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DBS Group’s Latest Earnings Update: Record Income and Net Profit

Yesterday, DBS Group Holdings Ltd (SGX: D05), one of the three major banks in Singapore, released its 2019 first-quarter earnings update. Here are 10 things that investors should know from the latest earnings update.

  1. Net interest income improved by 9% year-on-year to S$2.31 billion. Total income increased by 6% year-on-year to S$3.6 billion, which was a record high.
  2. Profit before allowance was up by 5% year-on-year to S$2.1 billion. Profit before allowance grew at a slower pace (as compared to total income) mainly due to higher expenses.
  3. Net profit was up by 9% year-on-year to a high of S$1.7 billion, driven by higher income and lower allowance.
  4. Customer loans and deposits were up by 6% and 5%, respectively, as compared to last year.
  5. DBS Group’s net interest margin (NIM) improved from 1.83% to 1.88%. The higher NIM was driven by higher interest rates in Singapore and Hong Kong.
  6. DBS Group’s cost to income ratio grew from 41.6% to 42.2%.
  7. The non-performing loans (NPL) ratio was at 1.5%, down by 0.1%.
  8. On a year-on-year basis, annualised return on shareholders’ equity (ROE) improved from 13.1% to 14.0%, while book value per share rose from S$18.29 to S$18.75.
  9. DBS Group’s Common Equity Tier 1 capital adequacy ratio (CAR), Tier 1 CAR and Total CAR, as of 31 March 2019, were 14.1%, 15.2% and 17.0%, respectively. These ratios are well above the respective regulatory requirement of 6.5%, 8% and 10%, respectively.
  10. DBS CEO Piyush Gupta commented:

“We have had a good start to the year as business momentum was sustained and non-interest income recovered from the recent weakness. The record earnings and ROE progression demonstrate the strengthened profitability of our franchise from digitalisation, a shift towards higher-returns businesses and more nimble execution. We are well placed to continue capturing growth opportunities across the region and delivering healthy shareholder returns.”

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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 recommendations for DBS Group Ltd.