DBS Group (D05) Q4 2024 (Q&A) earnings summary

Executive summary

• Achieved record full-year net profit of SGD 11.4 billion, up 11% year-over-year, with ROE sustained at 18.0%.

• Total income rose 10% to SGD 22.3 billion, driven by broad-based growth across commercial book, markets trading, and wealth management.

• Wealth management and treasury customer sales reached new highs, supported by improved investor sentiment and digital transformation initiatives.

• Management discussed capital allocation, dividend policy, and share buybacks, emphasizing strong capital returns and prudent provisioning.

• Board proposed a final dividend of 60 cents per share and will introduce a quarterly Capital Return dividend for FY2025.

Financial highlights

• Net interest income guidance shifted from stable to slightly up quarter-on-quarter, with sensitivity to rate changes factored in.

• Net interest margin up four basis points to 2.80% for the year, with exit NIM guided at approximately 2.12%.

• Fee income crossed SGD 4 billion for the first time, led by a 45% increase in wealth management fees and 19% growth in card fees.

• Cost-income ratio remained stable at 40% for the year, with mid-single digit OpEx growth budgeted for the coming year.

• Wealth management revenue grew 40% year-over-year, with S$21 billion net new money for the year and S$6 billion in Q4.

Outlook and guidance

• 2025 group net interest income expected to be slightly above 2024, assuming two rate cuts in 2H25.

• Group NIM to decline slightly but offset by loan growth; commercial book non-interest income to grow high single digits.

• Cost-income ratio projected in low-40% range; pretax profit to be around 2024 levels, but net profit to be lower due to global minimum tax.

• Wealth management business budgeted for 15% growth, but outlook is highly sensitive to market sentiment and volatility.

• ROE expected to remain at the higher end of the 15%-17% range if rates remain elevated.