SINGAPORE (Feb 13): DBS Group Holdings has recorded earnings of $1.51 billion for 4QFY2019 ended December 2019, some 14% y-o-y higher than earnings of $1.32 billion a year ago, on the back of broad-based business momentum.

4QFY2019 total income rose 7% y-o-y to $3.46 billion from loan growth and a double-digit improvement in fee income.

Compared to the preceding 3QFY2019, earnings were 7% q-o-q lower, as total income retreated 9% q-o-q on seasonally-lower non-interest income and a decline in net interest margin from falling interest rates.

However, the bank noted that business momentum remained healthy in the latest quarter as loans rose 2% in constant-currency terms.

The healthy 4Q performance brought DBS’ FY2019 earnings and total income to record highs.

FY2019 earnings jumped 14% y-o-y to $6.39 billion while total income rose 10% y-o-y to $14.54 billion.

FY2019 return on equity also hit a new high at 13.2%.

4QFY2019 net interest income climbed 4% y-o-y to $2.43 billion, as loans increased 4% in constant-currency terms from a year ago and net interest margin was flattish y-o-y at 1.86%.

Net fee income grew 17% from a year ago to $741 million, led by a 31% increase in wealth management fees due to buoyant investor sentiment and a near-trebling of investment banking fees.

Other non-interest income rose 5% y-o-y to $294 million due to higher gains on investment securities.

Expenses rose 7% y-o-y to $1.60 billion from higher staff costs, but was 1% q-o-q lower than the previous quarter.

Profit before allowances grew 7% to $1.86 billion.

Non-performing assets (NPA) declined 3% from the previous quarter to $5.77 billion as new NPA formation was more than offset by write-offs and recoveries. The NPL rate was stable at 1.5%.

Specific allowances were $199 million, or 21 basis points of loans – in line with recent quarterly trends. There was a general allowance write-back of $77 million, which was reclassified as specific allowances for new NPA.

Allowance coverage was at 94%, and at 191% after taking collateral into account.

The liquidity coverage ratio was at 139% and the net stable funding ratio was at 110%.

The Common Equity Tier 1 ratio and leverage ratio were both above regulatory requirements, at 14.1% and 7.0%, respectively.

The board has proposed a final dividend of 33 cents per share for the period, to be approved by shareholders at the annual general meeting.

Barring unforeseen circumstances, the annualised dividend will be $1.32 per share, an increase of 10%.

DBS says the higher quarterly dividend is in line with the policy of paying sustainable dividends that grow progressively with earnings.

With effect from FY2019, dividends are paid quarterly instead of semi-annually to provide shareholders with a more regular income stream.

“Our record performance with return on equity at a new high of 13.2% demonstrates a franchise that delivers high quality results,” says DBS CEO Piyush Gupta. “The increased quarterly dividend proposed by the board reflects the enhanced capacity of our business to generate earnings and reward shareholders.”

Shares in DBS opened 22 cents higher, or up 0.9%, at $25.64 on Thursday, following the results announcement.