DBS Group Holdings Ltd · SGX:D05
DBS — Q2 2022 Earnings Presentation
31 slides from DBS's earnings presentation, Aug 4, 2022
Slide 1: Strong first-half operating performance
Strong first-half operating performance DBS Group Holdings 2Q 2022 financial results August 4, 2022 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 acce
Slide 2: Highlights
Highlights First-half net profit at $3.62 billion, ROE at 13.3% ▪ Business momentum sustained as loans rise 3% in first half, while fee income streams other than wealth management and investment banking higher than year ago ▪ NIM rises after three years of decline ▪ Cost-income ratio at 44% Second-q
Slide 3: 1H net profit down 3% on year
1H net profit down 3% on year (S$m) 1H22 YoY % ▪ Net interest income up 11% from NIM increase Total income 7,539 1 of 5bp and loan growth of 7% from year ago Expenses 3,302 5 ▪ Fee income falls 9% due to wealth management and investment banking Profit before allowances 4,237 (2) ▪ Other non-interest
Slide 4: 2Q net profit up 7% on year
2Q net profit up 7% on year (S$m) 2Q22 YoY % ▪ Net interest income up 17% from NIM increase of 13bp and loan growth of 7% from year ago Total income 3,792 6 ▪ Fee income falls 12% due to wealth management Expenses 1,658 7 and investment banking Profit before allowances 2,134 4 ▪ Other non-interest i
Slide 5: 2Q net profit up 1% on quarter
2Q net profit up 1% on quarter (S$m) 2Q22 QoQ % ▪ Net interest income up 12%, boosted by 12bp increase in NIM Total income 3,792 1 ▪ Fee income declines 14% due to weaker market Expenses 1,658 1 conditions, partially offset by higher card fees Profit before allowances 2,134 1 ▪ Other non-interest in
Slide 6: 2Q net interest income up 12% on quarter as NIM rises 12bp to 1.58%
2Q net interest income up 12% on quarter as NIM rises 12bp to 1.58% 1.58 1.52 1.47 1.49 Net interest 1.45 1.46 1.43 margin (%) Net interest 4,641 4,196 4,244 2,454 income (S$m) 2,187 2,107 2,089 1H21 2H21 1H22 1Q21 2Q21 1Q22 2Q22 6
Slide 7: Loans up 1% on quarter, 3% in first half
Loans up 1% on quarter, 3% in first half (S$bn) 431 In constant-currency terms Others 7 ▪ Loans up 1% in 2Q, 3% in 1H CBG / 125 WM ▪ Non-trade corporate loans up +8 1% on quarter led by Singapore and Hong Kong +14 +6 ▪ Housing and wealth +2 Other +8 management loans stable on 250 IBG quarter +6 ▪ Tr
Slide 8: Deposits up 1% on quarter, 5% in first half
Deposits up 1% on quarter, 5% in first half 565 575 (S$bn) 555 528 47 53 46 45 121 127 146 Loans 116 Other funding FD and others Casa 397 409 416 392 425 366 381 382 Jun-21 Dec-21 Mar-22 Jun-22 HQLA (S$bn) 122 126 134 140 Ratios (%) LDR 82 81 80 80 LCR 137 135 138 142 NSFR 127 123 122 118 HQLA is hi
Slide 9: 2Q fee income declines, with lower wealth management moderated by continued recovery in cards
2Q fee income declines, with lower wealth management moderated by continued recovery in cards (S$m) 2,077 Investment 1,980 1,939 114 banking 104 73 1,086 49 991 1,022 43 917 Wealth 65 management 945 841 745 30 519 408 426 337 183 258 Loan-related 230 144 114 119 111 334 381 390 Cards 187 203 169 165
Slide 10: 1H expenses up 5% on year, cost-income ratio at 44%
1H expenses up 5% on year, cost-income ratio at 44% 49 Cost / income 44 43 44 44 42 41 (%) 3,339 3,302 (S$m) 3,130 1,587 1,644 1,658 1,543 Staff 1,962 2,054 1,913 expenses 968 1,047 1,007 945 Other 1,377 1,248 1,217 619 651 expenses 598 597 1H21 2H21 1H22 1Q21 2Q21 1Q22 2Q22 10
