3 Important Things For Investors To Know About DBS Group Holdings Ltd Now

DBS Group Holdings Ltd (SGX: D05) is Singapore’s largest bank by total assets.

With US interest rates likely to rise going forward (given the fact that the Federal Reserve has signalled six rate hikes from now till end-2019), investors in Singapore are paying attention to the local banks as higher interest rates may be a net positive for them.

Here are three other important things to know about DBS apart from the movement in interest rates:

1. Latest results

The table below shows some important numbers from DBS’s income statement for the first half of 2017:

Source: DBS 2017 second quarter earnings presentation

The bank’s net profit grew by 4% year-on-year in the reporting period as a result of broad-based loan growth, record fee income, lower expenses due to digitalisation, and lower allowances.

The positive factors were partially offset by a lower NIM (net interest margin) and trading income.

2. Latest dividend

In its 2017 second quarter earnings, DBS declared an interim dividend of 33 cents per share, which is 10% higher than the same period a year ago. DBS has kept its full-year dividend at 60 cents per share in both 2015 and 2016.

The bank’s trailing dividend is currently just 37% of its trailing earnings.

3. What lies ahead

Here’s a slide from DBS’s latest earnings presentation showing its outlook for the rest of 2017:

Source: DBS 2017 second quarter earnings presentation

DBS’s tone for its outlook is rather positive. The bank sees loan growth in the second half of 2017, and a steady cost-to-income ratio . But DBS did warn that specific provisions could be higher than previous guidance; this is linked to falling collateral values for some portion of DBS’s loan portfolio that’s exposed to the oil & gas support services sector.

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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 Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has a recommendation for United Overseas Bank.