Dbs Group Holdings Ltd · SGX:D05
Dbs — Q1 2023 Earnings Presentation
19 slides from Dbs's earnings presentation, May 2, 2023
Slide 1: Record quarterly earnings and ROE
Record quarterly earnings and ROE DBS Group Holdings 1Q 2023 financial results May 2, 2023 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 li
Slide 2: Highlights
Highlights First-quarter net profit up 43% yoy to record $2.57bn, ROE 18.6% at new high • Total income up 34% to $4.94bn from healthy business momentum with loans up 3%, NIM up 66bp, fee trend improving • Commercial book total income up 44% to $4.67bn while Treasury Markets normalises to $269m per g
Slide 3: 1Q net profit up 43% YoY to new quarterly high
1Q net profit up 43% YoY to new quarterly high 1Q23 YoY % record ▪ Commercial book total income up 44% from higher Total income 4,936 34 NIM (+104bp) and sustained business momentum Commercial book 4,667 44 Treasury Markets (TM) 269 (38) ▪ TM total income normalises to $269m per guidance Expenses 1,
Slide 4: 1Q net profit rises 10% QoQ
1Q net profit rises 10% QoQ 1Q23 QoQ % record ▪ Commercial book total income up 6% from higher Total income 4,936 8 NIM (+8bp), loan growth and seasonally higher non- Commercial book 4,667 6 interest income Treasury Markets (TM) 269 32 Expenses 1,882 (4) ▪ Expenses decline 4% due to non-recurring it
Slide 5: 1Q commercial book net interest income up day-adjusted 2% QoQ, NIM rises 8bp to 2.69%
1Q commercial book net interest income up day-adjusted 2% QoQ, NIM rises 8bp to 2.69% Net interest margin (%) 2.61 2.69 2.30 1.85 Commercial book 1.65 2.12 2.05 1.90 Group 1.46 1.58 Net interest income (S$m) 3,280 3,271 3,020 2,454 31 2,187 134 Treasury 182 Markets 3,405 3,384 2,989 Commercial 2,320
Slide 6: Loans up 1% QoQ in constant-currency terms
Loans up 1% QoQ in constant-currency terms (S$bn) 423 Others 6 +8 +2 CBG / WM 122 +6 +4 In constant-currency terms +6 +2 ▪ Non-trade corporate loan +8 +4 growth led by Singapore +4 real estate acquisition + +2 financing Other +1 +1 251 IBG − ▪ Consumer loans decline -3 slightly -5 -2 Trade 44 As at
Slide 7: Deposits rise 1% QoQ in constant-currency terms, benefited from flight-to-safety inflows
Deposits rise 1% QoQ in constant-currency terms, benefited from flight-to-safety inflows (S$bn) 566 575 580 574 576 46 47 48 47 47 Loans 127 146 183 209 227 Other funding FD and others Casa 416 392 425 429 415 417 382 350 318 302 Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 HQLA (S$bn) 134 140 138 145 144 Rat
Slide 8: Fee income decline moderates YoY, up QoQ
Fee income decline moderates YoY, up QoQ (S$m) 1,022 1,008 Investment 43 923 44 banking 917 30 25 835 23 Wealth 408 365 management 323 337 262 122 79 142 Loan-related 144 114 Cards 187 203 223 245 227 Transaction services 240 233 230 226 230 1Q22 2Q22 3Q22 4Q22 1Q23 Gross fee income 8
Slide 9: Fee income up YoY in February and March, reversing declines over past year
Fee income up YoY in February and March, reversing declines over past year Cards Wealth Total (net) +27 +23 +22 +17 +16 +9 +2 -1 +1 -9 -16 -21 -20 -30 -29 1H22 2H22 Jan 23 Feb 23 Mar 23 YoY change (%) 9
Slide 10: Cost-income ratio improves seven percentage points YoY to 38%
Cost-income ratio improves seven percentage points YoY to 38% 45 44 Cost / income (%) 43 41 38 (S$m) 1,963 1,825 1,882 1,644 1,658 1,203 1,119 1,215 Staff 1,007 1,047 expenses Other 651 706 760 667 597 expenses 1Q22 2Q22 3Q22 4Q22 1Q23 10
Slide 11: NPL ratio unchanged QoQ at 1.1%
NPL ratio unchanged QoQ at 1.1% (S$m) 1Q22 2Q22 3Q22 4Q22 1Q23 NPAs at start of period 5,849 5,981 5,908 5,600 5,125 IBG and others 187 (98) (346) (207) (133) New NPAs 465 271 278 350 218 Upgrades, settlements and recoveries (269) (173) (411) (357) (251) Write-offs (9) (196) (213) (200) (100) CBG /
Slide 12: 1Q SP remains low at 6bp
1Q SP remains low at 6bp (S$m) 1Q22 2Q22 3Q22 4Q22 1Q23 IBG and others 122 52 (7) 27 24 Add charges for 189 91 74 152 84 New NPLs 157 58 7 67 17 Existing NPLs 32 33 67 85 67 Subtract charges for 67 39 81 125 60 Upgrades 0 0 45 2 1 Settlements 62 28 26 108 50 Recoveries 5 11 10 15 9 CBG / WM 32 32 28
Slide 13: Allowance coverage rises to 127%
Allowance coverage rises to 127% (S$m) 6,814 6,707 6,692 6,242 6,266 GP 3,754 3,737 3,902 ▪ Allowance coverage 3,736 3,831 comfortably above 100% and exceeds 200% after considering collateral SP 3,060 2,955 2,805 2,506 2,435 Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 Total allowance reserves as % of: NPA 11
Slide 14: Positive OCI from cash flow hedges and FVOCI debt securities in 1Q
Positive OCI from cash flow hedges and FVOCI debt securities in 1Q, partially reversing losses in FY22 (S$m) FY22 1Q23 ▪ Cash flow hedges of $33bn (or 6% of Commercial book) are used to Net profit 8,194 2,572 transform floating rate loans to fixed rate via interest rate swaps Other comprehensive inc
Slide 15: Fixed-income investment portfolio duration remains short
Fixed-income investment portfolio duration remains short Carrying value ($bn) Mar 23 FVOCI HTC Government 30.1 21.0 Supranational and bank 12.4 3.7 Corporate 9.2 28.0 Total 51.7 52.7 Weighted duration (years) 1.9 3.6 ▪ Of the $104 billion of FVOCI and HTC bond portfolio, $87 billion are High Quality
Slide 16: Strong CET-1 and leverage ratios
Strong CET-1 and leverage ratios (%) 16.7 17.0 16.5 16.2 16.5 1.8 1.8 1.5 Tier 2 1.8 1.7 0.7 0.6 0.6 Additional Tier 1 0.7 0.7 14.0 14.2 13.8 14.6 14.4 Common Equity Tier 1 Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 RWA (S$bn) 351 349 361 347 354 Leverage ratio (%) 6.3 6.2 6.1 6.4 6.4 16
Slide 17: 1Q dividend at 42 cents per share
1Q dividend at 42 cents per share (S¢ per share) Ordinary Special 42 4Q 36 36 3Q 33 36 2Q 33 50 36 42 1Q 18 2021 2022 2023 17
Slide 18: In summary – record earnings and ROE
In summary – record earnings and ROE Record performance including ROE of 18.6% reflects structural improvements from ongoing digital and organisational transformation as well as higher interest rates Ability to sustain business momentum and customers’ trust during quarter marked by market volatility
Slide 19: Record quarterly earnings and ROE
Record quarterly earnings and ROE DBS Group Holdings 1Q 2023 financial results May 2, 2023 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 li