DBS Group (D05) Q2 2024 earnings summary

Executive summary

• Second-quarter net profit rose 4% year-over-year to SGD 2.80 billion, with ROE at 18.2%.

• First-half 2024 net profit reached a record SGD 5.76 billion, up 9% year-over-year, with ROE at 18.8%.

• Total income for the second quarter increased 9% to SGD 5.48 billion, and for the first half, it rose 11% to SGD 11.0 billion, driven by broad-based growth in net interest, fee, and treasury customer sales income.

• Resilience maintained amid market volatility and geopolitical tensions, with strong capital and liquidity positions.

• Interim dividend of 54 cents per share declared for Q2, totaling SGD 1.08 per share for H1.

Financial highlights

• Net interest income for Q2 reached SGD 3.77 billion, up 5% year-over-year; net interest margin for the commercial book improved to 2.83%.

• Net fee income for Q2 hit a record SGD 1.05 billion, up 27% year-over-year, led by wealth management and card fees.

• Markets trading income for Q2 was SGD 187 million, up 6% year-over-year.

• Expenses increased 11-12% year-over-year, with Citi Taiwan accounting for five percentage points of the increase; cost-to-income ratio was 40% for Q2 and 39% for H1.

• Asset quality remained strong with a non-performing loan ratio of 1.1% and allowance coverage at 129% (227% with collateral).

Outlook and guidance

• Management expects high single-digit total income growth for the year, with resilience against economic slowdown and lower interest rates supported by high allowance reserves and strong capital.

• Allowances guidance revised to 10-15 basis points, with net profit growth expected in the mid- to high single digits.

• Heightened uncertainty from market volatility and geopolitical tensions remains a key risk.