Dbs Group Holdings Ltd · SGX:D05
Dbs — Q2 2021 Earnings Presentation
29 slides from Dbs's earnings presentation, Aug 5, 2021
Slide 1: Record first-half earnings
Record first-half earnings DBS Group Holdings 2Q 2021 financial results August 5, 2021 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 liabil
Slide 2: First-half net profit up 54% to record $3.71bn, ROE at 14.0%
First-half net profit up 54% to record $3.71bn, ROE at 14.0% Strong business momentum ▪ Broad-based loan growth of 3% in each of 1Q and 2Q, Casa deposit inflows sustained ▪ 1H fee income up 20% yoy, 1Q and 2Q the strongest quarters on record ▪ 1H Treasury Markets income and treasury customer flows a
Slide 3: 1H net profit up 54% on year to record
1H net profit up 54% on year to record (S$m) 1H21 YoY % ▪ Net interest income down 12% as 27bp decline in NIM offsets 7% loan growth Total income 7,443 (4) ▪ Fee income up 20% from broad-based growth Expenses 3,130 3 ▪ Other non-interest income down 2% as record Profit before allowances 4,313 (8) tr
Slide 4: 2Q net profit down 15% on quarter
2Q net profit down 15% on quarter (S$m) 2Q21 QoQ % ▪ Net interest income down 1% as 4bp decline in NIM offsets 3% loan growth Total income 3,589 (7) ▪ Fee income down 9% from a record first quarter Expenses 1,543 (3) ▪ Other non-interest income down 20% from Profit before allowances 2,046 (10) recor
Slide 5: 1H net interest income down 12% on year as lower interest rates offset loan growth
1H net interest income down 12% on year as lower interest rates offset loan growth 1.86 1.74 1.62 Net interest 1.51 1.49 1.47 1.45 margin (%) Net interest 4,785 income (S$m) 4,291 4,196 2,482 2,303 2,107 2,089 1H20 2H20 1H21 1Q20 2Q20 1Q21 2Q21 5
Slide 6: Loans up 6% YTD from broad-based growth
Loans up 6% YTD from broad-based growth Others (S$bn) 403 In constant-currency terms 8 CBG / ▪ Loans up 3% in 2Q, 6% in 1H WM 120 ▪ Broad-based growth led by trade and non-trade corporate loans ▪ Consumer loan growth from +22 Other both housing and wealth 231 +7 IBG +12 management +3 +10 +4 Trade 45
Slide 7: Deposits up 3% YTD from Casa inflows
Deposits up 3% YTD from Casa inflows 528 (S$bn) 498 508 45 50 43 116 127 Loans 151 Other funding FD and others Casa 375 397 371 338 366 296 Jun-20 Dec-20 Jun-21 HQLA (S$bn) 108 116 122 Ratios (%) LDR 84 80 82 LCR 134 137 136 NSFR 121 125 127 HQLA is high quality liquid assets; Other funding comprise
Slide 8: 1H gross fee income up 19% on year to record
1H gross fee income up 19% on year to record (S$m) 2,077 114 1,748 1,785 Investment 85 1,086 banking 63 962 49 991 945 Wealth 36 65 742 764 786 management 27 519 418 426 230 324 Loan-related 226 191 126 119 111 337 334 100 Cards 304 173 169 165 131 Transaction 454 services 413 408 209 230 224 204 1H
Slide 9: 1H expenses up 3%, cost-income ratio at 42%
1H expenses up 3%, cost-income ratio at 42% 46 42 41 43 Cost / income 39 39 40 (%) (S$m) 3,039 3,119 3,130 1,556 1,587 1,543 1,483 Staff 1,796 1,754 1,913 expenses 882 872 968 945 Other 1,285 1,323 1,217 expenses 674 611 619 598 1H20 2H20 1H21 1Q20 2Q20 1Q21 2Q21 9
Slide 10: 1H CBG/WM income down 12% on year from lower interest rates
