DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion
On August 3, DBS announced a remarkable performance in the second quarter of 2023. The company's total income surpassed S$5 billion for the first time, representing an impressive YoY increase of 35%. Furthermore, the net profit soared by 48% YoY to S$2.69 billion, with an ROE of 19.2%, both hitting new highs.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/fe094928769231ffaf7364eab567639a.png/bigmoo)
“We achieved another set of record results as second-quarter and first-half earnings reached new highs with return on equity at 19%. The commercial book benefited from higher interest rates and broad-based growth in non-interest income activities, which was moderated by higher funding costs for Treasury Markets.,”DBS CEO Piyush Gupta said.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/97e5c304de533b0881b24e7915442144.png/bigmoo)
1. Commercial book total income recorded a 40% increase to S$4.87 billion in 2Q23, driven by higher net interest margin (NIM) and broad-based non-interest income growth.
1) 2Q commercial book net interest income rose to S$3.58 billion, with a YoY growth of 54% and QoQ growth of 6%. The NIM rises for the sixth consecutive quarter to 2.81%, up by 96bp YoY and 12bp QoQ.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/2f056ec0f27933dd8e6c354dcf164d2d.png/bigmoo)
2) The net fee income of DBS's commercial book increased by 7% year-on-year in 2Q, signaling the first YoY growth in six quarters. Within this segment, wealth management fees saw a significant increase of 12%, reaching S$377 million, driven by higher sales of bancassurance and investment products. Card fees also grew thanks to increased spending on travel. Loan-related fees experienced YoY growth as well. However, the overall growth in net fee income was partly offset by a 5% decline in transaction service fees, primarily due to a decrease in trade finance-related fees.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/b329c3929eed3f6e91e3d4ed8df799a7.png/bigmoo)
2.Treasury Markets trading income declines 34% YoY to S$177m due to higher funding costs
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/2bf66493147538978c9670ecbc306733.png/bigmoo)
3. DBS maintained a stable cost-income ratio of 38% in the second quarter of 2023, representing a 6% improvement from last year. Total expenses increased by 16% YoY due to higher staff costs.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/db7dea869c9035babc32fc7d6e9033fb.png/bigmoo)
DBS's asset quality remained resilient, with the non-performing loan (NPL) ratio unchanged quarter-on-quarter at 1.1%. The non-performing assets (NPAs) were stable at S$4.99 billion compared to the previous quarter, as new non-performing loan formation remained low and was offset by repayments and write-offs.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/f4cfd3c60af03ae7bd940b3782c1529d.png/bigmoo)
The total allowance reserves at DBS amounted to S$6.33 billion, resulting in an allowance coverage ratio of 127%. After considering collateral, the allowance coverage ratio increased to 224%.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/d199ba5ae6323e67bb3420118aac1e43.png/bigmoo)
DBS's capital position remained robust, with a Common Equity Tier-1 (CET1) ratio of 14.1%, indicating a healthy level. Additionally, the company's leverage ratio stood at 6.5%, which is more than twice the regulatory minimum requirement of 3%.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/6d44b80ff6473da3872f6bc9855bfcdd.png/bigmoo)
DBS's liquidity remained robust, with a liquidity coverage ratio (LCR) of 146% and a net stable funding ratio (NSFR) of 116%. Both ratios were comfortably above the regulatory requirements of 100%.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/f087a7aa6ef034c88b12524c7a9f0a96.png/bigmoo)
The Board has declared an interim one-tier tax-exempt dividend of 48 cents for each DBSH ordinary share for the second quarter of 2023 (the “2Q23 Interim Dividend”), which brings the first-half dividend to 90 cents per share. The dividend growth was in line with guidance, reflecting the company’s stronger growth prospects for the year.
![DBS's 2Q23 Net Profit Soared 48% YoY to A New High of S$2.69 Billion](https://sgsnsimg.moomoo.com/feed_image/101000102/1f34aa3f4f4939849defef26d97aad2b.png/bigmoo)
DBS CEO Piyush Gupta said,“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.”
Source: DBS
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