The Motley Fool

3 Interesting Charts From DBS Group Holdings Ltd’s 2018 Annual Report

DBS Group Holdings Ltd (SGX: D05) achieved another record performance in 2018 as net profit increased 28% from the previous year. Total income was 11% higher, largely due to higher net interest income and fee income. Perhaps the greatest achievement for the bank was generating a return on equity of 12.1% for the year, the highest seen since 2007. The feat is made even more impressive with the stricter capital requirements facing DBS today.

Besides the impressive headline numbers, DBS ‘s annual report for 2018 – released just yesterday – also brought to light many interesting developments in the bank. Here are three charts from the report that really caught my eye.

Increasing market share

Even with heavy competition from other major banks in Singapore, DBS has still managed to grow its market share of loans in Singapore. The chart below compares DBS’s market share in 2009 with 2018.


Source: DBS 2018 annual report

DBS has increased its market share across the whole spectrum of loan types, with its overall market share in Singapore increasing four percentage points to 25%.

Digital transformation

DBS has been at the forefront of digital innovation for some time now. In July last year, the bank was crowned World’s Best Digital Bank by Euromoney for the second time in three years.

The emphasis on digitalisation has not only gained DBS worldwide recognition, but also has been one of the drivers of its high return on equity in 2018. The chart below shows how digital services compare to traditional methods in terms of the cost-to-income ratio.


Source: DBS 2018 annual report

Digital banking services had a 20 percentage-point advantage over traditional banking services in terms of the cost-to-income ratio. In 2018, digital banking services made up 68% of all consumer and SME business for DBS, up from 63% in 2017. As the bank continues to shift towards digitalisation, we are likely to see its overall cost-to-income ratio continue to decline, resulting in improving profit margins in the future.

Consistency

Finally, DBS has been an epitome of consistency. The bank has achieved income growth over the past five years. In 2018, the 11% growth in income to S$13.2 billion was driven by both its fee and loan businesses. In the loan business, a higher net interest margin played a role in the growth of DBS’s interest income too.

The chart below shows DBS’ net income growth over the last five years.


Source: DBS 2018 annual report

DBS has grown its net income from S$9.6 billion in 2014 to S$13.2 billion in 2018. This translates to a respectable 6.5% compound annual growth rate.

The Foolish bottom line

DBS has been a model of consistency. The bank, however, is clearly not resting on its laurels and is positioning itself well for the future with its drive towards digitalisation. It has also managed to wrestle market share in loans from its fellow competitors over the past decade, proving that the DBS brand continues to resonate among Singaporeans.

The Motley Fool's purpose is to make the world smarter, happier, and richer. 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.

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

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has a recommendation on DBS Group Holdings Ltd. Motley Fool Singapore contributor Jeremy Chia owns shares in DBS Group Holdings Ltd.