DBS Group Holdings Ltd · SGX:D05
DBS — FY2020 Earnings Presentation
30 slides from DBS's earnings presentation, Feb 10, 2021
Slide 1: Resilient full-year operating performance
Resilient full-year operating performance DBS Group Holdings 4Q 2020 financial results February 10, 2021 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank
Slide 2: Highlights
Highlights Full-year earnings 26% lower at $4.72 billion ▪ Total allowances quadruple to $3.07bn as general allowances of $1.71bn conservatively set aside ▪ Profit before allowances rises 2% to new high of $8.43 billion Total income stable at $14.6bn despite economic disruption caused by the pandemi
Slide 3: Full-year net profit down 26%
Full-year net profit down 26% (S$m) FY20 YoY % ▪ Net interest income down 6% from the impact of interest rate cuts at the end of first quarter Total income 14,592 0 ▪ Fee income stable despite a challenging economic Expenses 6,158 (2) environment Profit before allowances record 8,434 2 ▪ Other incom
Slide 4: 4Q net profit down 22%
4Q net profit down 22% (S$m) 4Q20 QoQ % ▪ Total income down 9% due to 4bp lower NIM from Total income 3,263 (9) loans repricing in a low interest rate environment, seasonally-lower fee income and lower gains from Expenses 1,580 3 investment securities Profit before allowances 1,683 (17) ▪ Pace of ge
Slide 5: 4Q net interest income down 2% on quarter
4Q net interest income down 2% on quarter Net interest margin (%) 2.15 2.07 Excluding TM 1.76 1.73 1.62 1.62 1.89 Group 1.62 1.86 1.62 1.53 1.49 9,625 9,076 2H 4,886 4,291 Net interest income (S$m) 2,482 2,303 2,171 2,120 1H 4,739 4,785 FY19 FY20 1Q20 2Q20 3Q20 4Q20 5
Slide 6: Loans up 1% on quarter
Loans up 1% on quarter (S$bn) Others 378 ▪ Loans up $5bn or 1% from +3 growth in consumer and CBG / non-trade corporate loans, 114 WM and $2bn loans from Lakshmi Vilas Bank (LVB) +19 +16 ▪ Singapore housing loans +10 +2 +10 +9 rise following strong +5 bookings in 3Q Other 221 + +3 IBG +2 ▪ Loans up
Slide 7: Deposits up 15% on year from Casa inflows
Deposits up 15% on year from Casa inflows 498 508 (S$bn) 461 43 50 57 127 Loans 151 Other funding 166 FD and others Casa 358 375 371 338 296 238 Dec-19 Jun-20 Dec-20 HQLA (S$bn) 92 108 116 Ratios (%) LDR 89 84 80 LCR 135 134 137 NSFR 110 121 125 Lakshmi Vilas Bank added SGD 3 billion of deposits. HQ
Slide 8: Full-year gross fee income stable on year
Full-year gross fee income stable on year (S$m) 3,574 3,533 Brokerage 114 149 Investment 213 148 962 banking 913 37 872 36 38 Wealth 786 41 37 management 1,290 44 1,432 37 27 402 380 345 305 Loan-related 407 417 126 111 80 Cards 790 100 641 173 131 160 177 Transaction 760 746 services 188 186 183 18
Slide 9: Full-year expenses stable, cost-income ratio at 42%
Full-year expenses stable, cost-income ratio at 42% 43 48 Cost / income 42 43 (%) 39 40 (S$m) 6,258 6,158 1,556 1,539 1,580 1,483 Staff 3,514 3,550 expenses 895 882 901 872 Other 2,744 2,608 685 674 611 638 expenses FY19 FY20 1Q20 2Q20 3Q20 4Q20 9
Slide 10: Full-year CBG income down 8% from lower interest rates and card spending
Full-year CBG income down 8% from lower interest rates and card spending (S$m) FY20 FY19 YoY % ▪ Full-year total income at $5.77bn, 8% Total income 5,767 6,299 (8) lower than a year ago Retail 2,902 3,219 (10) ▪ Weaker income from lower deposit Wealth Management 2,866 3,080 (7) margin and cards fees
