Friday, April 27, 2012

DBS Group net profit rises to record high

SINGAPORE: DBS Group Holdings on Friday announced a 16 per cent on-year rise in net profit on the back of its highest ever recorded total income.

Net profit rose to a record-setting S$933 million while total income crossed S$2 billion for the first time.

The record numbers were boosted by sustained loan volumes, improved net interest margins, broad-based fee income growth and higher customer flows for treasury products.

Net interest income increased four per cent from the previous quarter to a record S$1.34 billion, while loans rose three per cent to a new high of S$820 million.

Fee income rose 19 per cent to S$406 million, led by the banking group's wealth management, lending, stockbroking and trade and remittances businesses.

Trading income more than doubled to S$292 million from higher customer flows and more favourable market conditions.

Income from customer flows rose 71 per cent to S$256 million, accounting for 39 per cent of total treasury net interest and non-interest income.

DBS CEO Piyush Gupta said strong business momentum, with key earnings drivers and strategic initiatives kicking in, contributed to the bank's solid growth in the past eight quarters.

"Our funding capacity is robust, our asset quality remains sound and we believe we are well placed to seize opportunities in the months ahead," he added.

DBS was reticent about its S$9.1 billion bid to acquire Indonesia's Bank Danamon.

At its Q1 results briefing on Friday, DBS said that it had no further comments to add regarding the proposed acquisition.

CEO Piyush Gupta reiterated that while the Bank Danamon acquisition will lead to share price dilution for "a couple of years", it will eventually be accretive to earnings per share.

He expects earnings per share to pull back by less than five per cent over the next two years, and return on equity to be sustained at levels around 12 per cent from 2015 onwards.

The Bank Danamon deal is expected to be completed by this year end, but Bank Indonesia (BI) -- the Indonesian regulator and central bank -- still has not given the deal the go-ahead.

Earlier this month, BI said it was seeking reciprocity for Indonesian banks in Singapore, as a condition to approving the deal.

- CNA/wm

View the original article here

Source From Channel News Asia

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