Home Finance Singapore banks post lower profits in weak markets, but top estimates

Singapore banks post lower profits in weak markets, but top estimates

by Enochadmin

A brand of DBS financial institution is seen in Taipei, Taiwan, January 28, 2022. REUTERS/Ann Wang

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SINGAPORE, April 29 (Reuters) – Singapore lenders DBS Group (DBSM.SI) and OCBC (OCBC.SI) each reported 10% declines in quarterly earnings, which nonetheless topped analysts’ estimates after file outcomes a yr in the past, however their wealth administration companies suffered in weaker markets.

“The market may even look forward for indicators, and see the beginnings of advantages on margin uplift, and respectable mortgage progress of 8-9%,” Kevin Kwek, a senior analyst at Sanford C. Bernstein, stated on Friday.

Buoyed by the better-than-expected outcomes, DBS shares rose 3.4% whereas OCBC jumped 3.6% in a broader market (.STI) that was up 1%.

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Singapore banks face a tricky comparability after notching up bumper earnings a yr earlier after they benefited from a powerful restoration from pandemic-hit markets.

“Geopolitical developments in current weeks have created macroeconomic headwinds and monetary market volatility,” DBS Chief Government Piyush Gupta, stated in a press release on Friday.

“Whereas some actions equivalent to wealth administration can be affected, our total enterprise pipeline continues to be wholesome,” he stated, including that DBS would profit considerably from rate of interest will increase within the coming quarters.

Internet revenue at Southeast Asia’s largest financial institution fell to S$1.8 billion ($1.30 billion) in January-March from a file S$2 billion a yr earlier however got here in above a mean estimate of S$1.63 billion from six analysts, in keeping with Refinitiv information.

Second-ranked OCBC posted a first-quarter revenue of S$1.36 billion, down from S$1.5 billion a yr earlier, however this additionally got here above a mean estimate of S$1.2 billion from six analysts, in keeping with Refinitiv information.

OCBC counts Singapore, Higher China and Malaysia, amongst its key markets, whereas DBS earns most of its revenue from Singapore and Hong Kong.

Singapore’s economic system, which is benefiting from political uncertainty and pandemic pains elsewhere in Asia, is ready to broaden 3% to five% this yr.

On Friday, Singapore’s United Abroad Financial institution (UOBH.SI) additionally reported a ten% fall in internet revenue to S$906 million versus common market estimate of S$1 billion.

Earlier this yr, DBS and UOB individually snapped up retail belongings offered by Citibank (C.N) in Southeast Asian markets and Taiwan, because the lenders broaden regionally.

($1 = 1.3868 Singapore {dollars})

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Reporting by Anshuman Daga; Enhancing by Muralikumar Anantharaman, Sam Holmes & Shri Navaratnam

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