DBS Group Holdings Ltd · SGX:D05

DBS — 2Q 2016 Earnings Presentation

37 slides from DBS's earnings presentation, Aug 8, 2016

  1. Slide 1: Record first-half and second-quarter income

    Record first-half and second-quarter income DBS Group Holdings 2Q 2016 financial results August 8, 2016 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

  2. Slide 2: Highlights

    Highlights Record 1H and 2Q total income underpinned by improved business momentum  Net interest income and fee income at half-year highs  1H total income rises 6% to $5.78 billion; 2Q total income up 8% from broad-based growth  2Q NIM of 1.87% up 12bp on year, stable on quarter. Loans grow 4% on

  3. Slide 3: Increase in allowances due to a significant exposure

    Increase in allowances due to a significant exposure (S$m) 30 Jun 31 Jul 2Q16 2Q16 2Q16 NPA NPA SP GP Total Swiber group 651 721 400 (250) 150 Loans 387 469 200 Other credit exposures 264 252 200 Others 194 22 216 Loans 136 Other credit exposures 40 Others 18 Total 594 (228) 366  Recovery of Swiber

  4. Slide 4: Record 1H income, earnings unchanged at $2.25 billion

    Record 1H income, earnings unchanged at $2.25 billion (S$m) 1H16 YoY %  Total income up 6% on record higher NIM (+14 bp) and Total income 5,784 6 broad-based non-interest Expenses 2,550 6 income growth record  Cost/income ratio Profit before allowances 3,234 6 maintained at 44% Allowances 536 69 r

  5. Slide 5: 2Q income up 8% on year, earnings decline 6% from higher allowances

    2Q income up 8% on year, earnings decline 6% from higher allowances (S$m) 2Q16 YoY % record  Broad-based, 8% growth in Total income 2,919 8 total income to quarterly Expenses 1,285 6 high record  Higher NIM, fee and other Profit before allowances 1,634 10 non-interest income Allowances 366 >100 

  6. Slide 6: 2Q income up 2% on quarter

    2Q income up 2% on quarter (S$m) 2Q16 QoQ %  Improved business Total income 2,919 2 momentum Expenses 1,285 2  4% loan growth from corporate, trade and Profit before allowances 1,634 2 Singapore housing Allowances 366 >100  Fee income growth led Net profit 1,051 (13) by investment banking Impact

  7. Slide 7: NIM stable on quarter, up 12bp on year to 1.87%

    NIM stable on quarter, up 12bp on year to 1.87% (S$m) Net interest margin (%) 3,666 3,433 1.87 1.86 1.84 1.85 1.78 1.72 1.75 1.71 1.69 1.66 1.67 1.68 1,743 1,813 1,854 1,833 1,833 1,488 1,557 1,602 1,674 1,690 1H 1H 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015 2016 2014 2015 2016 7

  8. Slide 8: Loans up 4% on quarter, trade loans reverse declining trend

    Loans up 4% on quarter, trade loans reverse declining trend (S$bn) QoQ YoY Reported Underlying Reported Underlying  Overall loan growth up 4% or $11 billion 288 2 +11 +11 +5 +6 on quarter, and 2% or $5 billion on year 91 +2 +2 +6 +6  Non-trade loan CBG growth led by corporate loans and market shar

  9. Slide 9: Ample liquidity with LCR at 116%

    Ample liquidity with LCR at 116% (S$bn) Loans Other funding Deposits 357 353 358 345 342 339 33 35 38 35 36 25 324 306 318 320 314 310 281 280 285 283 274 285 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Ratios (%) LDR 87 92 90 88 87 92 LCR 135 131 121 122 119 116 Other funding comprises senior medium

  10. Slide 10: Fee income up 7% on year and 9% on quarter

    Fee income up 7% on year and 9% on quarter (S$m) 1,342 1,283 1,250 126 Others 138 Investment 105 78 banking 1,050 QoQ YoY 222800 700 +9% +7% Cards 207 700 626 657 642 850 62 75 589 580 64 Loan-related 234 244600 63 83 26 52 61 57 22 650 500 102 31 56 114 108 105 107 Wealth 400 120 124 120 450 342 35

  11. Slide 11: IBG 1H income little changed

    IBG 1H income little changed (S$m) 1H 1H YoY % 2016 2015 Total income 2,651 2,672 (1)  Total income stable as Corporate 1,881 1,899 (1) higher loans and cash management SME 770 773 0 contributions offset Loans 1,436 1,412 2 lower trade and Trade 368 491 (25) treasury customer Cash / SFS 396 301 32

  12. Slide 12: CBG / WM 1H earnings up 37% to new high

    CBG / WM 1H earnings up 37% to new high (S$m) 1H 1H YoY % 2016 2015 Total income 2,092 1,764 19 Retail 1,286 1,021 26  Total income increases Wealth Management 806 743 8 19% from higher loan and deposit volumes, Loans and deposits 1,223 918 33 NIM, bancassurance Investment products 566 554 2 and ca

