DBS Group Holdings Ltd · SGX:D05

DBS — Q3 2016 Earnings Presentation

35 slides from DBS's earnings presentation, Oct 31, 2016

  1. Slide 1: Resilient third quarter operating performance

    Resilient third quarter operating performance DBS Group Holdings 3Q 2016 financial results October 31, 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 B

  2. Slide 2: Highlights

    Highlights Resilient 3Q operating performance underpinned by income growth and cost containment  3Q total income up 8% on year and stable on quarter to $2.93 billion  Expenses decline 5% on year and 7% on quarter to $1.20 billion  Profit before allowances up 19% on year and 6% on quarter to $1.73

  3. Slide 3: 3Q profit before allowances up 19% on year

    3Q profit before allowances up 19% on year (S$m) 3Q16 YoY %  Profit before allowances up 19% from loan Total income 2,929 8 growth, higher non- Expenses 1,199 (5) interest income and Profit before allowances 1,730 19 lower costs  Strong performance Allowances 436 >100 provided headroom for Net pro

  4. Slide 4: 3Q earnings up 2% on quarter

    3Q earnings up 2% on quarter (S$m) 3Q16 QoQ %  Higher non-interest income offsets lower Total income 2,929 0 NIM Expenses 1,199 (7)  Lower costs result in 6% Profit before allowances 1,730 6 increase in profit before allowances Allowances 436 19  GP taken as prudent Net profit 1,071 2 measure Imp

  5. Slide 5: 9M profit before allowances up 11%

    9M profit before allowances up 11% (S$m) 9M16 YoY %  Profit before allowances up 11% from broad-based Total income 8,713 7 total income growth as Expenses 3,749 2 well as productivity gains Profit before allowances 4,964 11  Cost-income ratio improves to 43% from 45% Allowances 972 96  Higher SP

  6. Slide 6: 3Q NIM declines to 1.77% from lower SGD interest rates and higher liquidity buffers

    3Q NIM declines to 1.77% from lower SGD interest rates and higher liquidity buffers (S$m) Net interest margin (%) 5,481 1.87 5,246 1.84 1.85 1.78 1.77 1.83 1.75 1.69 1.74 1,690 1,743 1,813 1,854 1,833 1,833 1,815 9M 9M 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2015 2016 2015 2016 6

  7. Slide 7: Loans up 1% on quarter in constant-currency terms

    Loans up 1% on quarter in constant-currency terms (S$bn) QoQ YTD Reported Underlying Reported Underlying  Underlying loan 294 2 +5 +3 +7 +13 growth up 1% or $3 billion on quarter, CBG 93 +2 +2 +4 +5 and 5% or $13 billion year-to-date  Non-trade loan growth led by corporate loans and Other +4 +2 +7

  8. Slide 8: Deposits increase 5% on quarter as liquidity buffers built up

    Deposits increase 5% on quarter as liquidity buffers built up (S$bn) Loans Other funding Deposits 357 353 358 345 354 342 339 33 35 38 35 29 36 25 324 306 318 320 314 310 324 281 280 285 283 274 285 290 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Ratios (%) LDR 87 92 90 88 87 92 89 LCR 135 131

  9. Slide 9: 3Q fee income up 19% on year from broad-based growth

    3Q fee income up 19% on year from broad-based growth (S$m) YoY 2,044 +9% 1,872 193 1,850 Others 199 159 Investment 109 banking 800 QoQ YoY 345 700 702 +0% +19% Cards 1,350 314 700 657 642 626 62 67 75 589 580 64 354600 63 83 54 Loan-related 354 26 52 61 57 22 500 31 56 114 108 123 102 105 850 107 40

  10. Slide 10: IBG 9M income little changed

    IBG 9M income little changed (S$m) 9M 9M YoY % 2016 2015 Total income 3,961 4,015 (1)  Total income stable as Corporate 2,797 2,851 (2) higher cash management and SME 1,164 1,164 0 investment banking Loans 2,137 2,134 0 income offsets lower Trade 554 720 (23) trade and treasury Cash / SFS 602 469 2

  11. Slide 11: CBG 9M income and earnings rise to new highs

    CBG 9M income and earnings rise to new highs (S$m) 9M 9M YoY % 2016 2015 Total income 3,198 2,644 21 Retail 1,939 1,562 24  Total income increases Wealth Management 1,259 1,082 16 21% from higher loan and deposit volumes, Loans and deposits 1,864 1,435 30 NIM, bancassurance Investment products 865

