All three Singapore banks – DBS, UOB and OCBC – reported drops in their first quarter earnings as wealth management took a hit.
Banks globally have seen their earnings dented in the first quarter due to market volatility over the January-to-March period – driven by Russia’s invasion of Ukraine and higher interest rates. Singapore’s banks were not an exception.
Southeast Asia’s largest bank, DBS, reported its first quarter net profit came in at S$1.8 billion (US$1.30 billion), down 10 percent from the year-earlier quarter. OCBC reported Friday its net profit for the first quarter fell 10 percent from the year-earlier quarter to S$1.36 billion. UOB said its first quarter net profit dropped 10 percent from the year-ago quarter to S$906 million.
High-Base Comparison
To be sure, both OCBC and DBS highlighted that the year-ago quarter had a high base for the comparison on wealth management-related earnings.
However, all three reported improvements in their core banking businesses, with stronger net interest income as interest rates globally have increased as the U.S. Federal Reserve has tightened its policy.
DBS CEO Piyush Gupta was generally upbeat on the results.
«Healthy Pipeline»
«First-quarter business momentum was strong and broad-based, and earnings were second only to the exceptional quarter a year ago. Geopolitical developments in recent weeks have created macroeconomic headwinds and financial market volatility,» Gupta said in the statement on the results.
«While some activities such as wealth management will be affected, our overall business pipeline continues to be healthy and we will benefit significantly from interest rate increases in the coming quarters,» he added.
In a sign of recovery from the pandemic, DBS in particular noted its credit card fees for the first quarter climbed 11 percent from the year-ago quarter, as travel spending picked up. Credit card and debit card spending was higher than pre-pandemic levels, DBS said.
