3Q23.
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Record FY23 performance

• See DBS's announcement dated 7 Feb 2024. For the FY23 full year, DBS's
  • net profit jumped 26% to a record S$10.3b.
  • return on equity (ROE) improved y-o-y from 15% to 18%. FY23
  • net interest margin (NIM) was 2.15% versus 1.75% in 2022.
  • cost-to-income improved y-o-y from 43.0% to 39.9%.
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• DBS also announced a 1-for-10 bonus issue.

DBS's 4Q23 dividend of S$0.54

• Management declared a 4Q23 dividend per share (DPS) of S$0.54, making a full year dividend payout of S$1.92. This is up from S$1.50 in FY22 (excluding special dividends), an increase of S$0.42 or up 28% y-o-y.
• For 2024, DBS's management is guiding for a dividend of S$2.16 or S$0.54 per quarter. As dividend will also be distributed to the 1-for-10 bonus entitlement, this brings DBS's dividends payout for FY24 to S$2.376, up 24% from FY23.
• See DBS's dividend dates. The ex-dividend date is 5 Apr 2024 and dividends will be payable on 19 Apr 2024.

Guiding for double-digit fee income growth.

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Carmen Lee OCBC Investment Research | https://www.iocbc.com/ 2024-02-07 SGinvestors.io

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