Slide 11: Full-year IBG total income down 5% as lower interest rates offset loan growth and higher treasury sales
Full-year IBG total income down 5% as lower interest rates offset loan growth and higher treasury sales (S$m) FY20 FY19 YoY % ▪ Full-year total income at $5.75bn, 5% Total income 5,745 6,073 (5) lower than a year ago Corporate 4,028 3,947 2 ▪ Cash management income declined due SME 1,717 2,126 (19)
Slide 12: Full-year TM income increases 54%, customer income up 18%
Full-year TM income increases 54%, customer income up 18% 2,943 890 781 (S$m) 2,206 1,507 633 387 639 385 Customer 1,274 313 422 1,436 503 932 396 326 TM 211 FY19 FY20 1Q20 2Q20 3Q20 4Q20 YoY (%) 7 18 35 16 13 9 Customer TM 39 54 (28) >100 37 >100 Treasury customer income is included under IBG/CBG s
Slide 13: Hong Kong full-year earnings down 34%
Hong Kong full-year earnings down 34% (S$m) FY20 YoY (%) Constant- ▪ Total income declines 15% to $2.53bn currency YoY% from lower interest rates Total income 2,534 (13) (15) ▪ Profit before allowances 21% lower at Expenses 1,059 (5) (6) $1.48bn Profit before allowances 1,475 (19) (21) ▪ GP of $177m
Slide 14: India franchise boosted by amalgamation of Lakshmi Vilas Bank (LVB)
India franchise boosted by amalgamation of Lakshmi Vilas Bank (LVB) ▪ DBS India Ltd (ex-LVB) franchise achieved strong performance in 2020, with total income up 40% to record $376m and pre-tax profit quadrupling to $89m ▪ LVB amalgamated with DBS India Ltd with effect from 27 November 2020. DBS Indi
Slide 15: 4Q new NPA formation in line with recent average run-rate
4Q new NPA formation in line with recent average run-rate (S$m) FY19 FY20 1Q20 2Q20 3Q20 4Q20 NPAs at start of period 5,684 5,773 5,773 6,592 6,354 6,517 IBG and others 118 792 620 (201) 236 135 New NPAs 1,221 1,945 1,023 115 543 541 Upgrades, settlements and recoveries (413) (580) (340) (201) (78)
Slide 16: 4Q SP at 34bp of loans, in line with full year
4Q SP at 34bp of loans, in line with full year (S$m) FY19 FY20 1Q20 2Q20 3Q20 4Q20 IBG and others 501 874 257 146 189 282 Add charges for 575 1,012 359 165 212 293 New NPLs 264 759 315 16 161 153 Existing NPLs 311 253 44 149 51 140 Subtract charges for 74 138 102 19 23 11 Upgrades 1 1 0 0 0 0 Settle
Slide 17: GP reserves rise 72% on year to $4.31bn
GP reserves rise 72% on year to $4.31bn 7,326 Conservative GP reserves 6,721 ▪ Balance sheet conservatively (S$m) fortified against potential risks 5,417 arising from the Covid-19 RLAR 404 4,312 3,799 pandemic GP 2,511 ▪ GP reserves raised beyond Tier-2 eligibility by $1.5bn, forming a buffer for th
Slide 18: Strong CET-1 and leverage ratios
Strong CET-1 and leverage ratios (%) 16.7 16.6 16.8 Tier 2 1.7 1.7 1.8 Additional Tier 1 0.9 1.2 1.1 Common Equity Tier 1 14.1 13.7 13.9 Dec-19 Jun-20 Dec-20 RWA (S$bn) 304 323 321 Leverage ratio (%) 7.0 6.8 6.8 18
Slide 19: 4Q dividend at 18 cents per share
4Q dividend at 18 cents per share (S¢ per share) 33 Final 60 30 18 4Q 18 3Q 30 18 2Q Interim 60 30 33 1Q 2018 2019 2020 19
Slide 20: In summary – resilient full-year operating performance
