Singapore’s largest bank DBS reports Q2 earnings

DBS Group CEO Piyush Gupta mentioned the bank’s wealth administration and capital markets companies proceed to see “headwinds,” regardless of the bank reporting sturdy second-quarter earnings.

“Business momentum is a bit mixed. Our corporate lending activities are actually doing quite well. And so the balance sheets continue to grow,” Gupta advised CNBC’s “Capital Connection” following the discharge of the bank’s outcomes Thursday.

“Private banking customers have been reluctant to put money to work, that obviously is a challenge. The headwinds on wealth management and capital markets mean that the overall fee incomes … are down year-on-year,” he added.

DBS, Southeast Asia’s largest bank, reported internet payment revenue fell 12% within the second quarter as a consequence of decrease contributions from wealth administration and funding banking in contrast with a year in the past.

First-half internet payment revenue declined 9% from a year in the past to 1.66 billion Singapore {dollars} ($1.2 billion). Wealth administration charges declined 21% to S$745 million as weaker market situations led to decrease funding product gross sales, DBS mentioned. Investment banking charges additionally declined by 36% to S$73 million as capital market exercise slowed.

Stock picks and investing tendencies from CNBC Pro:

Uncertain outlook

Gupta mentioned the outlook for the wealth administration business stays unsure given the present market sentiment. 

“If the markets do start turning around and you start seeing more animal spirits, we can get some more capital markets deals done — and wealth management, private banking customers could get more active,” the CEO mentioned.

“But like I said, at this point in time, I’m not holding my breath on that happening,” he added.

On Thursday, DBS reported internet revenue rose to S$1.82 billion in the course of the April to June interval from S$1.7 billion a year earlier. That’s larger than the common forecast of S$1.69 billion, in line with knowledge from Refinitiv.

The bank’s internet curiosity margin elevated to 1.58% within the quarter, up from 1.45% a year in the past.

“Net interest margin, which had been declining since 2019, rose in the first quarter with the start of interest rate hikes, and the improvement accelerated in the second quarter. Net interest margin for the first half was 1.52%, five basis points higher than a year ago,” DBS mentioned in its report.

Gupta mentioned the rise within the internet curiosity margin was the “biggest story,” noting the sharp enhance. He famous projections for internet curiosity margin “in the third and fourth quarter are quite robust.”

“And if that is the case, then yes, it is the story of net interest margin increases that will propel the business along,” Gupta mentioned.

DBS mentioned the board has declared an interim one-tier tax-exempt dividend of 36 cents for every DBS bizarre share for the second quarter of 2022 .

Exit mobile version