Singapore banks post lower earnings in weak markets, but best estimates

A DBS bank logo is seen in Taipei, Taiwan January 28, 2022. REUTERS/Ann Wang

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SINGAPORE, April 29 (Reuters) – Singaporean lenders DBS Group (DBSM.SI) and OCBC (OCBC.SI) both reported a 10% drop in quarterly profits, which still beat analysts’ estimates after record results a year ago, but their wealth management businesses suffered in weaker markets.

“The market will also be waiting for signs and seeing the beginnings of earnings on rising margins and decent loan growth of 8-9%,” Kevin Kwek, principal analyst at Sanford C. Bernstein, said Friday.

Buoyed by better-than-expected results, shares of DBS rose 3.4% while OCBC jumped 3.6% in a broader market (.STI) up 1%.

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Singapore banks face a tough comparison after posting bumper profits a year earlier when they benefited from a strong rally in pandemic-hit markets.

“Geopolitical developments in recent weeks have created macroeconomic headwinds and financial market volatility,” DBS chief executive Piyush Gupta said in a statement Friday.

“While some businesses such as wealth management will be affected, our overall business portfolio continues to be healthy,” he said, adding that DBS would benefit significantly from interest rate increases over the course of the year. of the next quarters.

Net profit at Southeast Asia’s biggest bank fell to S$1.8 billion ($1.30 billion) in January-March from a record S$2 billion a year earlier , but exceeded the average estimate of S$1.63 billion from six analysts, according to Refinitiv data.

Second-ranked OCBC posted a profit of S$1.36 billion in the first quarter, up from S$1.5 billion a year earlier, but that also topped an average estimate of S$1.2 billion. Singaporeans from six analysts, according to data from Refinitiv.

OCBC counts Singapore, Greater China and Malaysia among its main markets, while DBS derives the bulk of its profits from Singapore and Hong Kong.

Singapore’s economy, which is benefiting from political uncertainty and pandemic pain elsewhere in Asia, is expected to grow 3-5% this year.

On Friday, United Overseas Bank of Singapore (UOBH.SI) also reported a 10% drop in net profit to S$906 million from an average market estimate of S$1 billion.

Earlier this year, DBS and UOB separately acquired retail assets sold by Citibank (CN) in Southeast Asian markets and Taiwan as lenders expand regionally.

($1 = 1.3868 Singapore dollars)

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Reporting by Anshuman Daga; Editing by Muralikumar Anantharaman, Sam Holmes and Shri Navaratnam

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