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Higher Provisions Squeeze DBS' Wealth, Consumer Banking Results

Editorial Staff, 11 February 2021


Although underlying results showed robust performance, the headline figures for the consumer and wealth management business showed that higher provisioning linked to the pandemic had taken a toll.

Singapore-based DBS said yesterday that the consumer banking and wealth management division logged a pre-tax profit of S$2.023 billion ($1.052 billion) for 2020, falling from S$2.777 billion a year ago; this was  affected by a rise in allowance for credit and other losses, as well as a drop in net interest income. 

Allowances for credit and other losses stood at S$456 million in 2020, against S$242 million a year ago, the bank said in a statement. Net interest income stood at S$3.339 billion, down from S$4.037 billion.

For the banking group as a whole, DBS reported net profit of S$4.72 billion for full-year 2020, falling by 26 per cent from the previous year. Total allowances more than quadrupled to S$3.07 billion as general allowances of S$1.71 billion were set aside for potential risks arising from the pandemic. Profit before allowances rose by 2 per cent to S$8.43 billion.

At the end of December 2020, the bank’s Common Equity Tier 1 ratio – a standard measure of a bank’s financial strength – was 13.9 per cent, compared with 14.1 per cent a year earlier.

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