  12. Slide 12: 3Q treasury customer income stable on year; other treasury income up 27%

    3Q treasury customer income stable on year; other treasury income up 27% (S$m) 58 Customer 52 55 54 52 52 50 50 income / 46 total treasury income (%) 1,867 1,797 -4% Customer income 978 932 -5% 721 YoY QoQ 612 608 594 595 11% - Other 534 502 335 treasury 889 865 -3% 335 301 323 308 - -5% 308 251 inc

  13. Slide 13: Year-on-year cost growth deceleration improves 9M cost-income ratio to 43%

    Year-on-year cost growth deceleration improves 9M cost-income ratio to 43% (S$m) Cost / income (%) Staff expenses YoY growth (%) Other expenses 45 45 46 47 43 43 44 44 41 3,658 3,749 13 16 14 10 7 6 (5) 2,00 2,06 8 1 1,218 1,259 1,242 1,265 1,285 1,181 1,199 669 667 643 706 683 672 672 1,65 1,68 0 8

  14. Slide 14: Hong Kong's 9M earnings decline

    Hong Kong’s 9M earnings decline (S$m) 9M16 YoY % Underlying  NIM improves YoY % 12 bp to 1.77% Total income 1,590 (10) (10)  Non-interest Expenses 688 (2) (2) income affected by weak market Profit before allowances 902 (15) (15)  Higher SP from Allowances 195 >100 >100 RMB derivative Net profit 6

  15. Slide 15: New NPAs include oil and gas support service exposure that is well-collateralised

    New NPAs include oil and gas support service exposure that is well-collateralised (S$m) 3Q 2Q 3Q 2016 2016 2015 NPAs at start of period 3,854 3,048 2,571 New NPAs 1,055 1,105 339 Upgrades, recoveries and translation (88) (212) (74) Write-offs (491) (87) (287) NPAs at end of period 4,330 3,854 2,549

  16. Slide 16: Allowance coverage at 100% and at 204% with collateral

    Allowance coverage at 100% and at 204% with collateral (S$m) 3,163 3,222 3,182 3,128 2,947 Surplus* $110m GP eligible General as Tier 2 allowances capital 1,404 $1.37bn * 1,212 932 915 908 Specific allowances Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Cumulative general and specific allowances as % of: NPA

  17. Slide 17: Strong CET-1 and leverage ratios

    Strong CET-1 and leverage ratios 16.0 16.3 16.5 (%) Total 14.8 15.4 1.7 1.9 1.6 Tier 2 1.9 1.9 13.5 14.3 14.4 14.9 Tier 1 12.9 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Common Equity Tier 1 (%) Transitional 12.9 13.5 14.0 14.2 14.4 Fully phased-in 11.9 12.4 13.2 13.4 13.5 RWA (S$bn) 279 274 269 268 271 Lev

  18. Slide 18: In summary – resilient third quarter operating performance

    In summary – resilient third quarter operating performance Growth in total income underpinned by multiple business engines Past investments to digitise as well as strategic cost management efforts yielding productivity gains, boosting profit before allowances Headroom for higher general and specific

  19. Slide 19: Supplementary slides

    Supplementary slides DBS Group Holdings 3Q 2016 financial results October 31, 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

  20. Slide 20: 9M earnings unchanged on year

    9M earnings unchanged on year (S$m) 9M 9M YoY 2016 2015 % Net interest income 5,481 5,246 4 Fee income 1,816 1,659 9 Trading income 960 915 5 Other income 456 329 39 Non-interest income 3,232 2,903 11 Total income 8,713 8,149 7 Staff expenses 2,061 2,008 3 Other expenses 1,688 1,650 2 Expenses 3,749

  21. Slide 21: 3Q profit before allowances up 19% on year

    3Q profit before allowances up 19% on year (S$m) 3Q 3Q YoY 2Q QoQ 2016 2015 % 2016 % Net interest income 1,815 1,813 - 1,833 (1) Fee income 614 517 19 628 (2) Trading income 338 286 18 307 10 Other income 162 93 74 151 7 Non-interest income 1,114 896 24 1,086 3 Total income 2,929 2,709 8 2,919 0 Sta

  22. Slide 22: Cost-income ratio fell on year and on quarter

    Cost-income ratio fell on year and on quarter (%) 3Q 3Q 2Q 9M 9M 2016 2015 2016 2016 2015 Net interest margin 1.77 1.78 1.87 1.83 1.74 Fee income/total income 21 19 22 21 20 Non-interest income/total 38 33 37 37 36 income Cost/income 41 46 44 43 45 ROE 10.0 10.9 10.1 10.7 11.6 Loan/deposit 89 90 92

  23. Slide 23: Hong Kong's 9M earnings at $602m

    Hong Kong’s 9M earnings at $602m Constant-currency terms (S$m) 9M 9M YoY YoY 2016 2015 % % Net interest income 975 986 (1) (1) Non-interest income 615 779 (21) (21) Total income 1,590 1,765 (10) (10) Expenses 688 700 (2) (2) Profit before 902 1,065 (15) (15) allowances General allowances (1) (28) NM

