DBS Group Holdings, a Singapore-based financial services firm, has recorded net earnings of S$552 million for Q2, 2009, an increase of 21% from the previous quarter. It has claimed that revenue growth and cost discipline have boosted earnings before allowances to a record S$1.16 billion.
Revenues rose 8% from the previous quarter to a new high of S$1.79 billion as better net interest margins, capital market activities, trading and investment income resulted in broad-based revenue growth. Expenses were held at S$631 million, improving the cost-income ratio further to 35%, the best level in several years. Net interest income grew 3% from the previous quarter to S$1.11 billion. Singapore and Hong Kong savings and current deposit volume grew during the quarter. Including currency translation effects, deposits were stable at S$179 billion.
Non-interest income rose 16% from the previous quarter to S$680 million. Fee income increased 13% to S$358 million as revenues from stockbroking, investment banking and wealth management benefited from improved capital markets. The non-performing loan rate rose from 2% in the previous quarter to 2.8%. The increase came primarily from exposures to shipping and Middle East corporates and institutions. Return on equity improved to 9.1% from the previous quarter’s 8%, but was below 13% recorded a year ago.
Koh Boon Hwee, chairman, DBS Group, said: Our operating performance in the first six months of 2009 reflects the underlying strength of our franchise and the depth of our relationships with customers. We will continue to focus on our customers, on managing risks and on being disciplined in managing our costs. DBS is well positioned to weather the uncertainties ahead as our balance sheet remains strong.
