DBS (SGX:D05) posted a strong set of 1Q results which was ahead of market expectations. 1Q26 net profits came in at S$2930m, up 1% y-o-y or 30% q-o-q. The improvement was driven by higher fee and commission income (+16% y-o-y) and higher treasury customer sales and other income (+10% y-o-y).
Strong start to the year.
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Assets under management (AUM) also improved strongly from S$432b in 1Q25 to S$492b in 1Q26. It also attracted more net new money (NNM), which was at a strong rate of S$10b in the quarter.
Allowances came off from S$325m in 1Q25 to S$190m in 1Q26. Its balance sheet remained healthy. New non-performing asset (NPA) formation was low, and this was offset by repayments and write-offs. NPL stayed at 1.0%. Return on equity (ROE) was 17%.
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Geopolitical tensions and elevated risks.
Market tone has turned decisively more cautious since the start of the US-Iran war in late-February 2026. Oil prices have also sky-rocketed to above US$100/ bbl. Against this backdrop, earnings outlook has been hit over the potential impact on demand and supply, especially from significantly reduced oil supply and second order impact.
With DBS’s strong set of 1Q26 results, this has provided comfort that a well-managed and rigorously stress-tested financial institution is able to deliver better results despite massive challenges in 1Q26. Management shared that it has limited direct exposure to the Middle East.
Building its wealth franchise.
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Above is an excerpt from a report by OCBC Group Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
