DBS Group - UOB Kay Hian 2024-05-03: Accelerating Pace Of Returning Surplus Capital To Shareholders

• DBS’s 1Q24 net profit of S$2,951m (+15% y-o-y) was significantly above our expectation. Management will continue to review DBS’s capital structure in view of returning more surplus capital to shareholders.

DBS’ 1Q24 Results

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Resilient NIM despite lower HIBOR.

• NIM expanded 2bp y-o-y and 1bp q-o-q to 2.14% in 1Q24. Net interest income grew 7% y-o-y.
• DBS benefitted from repricing of fixed-rate assets at higher interest rates. 3M HIBOR declined 43bp q-o-q to 4.72% and had a negative impact of 2bp on NIM.
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• Deposits expanded 1% or S$7b q-o-q, while CASA outflow has eased.

Strong organic growth for fee income.

• Fees & commissions jumped 23% y-o-y and 20% q-o-q in 1Q24. The recovery was led by wealth management (+47% y-o-y), cards (+33% y-o-y) and loans-related fees (+30% y-o-y).
• Wealth management benefitted from stronger market sentiment and high net worth clients deploying the expanded AUM in a wide range of investment products.
• Both wealth management and cards benefitted from the consolidation of Citi Taiwan. Excluding Citi Taiwan, growth from wealth management and cards would still be sizeable at 35% and 12% y-o-y respectively.

Bonanza quarter for treasury sales.

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Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-05-03 SGinvestors.io

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