DBS forecasts stable loan growth

19 February, 2019 12:00 AM printer

SINGAPORE: DBS Group Holdings, Southeast Asia's biggest lender, forecast stable loans growth for 2019 after a robust increase in net interest margin drove an 8 per cent rise in quarterly profit and a record annual profit.

After three years of strong loans growth, Singapore's banks face tougher times as the city-state's export-reliant economy slows, partly due to a trade war between China and the United States, report agencies.

Data released on Monday showed Singapore's exports fell 10.1 per cent in January from a year earlier, the biggest drop in over two years.

DBS, nearly 30 per cent owned by state investor Temasek Holdings, forecast mid-single-digit loans growth and high single-digit income growth for this year. Loans grew 6 percent in constant-currency terms to S$345 billion last year.

The bank reported a net profit of S$1.32 billion for October-December versus S$1.22 billion a year earlier, and in line with an average estimate of S$1.34 billion from three analysts, according to data from Refinitiv.

Full-year profit jumped 28 per cent to a record S$5.63 billion as Singapore banks benefited from higher interest rates.

"We believe the result reads well for peers, for which street expectations are a lot lower," Jefferies analyst Krishna Guha said in a report, referring to the quarterly numbers.

DBS kicked off the reporting season for Singapore banks, with smaller peers Oversea-Chinese Banking Corp and United Overseas Bank reporting results on Friday.