  13. Slide 13: Treasury customer income stable on quarter and on year

    Treasury customer income stable on quarter and on year (S$m) 58 Customer 55 54 50 52 50 50 income / 46 total treasury income (%) 1,333 1,202 -10% Customer income 670 624 -7% 721 YoY QoQ 612 608 594 -3% -2% 534 502 335 Other 335 301 323 -4% 7% treasury 663 308 251 578 -13% income 386 277 307 271 -2%

  14. Slide 14: Cost growth decelerates, cost-income ratio at 44%

    Cost growth decelerates, cost-income ratio at 44% (S$m) Cost / income (%) Staff expenses YoY growth (%) Other expenses 46 47 44 44 45 44 44 43 2,550 2,399 16 14 13 10 7 6 1,389 1,341 1,218 1,259 1,242 1,265 1,285 1,181 669 667 643 706 683 672 1,058 1,161 509 549 592 599 559 602 1H 1H 1Q 2Q 3Q 4Q 1Q

  15. Slide 15: Hong Kong's 1H earnings at $370m

    Hong Kong’s 1H earnings at $370m (S$m) 1H16 YoY % Underlying YoY %  Non-interest income Total income 1,024 (12) (13) affected by weak Expenses 460 0 (2) market and high year-ago base Profit before allowances 564 (20) (21)  Higher SP from Allowances 125 >100 >100 RMB derivative Net profit 370 (34)

  16. Slide 16: New NPAs led by single exposure

    New NPAs led by single exposure (S$m) 2Q 1Q 2Q 2016 2016 2015 NPAs at start of period 3,048 2,792 2,590 New NPAs 1,105 607 281 Upgrades, recoveries and translation (212) (205) (142) Write-offs (87) (146) (158) NPAs at end of period 3,854 3,048 2,571 NPL ratio (%) 1.1 1.0 0.9 SP / loans (bp) 48 18 19

  17. Slide 17: Allowance coverage at 113% with cumulative GP at $2.9 billion

    Allowance coverage at 113% with cumulative GP at $2.9 billion  Surplus GP over what counts as Tier 2 capital is $461m, providing strong cushion to absorb additional SP without impacting CAR (S$m) 3,089 3,163 3,222 3,182 2,947 $629m Surplus* General $461m allowances 1,404 1,034 932 915 908 Specific

  18. Slide 18: Strong CET 1 and leverage ratios

    Strong CET 1 and leverage ratios (%) 16.0 16.3 Total 15.3 14.8 15.4 1.7 1.9 Tier 2 1.9 1.9 1.9 Tier 1 13.4 12.9 13.5 14.3 14.4 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Common Equity Tier 1 (%) Transitional 13.4 12.9 13.5 14.0 14.2 Fully phased-in 12.3 11.9 12.4 13.2 13.4 RWA (S$bn) 268 279 274 269 268 Lev

  19. Slide 19: Interim dividend of 30 cents per share

    Interim dividend of 30 cents per share (S¢ per share) 60 58 58 30 Final 30 30 Interim 28 28 30 30 2013 2014 2015 2016 19

  20. Slide 20: In summary – record first-half and second-quarter income

    In summary – record first-half and second-quarter income Record 1H and 2Q income and profit before allowances, reflecting strong franchise despite a challenging environment Asset quality and allowance coverage remain sound Strong capital adequacy ratios and liquidity Strong operating performance and

  21. Slide 21: Supplementary slides

    Supplementary slides DBS Group Holdings 2Q 2016 financial results August 8, 2016 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

  22. Slide 22: 1H earnings unchanged on year

    1H earnings unchanged on year (S$m) 1H 1H YoY 2H HoH 2016 2015 % 2015 % Net interest income 3,666 3,433 7 3,667 - Fee income 1,202 1,142 5 1,002 20 Trading income 622 629 (1) 575 8 Other income 294 236 25 117 >100 Non-interest income 2,118 2,007 6 1,694 25 Total income 5,784 5,440 6 5,361 8 Staff ex

  23. Slide 23: Record 2Q income up 8% on year

    Record 2Q income up 8% on year (S$m) 2Q 2Q YoY 1Q QoQ 2016 2015 % 2016 % Net interest income 1,833 1,743 5 1,833 - Fee income 628 582 8 574 9 Trading income 307 273 12 315 (3) Other income 151 102 48 143 6 Non-interest income 1,086 957 13 1,032 5 Total income 2,919 2,700 8 2,865 2 Staff expenses 683

  24. Slide 24: 1H16 ROE at 11.0%

    1H16 ROE at 11.0% (%) 2Q 2Q 1Q 1H 1H 2H 2016 2015 2016 2016 2015 2015 Net interest margin 1.87 1.75 1.85 1.86 1.72 1.81 Fee income/total income 22 22 20 21 21 19 Non-interest income/total 37 35 36 37 37 32 income Cost/income 44 45 44 44 44 47 ROE 10.1 11.6 11.9 11.0 11.9 10.5 Loan/deposit 92 92 87 9

