The decline is attributed to high net worth clients continuing to be risk averse.
DBS’ wealth management fees are expected to slow 1.3% YoY to $627m in 4Q2018 as market sentiment remains weak in light of the heightened US-China trade dispute.
The bank suffered a decline in wealth management fees as high-net worth clients have become more risk averse and turned to less risky income streams.
“Contribution from investment banking fees was also lacklustre. Healthy growth from loans related fees (+6.0% yoy) and credit cards (+25.8% yoy) could not offset the steep decline in wealth management fees,” said Jonathan Koh, chartered financial analyst of UOB Kay Hian.
On the other hand, double digit growth in DBS’ net interest income of 10.1% YoY could counter the bank’s decline in wealth management fees. Its NIM will continue to expand of 1 bp QoQ to 1.87% due its strong deposit franchise for the Singapore dollar.
Koh expects DBS’ profit to rise 8% to $1.29b for 4Q18, representing a 8.8% QoQ slip and a 8.0% YoY rise. Loan growth would be up 6.6% YoY whilst net trading income fell 47.4% YoY to S$120m, attributed to its unexpected shift in yield curve.
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