SINGAPORE: DBS Group, Singapore's biggest bank, raised its full-year guidance after second-quarter net profit rose 9%, beating expectations as strong wealth-management fees, treasury sales and trading income offset pressure from lower interest rates.
DBS, which is also Southeast Asia's biggest lender by assets, posted a record quarterly net profit of S$3.08 billion ($2.40 billion), up from S$2.82 billion a year earlier. This beat the mean estimate of S$2.88 billion from three analysts, according to LSEG data.
Net interest margin, a key gauge of profitability, fell to 1.87% from 2.05% in the same period a year earlier, but that was offset by strong loan and deposit growth.
"We delivered a strong set of results for the first half, anchored by the strength of our wealth management franchise," CEO Tan Su Shan said in a statement, noting assets under management in the wealth division surpassed S$500 billion for the first time.
She raised DBS' 2026 outlook, saying total income was expected to exceed 2025 levels, while group net interest income was expected to close the gap to 2025 levels.
The bank also lifted its commercial-book non-interest income growth forecast to the mid-teens, led by wealth management.
The lender said it expected interest rates to remain at current levels, deposit growth to be in the high-single-digit range and its cost-income ratio to remain in the low-40% range.
It expects specific provisions to be within 17 to 20 basis points of loans in the second half, while general-provision reserves provide a buffer against risks.
The bank said the stronger full-year outlook reflected a record first-half performance and its ability to remain resilient and capture opportunities despite a challenging interest-rate environment, according to Tan's observation slides accompanying the results.
OTHER SINGAPORE BANKS TO FOLLOW
DBS' results kick off the second-quarter earnings season for Singaporean banks, with investors focused on how lenders are managing interest-rate pressure and whether wealth, transaction-banking and markets income can offset any narrowing in lending margins.
Both smaller peers Oversea-Chinese Banking Corp and United Overseas Bank are scheduled to announce their results on Friday. Asia-focused HSBC reported a 23% rise in first-half pretax profit driven by lending revenue and wealth-management fees, while Standard Chartered posted a 9% increase helped by wealth management, markets and global banking.
For the second quarter, DBS announced a total dividend of 81 Singapore cents per share, up 6 Singapore cents from a year earlier.
The bank's return on equity rose to 17.9%, up from 16.7% a year ago. - Reuters
