Dbs Group Holdings Ltd · SGX:D05
Dbs — Q2 2023 Earnings Presentation
30 slides from Dbs's earnings presentation, Aug 3, 2023
Slide 1: Record quarterly and half-yearly performance
Record quarterly and half-yearly performance DBS Group Holdings 2Q 2023 financial results August 3, 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
Slide 2: Highlights
Highlights 2Q net profit up 48% to record $2.69bn with ROE at 19.2% as total income crosses $5bn ▪ Commercial book total income up 40% YoY to $4.87bn from broad-based growth o NIM rises 96bp YoY and 12bp QoQ o Fee income up 7% YoY, first YoY increase in six quarters o Treasury customer sales and oth
Slide 3: 2Q net profit up 48% YoY to record as total income crosses $5bn
2Q net profit up 48% YoY to record as total income crosses $5bn (S$m) 2Q23 YoY % Total income record 5,045 35 ▪ Commercial book total income up 40% from higher Commercial book 4,868 40 NIM and broad-based non-interest income growth TM trading 177 (34) Expenses 1,931 16 ▪ TM trading income declines 3
Slide 4: 2Q net profit rises 5% QoQ
2Q net profit rises 5% QoQ (S$m) 2Q23 QoQ % Total income record 5,045 2 ▪ Commercial book total income up 4% as NIM Commercial book 4,868 4 increases 12bp TM trading 177 (34) ▪ Fee income decline of 3% offset by 7% increase in Expenses 1,931 3 treasury sales and other income Profit before allowances
Slide 5: 1H net profit up 45% to record as total income rises 34%
1H net profit up 45% to record as total income rises 34% (S$m) 1H23 YoY % Total income record 9,981 34 ▪ Commercial book total income up 42% from higher Commercial book 9,535 42 NIM and treasury customer sales TM trading 446 (36) ▪ TM trading income declines 36% from higher Expenses 3,813 15 funding
Slide 6: 2Q commercial book net interest income up 6% QoQ as NIM rises 12bp to 2.81%
2Q commercial book net interest income up 6% QoQ as NIM rises 12bp to 2.81% Net interest margin (%) 2.69 2.81 2.75 2.61 2.30 1.85 Commercial book 1.75 1.65 2.16 2.05 2.12 2.14 1.90 1.46 1.58 Group 1.52 Net interest income (S$m) 6,704 3,280 3,433 3,020 3,271 2,454 31 4,641 2,187 Treasury 134 316 182
Slide 7: Loans decline 1% QoQ mainly from lower trade loans
Loans decline 1% QoQ mainly from lower trade loans (S$bn) 422 Others 5 In constant-currency terms ▪ 2Q loans decline $5bn CBG / WM 123 QoQ as maturing trade +4 loan exposures were not -1 replaced due to general market slowdown and +4 unattractive pricing +3 ▪ 1H loans stable as non- -5 Other + +1 25
Slide 8: Deposits decline QoQ with liquidity remaining ample
Deposits decline QoQ with liquidity remaining ample (S$bn) 575 580 574 576 567 47 48 47 47 47 Loans 146 183 209 227 228 Other funding FD and others Casa 425 429 415 417 416 382 350 318 302 292 Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 HQLA (S$bn) 140 138 145 144 149 Ratios (%) LDR 80 81 79 79 80 LCR 142 13
Slide 9: 2Q fee income rises YoY for first time in six quarters
2Q fee income rises YoY for first time in six quarters (S$m) 2,007 1,939 75 1,022 1,008 999 Investment 73 banking 43 917 923 44 31 30 25 835 Wealth 742 23 management 745 408 365 377 337 323 262 275 Loan-related 258 122 142 133 144 114 79 Cards 390 464 245 227 187 203 223 237 Transaction services 473
Slide 10: 1H expenses stable HoH, cost-income ratio improves 6%pt YoY to 38%
