DBS Q3 net profit up 6%, beats expectations on higher margins

SINGAPORE: DBS Group, Singapore's biggest bank, on Monday (Nov 2) posted a 6 per cent rise in third-quarter net profit, beating expectations as higher interest rate margins boosted net interest income by 13 per cent.

DBS said net profit came to S$1.07 billion for the July to September period, versus S$1.01 billion in the same period a year earlier and above an average forecast of S$994 million from six analysts polled by Reuters.

The bank also booked charges of S$50 million to its trading income due to what it called "funding valuation adjustments" to the fair value of over-the-counter derivatives.

Earnings are slowing for Singapore banks as loan growth decelerates due to a sluggish economy, a weak property market and the lacklustre trade finance business.

United Overseas Bank last week posted a 1 per cent drop in quarterly net profit, while Oversea-Chinese Banking Corp saw a 7 per cent increase in core third-quarter net profit, but also showed a spike in bad loans.

- REUTERS/cy

DBS aims for S$100b in private banking assets in less than 3 years

SINGAPORE, June 9 (Reuters): Singapore's DBS Group Holdings DBSM.SI is aiming for a 40 percent jump in its private banking assets to $100 billion in less than three years, fueled by the growth of millionaires in the Greater China region and in its home market.

DBS's group head of wealth management, Tan Su Shan, said Singapore's biggest lender is generating strong asset growth in its home market, where there are more than 100,000 millionaires, and in China, where sectors such as technology and real estate are adding to the millionaire population.

"For both onshore and offshore in China, we're seeing very good, double-digit growth," Tan told the Reuters Wealth Management Summit on Tuesday.

"China now wants to do wealth management in a big way. The speed of change, the recognition that the RMB (renminbi) is an international currency, the wide use of the RMB, the opening up of the capital account, the flow of North-South-South North, to me it's all very exciting and it represents what is the single biggest trend for us in Asia," she said.

DBS bought Societe Generale's SOGN.PA Asian private bank last year, helping boost the ranking of the Singapore lender to Asia's seventh biggest private bank. DBS manages S$96 billion ($71 billion) at its private bank.

DBS and the private banking arm of rival Oversea-Chinese Banking Corp OCBC.SI are jostling for market share in a highly competitive wealth management market in Asia, led by global players such as UBS UBSG.VX and Citigroup C.N.

In China, Tan said DBS is looking at alliances and partnerships with companies in the technology space, travel companies, luxury retailers - tie-ups which will help DBS get a better foothold in the market.

"In the wealth management space onshore, an ideal partner would be someone who is already looking after the targeted clients, who may want to then have a good bank that's able to do part of the infrastructure for them," she said.

DBS is gaining market share in Singapore, Tan said, without giving details. To win market share in places such as China and Indonesia, data mining is key to get a better insight about what customers want, she said.

"The old style of wealth management and sales - create the product, get the relationship manager to sell, sell sell - doesn't work anymore," said Tan, who has previously worked for Morgan Stanley MS.N and Citigroup.

DBS gets nod to set up branches in Australia, with first to open this month

By Rupali Karekar

SINGAPORE - DBS, Southeast Asia's largest bank, has received much-awaited regulatory approval to carry out banking activities in Australia, expanding its presence to 18 markets around the world.

The bank will open its first branch in Sydney later this month, which will be headed by DBS Australia Country Head Helen Yap, DBS announced in a filing with the Singapore Exchange on Wednesday. Ms Yap was formerly Australian general manager for OCBC Bank.

DBS is the only Singapore bank which does not have a presence in Australia. Rivals OCBC and United Overseas Bank have had branches in Australia for a while. OCBC has one in Sydney while UOB has a branch in Sydney and offices in Melbourne and Brisbane.

The new branch will provide corporate finance, trade finance, cash management and treasury solutions to Asian and international companies looking to expand Down Under or Australian companies looking for opportunities in Asia.

By Rupali Karekar

SINGAPORE - DBS, Southeast Asia's largest bank, has received much-awaited regulatory approval to carry out banking activities in Australia, expanding its presence to 18 markets around the world.
The bank will open its first branch in Sydney later this month, which will be headed by DBS Australia Country Head Helen Yap, DBS announced in a filing with the Singapore Exchange on Wednesday. Ms Yap was formerly Australian general manager for OCBC Bank.
DBS is the only Singapore bank which does not have a presence in Australia. Rivals OCBC and United Overseas Bank have had branches in Australia for a while. OCBC has one in Sydney while UOB has a branch in Sydney and offices in Melbourne and Brisbane.
The new branch will provide corporate finance, trade finance, cash management and treasury solutions to Asian and international companies looking to expand Down Under or Australian companies looking for opportunities in Asia.

