DBS Group Q4 net profit falls 33% YOY

DBS Group Holdings Ltd. said its net profit for the quarter ended Dec. 31, 2020, dropped 33% year over year to S$1.01 billion from S$1.51 billion due to a lower net interest margin and higher total allowances.

EPS for the three-month period fell to S$1.54 from S$2.31.

For full year 2020, the group's net profit dropped 26% year over year to S$4.72 billion from S$6.39 billion.

Net interest income in the fourth quarter fell 13% to S$2.12 billion compared with S$2.43 billion in the year prior, while net interest margin slowed 4 basis points to 1.49% as interest rates stabilized. Total income also declined 6% to S$3.26 billion from S$3.46 billion, according to the company's Feb. 10 earnings release.

On the other hand, the banking group saw a 1% uptick in net fee and commission income for the quarter to S$747 million from S$741 million a year ago.

Fourth-quarter expenses dropped year over year to S$1.58 billion from S$1.60 billion, with the inclusion of costs for the merger of Lakshmi Vilas Bank Ltd. with DBS Bank India Ltd.

Total allowances for credit and other losses during the quarter was S$577 million, unchanged from the previous quarter but higher than the S$122 million allocated in the last quarter of 2019.

As of Dec. 31, 2020, the group's total capital adequacy ratio stood at 16.8%. It was unchanged from Sept. 30, 2020, but higher than 16.7% as of Dec. 31, 2019.

Its common equity Tier 1 capital amounted to S$44.79 billion by the end of 2020. The CET1 ratio was unchanged from the third quarter at 13.9% but was lower than the 14.1% logged a year ago. The Lakshmi Vilas Bank amalgamation caused a 0.3% decline in the ratio. However, it was offset by profit acceleration during the quarter.

The board proposed a final dividend of 18 cents per share, lower than the 33 cents per share paid the year prior. Distribution of the final dividend for 2020 is slated for on or about May 24 to shareholders on record up to April 9.

As of Feb. 9, US$1 was equivalent to S$1.33.