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DBS posts 8% YOY increase in Q2 net profit, raises dividend


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DBS posts 8% YOY increase in Q2 net profit, raises dividend

DBS Group Holdings Ltd.'s second-quarter net profit rose 8% year over year despite a lower net interest margin.

The group's net profit after tax for the quarter ended June 30 climbed to S$1.14 billion, or S$1.77 per share, from S$1.05 billion, or S$1.67 per share, in the prior-year quarter.

Including one-time items, second-quarter net profit rose 8% year over year to S$1.13 billion from S$1.05 billion, while EPS increased to S$1.76 from S$1.67. The one-time items include the divestment of a unit, general allowances, as well as integration costs related to the acquisition of Australia & New Zealand Banking Group Ltd.'s retail and wealth management operations in certain Asian markets.

The net interest margin for the quarter stood at 1.74%, remaining the same from the previous quarter, but down from 1.87% in the year-ago quarter.

Net interest income for the quarter rose to S$1.89 billion from S$1.83 billion in the year-ago quarter, while net fee and commission income increased to S$636 million from S$628 million over the same period.

Allowances for credit and other losses dropped year over year to S$304 million from S$366 million.

The group's total income remained unchanged at S$2.92 billion.

For the first half ended June 30, net profit after tax climbed 4% year over year to S$2.35 billion, or S$1.83 per share, from S$2.25 billion, or S$1.79 per share.

Including one-time items, the group's first-half net profit rose 5% year over year to S$2.38 billion from S$2.25 billion, while EPS jumped to S$1.84 from S$1.79.

Net interest margin for the first half came in at 1.74%, compared to 1.86% in the first half of 2016.

DBS Group's nonperforming loan ratio was 1.5% as of June 30, up from 1.4% as of March 31 and 1.1% as of June 30, 2016.

As of June 30, the bank's total capital adequacy ratio clocked in at 16.5%, down from 16.6% in the previous quarter and up from 16.3% in the year-ago quarter. The common equity Tier 1 and Tier 1 capital adequacy ratios stood at 14.4% and 15.2%, respectively, compared to 14.6% and 15.4% in the first quarter and 14.2% and 14.4% in the 2016 second quarter.

The company's board declared an interim one-tier tax-exempt dividend of 33 cents for the first half, up from an interim dividend of 30 cents in the prior-year period. The interim dividend will be paid Aug. 11.

As of Aug. 3, US$1 was equivalent to S$1.36.