- See more at: http://www.straitstimes.com/news/business/banking/story/dbs-gets-nod-set-branches-australia-20150603#sthash.hIaSqXtv.dpuf

Read? DBS gets nod to set up branches in Australia, with first to open this month

DBS first-quarter profit rises 3% as interest income increases

SINGAPORE: DBS Group’s net profit rose 10 per cent year-on-year to a record S$1.27 billion in the first quarter of 2015, the bank announced on Monday (Apr 27).

Said Chief Executive Officer Piyush Gupta: “DBS started the year on a solid footing, with strong all-round performance yet again. Despite a slowdown in trade volumes, the bank’s first-quarter earnings reached a record high. This is testament to the strength and resilience of the DBS franchise. We will continue to grow our business, while keeping a watchful eye on the economy.”

The spike in profit came as DBS’ total income grew 12 per cent to S$2.74 billion, amid net interest income and non-interest income reaching new highs. The growth was broad-based across all business units, the bank said in a news release.

Net interest income increased 14 per cent to S$1.69 billion. Loans grew by 11 per cent to S$281 billion, as an increase in regional corporate borrowing and secured consumer loans was partially offset by a decline in trade loans, DBS said.

The bank’s non-interest income crossed S$1 billion for the first time, rising 9 per cent to S$1.05 billion. The fee income increased 10 per cent to S$560 million. Meanwhile, contributions from wealth management rose 43 per cent from higher unit trust and insurance sales, and fees from credit and debit cards rose 23 per cent.
Other non-interest income grew 7 per cent to S$486 million. Income from investment securities tripled to S$103 million amid profits from government securities.

All business units also attained record income, said DBS. The Consumer Banking/Wealth Management income rose 29 per cent to S$861 million, and income from Institutional Banking came in at 5 per cent higher, at S$1.35 billion. Meanwhile, Treasury income rose 38 per cent to S$386 million.

There was also a one-time gain of S$136 million during the quarter, from the disposal of a property investment in Hong Kong.

DBS’ total expenses rose 13 per cent to S$1.18 billion, in line with income growth. Profit before allowances were up 10 per cent to S$1.56 billion.

Total allowances were 20 per cent higher at S$181 million, but general allowances of S$21 million were lower than a year ago.

- CNA/xq

DBS, Manulife ink US$1.2b regional distribution deal

SINGAPORE: DBS Bank and Manulife Financial Asia on Wednesday (Apr 8) announced a 15-year regional distribution agreement whereby the Canadian insurance group will pay the Singapore lender an initial US$1.2 billion (S$1.6 billion).

The exclusive life partnership, which takes effect on Jan 1, 2016, will cover Singapore, Hong Kong, China and Indonesia. DBS' current bancassurance agreement with Aviva will conclude at the end of 2015.

Manulife will gain access to DBS' large and growing retail, wealth and small and medium enterprise (SME) customer base of 6 million, while DBS will be able to sell a suite of life and health insurance solutions from Manulife through its branch network as well as via its internet and mobile banking platforms.

Besides the initial payment of US$1.2 billion, Manulife will also make ongoing, variable payments to DBS "based on the success of the partnership", the two firms said in a joint statement.

The bancassurance model - which involves selling insurance through banks as opposed to the traditional agency - is lucrative for commercial banks in Asia because global insurers are willing to pay hefty fees for access to lenders' branch networks.

According to Reuters, AIA Group struck a 15-year exclusive deal with Citibank in Asia in 2013, for which AIA made a US$800 million upfront payment. UK insurer Prudential also struck an agreement last year with Standard Chartered, agreeing to pay US$1.25 billion in fees to extend its current agreement for 15 years.
DBS CEO Mr Piyush Gupta said: “Bancassurance is a key focus for DBS and an important part of our overall customer value proposition."

Manulife is the world's sixth-largest life insurer with principal operations in Asia, Canada and the United States, where it operates under the John Hancock name. The company first established a presence in Singapore in 1898 while its Hong Kong operations began in 1897. Assets under management by Manulife and its subsidiaries were approximately C$691 billion (S$753 billion) as at Dec 31, 2014.

