Interest fee

DBS first-quarter profit drops 10% to $1.8 billion on lower commission revenue in weaker markets

SINGAPORE – DBS Group Holdings on Friday (April 29th) reported lower first-quarter earnings from its record profit a year ago as higher interest rates were partly offset by lower revenue from fees, as the bank’s wealth management business was impacted by weaker markets. .

DBS’ net profit fell 10% to $1.8 billion, beating the $1.62 billion forecast by financial data platform Refinitiv. It is also the bank’s second best quarterly result.

The board declared a dividend of 36 cents per share for the first quarter. The estimated dividend payable is $926 million.

The Singaporean bank’s latest profit was lower than the $2.01 billion reported a year ago – the first time quarterly profits crossed the $2 billion mark and the first growth it had then in addition to ‘a year.

DBS said its performance was moderated by a strong base for the wealth and cash management businesses a year ago, when sustained market sentiment and clear momentum drove revenue from both businesses to exceptional levels. .

Chief Executive Piyush Gupta said first-quarter business momentum was strong and broad-based.

“Geopolitical developments in recent weeks have created macroeconomic headwinds and financial market volatility. We have stress tested our portfolio and it remains resilient.

“While some businesses such as wealth management will be affected, our overall business pipeline continues to be healthy and we will benefit significantly from interest rate increases over the coming quarters,” he said. declared.

Mr. Gupta added that loans are expected to increase by 1% to 2% in the second quarter, bringing loan growth for the first half to around 3% to 4%.

For all of 2022, lending is expected to grow mid-single-digit percentage if momentum slows in the second half, the CEO said. DBS previously said it expected mid-to-high single-digit loan growth this year.

Net interest income for the first quarter rose 4% year-over-year to $2.19 billion amid higher interest rates.

Net interest margin – a key indicator of a lender’s profitability – fell three basis points to 1.46%. This offset loan growth of 8% or $30 billion.

Net fee income fell 7% from last year’s record to $891 million as weaker market sentiment hit wealth management and investment banking.

Other commission-generating activities increased. Loan fees rose 21% to $144 million, while card fees rose 11% to $187 million as credit and debit card spending exceeded before the pandemic and increased travel spending.

DBS’s latest revenue fell 3% year-over-year to $3.75 billion. Expenses were $1.64 billion, 4% higher than a year ago due to base salary increases made in the middle of last year.

Its latest earnings were 30% higher than the previous quarter, amid higher total revenues thanks to broad-based growth.