DBS Group Holdings has reported a 10% drop in its 4QFY2025 earnings to $2.36 billion, due higher tax and the absence of non-recurring gains from a year earlier. The bank made higher specific allowances as well.
For the full year, DBS made $11 billion, down 3% over the preceding year ended Dec 31, 2024.
The numbers were below estimates compiled by Bloomberg of $2.6 billion for 4QFY2025 and $11.37 billion for the full year.
As guided, DBS plans to pay a final quarterly dividend of 66 cents per share, an increase of 6 cents from the preceding three quarters.
In addition, the bank will continue with a 15 cents per share capital return dividend.
This will bring its 4Q payout to 81 cents and FY2025 total payout to $3.06 per share — an increase of 38% over FY2024's total of $2.22.
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For the current FY2026 and coming FY2027, the bank plans to maintain the quarterly capital return dividend of 15 cents, barring unforeseen circumstances.
"Our ability to nimbly capture market opportunities and support client needs was key to the year’s performance," says CEO Tan Su Shan.
"While rate pressures and geopolitical tensions are expected to persist, the quality of our franchise and strong balance sheet provide a solid foundation for the year ahead," she adds.
The bank was able to put back $63 million in general allowances but its FY2025 bottomline was weighed down by specific allowances of $854 million, which is a jump from $559 million made in FY2024.
“On asset quality, new non-performing asset (NPA) formation moved up to $751 million (17bps) during 4QFY2025, as the bank downgraded some of the higher risk, watchlisted real estate exposure. As a result, a part of general provisions (GPs) were moved to specific provisions (SPs), with total credit costs of 19 bps announced for the quarter. Guidance for 2026 stays at 17-20 bps of SPs, which suggests the bank used a strong year to lower risk for 2026. This is quite different from UOB, where we expect lingering asset quality concerns,” notes Harsh Modi, banking analyst at JP Morgan, and he adds DBS is his most preferred local bank.
In all, non-performing loan ratio was stable at 1.0%; its return on equity was 16.2% and return on tangible equity was 17.8%.
Its reported Common Equity Tier-1 ratio was 17.0% based on transitional arrangements, while the pro-forma ratio on a fully phased-in basis was 15.0%. The leverage ratio was at 6.2%, more than twice the regulatory minimum of 3%.
DBS shares opened at $58.41, down 1.5% from the previous close.