- CNA/hs

DBS Said to Consider SocGen Tie-Up for Coutts International Bid

By Joyce Koh, Elffie Chew and Ambereen Choudhury


DBS Group Holdings Ltd. (DBS) is in talks to team up with Societe Generale SA in its bid for Royal Bank of Scotland Group Plc’s international private-banking operations, people with knowledge of the matter said.

DBS was among banks that submitted first-round offers for Coutts International this month, the people said, asking not to be named as the details are private. A potential bid with Societe Generale, if successful, would see the Singapore lender take over Coutts International’s Asian operations while the French bank would assume the rest of the business, one person said.

Southeast Asia’s biggest lender has been pursuing acquisitions to expand in private banking as the ranks of wealthy in the region increase. DBS completed the $220 million purchase of Societe Generale SA (GLE)’s Asian wealth-management business in October, boosting its assets under management to S$88 billion ($67 billion).

Coutts International could fetch $600 million to $900 million, a person with knowledge of the matter said this month. DBS spokeswoman Edna Koh and Jolyon Barthorpe, a spokesman for Societe Generale in Paris, declined to comment.

RBS said in a memo in August that it was examining options including a sale of Coutts’s overseas business, as it shifts its focus to wealthy clients in the U.K. Chief Executive Ross McEwan is eliminating thousands of jobs and cutting about 1 billion pounds ($1.6 billion) in costs as he seeks to reverse six straight annual losses.

Coutts International had 32.6 billion Swiss francs ($33.2 billion) of assets under management at the end of 2013. RBS isn’t selling the U.K. arm of Coutts, which counts Queen Elizabeth II among its customers. The private bank has roots in 1692, before the Bank of England was founded.
 

Healthy growth for all three local banks in Q3

SINGAPORE: Local banks have delivered robust earnings for yet another quarter this year. Despite the slowdown in loans growth, income was largely driven by non-interest components such as fee and trading income.

Fee-generating businesses like investment banking and wealth management helped to drive non-interest income in all three local banks for the third quarter of this year - fee income for DBS Bank, OCBC Bank and United Overseas Bank gained between 16 and 20 per cent.

Analysts said that has helped to offset some deceleration in loan demand amid Singapore's property slowdown and regional headwinds.

Nonetheless, with the Federal Reserve putting an end to its bond buying programme, interest rates are expected to rise in late 2015. As a result, market watchers said higher net interest margins can offset slower momentum in loan volumes.

Said Kenneth Ng, head of Singapore Research at CIMB: "While there was 7 to 10 per cent loan growth, at least margins are no longer contracting. That helps net interest income a lot. Margins are actually a bigger driver of net interest income, not volume.

"When interest rates rise, because the banks have deposits that tend to be sticky and will not raise the same way as interest rates, while loans will rise as interest rates rise, there is the scope for added margin."

Group CEO of DBS Bank Piyush Gupta said that his outlook for interest income over the next year is "relatively sanguine". "If rates go up by one per cent, we make about S$800 million to our bottom line, so we are very positively correlated to interest rate increases. So our ROE (return on equity) goes up by about a couple of percentage points if rates go up."

RISING COMPETITION AS REGIONAL BANKS CONSOLIDATE

Throughout Asia, market watchers said that competition is rising as regional banks consolidate.
"I would not be surprised if once they are done with consolidation, they may place more effort into regional expansion such as expanding into Singapore or making greater impact on Singapore, so we may face stiffer competition from foreign banks. That is an area I think our banks may want to consider adapting to as well," said Liu Jinshu, lead analyst at Voyage Research.

Some analysts said this would put pressure on Singapore's lenders to expand their regional presence. UOB and OCBC Bank, for example, are making inroads into Myanmar.

"There is a significant amount of investment by Singapore businessmen into Myanmar," said Samuel Tsien, group CEO of OCBC Bank. "So that will be our first target. To make sure that we are able to expand their business in Myanmar with them. We are already banking with them in a way but we are financing through the Singapore company, then they take the money as capital and inject into Myanmar. Going forward, we will be able to bank with them more comprehensively."

Looking ahead, observers warn banks of the potential risk of bad debts, in a higher interest rate environment.

Still, all three banks have kept the ratio of non-performing loans relatively stable. Non-performing loans account for 1.2 per cent of all customer loans for UOB, and these make up less than 1 per cent for both DBS' (0.9 per cent) and OCBC's (0.7 per cent) loan books.

