The largest bank in Singapore, DBS Group, reported on Thursday that higher interest rates contributed to income growth and expected rise in its net interest margin (NIM), causing its second-quarter profit to leap an expectation-beating 48% to a new record.
A hike in the Hong Kong Interbank Offered Rate and unanticipated increases in U.S. interest rates in the second half, according to DBS, have boosted the outlook for NIM, a crucial measure of profitability.
According to presentation slides that accompanied its results, it anticipated continuing support from the one-fifth of its commercial book that still needed to be repriced and less deposit repricing pressure than it had anticipated.
In early trade on Thursday, DBS shares increased 1.1% despite a somewhat flat broader market.
The smaller counterpart United Overseas Bank (UOBH.SI), whose views were followed by DBS after it reported a 27% increase in second-quarter earnings last Thursday, had a more optimistic prognosis for NIM in the wake of the most recent U.S. rate hike.
Due to the city-state's reputation as a financial haven, Singapore banks have profited from large wealth inflows during times of global uncertainty in addition to higher interest rates.
On Friday, Oversea-Chinese Banking Corp is scheduled to release its second-quarter financial results.
According to the presentations, DBS, which is also the largest lender in Southeast Asia by assets, anticipates another record year as first-half drivers continued into the second. It anticipates a full-year return on equity of over 17%.
"While there is some macroeconomic uncertainty, our prospects for the rest of the year are anchored on a franchise with a proven ability to capture business opportunities," DBS Chief Executive Officer Piyush Gupta said in a statement.
In comparison to S$1.82 billion a year earlier, DBS said that the net profit for April through June reached a quarterly record high of S$2.69 billion ($2.69 billion).
This was greater than the S$2.41 billion consensus forecast of the four analysts surveyed by Refinitiv.
For the sixth straight quarter, DBS' NIM increased to 2.16% from 1.58% a year earlier.
Return on equity increased to a new quarterly high of 19.2% from 13.4% in the corresponding period last year.
A dividend of 48 Singapore cents per share was issued.
(Source:www.channelnewsasia.com)
A hike in the Hong Kong Interbank Offered Rate and unanticipated increases in U.S. interest rates in the second half, according to DBS, have boosted the outlook for NIM, a crucial measure of profitability.
According to presentation slides that accompanied its results, it anticipated continuing support from the one-fifth of its commercial book that still needed to be repriced and less deposit repricing pressure than it had anticipated.
In early trade on Thursday, DBS shares increased 1.1% despite a somewhat flat broader market.
The smaller counterpart United Overseas Bank (UOBH.SI), whose views were followed by DBS after it reported a 27% increase in second-quarter earnings last Thursday, had a more optimistic prognosis for NIM in the wake of the most recent U.S. rate hike.
Due to the city-state's reputation as a financial haven, Singapore banks have profited from large wealth inflows during times of global uncertainty in addition to higher interest rates.
On Friday, Oversea-Chinese Banking Corp is scheduled to release its second-quarter financial results.
According to the presentations, DBS, which is also the largest lender in Southeast Asia by assets, anticipates another record year as first-half drivers continued into the second. It anticipates a full-year return on equity of over 17%.
"While there is some macroeconomic uncertainty, our prospects for the rest of the year are anchored on a franchise with a proven ability to capture business opportunities," DBS Chief Executive Officer Piyush Gupta said in a statement.
In comparison to S$1.82 billion a year earlier, DBS said that the net profit for April through June reached a quarterly record high of S$2.69 billion ($2.69 billion).
This was greater than the S$2.41 billion consensus forecast of the four analysts surveyed by Refinitiv.
For the sixth straight quarter, DBS' NIM increased to 2.16% from 1.58% a year earlier.
Return on equity increased to a new quarterly high of 19.2% from 13.4% in the corresponding period last year.
A dividend of 48 Singapore cents per share was issued.
(Source:www.channelnewsasia.com)
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