Total income increased 16% to $3.36 billion, led by broad-based growth in loans and non-interest income as well as a higher net interest margin.
Asset quality was healthy with total allowances declining 18% and new non-performing asset formation at a four-year low.
Return on equity came in at 13%, the highest in a decade.
Net interest income rose 16% to $2.13 billion from higher loan volumes while net interest margin improved by 9 basis points to 1.83% on higher interest rates.
Loans expanded 13% in constant-currency terms to $328 billion.
Net fee income increased 12% to $744 million. Wealth management fees grew by an underlying 31% to a new high of $331 million from higher investment product and bancassurance sales.
Other non-interest income was 25% higher at $488 million. There was a net gain of $86 million from a Hong Kong property disposal.
Net trading income increased 36% to $368 million from higher trading gains. These increases were partially offset by a 78% decline in net gain from investment securities to $22 million.
By business unit, Consumer Banking/Wealth Management income rose 17% to $1.36 billion, Institutional Banking income grew 3% to $1.36 billion while trading-related income for Treasury Markets rose 33% to $249 million.
Non-performing assets declined 4% to $5.82 billion. NPA formation was at a four-year low of $195 million and was more than offset by recoveries and write-offs.
Compared to the previous quarter, the NPL rate fell from 1.7% to 1.6%, while allowance coverage rose to 90% and to 177% when collateral was considered.
Total allowances fell 18% from a year ago and 27% from the previous quarter to $164 million. Allowances for impaired assets amounted to 20 basis points of loans.
The Common Equity Tier-1 ratio (CET-1) was little changed from the previous quarter at 14.0% as an increase in retained earnings was partially offset by the impact of loan growth.
DBS has maintained its guidance for year and is expected to on track for full-year NIM of at least 1.85%.
DBS CEO Piyush Gupta says, “With interest rates and allowance charges reverting to more normalised levels, and our capital base streamlined with the finalisation of regulatory requirements, the structural profitability of our franchise has been more clearly demonstrated with this quarter’s results. While we are keeping a watchful eye on how geopolitical trade tensions play out, the region’s economic fundamentals remain sound. Our pipeline is healthy and we expect to continue capturing business opportunities and delivering shareholder returns in the coming year.”
Shares in DBS closed 26 cents higher at $30 on Friday.