- CNA/ac

DBS, Bank of Singapore among top 10 private banks in Asia

SINGAPORE: Local wealth managers, DBS Private Bank and Bank of Singapore, kept their top 10 rankings among private banks in Asia as the industry notched another strong performance in 2013, according to a widely followed industry publication.

Private Banker International (PBI) said on Friday (Oct 17) that DBS Private Bank kept its ninth place in the ranking of wealth managers for the rich, with assets under management (AUM) of US$54 billion (S$68.7 billion) as at December 2013, up from US$46 billion the year before.

Bank of Singapore, the private banking arm of Oversea-Chinese Banking Corp (OCBC), stayed at number 10, with AUM of US$46 billion at the end of 2013, an increase from US$43 billion at end-2012.

PBI estimated that total AUM in Asia rose 18 per cent to a record US$1.387 trillion in 2013 from US$ 1.173 trillion in 2012.
The annual study – which ranks the top 20 private banks in Asia by AUM – saw Swiss bank UBS clinch top spot for the second year in the row with US$245 billion, followed by Citi with US$238 billion.

- CNA/cy

DBS most valuable brand in Singapore again

SINGAPORE: DBS Bank is the most valuable brand in the annual Top 100 Singapore Brands ranking for a second year running. DBS grew its brand value by US$535 million to US$4.01 billion (S$5.0 billion) over the last year, said London-based consultancy, Brand Finance.

It helped the bank extend its lead over the Singapore Airlines (SIA) brand by US$761 million. DBS contributed more than 30 per cent of the total brand value increase of US$1.71 billion across the top 100 Singapore brands. 

The bank has managed to nearly double its brand value in three years, from US$2.04 billion to US$4.01 billion and its brand value today is almost double that of other bank brands in Singapore. 

"The fact that DBS has generated a significant lead over SIA in a very short period of time clearly communicates the importance and significance of a strong brand for DBS. It will likely stay at the No. 1 position for a few years unless there is a game-changing strategy amongst the other top five brands," said Mr Samir Dixit, Managing Director of Brand Finance Asia Pacific.

- CNA/kk

Singapore to Require Banks to Hold Liquid Assets for Crises

 

By Sanat Vallikappen | Bloomberg



Banks in Singapore will soon be required to keep certain amounts of easy-to-sell assets on hand in the country to support themselves in times of stress.

The new liquidity framework applies to lenders with a “significant retail presence” in the country and covers all currencies, Lim Hng Kiang, the deputy chairman of the Monetary Authority of Singapore, or MAS, said in a speech last night. Banks will also need to hold liquid Singapore dollar assets separately to manage their liabilities in the local currency.

The so-called liquidity coverage ratio is part of an overhaul of banking standards by the Group of 20 nations in response to the financial crisis that followed Lehman Brothers Holdings Inc.’s 2008 collapse. MAS’s proposal comes six months after it warned that rising global interest rates could weigh on household and corporate debt and pose risks for banks.

The requirement for overseas currency exposures “is going to be a huge challenge for banks in Singapore, which is a major foreign-exchange center and where the local economy is not the lion’s share of the business,” Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., said by phone today. “It may be fine for banks in Ohio because there’s no foreign exposure, but not in Singapore.”

Under the global rules formulated by the Basel Committee on Banking Supervision, banks must have enough assets on their books that they can sell to survive a 30-day funding squeeze. The regulations, which allow assets ranging from cash and central bank reserves to government bonds and some corporate debt, are set to be phased in from next year.

Foreign Banks

Foreign banks will need a Singapore dollar liquidity coverage ratio of 100 percent, Lim said, meaning they would have to hold enough high-quality, liquid assets to match net cash outflows during a month of stress. He didn’t specify a deadline for meeting the requirement.

The coverage for other currencies will be 50 percent as their head offices are probably subject to similar ratios, he said. Citigroup Inc. (C), HSBC Holdings Plc and Standard Chartered Plc (STAN) are among foreign banks operating in the country.

For such firms, “while MAS recognizes that there may be cost efficiencies in managing liquidity centrally at the group level, there can be significant obstacles to the free movement of liquidity across borders during a stress scenario,” said Lim, who is also the minister for trade and industry.

Local Banks

MAS will consider a bank as having a significant retail presence if its share of resident customer deposits exceeds 3 percent, and if it has more than 150,000 depositors with balances of as much as S$250,000 ($200,000).

