DBS Q1 profit falls 29% as loan-loss provisions surge amid coronavirus pandemic

SINGAPORE (BLOOMBERG, REUTERS) – DBS Group Holdings, Singapore and South-east Asia’s largest lender, posted its first quarterly profit decline since 2017 as the coronavirus pandemic and oil price slump triggered a spike in loan-loss provisions.

Net income fell 29 per cent to $1.17 billion in the three months ended March 31 from $1.65 billion a year earlier, the bank said Thursday (April 30). That compares with the $1.19 billion average estimate of six analysts surveyed by Bloomberg. DBS last posted a quarterly profit decline in the third quarter of 2017.

The bank maintained its quarterly dividend at 33 cents.

Allowances for loan losses surged to $1.09 billion in January-March from $76 million a year earlier. They were well above an average estimate of $605 million, according to Refinitiv data.

Before allowances, DBS’ profit rose 20 per cent to a record $2.47 billion, with total income up 13 per cent from loan growth, stronger fee income and higher investment gains.

Its net interest income grew as key interest rates were resilient despite the US Federal Reserve’s cut in March.

DBS joins a host of international banks including JPMorgan Chase & Co and HSBC Holdings in setting aside hefty provisions for bad debts, as the pandemic cripples the global economy and slashes profits among the lenders’ corporate customers.

Investors will focus on any comments from chief executive officer Piyush Gupta on the full-year outlook and on dividend prospects at a media briefing which is due to start at 10:30am.

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