DBS' Wealth Fees Rise In Q1; Group Profit Hit By Higher Provisions

Tom Burroughes

1 May 2020

A strong rise in wealth management fees during the first three months of 2020 helped underpin results for , lifting fee income by 14 per cent from the same period a year ago to S$832 million (about $590 million). Wealth management fees rose by 28 per cent; investment banking surged by 64 per cent.

The Singapore-based banking group said it logged a net profit of S$1.17 billion in Q1, falling by 29 per cent from a year earlier. The bank set aside a further S$700 million of general allowances for risk because of the COVID-19 pandemic.

Total income rose by 13 per cent from a year ago to a new high of S$4.03 billion. Business momentum was healthy with broad-based growth in non-trade corporate loans and fee income. Gains from investment securities also contributed to the increase in total income, the bank said.

Net interest income rose by 7 per cent from a year ago and 2 per cent from the previous quarter to S$2.48 billion.

Expenses rose by 4 per cent from a year ago to S$1.56 billion. Compared with the previous quarter, it fell by 3 per cent from lower general expenses and staff costs.

The Common Equity Tier-1 ratio declined 0.2 percentage points from the previous quarter to 13.9 per cent. The ratio was above the group’s target operating range as well as regulatory requirements. The leverage ratio of 6.9 per cent was more than twice the regulatory minimum of 3 per cent. (Broadly speaking the leverage ratio is the proportion of debts that a bank has compared with its equity/capital.)