DBS First-Half Profits Tumble
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A five-fold surge in allowances primarily focused on coronavirus-linked risks drove net profits at DBS to tumble 26 percent in the first half.
DBS Group posted a net profit of S$2.41 billion ($1.76 billion) in the first half of 2020, a 26 percent year-on-year drop, according to a statement. This was driven largely by a five-fold increase of total allowances which reached S$1.94 billion of which S$1.26 billion has been «conservatively set aside to fortify the balance sheet against risks arising» from the ongoing pandemic.
Singapore bank’s ex-allowance profits increased 12 percent and reached a record S$4.71 billion driven in part by a 7 percent income rise to S$7.75 billion.
Our solid balance sheet was further fortified by a significant increase in allowance reserves, strong liquidity inflows and healthy earnings, said DBS CEO Piyush Gupta. «Notwithstanding the uncertainties, we are in a good position to continue supporting customers and the community through the difficult months ahead of us.»
Questions & Answers
Q.What was the main reason for the drop in DBS's net profits during the first half?
What was the main reason for the drop in DBS's net profits during the first half?
Net profits tumbled due to a five-fold surge in allowances, primarily set aside for coronavirus-linked risks. These total allowances reached S$1.94 billion, with S$1.26 billion specifically for pandemic-related risks.
Q.Did DBS's underlying financial performance improve, despite the overall profit drop?
Did DBS's underlying financial performance improve, despite the overall profit drop?
Yes, ex-allowance profits increased by 12 percent, reaching a record S$4.71 billion. This was supported partly by a 7 percent rise in income, which totalled S$7.75 billion.
Q.How much profit did DBS Group make in the first half of 2020?
How much profit did DBS Group make in the first half of 2020?
DBS Group posted a net profit of S$2.41 billion in the first half of 2020. This represented a 26 percent year-on-year drop compared to the previous year.