DBS Group Holdings Ltd · SGX:D05
DBS — Q1 2017 Earnings Presentation
31 slides from DBS's earnings presentation, May 2, 2017
Slide 1: Record quarterly earnings
Record quarterly earnings DBS Group Holdings 1Q 2017 financial results May 2, 2017 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
Slide 2: Highlights
Highlights Earnings at record $1.21 billion Total income rises 1% on year and 4% on quarter to $2.89 billion Net interest income up day-adjusted 3% on quarter from three basis point improvement in net interest margin and 1% constant-currency loan growth Fee income at record $665 million, up 16
Slide 3: Earnings up 1% on year to quarterly high
Earnings up 1% on year to quarterly high (S$m) 1Q17 YoY % Fee income rises to record, offsetting impact Total income 2,886 1 of lower NIM and trading Expenses 1,248 (1) income Profit before allowances 1,638 2 Expenses decline on sustained productivity Allowances 200 18 gains Net profit 1,210 1
Slide 4: Earnings up 33% on quarter
Earnings up 33% on quarter (S$m) 1Q17 QoQ % Total income up 4% on Total income 2,886 4 fee income growth Expenses 1,248 2 Positive jaw contributes to 5% rise in profit Profit before allowances 1,638 5 before allowances Allowances 200 (57) SP moderates from Net profit 1,210 33 recent quarters I
Slide 5: Net interest income up day-adjusted 3% on quarter as NIM improves 3bp
Net interest income up day-adjusted 3% on quarter as NIM improves 3bp (S$m) Net interest margin (%) 7,100 7,305 1.85 1.87 1.80 1.77 1.77 1.74 1.71 1,833 1,833 1,815 1,824 1,831 2015 2016 1Q 2Q 3Q 4Q 1Q 2016 2017 5
Slide 6: Loans up 1% on quarter and 7% on year in constant-currency terms
Loans up 1% on quarter and 7% on year in constant-currency terms (S$bn) QoQ YoY Reported Underlying Reported Underlying 303 3 -2 +2 +25 +21 Underlying loans -1% +1% +9% +7% up 1% or $2 billion on quarter, and 7% CBG 95 +0 +0 +6 +5 or $21 billion on year Non-trade corporate and Other consumer loa
Slide 7: Ample liquidity with LCR at 138%
Ample liquidity with LCR at 138% (S$bn) Loans Other funding Deposits 375 374 345 354 28 339 32 25 35 29 347 342 314 310 324 274 285 290 302 298 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Ratios (%) LDR 87 92 89 87 87 LCR 119 116 115 133 138 Other funding comprises senior medium term notes, commercial papers
Slide 8: Fee income rises to quarterly record, led by wealth management and transaction services
Fee income rises to quarterly record, led by wealth management and transaction services (S$m) 2,646 2,452 241 2,350 Others 256 189 Investment banking 165 483 QoQ YoY 1,850 800 741 +23% +15% Cards 434 700 702 700 642 66 434 62 67 602 45 Loan-related 442 600 64 83 54 1,350 22 48 123 123 30 500 114 108
Slide 9: IBG performance stable
IBG performance stable (S$m) 1Q 1Q YoY % 2017 2016 Total income 1,319 1,311 1 Total income up 1% Corporate 901 926 (3) as growth in cash SME 418 385 9 management offsets Loans 694 715 (3) decline in treasury 188 187 1 customer Trade Cash / SFS 245 202 21 Expenses and Treasury 176 200 (12) allowa
Slide 10: CBG / Wealth income and earnings rise to new highs
CBG / Wealth income and earnings rise to new highs (S$m) 1Q 1Q YoY % 2017 2016 Total income 1,159 1,022 13 Total income up Retail 643 639 1 13% from broad- based growth in Wealth Management 516 383 35 investment Loans and deposits 643 598 8 products, loans and Investment products 348 266 31 deposi
