Singapore bank DBS’ Q2 profit jumps 48% to record, beats forecasts By Reuters

By Yantoultra Ngui

SINGAPORE (Reuters) -Singapore’s biggest bank DBS Group (OTC:) said on Thursday its second-quarter profit jumped a forecast-beating 48% to a new record as higher interest rates helped drive income growth, and forecast growth in its net interest margin (NIM).

DBS said the outlook for NIM, a key indicator of profitibility, had improved due to unexpected U.S. interest rate increases in the second half and a rise in the Hong Kong Interbank Offered Rate.

It looked forward to continued support from one-fifth of its commercial book yet to reprice and lower deposit repricing pressure than it had expected, according to presentation slides accompanying its results.

“The commercial book benefited from higher interest rates and broad-based growth in non-interest income activities, which was moderated by higher funding costs for treasury markets,” DBS Chief Executive Officer Piyush Gupta said in a statement.

“While there is some macroeconomic uncertainty, our prospects for the rest of the year are anchored on a franchise with a proven ability to capture business opportunities,” Gupta added.

DBS, which is also Southeast Asia’s largest lender by assets, said April-June net profit hit a quarterly record high S$2.69 billion ($2.69 billion) compared to S$1.82 billion a year earlier.

This exceeded the average estimate of S$2.41 billion from four analysts surveyed by Refinitiv.

DBS’ NIM, a key profitability gauge, rose for sixth consecutive quarter to 2.16% during the quarter from 1.58% a year earlier.

Return on equity hit new quarterly high of 19.2%, up from 13.4% the same quarter a year ago.

It declared a dividend of 48 Singapore cents per share.

($1 = 1.3411 Singapore dollars)