1H CBG/WM income down 12% on year from lower interest rates (S$m) 1H21 1H20 YoY % 2H20 HoH % ▪ 1H total income at $2.71bn, 12% Total income 2,713 3,080 (12) 2,687 1 lower than a year ago Loans and deposits 1,126 1,729 (35) 1,287 (13) ▪ Higher investment product income Investment products 1,161 968 2
Slide 11: 1H IBG income stable on year as lower interest rates offset loan growth and higher treasury sales
1H IBG income stable on year as lower interest rates offset loan growth and higher treasury sales (S$m) 1H21 1H20 YoY % 2H20 HoH % ▪ 1H total income at $3bn, stable Total income 3,000 3,009 (0) 2,736 10 from a year ago Loans 1,699 1,489 14 1,538 10 ▪ Weaker cash management income Trade 378 349 8 370
Slide 12: 1H TM and customer income rise to records
1H TM and customer income rise to records 1,061 1,847 890 (S$m) 1,523 786 1,420 487 913 633 387 Customer 809 699 426 422 934 503 574 TM 714 722 360 211 1H20 2H20 1H21 1Q20 2Q20 1Q21 2Q21 YoY (%) Customer 26 11 13 35 16 15 10 TM 44 65 31 (28) >100 >100 (28) Treasury customer income is included under
Slide 13: 1H Hong Kong earnings up 8% on year
1H Hong Kong earnings up 8% on year (S$m) 1H21 YoY (%) Constant- currency YoY% ▪ Total income down 5% to $1.26bn from lower interest rates Total income 1,256 (9) (5) 491 (4) 0 ▪ Profit before allowances 7% lower Expenses at $765m Profit before allowances 765 (12) (7) ▪ Total allowances of $27m down
Slide 14: 1H new NPAs at pre-pandemic levels
1H new NPAs at pre-pandemic levels (S$m) 1H20 2H20 1H21 1Q21 2Q21 NPAs at start of period 5,773 6,354 6,686 6,686 6,585 IBG and others 419 372 (103) (153) 50 New NPAs 1,034 985 553 271 288 Upgrades, settlements and recoveries (437) (218) (469) (272) (205) Write-offs (178) (395) (187) (152) (33) CBG
Slide 15: 1H specific allowances at 18bp of loans, in-line with pre-pandemic levels
1H specific allowances at 18bp of loans, in-line with pre- pandemic levels (S$m) 1H20 2H20 1H21 1Q21 2Q21 IBG and others 403 471 271 164 107 Add charges for 514 503 337 181 160 New NPLs 389 331 199 103 82 Existing NPLs 125 172 138 78 78 Subtract charges for 111 32 66 17 53 Upgrades 0 0 0 0 0 Settlem
Slide 16: GP reserves at $4.05bn remain prudent
GP reserves at $4.05bn remain prudent 7,326 7,201 (S$m) 6,721 ▪ Balance sheet remains well-fortified against risks ▪ GP reserves above Tier-2 4,312 4,045 GP 3,799 eligibility by $1.2bn, providing future store of CET-1 to buffer against unforeseen credit deterioration SP 2,922 3,014 3,156 ▪ GP reserv
Slide 17: Strong CET-1 and leverage ratios
Strong CET-1 and leverage ratios (%) 17.5 16.6 16.8 Tier 2 1.8 2.0 1.7 1.1 1.0 Additional Tier 1 1.2 Common Equity Tier 1 13.7 13.9 14.5 Jun-20 Dec-20 Jun-21 RWA (S$bn) 323 321 331 Leverage ratio (%) 6.8 6.8 6.8 17
Slide 18: 2Q dividend at 33 cents per share, scrip dividend scheme suspended
2Q dividend at 33 cents per share, scrip dividend scheme suspended (S¢ per share) Final 33 30 18 18 Interim 30 18 33 2Q 30 33 18 1Q 2019 2020 2021 18
Slide 19: In summary – Record first-half earnings
