DBS' 1Q25 core-earnings were in-line with Street. Their strong platform is resilient despite volatile operating conditions.
While Management is sticking to similar guidance as was issued pre-Liberation Day, we are more cautious. DBS’ commitment to capital returns and its ‘safe haven’ status provides a cushion for downside balance sheet risks. However, the potential for sizable earnings upgrades amidst poor macro visibility is also limited, in our view.
While NIMs fell, NII held up as excess liquidity is deployed to high quality, low yield instruments and loan substitutes. Management claims 50% of the S$ book is hedged and 1/3 of the loan book is on fixed rates. This should moderate DBS' NIM decline.
Guidance confident. We are more cautious.
Read more at SGinvestors.io.
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