DBS Profits Fall in Third Quarter

The bank will issue an interim one-tier tax-exempt dividend of 18 cents per share, for which the scrip dividend scheme will be applicable, for the third quarter of 2020 DBS Group reported net profit of S$1.30 billion ($960 million) for third-quarter of 2020, according to financial results released on Thursday.

This is 20 percent lower than the same period a year before (S$1.63 billion), but 4 percent up on-quarter on the back of improved business momentum. During the quarter, DBS also set aside S$554 million in allowances for potential bad loans and lower net interest income, bringing total allowances for the nine months this year to S$2.49 billion.

The bank noted improved business momentum as fee income rebounded 17 percent to pre-Covid levels of S$798 million, led by wealth management and card fees, which softened the impact of lower interest rates as well as a decline in trading income from a high base.

Due to the higher allowances, the bank’s net profit for the nine months declined 24 percent from the year before to S$3.71 billion.

DBS said it expects a strong economic rebound in Asia from the current low base to support mid-single-digit loan growth and double-digit fee income growth in 2021.

The accelerated build-up of allowances has strengthened our ability to meet the challenges of an uneven economic recovery in the coming year. In the longer term, Asia’s fundamentals remain undiminished, Piyush Gupta, chief executive, said.