Slide 11: 1H CBG/WM income up 6% on year from higher interest rates
1H CBG/WM income up 6% on year from higher interest rates (S$m) 1H22 1H21 YoY % ▪ 1H total income at $2.88bn, 6% higher Total income 2,884 2,713 6 than a year ago Loans and deposits 1,496 1,126 33 ▪ Stronger deposit income from higher Investment products 973 1,161 (16) interest rates more than offse
Slide 12: 2Q wealth management income up 14% on quarter
2Q wealth management income up 14% on quarter Total income 2Q 1H (S$m) 1,427 1,414 1,302 QoQ YoY Net interest 767 753 +14% -1% income 660 661 Non-interest income 1H21 2H21 1H22 1Q21 2Q21 1Q22 2Q22 (S$bn) AUM 285 291 294 275 285 293 294 +0% +3% Earning assets 339 347 350 328 339 350 350 +0% +3% Compr
Slide 13: 1H IBG income up 13% on year from broad-based growth
1H IBG income up 13% on year from broad-based growth (S$m) 1H22 1H21 YoY % ▪ 1H total income at $3.39bn, 13% higher Total income 3,392 3,000 13 than a year ago Loans 1,742 1,626 7 ▪ Income growth from loans, trade, cash Trade 387 378 3 management and treasury sales offset Cash / SFS 752 497 51 lower
Slide 14: 2Q GTS income up 45% on quarter, with cash up 76%
2Q GTS income up 45% on quarter, with cash up 76% 2Q 1H 1,140 QoQ YoY 674 +45% +30% Income (S$m) 875 884 752 443 466 431 Cash / SFS 497 505 480 +76% +51% 245 252 273 Trade 378 379 387 +1% +3% 187 191 193 194 (S$bn) 1H21 2H21 1H22 1Q21 2Q21 1Q22 2Q22 Trade assets 51 48 57 47 51 52 57 +10% +11% Deposi
Slide 15: 1H TM and customer income decline from year-ago record
1H TM and customer income decline from year-ago record 1,061 (S$m) 1,847 866 1,540 786 1,367 487 Customer 913 674 435 838 426 792 403 934 574 TM 431 575 702 360 271 1H21 2H21 1H22 1Q21 2Q21 1Q22 2Q22 YoY (%) Customer 13 13 (8) 15 10 (11) (6) TM 31 (20) (25) >100 (28) (25) (25) Treasury customer inco
Slide 16: 1H Hong Kong earnings down 6% on year
1H Hong Kong earnings down 6% on year (S$m) 1H22 YoY (%) Constant- currency YoY% ▪ Total income up 1% to $1.29bn led by higher net interest income Total income 1,292 3 1 Expenses 539 10 8 ▪ Profit before allowances 3% lower at $753m Profit before allowances 753 (2) (3) ▪ Total allowances at $43m fro
Slide 17: NPL ratio stable at 1.3%
NPL ratio stable at 1.3% (S$m) 1H21 2H21 1H22 1Q22 2Q22 NPAs at start of period 6,686 6,621 5,849 5,849 5,981 IBG and others (103) (768) 90 187 (98) New NPAs 553 521 704 465 271 Upgrades, settlements and recoveries (469) (941) (409) (269) (173) Write-offs (187) (348) (205) (9) (196) CBG / WM (25) (2
Slide 18: 1H specific allowances at 11bp of loans
1H specific allowances at 11bp of loans (S$m) 1H21 2H21 1H22 1Q22 2Q22 IBG and others 271 73 174 122 52 Add charges for 337 257 270 189 91 New NPLs 199 90 223 157 58 Existing NPLs 138 167 47 32 33 Subtract charges for 66 184 96 67 39 Upgrades 0 0 1 0 0 Settlements 50 155 80 62 28 Recoveries 16 29 15
Slide 19: GP reserves of $3.74bn remain prudent
GP reserves of $3.74bn remain prudent (S$m) 7,201 6,802 6,814 6,692 GP 4,045 3,876 3,754 3,737 Allowance coverage comfortably exceeds 100% and near 200% after considering collateral SP 3,156 2,926 3,060 2,955 Jun-21 Dec-21 Mar-22 Jun-22 Total allowance reserves as % of: NPA 109 116 114 113 Unsecured
Slide 20: Negative OCI in 1H22 due to cash flow hedge movements and marked-to-market losses
