Strong showing: Customers at a DBS branch in Singapore. The bank’s net profit for the fourth quarter of last year rose 10% to S$2.62bil. — Bloomberg
SINGAPORE: DBS Group will reward all employees, excluding senior managers, with a special one-time bonus of S$1,000 each, and plans to introduce a new “capital return” dividend, as Singapore’s biggest bank reported record earnings for last year.
The bank’s net profit for the fourth quarter to last December rose 10% to S$2.62bil from S$2.39bil a year earlier.
This matched the mean estimate of nearly S$2.63bil from five analysts, according to LSEG data, Reuters reported.
DBS said it achieved the record performance in 2024 as full-year net profit rose 11% to S$11.4bil, with return on equity at 18%.
DBS’ latest bonus payments are expected to cost the bank a total of S$32mil.
It previously handed out S$1,000 one-time bonuses to more than 5,500 junior staff in Singapore last February to help them cope with cost-of-living concerns.
South-East Asia’s largest bank by assets said it plans to pay a final dividend of 60 Singapore cents per share for the fourth quarter of 2024, up from the year-ago payout of 54 Singapore cents.
This brings its ordinary dividend for the full year to S$2.22 per share or S$6.31bil – an increase of 27% from a year earlier.
DBS also plans to introduce a capital return dividend of 15 Singapore cents per share per quarter in this year, as a first step to managing down the stock of excess capital over the coming three years.
In the subsequent two years, DBS said it expects to pay out a similar amount of capital either through this or other mechanisms, barring unforeseen circumstances.
“The board will continue to consider all forms of returning capital,” DBS said.
The bank also set aside S$100mil from last year’s profits as part of its commitment of up to S$1bil over 10 years to support vulnerable communities.
Outgoing DBS chief executive Piyush Gupta said he is confident about the bank’s outlook.
“While macroeconomic and geopolitical uncertainties persist, the franchise and digital transformations carried out over the past decade position us well to continue delivering healthy returns,” he said in a statement.
Analysts have said that local banks’ earnings could take a hit this year, with global economic growth threatened by US President Donald Trump’s trade tariffs and other policies.
For this year, DBS expects group net interest income to slightly surpass last year’s levels based on the US Federal Reserve’s projection of two rate cuts in the first half of this year.
It also projects commercial book non-interest income growth to be in high-single digits, led by growth in wealth management fees and treasury customer sales.
In the fourth quarter under review, DBS’ net interest margin (NIM), a key profitability gauge, rose to 2.15% from 2.13% in the same period a year earlier.
Commercial book net interest income rose 5% to S$3.83bil thanks to the higher NIM and balance sheet growth.
Commercial book net fee income increased 12% to S$968mil, driven by growth in wealth management fees, as well as higher card, transaction service and investment banking fees. Loan-related fees declined 11%.
Gupta will pass the baton to Tan Su Shan, deputy chief executive, when he steps down in March.
DBS kicked off local banks’ earnings season, with UOB slated to report on Feb 19 and OCBC on Feb 26. — The Straits Times/ANN
