5 Things That I Like About DBS Group Holdings Ltd’s Latest Earnings Update

DBS Group Holdings Ltd (SGX: D05) is one of the three major banks based in Singapore. In late April, the bank announced its 2018 first quarter earnings update. Here are five positive things that I think investors should know about DBS’s latest result:

1. Total income for DBS (the revenue of the bank) grew 16% year-on-year to a record high of S$3.4 billion in 2018’s first quarter, “led by broad-based growth in loans and non-interest income as well as a higher net interest margin.”

2. DBS’s Hong Kong business delivered an exceptional quarter. In terms of constant currencies, the business’s total income and net profit were up by 99% and 100% year-on-year, respectively

3. DBS’s cost-to-income ratio fell from 43% to 42% as a result of its income growth, and a slower increase in expenses. The bank’s total income had increased by 16% as mentioned earlier, but its expenses stepped up by only 12%. In general, a lower cost-to-income ratio is preferred.

4. The annualized return on equity (ROE) for the bank improved from 11.1% a year ago to 13.1%, the highest level achieved in a decade.

5. DBS maintained an extremely sound capital position and strong balance sheet as of 31 March 2018. Its Common Equity Tier 1 capital adequacy ratio (CAR), Tier 1 CAR, and Total CAR were at 14.0%, 15.0%, and 15.8% respectively. They were well above their respective regulatory requirements of 6.5%, 8%, and 10%.

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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. The Motley Fool Singapore has a recommendation on DBS Group Holdings.