DBS posts record S$6.8b net profits in 2021

Loan growth was at its highest in seven years.

DBS Group net profits rose to a record S$6.8b in 2021, a 44% jump from 2020, putting Singapore’s biggest bank by assets back on track in posting consecutively higher annual earnings following a disruption in 2020 due to the pandemic, the bank said in a statement.

Return on equity reportedly rose to 12.5% in 2021 from 9.1% the previous year. Strong business momentum mitigated the full-period impact of interest rate cuts in March 2020, the bank said. 

Loan growth was also at its highest in seven years with DBS reporting a 9% rise to S$409b.

DBS’ board has raised the quarterly dividend by 9% to 36 cents per share. 

The robust growth in the bank’s loan book, along with the solid 15% growth in fee income, speak to a recovering economic environment and the bank’s “broadly diversified franchise”, CEO Piyush Gupta said in the bank’s announcement.

“I am pleased that we have managed expenses and credit costs well through this period. Equally important, we have made significant investments in our future by expanding our footprint in India, Taiwan, and the Greater Bay Area and building new digital platforms to give us additional engines of growth,” Gupta said.

DBS’ asset quality also showed marked improvement for the full year, with non-performing assets falling 13% in 2021, with most of the decline occurring in the fourth quarter due to repayments of two significant non-performing loans. 

Total allowances fell to S$52m from S$3.07b a year ago.

Net interest income fell 7% to S$8.44b, hit by the full impact of interest rate cuts in the previous year, reportedly moderated by broad-based loan growth. Net interest margin also fell by 17 basis points (bp) to 1.45%, with most of the decline occurring in the first half of the year.

Net fee income rose 15% to S$3.52b. This was led by a 19% rise in wealth management fees to a record S$1.79b from higher sales of investment products and bancassurance.

Transaction services fees were also up 13% to a new high of S$925m from growth in trade finance and cash management fees; whilst investment banking fees rose 47% to S$218m.

Card fees also rose 12% to S$715m. Loan-related fees were reportedly stable at S$413m.

Total loans expanded by S$34b in constant-currency terms, the bank’s fastest growth since 2014. This was led by non-trade corporate loans rising by S$18b or 8% to S$241b from broad-based growth led by Singapore and Hong Kong. 

Meanwhile, trade loans grew 10% to S$43b on the back of regional trade activity strengthened; whilst housing loans jumped 5% to S$79b. 

Other consumer loans grew by 15%, led by wealth management loans as investment activity increased.

DBS also saw its deposits grow by 7% or S$32b in constant-currency terms to S$502b. 

Other non-interest income fell 5% to S$2.33b.