Singapore’s DBS achieved record earnings in the second quarter of 2023, driven by improved interest margins from rising rates.
DBS posted a record net profit of S$2.7 billion ($2 billion) for the second quarter of 2023, according to the bank’s financial results, up 48 percent year-on-year.
Total income grew 35 percent to over S$5 billion for the first time ever. This was driven mainly by a 54 percent increase in net interest income from the commercial book as net interest margin rose 96 basis points, including 12 basis points during the quarter. Total expenses increased 16 percent to S$1.9 billion, primarily due to higher staff costs.
Overall, DBS's net profit in the first half rose 45 percent to S$5.3 billion – a new high – after excluding a one-time integration cost of S$60 million from the acquisition of Citi’s Taiwan consumer unit. Return on equity during the period also climbed to a new high of 18.9 percent.
2023: Record Year
According to DBS's presentation, it is optimistic about the remainder of 2023. The bank expects positive drivers in the first half to sustain into the second half, resulting in a record year with return on equity exceeding 17 percent.
«While there is some macroeconomic uncertainty, our prospects for the rest of the year are anchored on a franchise with a proven ability to capture business opportunities. Our longstanding prudence in building general allowance reserves and maintaining strong capital ratios will position us well to withstand headwinds,» said DBS CEO Piyush Gupta.
