DBS Q3 profit jumps 15% to $1.63 billion
DBS Group, South-east Asia's biggest lender, reported that higher wealth management fees drove a forecast-beating 15 per cent rise in third-quarter profit, but cautioned growth will slow next year due to the impact of lower interest rates.
The bank said yesterday it expects its net interest margin, a key gauge of profitability, to fall by about 7 basis points in 2020. It was 1.90 per cent for the three months ended Sept 30.
Banks here face a challenging outlook as interest rates soften and lending moderates after robust growth in recent years.
DBS made a net profit of $1.63 billion for the quarter, compared with $1.41 billion a year earlier and an average estimate of $1.57 billion from five analysts, according to Refinitiv data.
Annualised earnings per share stood at $2.50 for the quarter, up 15.7 per cent from $2.16 a year ago. Net interest income rose 8 per cent to $2.46 billion in the quarter and wealth management fees climbed 22 per cent to $357 million.
"Growth was driven by higher fees and trading gains, good cost control and flat margins, partially offset by higher credit costs and one-offs," said Mr Krishna Guha, an analyst at Jefferies Singapore.
DBS' revenue and profit growth will be in the low single digits next year, while fee and commission income should continue to expand in double digits, chief executive officer Piyush Gupta said. - REUTERS, THE BUSINESS TIMES