DBS reports 3QFY2023 net profit of $2.63 bil; 9MFY2023 net profit of $7.89 bil at new high

An interim quarterly dividend of 48 cents was declared for the 3QFY2023.

DBS Group Holdings has reported a net profit of $2.63 billion for the 3QFY2023 ended Sept 30, 18% higher y-o-y. This brings the bank’s 9MFY2023 net profit to a record $7.89 billion, 35% higher y-o-y.

Net profit including one-item items for the 3QFY2023 and 9MFY2023 stood at $2.59 billion and $7.79 billion respectively.

For the 3QFY2023, total income grew by 16% y-o-y to a record $5.19 billion from higher net interest margin (NIM) and higher commercial book non-interest income. NIM for the 3QFY2023 stood at 2.82%, up 52 basis points (bps) y-o-y and 1 bps q-o-q from higher rates.

3QFY2023 net interest income (NII) under its commercial book business rose by 23% y-o-y to $3.68 billion from higher NIM while net fee and commission income rose by 9% y-o-y to $843 million from higher wealth management, cards and loan-related fees. Loans grew by 1% q-o-q in constant currency terms to $420 billion.

The consolidation of Citi Taiwan, which took place on Aug 12, contributed $10 billion to loans and $12 billion in deposits. It also boosted DBS Taiwan’s credit card accounts by five-fold to over 3 million and tripled investment assets under management (AUM) to over $12 billion. Provisional goodwill of $936 million was recorded while one-time integration costs of $40 million were accrued in the third quarter.

Excluding Citi Taiwan, non-trade corporate loans declined 1% from higher repayments while trade loans fell 3% due to unattractive pricing. Housing and other consumer loans were 1% lower. Deposits grew 2% in constant-currency terms from the previous quarter to $531 billion due to the consolidation of Citi Taiwan.

Treasury customers sales and other income rose by 8% y-o-y to $499 million.

DBS’s NII under treasury markets stood at a negative $180 million, down from the $31 million in the 3QFY2022. Non-interest income rose by 45% y-o-y to $346 million.

Compared to the record in the previous quarter, net profit was 2% lower as higher income was offset by higher expenses and total allowances.

Expenses for the 3QFY2023 rose by 12% y-o-y to $5.19 billion.

Allowances for credit and other loans rose by 21% y-o-y to $215 million.

As at Sept 30, DBS’s cost-to-income ratio improved by 4 percentage points to 39%.

Its non-performing loan (NPL) ratio stood unchanged at 1.2% while its leverage ratio stood at 6.4% as at Sept 30.

DBS’s loan-to-deposit ratio (LDR) as at Sept 30 stood at 79% while its liquidity coverage ratio (LCR) stood at 138%. Net stable funding ratio stood at 117%.

Its common equity tier 1 (CET-1) ratio stood unchanged q-o-q at 14.1%.

For the 3QFY2023, the bank has declared a dividend of 48 cents per share, bringing its total dividend for the 9MFY2023 to $1.38 per share.

“We achieved record income in the third quarter as NIM continued to expand and growth in commercial book non-interest income was sustained. The successful integration of Citi Taiwan has progressed our strategy of building meaningful scale in growth markets. As we enter the coming year, higher-for-longer interest rates will be a net benefit to earnings, while our solid balance sheet with ample liquidity, prudent general allowance reserves and healthy capital ratios will provide us with strong buffers against macro uncertainties,” says DBS CEO Piyush Gupta.

“We will also dedicate ourselves to executing the comprehensive set of measures we recently announced to address the series of digital disruptions, for which we are truly sorry. We are committed to strengthening our technology resilience and ensuring customer service reliability,” he adds.

Shares in DBS closed 63 cents higher or 1.93% up at $33.29 on Nov 3.

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