Thu, Aug 06, 2020 – 7:24 AM
UPDATED Thu, Aug 06, 2020 – 9:32 AM
DBS on Thursday posted a 22 per cent fall in second-quarter net profit, dragged by further provisions and flat total income.
The board declared a dividend of 18 cents per share for the second quarter, with the scrip dividend scheme applicable. Scrip dividends will be issued at the average of the closing share prices on Aug 14, 2020 and Aug 17, 2020. The move is in line with MASs guidance for local banks to moderate their dividends for 2020.
DBS pays dividend by the quarter. In the year-ago quarter, DBS paid a dividend of 30 cents per share. In the previous quarter, DBS paid a dividend of 33 cents per share.
Shares of DBS rose in early morning trading on Thursday, gaining 30 cents to S$20.13 as at 9.24am.
Net profit for the three months ended June 30, 2020 stood at S$1.25 billion, compared with S$1.60 billion in the same period a year ago. This is slightly under the consensus forecast of S$1.31 billion in net income from three analysts in a Bloomberg poll.
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Total income for the second quarter was largely flat at S$3.73 billion compared with S$3.71 billion in the year-ago quarter, with both net income and fee income falling from the same period a year ago. Net interest margin (NIMs) fell to 1.62 per cent from 1.91 per cent a year ago, and 1.86 per cent a quarter ago. The one-month Sibor as at Wednesday stood at an all-time record low of 0.25 per cent; the three-month Sibor of 0.438 per cent was at a level not seen since 2014.
DBS expects full-year NIM to come in at 1.6 per cent.
The bank saw record deposit inflows in the first half, led by inflows from current accounts and savings accounts, with momentum expected to continue. The excess deposits were deployed in risk-free assets, which diluted NIM but improved earnings and return on equity (ROE), DBS said. The bank's loan-to-deposit ratio as at June 30, 2020 stood at 84 per cent.
ROE stood at 9.8 per cent, down from 13.4 per cent a year ago, but slightly stronger than the 9.2 per cent reported a quarter ago.
Expenses for the second quarter fell 4 per cent from a year ago to S$1.48 billion.
Provisions against bad loans in the second quarter surged to S$849 million, up from S$251 million in the yRead More – Source