For the country’s three local banks -- DBS Group Holdings Ltd. (DBS), Oversea-Chinese Banking Corp. (OCBC) and United Overseas Bank Ltd. (UOB) -- the requirement for a 100 percent Singapore dollar liquidity coverage ratio will be set for the start of 2015, Lim said. Coverage for other currencies is set at 60 percent from 2015, increasing to 100 percent by 2019, he said.

OCBC already complies with the liquidity framework for 2015 and DBS is “comfortable” with the requirements as they’re in line with Basel III rules, the banks said in separate statements.

DBS looking to capitalise on emerging markets to grow SME Banking business

DBS Bank is looking at opportunities in emerging markets such as China, India, Indonesia and Taiwan to grow its small- and medium-sized enterprise (SME) Banking business.

 

 

 

SINGAPORE: DBS Bank is looking at opportunities in emerging markets such as China, India, Indonesia and Taiwan to grow its small- and medium-sized enterprise (SME) Banking business.

The lender is hoping that in time, these markets will make up one-third of its SME Banking's takings, up from one-fifth currently.

Currently, Singapore and Hong Kong make up four-fifths of DBS' SME Banking income.

Last month, DBS reported that its SME business grew 11 per cent in 2013 to hit a record S$1.37 billion.

It expects performance this year to keep pace with or outdo last year’s record, although it is also cautious about the global outlook.

Lim Chu Chong, managing director and regional head of SME Banking at DBS Bank, said: "Because of the macroeconomic headwinds we see in some of these markets like India, Indonesia, and China, we do not expect loan growth to be as high. That's because we need to ensure that we manage our loan quality as we ride through the cycle. However, we will still expand our customer franchise by picking out good clients."

- CNA/gn

Singapore's DBS agrees to buy SocGen's Asian private bank: sources

[HONG KONG] Singapore's DBS Group Holdings Ltd has agreed to buy French bank Societe Generale's (SocGen) Asian private bank for about US$250 million, people familiar with the matter told Reuters on Friday.

A deal is expected to be announced as early as Monday, said the sources, who declined to be identified as the information is not public.
DBS and SocGen declined to comment. - Reuters

DBS riding high in offshore yuan bond market

By              

Wong Wei Han

Published: March 13, 4:12 AM

 

SINGAPORE — DBS is shaping up to be one of the biggest players in the burgeoning offshore yuan bond market, joining the ranks of top global banks as its issuances in the Chinese currency continue to climb.

In the first two months of the year, offshore yuan bonds issued by DBS totalled around 9.97 billion yuan (S$2.06 billion), or 9.3 per cent of the overall market, exceeding the 8.59 billion yuan tallied in the whole of last year.

“From 2012, when we were 20th in the league table, we halved that last year to 10th, and as of the end of last month, we’ve moved up to the top three,” DBS’ Head of Fixed Income Clifford Lee said during a press briefing yesterday. This means it is behind only Standard Chartered Bank and HSBC Bank.

“We’re cognisant that (the ranking) will move around, but we’ll want to be rated around top five to top 10,” he said. “The fact that the market is open enough for us to participate and move up the ranks is encouraging for us.”

Among the key deals led by DBS this year was the sale of China Eastern Airlines’ three-year, 2.5 billion yuan bonds last week. The bank — South-east Asia’s biggest by capital — was also the sole bookrunner for Peking University Founder Group’s two billion yuan bonds issued in January.


The rapid rise of DBS in the sector reflects Singapore’s growing status as an offshore yuan hub, amid active moves by the Chinese government to internationalise its currency.

Last February, the local branch of Industrial and Commercial Bank of China was appointed by the Chinese authorities as the yuan clearing bank here, putting Singapore on the same footing as Hong Kong and Taiwan.

However, Singapore has a long way to go before catching up with Hong Kong, where yuan deposits, which is one indicator of market depth, stand at around 893 billion yuan compared with 142 billion yuan here.

Mr Lee is, however, confident about Singapore’s future in the yuan game — not in replacing Hong Kong, but in filling the gaps in the bond market.

“Singapore can continue to broaden its sphere of engagement for yuan, because so far the activities in Hong Kong have very much been surrounding Greater China,” he said. “The rest of the participation, from South-east Asia, for instance, is still very limited.”

