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Singapore's largest bank, DBS Group, reported a 10% decline in fourth-quarter net profit, posting SGD 2.26 billion (USD 1.78 billion), below analysts estimate of SGD 2.55 billion. The drop was mainly due to weaker markets trading income and a fall in net interest margin to 1.93% from 2.15% a year earlier. Return on equity fell to 13.5%. Wealth management assets under management rose to a record SGD 488 billion. The bank maintained guidance for slightly lower profit in 2026 and declared higher dividends for shareholders.
Singapore's DBS Group, the country's largest bank and Southeast Asia's biggest by assets, reported a 10% decline in fourth-quarter net profit, which fell to SGD 2.26 billion (USD 1.78 billion), missing analysts forecast of SGD 2.55 billion. The drop was largely driven by weaker-than-expected markets trading income and a lower net interest margin. Advertisement
Net interest margin, a key measure of banking profitability, declined to 1.93% from 2.15% a year earlier, reflecting pressure from lower domestic rates. Return on equity also fell to 13.5%, down from 15.8% in the same period last year. Despite these challenges, the bank's wealth management business saw assets under management climb 19% in constant-currency terms, reaching a record SGD 488 billion.
DBS CEO Tan Su Shan highlighted that, despite challenging conditions last year, including a strong Singapore dollar and fluctuating interest rates, the bank achieved record pre-tax profit and deposit growth in 2025. For the year ahead, DBS expects net profit to be slightly below 2025 levels, emphasizing that market volatility is likely to continue. Tan advised clients to be prepared for a turbulent year while expressing confidence that DBS could still benefit from global market fluctuations.
Provisions for bad loans rose 81% to SGD 415 million, mainly due to real estate exposure. At the same time, the bank reversed SGD 206 million in general allowances that were previously set aside for such exposure. DBS declared a higher ordinary dividend of SGD 0.66 per share and a capital return dividend of SGD 0.15 per share for the quarter. The bank intends to continue capital return dividends through financial years 2026 and 2027, barring unforeseen circumstances.
Shares of DBS traded down 1.1% at SGD 58.63, after earlier falling nearly 2%. Analysts at CGS International maintained a hold rating, noting that the dividend outlook provides support to the stock. DBS is the first Singapore lender to release earnings for the season, with United Overseas Bank and Oversea-Chinese Banking Corp expected to report results later this month.
Source Reuters
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