Slide 11: Treasury customer income stable on year
Treasury customer income stable on year (S$m) 62 Customer income / 52 54 52 51 50 49 total treasury income (%) 2,369 2,316 Customer income 1,229 1,187 Treasury QoQ YoY 608 594 595 Markets 1,140 1,129 519 491 -5% -19% income 301 323 308 255 304 19% 1% 307 271 287 264 187 -29% -39% 2015 2016 1Q 2Q 3Q
Slide 12: Cost-income ratio improves 1% point on year from productivity gains
Cost-income ratio improves 1% point on year from productivity gains (S$m) Cost / income (%) Staff expenses YoY growth (%) Other expenses 45 44 44 44 43 43 41 4,900 4,972 7 6 (2) (1) (5) 2,651 2,725 1,265 1,285 1,199 1,223 1,248 706 683 672 664 711 2,249 2,247 559 602 527 559 537 2015 2016 1Q 2Q 3Q 4
Slide 13: Hong Kong’s earnings up 9% on year
Hong Kong’s earnings up 9% on year (S$m) 1Q17 YoY % Income growth of 4% from asset growth, wealth Total income 524 4 management, cards and Expenses 230 1 capital markets Profit before allowances 294 7 Positive jaw as expenses rise 1% Allowances 20 (31) Lower SP offsets higher Net profit 228 9
Slide 14: New NPAs moderate, NPL ratio stable on quarter at 1.4%
New NPAs moderate, NPL ratio stable on quarter at 1.4% (S$m) 1Q 4Q 1Q 2017 2016 2016 NPAs at start of period 4,856 4,330 2,792 New NPAs 523 779 607 Upgrades, recoveries and translation (307) (66) (205) Write-offs (239) (187) (146) NPAs at end of period 4,833 4,856 3,048 NPL ratio (%) 1.4 1.4 1.0 Spe
Slide 15: Allowance coverage at 103%
Allowance coverage at 103% (S$m) 3,494 3,182 3,128 3,166 2,947 General allowances 1,404 1,541 1,492 1,212 908 Specific allowances Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Cumulative general and specific allowances as % of: NPA 134 113 100 97 103 Unsecured NPA 286 226 204 210 217 15
Slide 16: Strong CET-1 and leverage ratios
Strong CET-1 and leverage ratios (%) Total 16.0 16.3 16.5 16.2 16.6 1.7 1.9 1.6 1.5 1.2 Tier 2 Tier 1 14.3 14.4 14.9 14.7 15.4 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Common Equity Tier 1 (%) Transitional 14.0 14.2 14.4 14.1 14.6 Fully phased-in 13.2 13.4 13.5 13.3 14.2 RWA (S$bn) 269 268 271 279 272 Lev
Slide 17: In summary – Record quarterly earnings
In summary – Record quarterly earnings Sustained business momentum and productivity gains enable earnings to be maintained at year-ago quarterly high, offsetting impact of lower net interest margin and a weak trading quarter Healthy business pipeline Asset quality pressures moderate, remaining vigil
Slide 18: Supplementary slides
Supplementary slides DBS Group Holdings 1Q 2017 financial results May 2, 2017 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whats
Slide 19: Earnings at quarterly high
Earnings at quarterly high (S$m) 1Q 1Q YoY 4Q QoQ 2017 2016 % 2016 % Net interest income 1,831 1,833 - 1,824 - Fee income 665 574 16 515 29 Trading income 270 315 (14) 397 (32) Other income 120 143 (16) 40 >100 Non-interest income 1,055 1,032 2 952 11 Total income 2,886 2,865 1 2,776 4 Staff expense
Slide 20: ROE at 11.1%
ROE at 11.1% (%) 1Q 1Q 4Q 2017 2016 2016 Net interest margin 1.74 1.85 1.71 Fee income/total income 23 20 19 Non-interest income/total 37 36 34 income Cost/income 43 44 44 ROE 11.1 11.9 8.4 Loan/deposit 87 87 87 SP/loans (bp) 26 18 57 NPL ratio 1.4 1.0 1.4 20
Slide 21: Hong Kong’s earnings up 9% on year and double on quarter
