Singapore DBS Q3 profit beats view, sees steady earnings next year

Singapore DBS Q3 profit beats view, sees steady earnings next year

DBS Group, Singapore’s largest bank, announced an 18% increase in third-quarter net profit, surpassing expectations. The bank attributed this growth to higher interest rates and projected that these rates would help maintain steady profits in the coming year. DBS has already forecasted a record full-year profit for the current year and expects to maintain this level of profitability in 2024. CEO Piyush Gupta emphasized the positive impact of higher interest rates on earnings and highlighted the bank’s strong balance sheet, liquidity, general allowance reserves, and capital ratios as buffers against macro uncertainties.

In the third quarter, DBS reported a net profit of S$2.63 billion, up from S$2.24 billion the previous year. This increase was driven by record total income, which was supported by higher interest margins and fee income. The bank’s performance exceeded the mean estimate of S$2.5 billion from four analysts surveyed.

Gupta also expressed confidence in the bank’s future prospects. He anticipated that net interest income in 2024 would be on par with the current year, and fee income momentum would be sustained by wealth management and cards. Additionally, he forecasted higher profits before allowances for the next year and expected total allowances to normalize to 17-20 basis points of loans.

Singapore’s banks, including DBS, have benefited from strong inflows of wealth due to the country’s political stability. However, global economic uncertainty could pose challenges to Singapore’s economic outlook. The country’s central bank has maintained unchanged monetary policy settings in April and October.

DBS’s smaller peer, United Overseas Bank, reported a 1% decline in third-quarter net profit, falling short of expectations. Oversea-Chinese Banking Corp is set to announce its quarterly results on November 10.

Last week, DBS was restricted by the central bank from acquiring new businesses or making non-essential IT changes for six months. This measure aims to ensure the bank focuses on strengthening its digital banking services following disruptions experienced this year. Gupta stated that DBS would implement a comprehensive set of measures to address these digital disruptions.

In conclusion, DBS Group’s strong performance in the third quarter, driven by higher interest rates, has exceeded expectations. The bank is optimistic about maintaining steady profits in the future and has outlined strategies to address digital disruptions.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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