SINGAPORE (Reuters) -DBS Group reported a higher-than-expected 68% rise in quarterly profit as rising interest rates boosted its net interest margins and Southeast Asia’s largest bank by assets retained its full-year outlook for mid-single-digit loan growth.
“Our business pipelines are healthy and asset quality robust. We expect confidence to return to markets in the coming year as interest rate increases ease and China reopens,” CEO Piyush Gupta said in a statement on Monday.
DBS, which earns most of its profit from Singapore and Hong Kong, announced a special dividend of 50 Singapore cents per share, citing its strong earnings and capital position.
Singapore lenders were set to report their highest quarterly net interest margins in more than a decade on rising interest rates but as the cycle peaks and economic growth falters, profit growth will be curbed, analysts said.
DBS, the first Singapore bank to report this season, said October-December net profit rose to a record S$2.34 billion ($1.76 billion) compared with an average estimate of S$2.16 billion from three analysts, according to Refinitiv data, and S$1.39 billion in the same period a year earlier.
It reported a total net interest margin of 2.05% for the latest quarter, up from 1.43% in the same period a year earlier.
($1 = 1.3297 Singapore dollars)
(Reporting by Anshuman Daga; Editing by Kim Coghill, Stephen Coates and Sam Holmes)