“The relevance of Singapore in this whole scheme of things is to bring in new investors and new issuers. We’re starting to see traction there,” he said, adding that Singapore can be a facilitator of investments from South-east Asia. WONG WEI HAN


 

S'pore banks Q4 result

DBS CEO said that the bank "plans to stick to 58 cents for the foreseeable future"


CW8888:

That means dividend is raised by 3.6% from 56 to 58 cents

DBS POSTS RECORD 2013 NET PROFIT OF SGD 3.50 BILLION

Total income rises 11% to new high of SGD 8.93 billion

 

SINGAPORE, 14 February 2014 – DBS Group Holdings’ net profit rose to a record SGD 3.50 billion for 2013. Including one-time items, net profit was SGD 3.67 billion.

 

Total income increased 11% to a new high of SGD 8.93 billion, propelled by higher loan volumes and broad-based non-interest income growth. The double-digit top-line growth reflected the depth and resilience of DBS’ regional franchise in a year marked by market volatility. Profit before allowances increased 13% to cross SGD 5 billion for the first time.

 

The stronger operating performance was partially offset by higher general and specific allowances, resulting in net profit growth of 4% before one-time items.

Full-year performance underpinned by double-digit income growth

Total income rose 11% to SGD 8.93 billion.

 

Net interest income rose 5% to a record SGD 5.57 billion. Loans increased 18% or SGD 38 billion to SGD 249 billion, led by regional trade loans, Singapore corporate borrowing and secured consumer loans. While the net interest margin of 1.62% was eight basis points below the previous year due to lower average loan spreads and yields on securities, it was stable during the course of the year with little quarterly fluctuations.

 

Non-interest income increased 21% to a record SGD 3.36 billion. Fee income rose 19% to SGD 1.89 billion. All fee segments grew by double-digit percentage terms, with contributions from wealth management and trade and transaction services reaching new highs. Stockbroking commissions and investment banking income benefited from stronger capital market activity, particularly in the first half. Other non-interest income increased 23% to SGD 1.47 billion as higher treasury customer income and trading gains were partially offset by lower income from investment securities.

 

By customer segments, Wealth Management income increased 18% to SGD 924 million and Small and Medium Enterprise Banking income grew 11% to SGD 1.37 billion. By product lines, income from treasury customer flows rose 19% to SGD 1.04 billion, accounting for a record 50% of total Treasury income from 44% in the previous year. Income from Global Transaction Services increased 5% to SGD 1.48 billion as double-digit percentage increases in loans and deposits were offset by lower rates.

 

Institutional Banking and Consumer Banking / Wealth Management, the two customer-facing business units, respectively accounted for 52% and 28% of the group’s total income. The remaining 20% was attributable to other activities, including balance sheet management, market making, and investment and trading gains.

 

Expense growth was contained at 8% to SGD 3.92 billion, giving a positive jaw of three percentage points. Cost-income ratio improved to 44% from 45% a year ago. Profit before allowances increased 13% to SGD 5.01 billion.

 

Total allowances rose 85% to SGD 770 million. General allowances increased in line with stronger loan growth while specific allowances doubled to 18 basis points of loans from exceptionally low levels a year ago.

 

One-time items amounted to SGD 171 million, comprising a gain of SGD 221 million for the partial divestment of a stake in the Bank of Philippine Islands less a sum of SGD 50 million set aside to establish the DBS Foundation to further the group’s commitment to social and community development.

 

Fourth-quarter income rises 10% from a year ago

Net profit for the fourth quarter rose 6% from a year ago to SGD 802 million. A 10% increase in total income to SGD 2.15 billion was partially offset by higher allowances. Strong business momentum resulted in fourth-quarter income crossing SGD 2 billion for the first time.

 

Net interest income increased 12% to SGD 1.45 billion as loans grew 18% and net interest margin was stable at 1.61%. Non-interest income rose 5% to SGD 697 million. Fee income increased 18% to SGD 439 million with wealth management, investment banking, trade and transaction services and cards leading the increase.

Other non-interest income declined 12% to SGD 258 million as there had been a gain on fixed asset sales of SGD 41 million a year ago.

 

Expenses rose 9% to SGD 1.03 billion. Profit before allowances was 10% higher at SGD 1.12 billion. Total allowances increased 32% to SGD 151 million as both general and specific allowances increased.

 

Fourth-quarter income maintained at previous quarter’s level

Total income was maintained at the previous quarter’s level as sustained growth in customer income offset lower trading gains.