  24. Slide 24: Hong Kong's profit before allowances up 17% on quarter

    Hong Kong’s profit before allowances up 17% on quarter Constant-currency terms (S$m) 3Q 3Q YoY YoY 2Q QoQ QoQ 2016 2015 % % 2016 % % Net interest income 325 356 (9) (6) 320 2 1 Non-interest income 241 248 (3) 0 200 21 21 Total income 566 604 (6) (3) 520 9 9 Expenses 228 240 (5) (2) 232 (2) (2) Profi

  25. Slide 25: Regional 9M income 4% lower on year

    Regional 9M income 4% lower on year (S$m) 9M 9M YoY 2016 2015 % Net interest income 807 840 (4) Non-interest income 560 577 (3) Total income 1,367 1,417 (4) Expenses 830 847 (2) Profit before allowances 537 570 (6) Allowances 316 294 7 Net profit 149 224 (33) Figures for operations outside of Singap

  26. Slide 26: NPL ratio up moderately, allowance coverage sound

    NPL ratio up moderately, allowance coverage sound 1.3 NPL ratio (%) 1.1 1.0 4,330 0.9 0.9 0.9 0.9 3,854 NPA (S$m) 20% 3,048 29% 2,792 Not overdue 2,590 2,571 2,549 20% 25% 18% 19% 13% <90 days overdue 22% 21% 17% 18% 10% 12% 18% 58% 55% >90 days overdue 64% 68% 67% 63% 63% Mar 15 Jun 15 Sep 15 Dec 1

  27. Slide 27: Specific allowances for loans rise to 30 bp

    Specific allowances for loans rise to 30 bp (S$m) 3Q 2Q 3Q 2016 2016 2015 Add charges for New NPLs 94 286 89 Existing NPLs 173 81 112 267 367 201 Subtract charges for Upgrading 1 1 - Settlements 30 14 41 Recoveries 16 16 18 47 31 59 Total SP charges for loans 220 336 142 SP/loans (bp) 30 48 20 27

  28. Slide 28: AFS duration remains short

    AFS duration remains short (S$m) Sep 16 Jun 16 Government securities 22,763 22,593 Less than 3 years 15,128 14,864 3 to 5 years 3,473 3,046 5 to 10 years 3,177 3,653 More than 10 years 985 1,029 Supranational, bank and 13,681 14,330 corporate bonds Equities 1,620 1,681 Total 38,064 38,603 AFS reserv

  29. Slide 29: 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 469 * 0 469 France 0 14 14 Germany 158 * 0 158 Netherlands 0 3 3 United Kingdom 683 * 140 823 Total 1,310 157 1,467 * Supranational and German entities rated AAA/Aaa by S&P, Moody’

  30. Slide 30: Deposits growth built liquidity buffer

    Deposits growth built liquidity buffer QoQ YoY (S$bn) Sep 16 Reported Underlying Reported Underlying Deposits 324 14 12 6 14 By product CASA 201 4 3 10 12 Fixed deposits 120 9 8 (3) 1 Others 3 1 1 0 0 By currency Singapore dollar 150 7 7 9 9 US dollar 99 5 4 7 11 HK dollar 33 2 2 (3) (1) Chinese yua

  31. Slide 31: Wealth Management segment

    Wealth Management segment Income (S$m) 2015 9M 2016 9M +16% yoy 1,082 1,259 Record High 453 423 34% yoy 365 378 383 338 334 7% qoq 275 231 197 155 127 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average

  32. Slide 32: SME segment

    SME segment 2015 9M 2016 9M flat yoy Income (S$m) 1,164 1,164 1% yoy 396 391 385 385 394 377 367 342 352 2% qoq 307 273 260 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average 32

  33. Slide 33: Global transaction services

    Global transaction services Income (S$m) 2015 9M 2016 9M -2% yoy 1,220 1,198 flat yoy 405 420 416 401 397 403 405 392 371 2% qoq 352 270 185 Cash/ SFS Trade 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average A

  34. Slide 34: Treasury customer flows

    Treasury customer flows 2015 9M 2016 9M -5% yoy Income (S$m) 978 932 335 335 323 flat yoy 308 301 308 284 259 5% qoq 251 217 206 172 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Quarterly Quarterly Quarterly Quarterly Quarterly Average Average Average Average Average 3Q16 customer inc

  35. Slide 35: Resilient third quarter operating performance

    Resilient third quarter operating performance DBS Group Holdings 3Q 2016 financial results October 31, 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 B

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