The largest bank in Singapore, DBS Group (DBSM.SI), reported on Monday that its third-quarter net profit increased by a better-than-anticipated 18% due to higher interest rates, which it predicted would also support continued profit growth in the upcoming year.
The largest lender in Southeast Asia, DBS, is already foreseeing a record full-year profit for the current year. “Net profit (for 2024) to be maintained around record 2023 level,” stated the CEO, Piyush Gupta in results presentation materials.
Gupta also added, “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.”
From July to September of the current year, the bank’s net profit increased to S$2.63 billion ($1.94 billion) from S$2.24 billion due to record-breaking growth in total income from higher interest margins and fee income. That was higher than the average estimate of S$2.5 billion provided by four analysts surveyed by LSEG.
However, because the bank took allowances for exposures related to a suspected money laundering case in Singapore, specific allowances of S$197 million were higher than in previous quarters. One of the banks involved in one of the largest suspected money laundering cases in Singapore is DBS. Banks are scrutinizing more closely as a result of the scandal.
Additionally, Gupta anticipated that the bank’s 2024 net interest income would be comparable to this year’s level and that cards and wealth management would continue to drive fee income momentum. According to the statement, he also predicted that next year’s profit before allowances would be higher and that total allowances would normalize to 17–20 basis points of loans.
In addition to increased interest rates globally, Singapore banks have benefited from substantial inflows of capital drawn by the political stability of the city-state. However, Singapore’s economic prospects may be impacted by global economic uncertainty. The nation’s central bank maintained the same monetary policy parameters in April and October.
Comparable smaller United Overseas Bank (UOBH.SI) revealed a lower-than-expected 1% decline in net profit for the third quarter at the end of October. On November 10, Oversea-Chinese Banking Corp (OCBC.SI) is scheduled to release its quarterly results.
The nation’s central bank last week prohibited DBS from acquiring new companies or making non-essential IT changes for a period of six months in order to make sure the company concentrates on strengthening its online banking services, which have seen multiple disruptions this year. DBS would implement a “comprehensive set of measures” to address the digital disruptions, as stated in Gupta’s statement on Monday.
- Published By Team Genuine Reporter