• Home
  • Business
  • Southeast Asia’s largest bank beats forecasts to post record quarterly profit
Image

Southeast Asia’s largest bank beats forecasts to post record quarterly profit

DBS Group Holdings, Southeast Asia’s largest bank, recently said that its net profit for the first quarter increased by 9% year-on-year to a record 1.65 billion Singapore dollars ($1.21 billion).

Refinitiv, which compiles forecasts by analysts, had projected a fall in net profit in the January to March period compared to a year ago.

The improvement was attributed to higher net interest margin — a measure of lending profitability — which climbed to 1.88% in the first quarter compared to 1.83% a year ago. That offset weakness in wealth management, brokerage and investment banking fees, the bank said.

DBS Group Chief Executive Piyush Gupta said lending margins could still climb, even though the U.S. Federal Reserve has indicated that it would not hike interest rates this year.

The impact of previous Fed rate hikes “haven’t flowed through to our portfolio entirely,” Gupta told CNBC’s Tanvir Gill on Monday after the bank’s earnings release.

He added that around 40% of its loan portfolio will only be re-priced to reflect those higher interest rates in the second or third year after the actual hikes in the U.S.

“It will come through in the later part of this year, that’s the positive driver,” said Gupta, adding that on average, net interest margin for the year would be 5 to 6 basis points higher than 2018.

Interest rates in Singapore are influenced by developments in global markets, rather than domestic monetary policy that is set based on the local currency’s exchange rate. The trajectory of interest rates in the U.S. is an important influence on Singapore’s rates.

DBS is the first among the three Singapore-listed lenders to announce first-quarter earnings. Its smaller rivals Oversea-Chinese Banking Corp and United Overseas Bank are expected to do so on May 10 and May 3, respectively.

DBS shares jumped by 2.81% in afternoon trade in Asia, while OCBC and UOB rose by 2.2% and 1.5%, respectively. The three banks are heavyweights on the benchmark Straits Times Index, which climbed around 1%.

Source:CNBC

Releated Posts

Nigeria: Moghalu appointed Academy of International Affairs fellow

Professor Kingsley Moghalu, President of the Institute for Governance and Economic Transformation (IGET) and CEO of Sogato Strategies…

ByByInstinctBusinessMar 28, 2024

Kenya: DTB boosts dividend amid Sh6.8bn profit growth

Diamond Trust Bank (DTB) Group has raised its dividend payout to a record of Sh6 per share for…

ByByInstinctBusinessMar 28, 2024

Nigeria: Access Corporation Reports Record-Breaking N612.4 Billion Profit

Access Corporation, Nigeria’s leading finance holding company, has announced a remarkable achievement with a profit after tax of…

ByByInstinctBusinessMar 28, 2024

Ghana: Herbert Krapa named ECG’s new board chairman

President Nana Akufo-Addo has appointed Deputy Energy Minister, Herbert Krapa, as the new Board Chair of the Electricity…

ByByInstinctBusinessMar 27, 2024

Leave a Reply

Your email address will not be published. Required fields are marked *