  25. Slide 25: Hong Kong's 1H earnings at $370m

    Hong Kong’s 1H earnings at $370m Constant-currency terms (S$m) 1H 1H YoY YoY 2H HoH HoH 2016 2015 % % 2015 % % Net interest income 650 630 3 2 700 (7) (5) Non-interest income 374 531 (30) (31) 428 (13) (11) Total income 1,024 1,161 (12) (13) 1,128 (9) (7) Expenses 460 460 0 (2) 491 (6) (4) Profit be

  26. Slide 26: Hong Kong's profit before allowances up 4% on quarter

    Hong Kong’s profit before allowances up 4% on quarter Constant-currency terms (S$m) 2Q 2Q YoY YoY 1Q QoQ QoQ 2016 2015 % % 2016 % % Net interest income 320 321 (0) (2) 330 (3) (1) Non-interest income 200 301 (34) (35) 174 15 17 Total income 520 622 (16) (18) 504 3 5 Expenses 232 231 0 (1) 228 2 4 Pr

  27. Slide 27: Regional 1H income 6% lower on year

    Regional 1H income 6% lower on year (S$m) 1H 1H YoY 2H HoH 2016 2015 % 2015 % Net interest income 528 558 (5) 554 (5) Non-interest income 365 393 (7) 334 9 Total income 893 951 (6) 888 1 Expenses 550 554 (1) 579 (5) Profit before allowances 343 397 (14) 309 11 Allowances 191 179 (7) 186 3 Net profit

  28. Slide 28: NPL ratio up slightly, allowance coverage sound

    NPL ratio up slightly, allowance coverage sound 1.1 NPL ratio (%) 1.0 0.9 0.9 0.9 0.9 3,854 NPA (S$m) 3,048 29% 2,792 2,590 2,571 2,549 20% Not overdue 19% 13% 18% 22% 21% 18% 17% <90 days overdue 18% 10% 12% 63% 58% >90 days overdue 64% 68% 67% 63% Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 SP / loa

  29. Slide 29: Increase in specific allowances for loans due to a significant exposure

    Increase in specific allowances for loans due to a significant exposure (S$m) 2Q 1Q 2Q 2016 2016 2015 Add charges for New NPLs 286 77 59 Existing NPLs 81 76 116 367 153 175 Subtract charges for Upgrading 1 1 - Settlements 14 13 32 Recoveries 16 16 11 31 30 43 Total SP charges for loans 336 123 132 S

  30. Slide 30: AFS duration remains short

    AFS duration remains short (S$m) Jun 16 Mar 16 Government securities 22,593 24,340 Less than 3 years 14,864 15,627 3 to 5 years 3,046 2,413 5 to 10 years 3,653 4,988 More than 10 years 1,029 1,311 Supranational, bank and 14,330 13,824 corporate bonds Equities 1,681 1,667 Total 38,603 39,831 AFS rese

  31. Slide 31: European AFS exposure mostly in AAA and AA entities

    European AFS exposure mostly in AAA and AA entities Government / Bank / Total (S$m) Govt-owned Corporates Supranational 465 * 0 465 France 0 14 14 Germany 156 * 0 156 Netherlands 0 8 8 Switzerland 0 8 8 United Kingdom 633 * 144 777 Total 1,254 173 1,427 * Supranational and German entities rated AAA/

  32. Slide 32: Deposits reflect strong growth in CASA

    Deposits reflect strong growth in CASA QoQ YoY (S$bn) Jun 16 Reported Underlying Reported Underlying Deposits 310 (4) (3) 4 6 By product CASA 197 3 3 12 12 Fixed deposits 110 (7) (6) (7) (5) Others 3 0 0 (1) (1) By currency Singapore dollar 143 1 1 3 3 US dollar 94 (1) (1) 9 9 HK dollar 31 (2) (2) (

  33. Slide 33: Wealth Management segment

    Wealth Management segment Income (S$m) 2015 1H 2016 1H +8% yoy 743 806 Record High 423 12% yoy 365 378 383 338 334 11% qoq 275 231 197 155 127 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average AUM 6% yoy (

  34. Slide 34: SME segment

    SME segment 2015 1H 2016 1H flat yoy Income (S$m) 773 770 2% yoy 396 391 385 385 377 367 342 352 flat qoq 307 273 260 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average 34

  35. Slide 35: Global transaction services

    Global transaction services Income (S$m) 2015 1H 2016 1H -3% yoy 817 797 1% yoy 405 420 416 397 403 405 392 371 3% qoq 352 270 185 Cash/ SFS Trade 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average Assets 2

  36. Slide 36: Treasury customer flows

    Treasury customer flows 2015 1H 2016 1H -7% yoy Income (S$m) 670 624 335 335 323 4% yoy 308 301 284 259 7% qoq 251 217 206 172 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average 2Q16 customer income: 54% of

  37. Slide 37: Record first-half and second-quarter income

    Record first-half and second-quarter income DBS Group Holdings 2Q 2016 financial results August 8, 2016 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

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