7 Quick Facts About DBS Group Holdings Ltd

DBS Group Holdings Ltd (SGX: D05) is one of the cool companies in Singapore that shares webcasts and/or transcripts of their earnings presentations.

There may be useful information that investors can learn from the webcasts and transcripts. A few weeks ago, DBS had released its earnings for the quarter and year ended 31 December 2015. I had spent time listening to the webcast for the earnings release and noted seven important takeaways.

But before I share them, here’s a quick background on DBS Group for context. The company, a leading financial services group in Asia with 280 branches across 18 markets, is one of the three major banks based out of Singapore along with Oversea-Chinese Banking Corp Limited (SGX: O39) and United Overseas Bank Ltd (SGX: U11).

With that, here are my notes:

  1. Chng Sok Hui, DBS Group’s chief financial officer, kicked of the meeting with an overview of the bank’s performance. Among the key figures shared were:
    • The cost/income ratio for the year was maintained at 45%.
    • The bank’s return on equity for the year was 11.2%
  2. Meanwhile, DBS Group’s net interest margin (NIM) of 1.84% at the end of the fourth-quarter of 2015 is at its highest levels over the past five years. Chng said that the higher NIM was inline with the higher Singapore-dollar interest rate. For the full year, the NIM averaged at 1.77%.
  3. For the full year, customer loans rose by 3%, or $8 billion, to $287 billion. DBS Group’s Consumer Banking/Wealth Management (CBG) loans saw a $7 billion uptick while its Institutional Banking (IBG) loans saw an increase of $11 billion. This was offset by an $11 billion fall in trade loans.
  4. As mentioned in an earlier article, DBS Group reported a loan-to-debt ratio of 88%. The Asian giant also had a loan coverage ratio of 122%, above the Basel requirement of 100% by 2019.
  5. Fee income for the full year rose by 8% to $2.45 billion on the back of cards, loan-related fees, and wealth management fees. The card fees and wealth management fees both jumped by 18% each while loan-related fees grew by 15%. These were held back by sharply lower investment banking fees.
  6. Total IBG income was $5.3 billion while profit before tax was $3 billion. Total CBG income was $3.5 billion while profit before tax was $1.2 billion. The market share of Singapore savings accounts was 53% at the end of 2015.
  7. For Hong Kong, net profit for the year increased by 14% on a constant currency basis. The increase in Singapore dollar terms was 24% (a jump to $1.1 billion) as the bank had benefited from a 9% appreciation in the Hong Kong dollar.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.