DBS Group, the largest lender in Southeast Asia, has reported a 17% increase in third-quarter profit, exceeding analysts’ expectations. The bank announced a net profit of 2.63 billion Singaporean dollars, surpassing the projected estimate of SG$2.5 billion. As a result of this strong performance, the bank declared a dividend of 48 Singapore cents for each ordinary share for the third quarter.
One of the contributing factors to DBS’s success was its net interest margin, which measures lending profitability. In the third quarter, this margin stood at 2.19%, higher than the 1.90% recorded a year ago. The bank also attributed its strong performance to a high-interest rate environment and sustained growth in commercial book non-interest income.
CEO Piyush Gupta expressed optimism for the future, anticipating that higher interest rates will benefit the bank’s earnings. He also highlighted that DBS has a strong balance sheet, ample liquidity, and healthy capital ratios, which will allow it to withstand any uncertainties in the macroeconomic environment.
Following the announcement of its financial results, shares of DBS rose by 0.75%. In contrast, smaller rival United Overseas Bank reported a 1% drop in third-quarter net profit in October, failing to meet analysts’ expectations.
Investors will now be eagerly awaiting the quarterly results of another prominent lender in the region, Oversea-Chinese Banking Corporation, which is set to report on November 10th.
Overall, DBS Group’s strong performance in the third quarter reflects the company’s ability to navigate the current economic landscape successfully. With its robust financial results, the bank has demonstrated its resilience and ability to generate profits in a challenging environment.
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