DBS FIRST-QUARTER EARNINGS RISE 16% FROM YEAR AGO TO RECORD SGD 933 MILLION

SINGAPORE, 27 April 2012 – DBS Group Holdings’ first-quarter 2012 net profit rose to a record SGD 933 million, up 16% from a year ago and 28% from the previous quarter. Total income crossed SGD 2 billion for the first time from sustained loan volumes, improved net interest margins, broad-based fee income growth and higher customer flows for treasury products. Return on equity rose to 12.8%, compared to 11.0% for full-year 2011.

Net interest income increased 4% from the previous quarter to a record SGD 1.34 billion. Net interest margins increased four basis points to 1.77% from higher loan yields. Loans rose 3% excluding currency translation effects to SGD 198 billion, with Singapore-dollar loans leading the increase. While loan growth moderated from recent quarters, it is in line with market trends and the loan pipeline remains healthy. Deposits grew 4% excluding currency effects to SGD 232 billion mainly from US dollar, Hong Kong dollar and Singapore dollar deposits. DBS’ liquidity remained healthy with the loan-deposit ratio easing to 85%.

Non-interest income increased 31% from the previous quarter to a new high of SGD 820 million. Fee income rose 19% to SGD 406 million from higher contributions across a wide range of businesses led by wealth management, lending, stockbroking and trade and remittances. Trading income more than doubled to SGD 292 million from higher customer flows and more favourable market conditions. Income from customer flows rose 71% to SGD 256 million, accounting for 39% of total Treasury net interest and non-interest income.

Total income of SGD 2.16 billion was 13% higher than the previous quarter. Expenses were little changed at SGD 898 million as higher staff costs were offset by lower technology and other costs. The cost-income ratio was healthy at 42%. Profit before allowances reached a record SGD 1.26 billion.

Asset quality continued to be strong. Non-performing assets were unchanged from the previous quarter at SGD 2.91 billion, with the non-performing loan rate stable at 1.3%. Specific allowances for loans amounted to SGD 43 million or nine basis points of loans, similar to recent quarters. General allowances of SGD 85 million were taken in line with a prudent provisioning policy. Allowance coverage remained strong at 128%.
DBS also continued to be well capitalised. The core Tier 1 ratio of 12.7% (with phased-in deductions), Tier 1 ratio of 12.7% and total capital adequacy ratio of 16.4% were above regulatory requirements.