Negative OCI in 1H22 due to cash flow hedge movements and marked-to-market losses on FVOCI debt securities (S$m) 1H21 1H22 ▪ Rising interest rates result in negative OCI for cash flow hedges Net profit 3,713 3,617 and FVOCI debt securities, which affect net book value Other comprehensive income (OCI
Slide 21: Strong CET-1 and leverage ratios
Strong CET-1 and leverage ratios (%) 17.5 17.0 16.5 16.7 Tier 2 2.0 1.9 1.8 1.8 Additional Tier 1 1.0 0.7 0.7 0.7 Common Equity Tier 1 14.5 14.4 14.0 14.2 Jun-21 Dec-21 Mar-22 Jun-22 RWA (S$bn) 331 343 351 349 Leverage ratio (%) 6.8 6.7 6.3 6.2 21
Slide 22: 2Q dividend at 36 cents per share
2Q dividend at 36 cents per share (S¢ per share) 36 Final 18 33 18 36 2Q Interim 18 33 33 36 1Q 18 2020 2021 2022 22
Slide 23: In summary – Strong first-half operating performance
In summary – Strong first-half operating performance Strong first-half performance despite challenging market conditions Business momentum sustained, while net interest margin expansion accelerates in second quarter Amidst macroeconomic uncertainty, we will benefit from rapidly rising interest rates
Slide 24: Supplementary slides
Supplementary slides DBS Group Holdings 2Q 2022 financial results August 4, 2022 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 wh
Slide 25: 1H earnings at $3.62 billion
1H earnings at $3.62 billion (S$m) 1H22 1H21 YoY % 2H21 HoH % Net interest income 4,641 4,196 11 4,244 9 Fee income 1,659 1,821 (9) 1,703 (3) Trading income 1,060 1,040 2 751 41 Other income 179 386 (54) 156 15 Non-interest income 2,898 3,247 (11) 2,610 11 Total income 7,539 7,443 1 6,854 10 Staff e
Slide 26: Hong Kong 1H earnings down 6% on year
Hong Kong 1H earnings down 6% on year Constant-currency terms (S$m) 1H22 1H21 YoY % YoY % 2H21 HoH % HoH % Net interest income 738 690 7 5 702 5 5 Net fee and commission income 354 395 (10) (12) 381 (7) (7) Other non-interest income 200 171 17 15 141 41 41 Total income 1,292 1,256 3 1 1,224 5 5 Expe
Slide 27: NPL at 1.3%, allowance coverage above 100%
NPL at 1.3%, allowance coverage above 100% 1.5 1.3 1.3 NPL ratio (%) 6,621 5,849 5,908 NPA (S$m) 25% 24% 30% Not overdue 5% 7% 4% Within 90 days overdue 70% 69% 66% More than 90 days overdue Jun-21 Dec-21 Jun-22 SP / loans (bp) 18 6 11 Total allowances as % of: NPA 109 116 113 Unsecured NPA 199 214
Slide 28: Fixed income duration remains short
Fixed income duration remains short ($m) Jun 22 FVOCI HTC Government securities 24,334 23,481 Less than 3 years 17,956 10,320 3 to 5 years 2,303 4,071 5 to 10 years 3,704 8,067 More than 10 years 371 1,023 Supranational, bank and corporate bonds 17,371 29,078 Total 41,705 52,559 Time-banding is base
Slide 29: Deposits up 5% on half and 9% on year in constant-currency terms
Deposits up 5% on half and 9% on year in constant- currency terms (S$bn) HoH (%) YoY (%) Jun-22 Reported Underlying Reported Underlying Deposits 528 5 5 9 9 By product Casa 382 0 (1) 4 3 Fixed deposits and others 146 21 21 26 25 By currency Singapore dollar 224 2 2 4 4 US dollar 189 8 5 16 12 HK dol
Slide 30: SME segment
SME segment 2Q 1H QoQ YoY 801 Total income 444 +24% +16% 692 697 (S$m) 345 347 357 Net interest income Non-interest income 1H21 2H21 1H22 1Q21 2Q21 1Q22 2Q22 (S$bn) Loans 28 27 28 28 28 27 28 +1% -3% Deposits 65 72 74 66 65 71 74 +5% +13% With effect from 1 January 2022, the SME segment is defined a
Slide 31: Strong first-half operating performance
Strong first-half operating performance DBS Group Holdings 2Q 2022 financial results August 4, 2022 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 acce