DBS Group Smashes Records: DBS Group, Singapore’s largest bank, reported a 48% increase in second-quarter profits, shattering its record. The bank anticipates rising net interest margin (NIM) due to increased interest rates.
Because U.S. interest rates rose more than predicted and the Hong Kong Interbank Offered Rate increased, NIM, a key profitability measure, improved.
Both of these started the right trend. DBS’s earnings presentation showed optimism about sustained support from one-fifth of its business book, which has yet to be repriced, and less pressure to reprice deposits. Data presentations say this.
DBS Company Limited (DBS) rose 1.1% in early trade on Thursday, outperforming the market.
DBS’s smaller competitor, United Overseas Bank, agrees. The recent rise in U.S. interest rates made United Overseas Bank more hopeful about NIM, and its second-quarter profits rose 27%. DBS agrees with UOB.
Due to its reputation as a haven, Singapore’s banks are flush with cash. This made banks rich. Singapore banks have profited from increased interest rates and this large flood of money.
DBS expects the first-half growth to continue. This year will break the annual water level record again. The bank expects its yearly return on equity to exceed 17%.
DBS CEO Piyush Gupta said, “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,” indicating the bank’s optimism.
The company’s net profit reached S$2.69 billion from April to June, above Refinitiv’s average expectation of S$2.41 billion. They earned $1.82 billion Singapore dollars the year prior.
DBS’s NIM rose to 2.16% for the sixth consecutive quarter. This rise has lasted a year. NIM rose from 1.58% a year ago.
Return on equity increased from 13.4% to 19.2%. DBS dividends are 48 Singapore cents per share. This indicates the bank’s confidence in its future and recent success.