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5 Positive Things Investors Should Know About DBS Group Holdings Ltd’s 2017 Second Quarter Performance

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

Recently, I went through the bank’s 2017 second quarter results and would like to share five positive things I found [Editor’s note: An article describing the negative developments with DBS in its latest earnings report has been published. It can be found here]:

1. Record first half earnings

The chart below shows the changes in the bank’s net profit in the first half of 2017 compared to the first half of 2016:


Source: DBS 2017 second quarter earnings presentation

For the first half of 2017, DBS generated its highest ever net profit in the first half of a calendar year.

2. Positive loan growth

The table below shows DBS’s loans in its past four quarters:


Source: DBS 2017 second quarter earnings announcement

We can see that the bank’s gross loans grew sequentially in the second quarter of 2017, after declining marginally in the first quarter of 2017 from end-2016.

3. An increase in cost efficiency

Here’s a chart showing DBS’s cost-to-income ratio in the first half of 2016 and 2017:


Source: DBS 2017 second quarter earnings presentation

We can see that DBS has improved its cost efficiency in the first half of 2017, with the cost-to-income ratio declining.

4. Strong liquidity position

The liquidity coverage ratio (LCR) refers to the ratio of a bank’s highly liquid assets to its short-term obligations. In general, the higher the ratio is, the lower the liquidity risk faced by a bank.

DBS’s LCR stood at 150% in the second quarter of 2017, which is much higher than the requirement of 100% set by the Monetary Authority of Singapore.

5. Higher dividend

For the first half of 2017, DBS raised its interim dividend by 10% to 33 cents per share, up from 30 cents per share a year ago.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. The Motley Fool Singapore has a recommendation for DBS Group.