Hong Kong’s earnings up 9% on year and double on quarter Constant-currency terms (S$m) 1Q 1Q YoY YoY 4Q QoQ QoQ 2017 2016 % % 2016 % % Net interest income 351 330 6 5 342 3 4 Non-interest income 173 174 (1) (2) 170 2 3 Total income 524 504 4 3 512 2 4 Expenses 230 228 1 - 273 (16) (15) Profit before
Slide 22: Regional earnings double on year
Regional earnings double on year (S$m) 1Q 1Q YoY 4Q QoQ 2017 2016 % 2016 % Net interest income 296 260 14 293 1 Non-interest income 196 190 3 187 5 Total income 492 450 9 480 3 Expenses 284 270 5 310 (8) Profit before allowances 208 180 16 170 22 Allowances 40 88 (55) 158 (75) Net profit 132 58 >100
Slide 23: NPL ratio stable on quarter, allowance coverage at 103%
NPL ratio stable on quarter, allowance coverage at 103% 1.4 1.4 1.3 1.1 4,856 4,833 NPL ratio (%) 1.0 4,330 15% 12% 3,854 20% 14% 20% NPA (S$m) 3,048 29% 25% Not overdue 20% 13% <90 days overdue 17% 71% 68% 58% 55% >90 days overdue 63% Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 SP / loans (bp) 18 48 30 57 2
Slide 24: Specific allowances for loans moderate to 26 bp
Specific allowances for loans moderate to 26 bp (S$m) 1Q 4Q 1Q 2017 2016 2016 Add charges for New NPLs 53 180 77 Existing NPLs 190 305 76 243 485 153 Subtract charges for Upgrading - 1 1 Settlements 27 34 13 Recoveries 23 18 16 50 53 30 Total SP charges for loans 193 432 123 SP/loans (bp) 26 57 18 2
Slide 25: AFS duration remains short
AFS duration remains short (S$m) Mar 17 Dec 16 Government securities 24,893 22,441 Less than 3 years 16,452 14,652 3 to 5 years 3,449 3,432 5 to 10 years 4,723 3,369 More than 10 years 269 988 Supranational, bank and 14,879 14,897 corporate bonds Equities 1,530 1,568 Total 41,302 38,906 AFS reserves
Slide 26: European AFS exposure mostly in AAA and AA entities
European AFS exposure mostly in AAA and AA entities Government / Bank / Total (S$m) Govt-owned Corporates Supranational 606 * 0 606 France 0 14 14 Germany 438 * 0 438 Netherlands 0 3 3 United Kingdom 300 * 131 431 Total 1,344 148 1,492 * Supranational and German entities rated AAA/Aaa by S&P, Moody’
Slide 27: Deposits little changed on quarter and up 7% on year in constant-currency terms
Deposits little changed on quarter and up 7% on year in constant-currency terms QoQ YoY (S$bn) Mar 17 Reported Underlying Reported Underlying Deposits 342 (5) 0 29 24 By product CASA 214 (1) 2 20 18 Fixed deposits 125 (5) (2) 8 4 Others 3 0 1 0 1 By currency Singapore dollar 154 2 2 12 12 US dollar
Slide 28: Wealth Management segment
Wealth Management segment Income (S$m) QoQ YoY 516 +22% +35% 453 423 422 354 383 275 231 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 Quarterly average AUM +2% +16% 109 134 146 147 151 159 166 170 (S$b) Total Earning 134 167 180 182 187 196 204 208 +2% +14% Assets (S$b) Comprising Treasures, Treasures Pr
Slide 29: SME segment
SME segment Income (S$m) QoQ YoY 394 418 +9% +9% 383 385 385 382 342 352 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 Quarterly average 29
Slide 30: Global transaction services
Global transaction services Income (S$m) QoQ YoY 415 441 +6% +9% 405 409 405 392 401 371 Cash/ SFS Trade 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 Quarterly average Assets 63 62 47 39 42 43 44 45 +2% +15% (S$b)(a) Deposits 119 135 122 125 -2% +10% 127 121 137 134 (S$b) Assets and deposits at end of pe
Slide 31: Record quarterly earnings
Record quarterly earnings DBS Group Holdings 1Q 2017 financial results May 2, 2017 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