DBS CEO Piyush Gupta

SINGAPORE: DBS Group Holdings reaches S$100 billion market cap after the company’s impressive performance in the first quarter of the financial year 2024, which concluded on March 31. The company’s share price experienced a surge, buoyed by yet another record-breaking net profit of S$2.96 billion for 1QFY2024.

This figure marks a 15% increase year-on-year and a 24% jump quarter-on-quarter. Such stellar performance has put DBS well above the expectations outlined in a Bloomberg poll, which projected a net profit of S$2.465 billion for the first quarter.

The Edge Singapore reports as of 9:16 am, DBS shares were changing hands at S$35.92, marking a 3.01% increase, pushing the company’s valuation to S$102 billion.

This surge in share price comes amidst global economic shifts, notably, the recent indication by the US Federal Reserve of potentially prolonged interest rate policies due to persistent inflationary pressures.

The company’s commercial book total income saw a 14% year-on-year increase, reaching S$5.31 billion. This growth can be attributed to various factors, including the rise in net interest income, net fee and commission income, as well as treasury customer sales and other income streams.

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Net interest income from the commercial book witnessed an 8% year-on-year growth, amounting to S$3.65 billion. This expansion was fueled by an increase in net interest margin, which climbed by 8 basis points to 2.77%, thanks to higher interest rates. Group net interest margin also saw a positive uptick, reaching 2.14%, up 2 basis points year-on-year.

Fee-based income also saw a remarkable surge, with net fee and commission income rising by an impressive 23% year-on-year, crossing the S$1 billion mark for the first time. This surge was primarily driven by higher wealth management fees and increased card fees from more spending.

Treasury customer sales also reached new heights, hitting S$621 million, a notable 44% increase year-on-year. However, market trading income saw a slight decline of 9% year-on-year to S$246 million, attributed to higher funding costs.

Non-interest income saw a modest 2% year-on-year increase, totaling S$382 million. Total income for the quarter reached a new high of S$5.56 billion, marking a 13% increase year-on-year.

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Return on equity (ROE) also saw a notable rise, hitting a new high of 19.4% compared to 18.6% in the 1QFY2023.

Despite geopolitical tensions, DBS remains optimistic about its future prospects. CEO Piyush Gupta expressed confidence in the company’s ability to seize business opportunities, stating, “We are optimistic that total income and earnings will be better than previously guided and we will be able to deliver another year of strong shareholder returns.”

An interim dividend of 54 cents has been declared, representing a 10% year-on-year growth. While maintaining the dividend from the previous quarter, DBS will issue bonus shares as part of the payout. The ex-dividend date is set for May 9, with payment scheduled for May 20. /TISG

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