DBS achieves record-high Q1 profit of S$2.96b

Dividend is SGD 54 cents per share for the quarter.

DBS Group’s net profit for the first three months of 2024 rose by 15% to S$2.96b compared to a year ago on the back of higher return on equity and a record-high income.

Total income grew 13% to S$5.56b, whilst net interest margin was stable at 2.14%. Return on equity was 19.4% for the quarter.

Compared to Q4 2023, net profit rose 24%, and total income grew 11% from record fee income and treasury customer sales. Expenses are also 6% lower.

A dividend of SGD 54 cents per share for Q1 has been declared, over the enlarged post-bonus share base.

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Fee income crosses billion dollar mark
Fee income notably crossed S$1b for the first time in a Q1 period, with commercial book net fee income rising by 20% to a record S$1.04b compared to Q4 2024. 

The continuous rise of wealth management also contributed to quarterly growth. Fees from wealth management services grew 45% to S$536m, which DBS attributed to the continued strengthening of market sentiment and from seasonal factors. 

Loan-related fees also rose by 30% to S$185m, whilst transaction services fees edged up 6% to S$231m.

However, these increases were moderated by a 38% decline in investment banking fees due to slower capital market activities and by a 3% decline in card fees from seasonal factors, DBS said.

Deposits rose by a marginal 1% to S$547b compared to Q4 2023. Casa outflows, which slowed from the previous year, was offset by an increase in fixed deposits.

Taiwan boosts wealth and card fees
Compared to Q1 2023, net fee income is 23% higher, led by a 47% increase in wealth management fees.

Card fees were also 33% higher than a year ago. Loan related fees grew 30%. DBS particularly noted the consolidation of Citi Taiwan as a benefit to its wealth management and card fees.

Net interest margin rose eight basis points from higher interest rates in Q1 compared to a year ago. 

Loans grew 1% from higher non-trade corporate loans and the consolidation of Citi Taiwan. Deposits were also 3% higher than in Q1 2023.

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Markets trading income declined 9% from higher funding costs.

However, expenses also rose 10%, with Citi Taiwan accounting for five percentage points of the increase. The cost-income ratio of 37% was little changed.

Bad assets rise marginally
Non-performing assets rose 3% from the previous quarter to S$5.22bm. However, the non-performing loan (NPL) ratio is unchanged at 1.1%.

New non-performing asset formation was partially offset by repayments and write-offs, DBS said.

The Common Equity Tier-1 ratio rose 0.1 percentage point (ppt) fromQ4 2023 levels, to 14.7%. DBS attributed this to profit accretion, which was partly offset by higher risk weighted assets.