In summary – resilient full-year operating performance Stable total income despite external headwinds attests to the quality of the franchise Balance sheet fortified by additional general allowances of $1.71bn Business pipeline healthy, strong momentum at start of 2021 New growth platforms include L
Slide 21: Supplementary slides
Supplementary slides DBS Group Holdings 4Q 2020 financial results February 10, 2021 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability
Slide 22: Full-year earnings down 26%
Full-year earnings down 26% (S$m) FY20 FY19 YoY % Net interest income 9,076 9,625 (6) Fee income 3,058 3,052 0 Trading income 1,405 1,459 (4) Other income 1,053 408 >100 Non-interest income 5,516 4,919 12 Total income 14,592 14,544 0 Staff expenses 3,550 3,514 1 Other expenses 2,608 2,744 (5) Expens
Slide 23: Hong Kong full-year earnings down 34% on year
Hong Kong full-year earnings down 34% on year Constant-currency terms (S$m) FY20 FY19 YoY % YoY % Net interest income 1,607 2,012 (20) (22) Net fee and commission income 661 667 (1) (3) Other non-interest income 266 250 6 4 Total income 2,534 2,929 (13) (15) Expenses 1,059 1,109 (5) (6) Profit befor
Slide 24: NPL stable, allowance coverage above 100%
NPL stable, allowance coverage above 100% 1.6 1.5 1.5 NPL ratio (%) NPA (S$m) 5,773 6,354 6,686 Not overdue 19% 17% 17% 10% 13% 8% Within 90 days overdue More than 90 days overdue 71% 70% 75% Dec-19 Jun-20 Dec-20 SP / loans (bp) 21 30 33 Total allowances as % of: NPA 94 106 110 Unsecured NPA 191 199
Slide 25: Fixed income duration remains well-balanced across the curve
Fixed income duration remains well-balanced across the curve ($m) Dec 20 FVOCI HTC Government securities 17,370 21,692 Less than 3 years 10,830 9,647 3 to 5 years 2,411 3,552 5 to 10 years 3,511 7,034 More than 10 years 618 1,459 Supranational, bank and corporate bonds 19,080 26,721 Total 36,450 48,
Slide 26: Deposits up 6% on half and up 15% on year in constant-currency terms
Deposits up 6% on half and up 15% on year in constant- currency terms (S$bn) HoH (%) YoY (%) Dec-20 Reported Underlying Reported Underlying Deposits 465 4 6 15 15 By product Casa 338 14 16 42 42 Fixed deposits and others 127 (16) (13) (23) (23) By currency Singapore dollar 204 4 4 26 26 US dollar 15
Slide 27: Wealth Management segment
Wealth Management segment 1,540 1,525 1,554 HoH YoY Income (S$m) 1,330 1,433 1,312 -16% -14% 2018 2019 2020 2H19 1H20 2H20 Half-yearly average (S$bn) AUM 220 246 264 246 251 264 +5% +7% Earning assets 270 297 314 297 300 314 +5% +6% Comprising Treasures, Treasures Private Client and Private Bank 27
Slide 28: SME segment
SME segment Income (S$m) 1,008 1,064 1,045 HoH YoY 859 905 812 -10% -22% 2018 2019 2020 2H19 1H20 2H20 Half-yearly average (S$bn) Loans 38 37 41 37 40 41 +1% +9% Deposits 59 61 77 61 64 77 +20% +27% 28
Slide 29: Global transaction services
Global transaction services 1,314 1,286 Income (S$m) 1,220 1,082 966 HoH YoY 850 -21% -34% Cash / SFS Trade 2018 2019 2020 2H19 1H20 2H20 Half-yearly average (S$bn) Trade assets 47 50 43 50 48 43 -9% -13% Deposits 142 140 166 140 158 166 +5% +19% Assets and deposits at end of period 29
Slide 30: Resilient full-year operating performance
Resilient full-year operating performance DBS Group Holdings 4Q 2020 financial results February 10, 2021 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank