Profits Slip 33% on Loan Losses, But Outlook is Optimistic

that of Singapore DBS Group announced a decline of one-third in quarterly net income, according to estimates, as it recorded higher loan losses in markets affected by the pandemic, but gave a bullish outlook for this year.

Piyush Gupta, CEO of Southeast Asia’s largest lender, said the latest economic data supported a strong economic rebound for 2021. DBS’s strong performance in January gave the year a head start, he said in a presentation on the bank’s business outlook.

“Business momentum was strong in the fourth quarter and our loan and commission income pipeline is healthy,” said Gupta.

Analysts expect strong revenues from the wealth management business to lead to a rebound in Singaporean banks’ full-year profits, as improving economic prospects are also expected to cushion the impact on their margins. interest that are close to the lowest records.

DBS, the first local lender to launch results, posted net income of S $ 1 billion for the quarter ending December, compared to an average estimate of S $ 1.02 billion ($ 769.6 million) of four analysts, according to data from Refinitiv.

Peers OCBC and UOB report the results later this month.

DBS’s net interest margin, a key indicator of profitability, fell to 1.49% in the quarter, from 1.86% a year earlier and 1.53% in the third quarter.

DBS said loan loss provisions jumped to S $ 577 million in the fourth quarter, from S $ 122 million a year earlier, but increased only slightly from the third quarter.