DBS posts 33% fall in Q4 profit to $1.01 billion
SINGAPORE – DBS Group Holdings posted a 33 per cent plunge in fourth-quarter earnings as its net interest margin fell and it set aside higher allowances for potential bad loans.
South-east Asia’s biggest lender on Wednesday (Feb 10) reported net profit of $1.01 billion, down from $1.5 billion a year ago.
Its earnings were in line with an average estimate of $1.02 billion from four analysts, according to estimates compiled by financial data platform Refinitiv.
The board has declared a final dividend of 18 cents a share, down from 33 cents for the year-ago period, to which the bank’s scrip dividend scheme will apply.
The bank’s net interest income dipped 13 per cent year on year to $2.12 billion. Its net interest margin fell 37 basis points to 1.49.
Net interest margin is a key gauge of profitability for banks, measuring the difference between income earned from loans and the interest paid to depositors.
Total allowances at $577 million, were almost five times higher than the year before.
DBS’ earnings per share for the fourth quarter stood at $1.54, a decrease from $2.31 a year ago.
For the full year, the bank’s net profit dropped 26 per cent to $4.72 billion due to a decline in net interest margin and a quadrupling of allowances to $3.07 billion.
DBS chief executive Piyush Gupta said: “Business momentum was sustained in the fourth quarter and our pipeline for loans and fee income is healthy. We have been proactive through the crisis and enter the year with new growth platforms.”
DBS is the first local lender to report fourth-quarter earnings. Smaller peers OCBC and UOB will release theirs on Feb 24 and Feb 25, respectively.
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