In summary – Record first-half earnings Exceptional first half with strong business momentum sustained in second quarter Business pipeline remains healthy Asset quality better than expected, with NPA formation and specific provisions at pre-pandemic levels General allowances reserves remain prudent
Slide 20: Supplementary slides
Supplementary slides DBS Group Holdings 2Q 2021 financial results August 5, 2021 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 21: Record first-half earnings
Record first-half earnings (S$m) 1H21 1H20 YoY % 2H20 HoH % Net interest income 4,196 4,785 (12) 4,291 (2) Fee income 1,821 1,513 20 1,545 18 Trading income 1,040 752 38 653 59 Other income 386 702 (45) 351 10 Non-interest income 3,247 2,967 9 2,549 27 Total income 7,443 7,752 (4) 6,840 9 Staff expe
Slide 22: Hong Kong 1H earnings up 8% on year
Hong Kong 1H earnings up 8% on year Constant-currency terms (S$m) 1H21 1H20 YoY % YoY % 2H20 HoH % HoH % Net interest income 690 897 (23) (19) 710 (3) (1) Net fee and commission income 395 325 22 28 336 18 20 Other non-interest income 171 160 7 12 106 61 65 Total income 1,256 1,382 (9) (5) 1,152 9 1
Slide 23: NPL at 1.5%, allowance coverage above 100%
NPL at 1.5%, allowance coverage above 100% 1.6 1.5 1.5 NPL ratio (%) NPA (S$m) 6,354 6,686 6,621 Not overdue 17% 17% 25% 13% 8% Within 90 days overdue 5% More than 90 days overdue 70% 75% 70% Jun-20 Dec-20 Jun-21 SP / loans (bp) 30 33 18 Total allowances as % of: NPA 106 110 109 Unsecured NPA 199 20
Slide 24: Fixed income duration remains well-balanced across the curve
Fixed income duration remains well-balanced across the curve ($m) Jun 21 FVOCI HTC Government securities 18,397 22,359 Less than 3 years 10,926 8,825 3 to 5 years 2,448 4,130 5 to 10 years 4,284 7,954 More than 10 years 739 1,450 Supranational, bank and corporate bonds 17,904 26,392 Total 36,301 48,
Slide 25: Deposits up 3% on half and up 9% on year in constant-currency terms
Deposits up 3% on half and up 9% on year in constant- currency terms (S$bn) HoH (%) YoY (%) Jun-21 Reported Underlying Reported Underlying Deposits 483 4 3 8 9 By product Casa 366 8 8 24 25 Fixed deposits and others 116 (8) (10) (23) (22) By currency Singapore dollar 215 5 5 9 9 US dollar 163 7 5 8
Slide 26: Wealth Management segment
Wealth Management segment 1,540 1,433 1,554 HoH YoY 1,330 1,312 1,380 Income (S$m) +5% -11% 2018 2019 2020 1H20 2H20 1H21 Half-yearly average (S$bn) AUM 220 246 264 251 264 285 +8% +13% Earning assets 270 297 314 300 314 339 +8% +13% Comprising Treasures, Treasures Private Client and Private Bank 26
Slide 27: SME segment
SME segment Income (S$m) 1,008 1,064 HoH YoY 859 905 812 787 -3% -13% 2018 2019 2020 1H20 2H20 1H21 Half-yearly average (S$bn) Loans 38 37 41 40 41 41 +0% +1% Deposits 59 61 77 64 77 72 -5% +14% 27
Slide 28: Global transaction services
Global transaction services 1,220 1,314 Income (S$m) 1,082 959 HoH YoY 837 802 -4% -26% Cash / SFS Trade 2018 2019 2020 1H20 2H20 1H21 Half-yearly average (S$bn) Trade assets 47 50 43 48 43 51 +18% +7% Deposits 142 140 166 158 166 177 +7% +12% Assets and deposits at end of period 28
Slide 29: Record first-half earnings
Record first-half earnings DBS Group Holdings 2Q 2021 financial results August 5, 2021 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 liabil