Image: Reuters Berita 24 English - The largest lender in Southeast Asia , DBS Group, announced a 7 percent increase in quarterly net profit...
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| Image: Reuters |
Berita 24 English - The largest lender in Southeast Asia, DBS Group, announced a 7 percent increase in quarterly net profit that was slightly above than market expectations and provided a positive outlook.
Following the government's relaxation of most of the COVID-19 restrictions in April, Singapore banks are also benefiting from a recovery in economic activity in the Asian financial hub.
While the overall market was slightly higher in early trade on Thursday, DBS shares were down 1.7%.
In comparison to the average estimate of S$1.69 billion compiled by Refinitiv from five analysts, DBS reported its net profit for April through June increased to S$1.82 billion ($1.30 billion) from S$1.7 billion a year earlier.
According to DBS CEO Piyush Gupta's earnings announcement on Thursday, "Net interest margin grew for the first time in three years and accelerated in the second quarter, while business momentum and asset quality were sustained."
According to "our ongoing stress tests," the asset quality is still strong.
After local competitors OCBC exceeded expectations and United Overseas Bank signalled additional improvement in net interest margins, the DBS results brought to a close a successful reporting season for Singapore banks.
According to JPMorgan analysts, Singapore lenders could outperform Asian rivals in April-June with a 10 basis point net interest margin expansion, the greatest in the previous eight quarters, they predicted last month.
DBS said that the main profitability metric exceeded 1.8 percent in July, and its net interest margin increased to 1.58 percent for the quarter from 1.45 percent a year earlier.
The bank kept its mid-single digit percent outlook for full-year loan growth.
Due to lower wealth management and investment banking contributions, which more than offset growth in other fee activities, net fee income decreased by 12% in the second quarter.
$1 is equal to 1.3801 Singapore dollars.
