The Motley Fool

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

DBS Group Holdings Ltd (SGX: D05), or DBS, is one of the three major banks based out of Singapore, along with United Overseas Bank Ltd and Oversea-Chinese Banking Corp Limited.

The company has recently announced its 2018 fourth-quarter earnings update, and there are five positive things I think investors should take note. But first, let’s run through the company’s numbers.

The results

Here’s a quick summary of some key financial metrics for the quarter.

Source: DBS’s Result Presentation

All metrics improved on a year-on-year basis, but there’s more to these numbers.

First of all, total income for the quarter grew 6% year on year to S$3.2 billion due to double-digit percentage growth in net interest income, offset slightly by lower non-interest income.

Secondly, DBS Group’s Hong Kong business delivered a strong result for the quarter, with total income up 16% year on year (constant-currency term) to S$698 million, while net profit grew 33% (constant-currency term) compared to last year, to S$329 million.

Thirdly, net interest margin rose to 1.87%, up from 1.78% in the same period last year. Also, customer loans and deposits were up by 7% and 5%, respectively, as compared to the same period last year.

Next, annualized return on equity (ROE) improved to 11.3% from 10.5% a year ago. Furthermore, 2018 full-year ROE reached a decade high of 12.1%.

Last but not least, DBS Group maintained an extremely sound capital position as of 31 December 2018. Its Common Equity Tier 1 capital adequacy ratio (CAR), Tier 1 CAR, and Total CAR as of 31 December 2018 were 13.9%, 15.1%, and 16.9%, respectively. These ratios were well above the respective regulatory requirements of 6.5%, 8%, and 10%.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook  to keep up-to-date with our latest news and articles.

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 for DBS Group Ltd, Oversea-Chinese Banking Corp Limited, and United Overseas Bank Ltd.