 

Net interest income rose 3%. Loans grew 3% from regional corporate and secured consumer loans while net interest margin was stable. Fee income fell 5%, mainly due to lower contributions from loan-related activities. Contributions from other fee segments were generally maintained at recent quarters’ levels. Other non-interest income fell 9% from a decline in trading gains.

 

Expenses rose 9% due to higher computerisation and other non-staff costs. Total allowances were unchanged as both general and specific allowances were stable.

 

Fourth-quarter net profit was 7% below the previous quarter.

 

Balance sheet remains strong

Asset quality remained healthy. The non-performing loan rate was little changed from recent quarters at 1.1%. Allowance coverage was at 135% and at 204% if collateral was considered.

 

Liquidity continued to be ample. Deposits grew 15% or SGD 39 billion during the year to SGD 292 billion, in line with loan growth, and the loan-deposit ratio was maintained around recent quarters’ levels at 85%. Three-fifths of the deposit growth during the year was in US dollars from multi-national corporations, institutional investors and other customers.

 

The group was also well capitalised, with a total capital adequacy ratio of 16.3% and a Common Equity Tier-1 ratio of 13.7%.

 

The Board proposed a final dividend of 30 cents per share for approval at the forthcoming annual general meeting. This compares to a final dividend of 28 cents per share in 2012 and raises the full-year payout from 56 cents per share to 58 cents per share. The increase is in line with DBS’ dividend policy of paying sustainable dividends in line with its capital management objectives and long-term growth prospects. The scrip dividend scheme will be applicable to the final dividend. Scrip dividends will be issued at the average of the last-dealt share price on each of 12, 14 and 15 May 2014.

 

DBS CEO Piyush Gupta said, “Our record earnings in a year marked by significant market volatility are testament to the strength and resilience of our franchise. DBS is today operating on a higher trajectory and increasingly recognised as a leading Asian bank. To reward shareholders, we are pleased to raise our full-year payout to 58 cents per share. Going forward, we will invest in intensifying our efforts to digitise the bank and redefine the customer experience. We remain committed to stakeholder value creation and to shaping the future of banking."

 

DBS, A*STAR to set up joint R&D lab

By

Jacquelyn Cheok jaccheok@sph.com.sg

        

The joint lab, the first of its kind between I²R and a bank in Asia, is also part of an ongoing journey by DBS to innovate the future of banking - PHOTO: BLOOMBERG

DBS Bank and A*STAR's Institute for Infocomm Research (I²R) on Wednesday announced that they will be setting up a joint lab to research new ways to engage customers through the use of innovative technology.

The joint lab, the first of its kind between I²R and a bank in Asia, is also part of an ongoing journey by DBS to innovate the future of banking.

It aims to develop commercial and actionable solutions and products in the financial sector, conduct new research and leverage existing intellectual property in data analytics, mobile technology, social platforms and other leading edge technologies.

This three-year partnership will enable DBS to tap into the vast network of more than 600 researchers and engineers at I²R.

DBS, OCBC see jump in brand value

While both improve their global ranking this year, UOB slips two spots to 89th

By

Jamie Lee leejamie@sph.com.sg

         

 

Top bank in S'pore and Asean: DBS has a brand value of US$4 billion this year, up 15.4 per cent from a year earlier. - PHOTO: BLOOMBERG

DBS and OCBC have improved their global brand ranking among lenders in the world with double-digit growth, a study by Brand Finance has found. UOB, however, experienced tepid growth and saw a fall in its global ranking.

According to the annual Top 500 Banking Brands ranking, the three local banks collectively have the greatest brand value of any Asean country, with a total brand value of US$8.5 billion.

Brand valuation agency Brand Finance calculated brand value by examining the royalties which a company would have had to pay to license its brand if the firm did not already own it. This form of calculation for intangible assets is known as the "royalty relief" method.

DBS is ahead of its local peers with a brand value of US$4 billion this year, up 15.4 per cent from a year earlier. It is ranked 54th place among 500 global banks this year, up four positions from 58th place previously.

DBS and OCBC are 2 of largest 100 banks in the world

Ranked 79th and 95th largest, respectively.

SNL Financial has released its first ranking of the largest 100 banks in the world based on assets, and two from Singapore made it to the list: DBS Group Holdings Litd. ranked 79th with $319.87b in assets while Oversea-Chinese Banking Corp. Ltd. came in at 95th with $255.74b.

