DBS Group Holdings has reported earnings of $2.95 billion for its 3QFY2025, a slight dip of 2% y-o-y, but up 5% q-o-q. This showing beat expectations of $2.786 billion.
As expected, the bank is starting to feel the impact of lower rates, but was able to offset this industry-wide trend with hedging and strong deposit growth.
In 3QFY2025, its commercial book net interest income was down by 6% y-o-y.
Total income was up 3% y-o-y in the same period to a record $5.9 billion, led by fee income and treasury customer sales. The growth was helped by market trading income, which surged by 33%.
DBS plans to pay a total 3QFY2025 dividend of 75 cents per share, comprising 60 cents in ordinary dividend and 15 cents in the form of capital return dividend.
“We delivered a strong set of results for the third quarter with record pre-tax profit and ROE above 17%," says CEO Tan Su Shan.
See also: UOB reports lower 3QFY2025 earnings after making 'pre-emptive' provisions
"Total income reached a new high as we sustained the strong momentum in wealth management and deposit growth while mitigating external rate pressures through proactive balance sheet hedging.
"As we enter the coming year, we will continue to navigate the pressures of declining interest rates with nimble balance sheet management and our ability to capture structural opportunities across wealth management and institutional banking," she adds.
Tan expects total income to be around 2025 levels despite rate headwinds but net interest income is seen to be slightly below 2025
This guidance is based on Sora held at current levels, three Fed rate cuts and also a Singdollar that is appreciating further.
Tan maintains that the full-year impact of lower rates will be mitigated by deposit growth.
DBS expects its commercial book non-interest income growth to be high-single digits and to achieve mid-teens growth in wealth management
DBS shares closed steady at $53.50 on Nov 5 but up more than 21% year to date.
