DBS Group Holdings in the central business district of Singapore.
Nicky Loh | Bloomberg | Getty Images
SINGAPORE – DBS Group Holdings, the largest bank in Singapore and Southeast Asia, reported second-quarter earnings on Thursday that exceeded expectations as the economic recovery hits its home market.
The bank’s net income for the April-June quarter rose 37% year over year to $ 1.7 billion (US $ 1.26 billion). According to Refinitiv analyst estimates, this exceeded an average forecast of 1.42 billion Singapore dollars.
Compared to the previous quarter, however, net income was 15% lower.
Singapore DBS stock rose roughly 0.6% in early trading following the financial results release.
“Business momentum and asset quality have both been better than expected as economic recovery from the pandemic takes hold,” the bank’s chief executive officer Piyush Gupta said in a statement.
“While risks remain, our pipeline remains healthy and we expect business momentum to continue over the coming quarters,” he added.
DBS announced a dividend of 33 Singapore cents per share for the second quarter. That’s up from 18 Singapore cents a share in the previous quarter after the Monetary Authority of Singapore removed a cap on dividend payments.
Here are the other highlights from the results report:
- The bank’s provisions for potential loan losses decreased to $ 79 million in the second quarter from $ 849 million a year earlier.
- The net interest margin, a measure of the profitability of lending, was 1.45% for the second quarter. That is less than 1.62% a year ago.
- Customer loans rose to around $ 397 billion in the first six months of 2021, 6% more than the same period last year.
A day before DBS released its second quarter results, its smaller Singapore competitors – Oversea-Chinese Banking Corp and United Overseas Bank – reported financial results that exceeded estimates.
OCBC, Singapore’s second largest bank, reported a 59% year-over-year increase in net income to $ 1.16 billion in the second quarter. UOB’s net income for the period was approximately $ 1 billion, up 43% from a year ago.