DBS to pay $1.20 a share in dividends

This article is more than 12 months old

DBS Group Holdings will pay $1.20 a share in dividends from financial year 2018 - double the payout in three of the past four years, the bank said yesterday.

Its commitment to raising its dividends, a one-time payment of a special dividend as well as record earnings sent the stock soaring 5.3 per cent to $26.71 yesterday.

DBS said its earnings reached a record high of $1.19 billion for the fourth quarter, up 31 per cent from the previous year.

Total income grew 10 per cent to $3.06 billion, marking the second straight quarter that it has stayed above the $3 billion level, as net interest income rose 15 per cent to $2.1 billion in line with higher Singdollar interest rates.

Excluding one-time items - mainly from integration costs of ANZ's wealth management and retail banking business - net profit would have grown 33 per cent to $1.22 billion.

The bank is proposing a final dividend of 60 cents a share for 2017 - double that of last year - and also a special dividend of 50 cents a share, as a one-time return of built-up capital buffers as well as to mark the bank's 50th anniversary. These payments will be made on May 15.

Including an interim dividend of 33 cents a share paid earlier, the full-year payout for 2017 will be 93 cents a share, 55 per cent more than the 60 cents declared for 2016.

DBS will up its full-year dividends to $1.20 a share going forward.It said the higher dividend policy was a result of a finalisation of Basel capital reforms, which provide clarity on future regulatory requirements.

"They have a benign impact on DBS, enabling its capital requirements to be rationalised," the bank said.

The board has suspended the scrip dividend with immediate effect and determined that ordinary dividends can be sustained at higher levels and increased over time with earnings growth.

DBS chief executive Piyush Gupta told reporters that the bank has returned to being a fairly high-yield dividend stock.

The positive results attest to the quality of the bank's multiple business engines and the nimbleness of its execution, he said .

For the full year, DBS recorded a 3 per cent growth in net profit to $4.37 billion.

This was a new high from broad-based loan growth and record fee income, which more than offset the impact of softer interest rates and weaker trading income, it said.