1H expenses stable HoH, cost-income ratio improves 6%pt YoY to 38% 45 44 Cost / income 44 43 (%) 41 38 38 38 3,813 1,963 1,825 1,882 1,931 (S$m) 3,302 1,658 1,644 2,430 1,203 1,215 Staff 1,119 1,215 2,054 1,047 1,007 expenses Other 760 716 1,248 1,383 597 651 706 667 expenses 1H22 1H23 1Q22 2Q22 3Q2
Slide 11: 1H CBG income up 48%
1H CBG income up 48% (S$m) 1H22 1H23 YoY % Total income 2,884 4,272 48 ▪ 1H total income up 48% to $4.27bn Loans and deposits 1,496 2,864 91 Investment products 973 1,051 8 ▪ Higher income from loans and deposits, as well as investment Cards 373 313 (16) products Others 42 44 5 ▪ Wealth management A
Slide 12: 1H IBG income up 38%
1H IBG income up 38% (S$m) 1H22 1H23 YoY % Total income 3,392 4,693 38 ▪ 1H total income up 38% to $4.69bn Loans 1,742 1,702 (2) Trade 387 345 (11) ▪ Increase led by tripling of cash management income, partially offset Cash / SFS 752 2,131 >100 by decline in trade income Treasury 459 459 0 ▪ GTS dep
Slide 13: 1H TM customer sales income rises to record, trading income declines
1H TM customer sales income rises to record, trading income declines 866 (S$m) 1,540 1,381 746 674 704 435 635 Customer 575 839 sales 935 435 477 404 372 458 Trading 701 431 446 270 269 269 204 177 1H22 1H23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 YoY (%) Customer sales (8) 11 (11) (5) 5 (1) 10 13 Trading (25
Slide 14: 1H Hong Kong net profit up 39%
1H Hong Kong net profit up 39% Constant- (S$m) 1H23 YoY % currency YoY% ▪ Net interest income up 43% from Total income 1,574 22 25 higher NIM Expenses 573 6 9 ▪ Non-interest income little changed Profit before allowances 1,001 33 36 ▪ Expenses up 9%, positive jaw of Allowances 45 5 6 16%pt ▪ Total a
Slide 15: 2Q NPA formation remains low, NPL ratio unchanged at 1.1%
2Q NPA formation remains low, NPL ratio unchanged at 1.1% (S$m) 1H22 1H23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 NPAs at start of period 5,849 5,125 5,849 5,981 5,908 5,600 5,125 4,951 IBG and others 90 (138) 187 (98) (346) (207) (133) (5) New NPAs 704 379 465 271 278 350 218 166 Upgrades, settlements and re
Slide 16: 2Q SP at 10bp, 1H at 8bp
2Q SP at 10bp, 1H at 8bp (S$m) 1H22 2H22 1H23 1Q23 2Q23 IBG and others 174 20 81 24 57 Add charges for 270 217 185 84 110 New NPLs 223 74 104 17 87 Existing NPLs 47 143 81 67 23 Subtract charges for 96 197 104 60 53 Upgrades 1 47 1 1 0 Settlements 80 125 80 50 39 Recoveries 15 25 23 9 14 CBG / WM 64
Slide 17: Allowance coverage at 127%
Allowance coverage at 127% (S$m) 6,692 6,707 6,242 6,266 6,327 GP 3,737 3,902 ▪ Allowance coverage 3,736 3,831 3,802 comfortably above 100% and exceeds 200% after considering collateral SP 2,955 2,805 2,506 2,435 2,525 Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 Total allowance reserves as % of: NPA 113 120
Slide 18: Strong CET-1 and leverage ratios
Strong CET-1 and leverage ratios (%) 16.7 17.0 16.2 16.5 1.8 15.8 Tier 2 1.8 1.5 1.7 1.1 Additional Tier 1 0.6 0.6 0.7 0.6 0.7 Common Equity Tier 1 14.2 14.6 14.4 14.1 13.8 Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 RWA (S$bn) 349 361 347 353 371 Leverage ratio (%) 6.2 6.1 6.4 6.4 6.5 18
Slide 19: Dividend guidance at May 2023 Investor Day
Dividend guidance at May 2023 Investor Day Baseline: +24 cents per year sustainable in the medium term, barring unforeseen circumstances Further upside of $3b based on CET-1 operating range of 12.5-13.5%, distribution could be in further ordinary dividend step-up, special dividend or buyback. Pace d
