DBS Group (SGX:D05) posted a record second-quarter net profit, boosted by higher fee income and wealth management growth that offset a decline in net interest income as interest rates fell.
Net profit rose 9% year over year in the second quarter to SG$3.08 billion from SG$2.82 billion, with earnings per share growing to SG$4.33 from SG$3.98 a year earlier, according to its earnings statement published Thursday.
Total income rose 6% to a record SG$6.09 billion from SG$5.73 billion, crossing the SG$6 billion mark for the first time.
Net interest income, the bank's largest revenue source, fell 2% in the second quarter to SG$3.58 billion from SG$3.65 billion a year prior. DBS attributed the drop to lower interest rates. However, the bank noted that strong loan and deposit growth, in addition to proactive hedging, helped offset most of the impact.
Net fee income in the second quarter jumped 25% year over year to SG$1.46 billion, which marked the second-highest quarterly level on record, owing to a 42% jump in wealth management fees to a record SG$919 million.
By the end of June, customer loans ballooned to SG$469.4 billion from SG$445 billion at the start of the year, driven by growth in non-trade corporate lending. Deposits rose 4% to SG$638.2 billion from SG$610 billion over the same period.
For the first half, attributable net profit climbed 5% year over year to SG$6.01 billion, with earnings per share rising to SG$4.25 from SG$4.04.
Total income in the January-June period edged up 3% to SG$12.04 billion, with net interest income dropping 3% to SG$7.08 billion and group net interest margin narrowing 20 basis points to 1.88%.
DBS declared a quarterly ordinary dividend of SG$0.66 per share and a capital return dividend of SG$0.15, bringing the first-half payouts to SG$1.32 and SG$0.30 per share, respectively.
The bank raised its full-year guidance, with total income expected to exceed 2025 levels and group net interest income expected to "close the gap to 2025 levels." It expects cost-income ratio to be in the low-40% range after booking 39% by the end of the first half.
