DBS Group Holdings Ltd · SGX:D05
DBS — Q1 2020 Earnings Presentation
21 slides from DBS's earnings presentation, Apr 30, 2020
Slide 1: CEO Observations
X DBS | sanciess CEO Observations 30 Apr 2020
Slide 2: Agenda
Agenda ▪ How we are navigating the COVID-19 Crisis ▪ Business Outlook ▪ Credit Outlook ▪ Dividends 2
Slide 3: Operational Resilience
Navigating Business Outlook Credit Outlook Dividends COVID-19 Operational Resilience 1. Business volumes are strong ▪ No loss in productivity 2. Seamless remote working in all functions ▪ ~90% relationship managers, >70% traders, ~99% developers and >50% operations staff working from home 3. Our dig
Slide 4: Telecommuting At Scale
Navigating Business Outlook Credit Outlook Dividends COVID-19 Telecommuting At Scale >50 eTownhalls attended by >20k staff >1.2mn virtual meetings in April, a 9x increase >700 staff engaged in 30 virtual >100 training courses conducted online, workshops held across the bank regionally benefiting >15
Slide 5: Accelerated roll out of digital customer capabilities
Navigating Business Outlook Credit Outlook Dividends COVID-19 Accelerated roll out of digital customer capabilities Enhanced Account Services Contact Free Transactions Engagement ▪ More self-service options ▪ Digitally signed forms enabled ▪ Guided Conversations via on IDEAL Chatbot for COVID-19 ▪ S
Slide 6: Significant uplift in digital activity
Navigating Business Outlook Credit Outlook Dividends COVID-19 Significant uplift in digital activity Online Equities Trading eFX Dealonline Fee income Transactions (S$’mn) # of Deals (k) 21.7 34.8 2.3x 1.5x 14.7 Non-AI/ Self- directed 15.0 14.3 2x Market share growth 23% Advisory-led Total turnover
Slide 7: COVID-19 Support measures
Navigating Business Outlook Credit Outlook Dividends COVID-19 COVID-19 Support measures Colleagues Consumers Corporates Communities ✓ No retrenchment, hiring ✓ Close to 8,000 mortgage ✓ Providing loan ✓ DBS Stronger Together judiciously, internships and principal and interest moratoriums for >1,800
Slide 8: Business outlook
Navigating Business Outlook Credit Outlook Dividends COVID-19 Business outlook 1Q profit before allowances growth of 20% provides head start for year ▪ Full-year profit before allowances to be around 2019 levels after factoring in declines for rest of year ▪ Provides capacity to absorb expected incr
Slide 9: Business outlook
Navigating Business Outlook Credit Outlook Dividends COVID-19 Business outlook Business volume holding up ▪ Loan growth resilient - Healthy non-trade corporate loan pipeline from top-end customers - Trade loans affected by lower global trade volumes - Housing and consumer loans expected to be little
Slide 10: Business outlook
Navigating Business Outlook Credit Outlook Dividends COVID-19 Business outlook Expenses to be tightened ▪ No retrenchments or pay cuts, but hiring judiciously ▪ Discretionary non-staff costs (e.g. travel) reduced ▪ Investments to be prioritised ▪ Bonuses will be aligned to earnings 10
Slide 11: Loan composition
Navigating Business Outlook Credit Outlook Dividends COVID-19 Loan composition SME Corporate $39bn $221bn (10%) (59%) Impacted industries $46bn, Consumer of which Singapore Inc $5bn $114bn (30%) 11
Slide 12: Credit costs to rise
Navigating Business Outlook Credit Outlook Dividends COVID-19 Credit costs to rise Credit costs to rise to between $3bn-5bn (80-130bp) cumulatively over two years ▪ Two scenarios used to derive estimates • Base scenario - Lockdowns in major economies until mid-2020 - Gradual recovery in 2H20, muted
Slide 13: Consumer
Navigating Business Outlook Credit Outlook Dividends COVID-19 Consumer Housing ▪ Loan size of $75bn ▪ Minimal losses expected, as in past crises ▪ Prudent regulations on LTV limits and debt servicing ratios ▪ Average LTV of 55% in Singapore and 32% in Hong Kong ▪ Loans principally for owner-occupati
Slide 14: SME
Navigating Business Outlook Credit Outlook Dividends COVID-19 SME ▪ Loan size of $39 billion ▪ Almost 90% of SME exposure in Singapore and Hong Kong ▪ Predominantly secured against property ▪ Lending criteria tightened over past two years ▪ 10% to highly impacted industries such as hotels, food and
Slide 15: Large corporates
Navigating Business Outlook Credit Outlook Dividends COVID-19 Large corporates ▪ Identified eight industries more directly impacted by slowdown – Oil and gas, Aviation, Hotels, Gaming/cruise ships, Tourism, Retail, Food and beverage and Shipping ▪ Total loans of $46bn, of which oil and gas is bigges
Slide 16: Oil and gas
Navigating Business Outlook Credit Outlook Dividends COVID-19 Oil and gas ▪ Total loans of $23bn ($bn) Producers Processors Traders Support services Total March 2020 7 7 5 4 23 Producers ▪ Principally to oil majors and state-owned companies Processors ▪ Majority of loans are to midstream (transport
Slide 17: Oil and gas
Navigating Business Outlook Credit Outlook Dividends COVID-19 Oil and gas Traders ▪ Of total $5bn loans, 50% are backed by bank letters of credit ▪ One loan recognised as NPA during quarter ▪ Balance of loans are to global traders or state-owned companies, or are tightly structured and secured loans
Slide 18: Aviation
Navigating Business Outlook Credit Outlook Dividends COVID-19 Aviation ▪ Total loans $6bn - 15% to Singapore Inc - 35% national airlines backed by aircraft - 35% bank-related and international leasing companies - 15% to aircraft/engine manufacturers 18
Slide 19: Entering slowdown with strong balance sheet
Navigating Business Outlook Credit Outlook Dividends COVID-19 Entering slowdown with strong balance sheet Strong capital CET-1: 13.9% Above management operating range and regulatory requirements Strong general GP: $3.2bn GP reserves include management allowance reserves overlays of around $1bn Stron
Slide 20: 1Q dividend maintained at 33 cents per share
Navigating Business Outlook Credit Outlook Dividends COVID-19 1Q dividend maintained at 33 cents per share ▪ Earnings generation currently expected to be sufficient for maintaining quarterly DPS at 33 cents ▪ Barring significant macroeconomic worsening, CET-1 envisaged not to dip significantly below
Slide 21: Thank You
Thank You EEDBS