Singapore’s largest bank beats expectations with 31% jump in third-quarter profit

SINGAPORE — Singapore’s largest bank, DBS Group Holdings, posted third-quarter earnings that beat analysts’ estimates as its chief executive flagged improving business conditions in the months ahead.  

The bank on Friday reported a net profit of 1.7 billion Singapore dollars ($1.26 billion) for the July to September quarter — 31% higher than a year ago and exceeding an average forecast of 1.57 billion Singapore dollars on Refinitiv.   

DBS shares were up 0.3% in early trade on Friday. The stock has climbed 28.6% this year as of Thursday’s close, beating the benchmark Straits Times Index‘s gains of 13.2% in the same period.

“A progressive normalisation of interest rates in the coming quarters will be beneficial to earnings,” DBS CEO Piyush Gupta said in a statement.

Here are other highlights of the bank’s third-quarter earnings:

• The bank wrote back 70 million Singapore dollars in allowances — previously set aside for potential loan losses — as economic recovery continues.
• Net interest margin, a measure of lending profitability, was two basis points lower than the previous quarter at 1.43% due to lower short-term interest rates.
• The DBS board declared a quarterly dividend of 33 Singapore cents per share.  

The release of DBS’ financial results rounded up the reporting season for Singapore’s top banks.

Earlier this week, the other two banks — Oversea-Chinese Banking Corp and United Overseas Bank — also reported third-quarter earnings that beat expectations.  

OCBC‘s net profit rose 19% from a year ago to 1.22 billion Singapore dollars ($904.5 million), while UOB reported a 57% rise in net profit to 1.05 billion Singapore dollars in the same period.