Overall though, banks in China, the United Kingdom, France and Japan dominated the highest rungs of the list, comprising the five largest banks, based on assets.

Beijing-based Industrial & Commercial Bank of China Ltd. ranked as the largest bank in the world as of Sept. 30, followed by London-based HSBC Holdings Plc and France-based Crédit Agricole Group. The fourth largest bank is Paris-based BNP Paribas SA and the fifth largest is Tokyo-based Mitsubishi UFJ Financial Group Inc.

But U.S. banks would be included in the mix if adjusted for the netting of derivatives that is not permitted under IFRS, SNL Financial data showed.

According to the report, SNL ranked the banks based on the assets they report under their respective accounting regimes. Industrial & Commercial Bank of China had $3.062 trillion in assets under IFRS, converted into U.S. dollars, as of Sept. 30.

JPMorgan Chase & Co., which reports under U.S. GAAP, had $2.463 trillion in assets as of Sept. 30, making it the sixth largest bank in the world. However, if JPMorgan followed IFRS accounting principles, it would most likely rank as the largest bank in the world, SNL reckoned.

DBS among S&P's top 10 Asia stock picks for 2014

By

Lee Meixian leemx@sph.com.sg

         

 

 

DBS Group Holdings has been named one of S&P Capital IQ's top 10 Asia stock picks for 2014 - the only Singapore stock to make the list - PHOTO: BLOOMBERG

DBS Group Holdings has been named one of S&P Capital IQ's top 10 Asia stock picks for 2014 - the only Singapore stock to make the list.

The research platform for Standard and Poor's noted that Singapore's largest bank, with a market cap of S$42.2 billion, has appreciated 15.2 per cent in 2013, outperforming the Straits Times Index's 0.3 per cent decline.
It gave DBS a "4-stars" "buy" rating.

"DBS' valuation remains attractive, in our opinion, at (a) prospective 2014 price-to-book ratio of 1.1x versus domestic peers' multiple of 1.2x-1.4x,'' it said

DBS handles $2.4b of bond sales; more to come

 

By

Siow Li Sen lisen@sph.com.sg

         

DBS Bank, the nation's largest debt player, has started the year with a bang - with a slew of bond sales involving multiple currencies.

In just two weeks, with fixed-income marketing hotting up, it has done more than $2.4 billion in deals - these include the year's first perpetual issue and first offshore yuan bond - as companies are jolted into action ahead of an expected interest-rate rise and investors are becoming active again.

Clifford Lee, DBS head of fixed income, said: "So far, activity has been good."

In addition to several Singapore-dollar deals, DBS has churned out yuan and US dollar issues; there is also a sukuk or Islamic bond in the pipeline.

DBS to invest up to S$15m in tech deal with IBM

SINGAPORE: DBS Bank is looking to invest up to S$15 million over the next three years in a technology deal with IBM.

Under the agreement, DBS will apply IBM's expertise in areas like data analytics to its wealth management business.

DBS said it is targeting a roll out of the new technology in the second half of this year.

Nearly three years ago, a computer system called Watson beat human contestants in an American gameshow, “Jeopardy”, proving that computers can think.

And now, IBM, the firm that created Watson, is bringing that technology to industries like healthcare and banking.

IBM on Thursday signed an agreement with DBS Bank, making the bank the first in Asia to use the technology.

Bridget van Kralingen, senior vice president of IBM Global Business Services, said: "We, in fact, today in New York have the creation of the Watson division in IBM which will have a billion dollars in investment to support the creation, development and implementation of Watson technology. To reinforce how strategic this is for IBM, the last time we created a separate division around a technology was actually when we built System/360, which was the mainframe."

Currently across the industry, investment advice given to wealth management clients revolves around the consensus view of the bank's research team.

DBS said the Watson technology will help its relationship managers provide investment advice that is tailored to each customer's investment and risk profiles.

Piyush Gupta, chief executive officer of DBS Group Holdings, said: "The new way of doing things is that the computer aggregates data -- every market, every asset class, (and) every country. And then, depending on every customer's individual profile and preference, it can spew out a recommendation. That completely changes the nature of the game, because now you're customised to a segment of one."

The agreement comes as traditional banks push to digitise more of their processes in a bid to compete with non-bank financial institutions like Paypal and Alipay.

DBS said it will launch more technology initiatives in the coming weeks targeted at its payments, and small and medium enterprises (SME) banking business units.

- CNA/gn