SINGAPORE (Nov 5): DBS Group Holdings reported a net profit of $1.4 billion for 3Q18, up 72% from $822 million a year ago when accelerated allowances had been taken for weak oil & gas support service exposures.

The group’s latest performance in 3Q was attributed to a sustained loan growth, fee income trends and net interest margin progression.

An average estimate of three analysts polled by Refinitiv had expected 3Q earnings of $1.47 billion.

Total income for the quarter grew 10% to a record $3.4 billion as compared to $3 billion in the previous year, exceeding the earlier high in 1Q18.

Net interest income grew 15% to $2.3 billion from $2 billion previously from an increase in loan volumes and net interest margin. Loans expanded 8% to SGD 340 billion, led by consumer & non-trade corporate loans.

Net interest margin rose 13 basis points to 1.86%, in line with higher interest rates in Singapore and Hong Kong.

Net fee income grew 1% from a year ago to $695 million, as increases in a wide range of activities were offset by a two-thirds decline in investment banking fees.

Expenses increased 18% from a year ago to $1.48 billion, which included expenses for a fiftieth-anniversary staff bonus and other non-recurring items. Profit before allowances of $1.89 billion was 5% higher on-year.  

Taking collateral into account, allowance coverage was at 174%, similar to the previous quarter.

Deposits were 7% higher than a year ago at $388 billion.

The group’s liquidity coverage ratio of 132% and net stable funding ratio of 109% were both above the regulatory requirements of 100%.

For 9M18, net profit increased 36% to $4.41 bil with total income growing 12% to $9.94 billion. Notably, specific allowances were a fifth as compared to that of a year ago, as new non-performing asset formation declined.

Commenting on the latest set of quarterly results, DBS CEO Piyush Gupta notes that the group’s YTD earnings per share is by far the highest in its history, while ROE is at its best in more than a decade.

“Third-quarter business momentum was sustained amidst heightened geopolitical and economic headwinds… We are well positioned to continue capitalising on Asia’s long-term prospects while navigating short-term uncertainties,” comments Gupta.

Year to date, shares in DBS are down 2.1% to its Friday close of $24.66.