Slide 20: 2Q dividend raised to 48 cents per share, bringing 1H dividend to 90 cents
2Q dividend raised to 48 cents per share in line with guidance, bringing 1H dividend to 90 cents per share (S¢ per share) Ordinary Special 42 4Q 36 36 3Q 33 48 36 2Q 33 50 36 42 1Q 18 2021 2022 2023 20
Slide 21: In summary
In summary Record performance with 2Q and 1H total income, net profit and ROE at new highs Commercial book benefited from higher interest rates and broad-based growth in non-interest income, moderated by higher funding costs for Treasury Markets While there is some macroeconomic uncertainty, our pro
Slide 22: Supplementary slides
Supplementary slides DBS Group Holdings 2Q 2023 financial results August 3, 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 liability wh
Slide 23: 1H net profit up 45% to record $5.26bn
1H net profit up 45% to record $5.26bn (S$m) 1H23 1H22 YoY % Net interest income 6,704 4,641 44 Fee income 1,674 1,659 1 Trading income 1,434 1,060 35 Other income 169 61 >100 Non-interest income 3,277 2,780 18 Total income 9,981 7,421 34 Staff expenses 2,430 2,054 18 Other expenses 1,383 1,248 11 E
Slide 24: 1H Hong Kong net profit up 39%
1H Hong Kong net profit up 39% Constant-currency terms (S$m) 1H23 1H22 YoY % YoY % Net interest income 1,035 738 40 43 Net fee and commission income 350 354 (1) 1 Other non-interest income 189 200 (6) (3) Total income 1,574 1,292 22 25 Expenses 573 539 6 9 Profit before allowances 1,001 753 33 36 GP
Slide 25: NPL ratio at 1.1%, allowance coverage above 100%
NPL ratio at 1.1%, allowance coverage above 100% NPL ratio (%) 1.3 1.2 1.1 1.1 1.1 NPA (S$m) 5,908 5,600 5,125 4,951 4,990 Not overdue 30% 24% 30% 30% 33% Within 90 days overdue 4% 9% 6% 8% 6% More than 90 days overdue 66% 68% 64% 61% 61% Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 SP / loans (bp) 8 2 6 6 10
Slide 26: Fixed income duration remains short
Fixed income duration remains short ($m) Jun 23 FVOCI HTC Government securities 32,677 21,965 Less than 3 years 25,300 7,738 3 to 5 years 3,176 4,494 5 to 10 years 3,615 8,752 More than 10 years 586 981 Supranational, bank and corporate bonds 21,067 34,838 Total 53,744 56,803 Time-banding is based o
Slide 27: Deposits decline 2% HoH, stable YoY
Deposits decline 2% HoH, stable YoY (S$bn) HoH (%) YoY (%) Jun-23 Reported Underlying Reported Underlying Deposits 520 (1) (2) (1) 0 By product Casa 292 (8) (8) (24) (22) Fixed deposits and others 228 9 8 56 61 By currency Singapore dollar 206 (4) (4) (8) (8) US dollar 200 1 (0) 6 9 HK dollar 33 (8)
Slide 28: 1H GTS income doubles to $2.48bn
1H GTS income doubles to $2.48bn 1,262 Total income 2,476 1,214 1,160 (S$m) 964 673 1,139 466 Cash / SFS Trade 1H22 1H23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 (S$bn) Trade assets 57 47 52 57 53 51 52 47 Deposits 199 187 196 199 197 197 196 187 28
Slide 29: 1H wealth management income up 53%
1H wealth management income up 53% 1,073 1,083 Total income 2,157 (S$m) 940 917 753 1,414 661 Net interest income Non-interest income 1H22 1H23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 (S$bn) AUM 294 320 293 294 293 297 309 320 Earning assets 350 371 350 350 349 349 360 371 Comprising Treasures, Treasures Priv
Slide 30: Record quarterly and half-yearly performance
Record quarterly and half-yearly performance DBS Group Holdings 2Q 2023 financial results August 3, 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