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DBS Group Holdings: Play on dividend growth from higher earnings and Basel IV

Goola Warden
Goola Warden1/17/2023 09:56 PM GMT+08  • 4 min read
DBS Group Holdings: Play on dividend growth from higher earnings and Basel IV
DBS's net zero building. Photo: Albert Chua/The Edge Singapore
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Long-term investors have been served well by having at least one bank in their port­folios. All three Singapore banks have proved their mettle through the Global Financial Crisis, the European debt cri­sis, Covid-19 and most recently, the Chinese property crisis.

As we move into 2023, banks are likely to start phasing in Basel IV in July with banks being given five years for total implementa­tion. And DBS Group Holdings is a major beneficiary.

As DBS group CEO Piyush Gupta had said during the 3QFY2022 ended September 2022 results briefing on Nov 3, 2022, “Our target CET-1 range has always been guided at 12.5%– 13.5%. Another thing to factor in is the im­pact of Basel IV, which is very material. Our CET-1 jumps to 16% because of it. Between now and the end of the decade, we are look­ing at capital cushion buffers of two to three percentage points, not decimals of a per cent.”

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