Maybank hosted the bank's management for a post-results non-deal roadshow (NDR).
In a Monday report, Ng says management is positive on loan growth in mortgages in Singapore and expects it to increase by another $4 billion in FY18, with en bloc demand to flow through this year.
FY18's Net Interest Margin (NIM) is also expected to increase to 1.85% from 1.81% in Dec 2017.
FY18 operational expenditure growth will be in high single-digit, partly due to integration with ANZ. DBS's businesses in Taiwan and Indonesia will also report high cost-to-income ratio of 85% and 70% respectively due to the lack of large platforms in the two markets.
Still, management hopes to drive down the costs of these businesses over the next 12-18 months. To drive cost efficiency, it will continue to change the format of the branches into centres more dedicated for advisory and services.
As for DBS's digital initiatives, 90% of its systems will be cloud-ready by the end of this year. However, management admits digital banking in India and Indonesia will still be loss-making.
Meantime, Phillip Capital is also maintaining DBS at "buy" with unchanged target price of $29.30.
In a Monday report, analyst Jeremy Teong says loans growth was 7% higher y-o-y as housing loans continued its strong quarterly growth momentum. DBS's share of Singapore mortgage loans also edged higher to 30.8% from 28.7% in June 2017.
Consumer and SME banking in Singapore and Hong Kong gained momentum too with 4Q17 wealth management income up 26.5% y-o-y at $534 million.
4Q17 retail income growth was flat y-o-y following weak performance from 1Q17 through to 3Q17. SME banking was a bright spot though, growing 16.2% y-o-y on the strong business expectations and PMI reading in Singapore and continued strength in Chinese consumer sentiment.
The pleasant surprise for Teong was the normalisation of the provision expense in 4Q17 as he had expected a carryover of higher provision expense from the 3Q17 cleanup.
"We believe the normalisation is an indication that the cleanup in 3Q17 was sufficient to clear the path a stronger asset quality performance in 2018," says the analyst.
Finally, annual dividend per share will double in 2018 from the payout in 2016.
DBS says the final one-tier tax exempt dividend was increased to 60 cents per share from 30 cents per share in 2016. In addition, a special dividend of 50 cents per share was also announced.
Barring any unforeseen circumstances, the proposed annual dividend moving ahead will be raised to $1.20 per share, double the annual rate of 60 cents per share in 2016.
"The $1.20 per share dividend represents a 50% dividend payout ratio based on FY18 earnings and a dividend yield of 4.5% at current share price," says Teong.
As at 3.42pm, shares in DBS are up 60 cents at $27.31 or 8.5 times FY20 forward core earnings.
