DBS's Hong Kong arm records S$1.6b profit

DBS said its Hong Kong business recorded a profit of S$1.6 billion (HK$9.19 billion) last year, up over 1.2 percent year-on-year.

Shares jumped after the lender posted earnings in line with expectations and announced an investor payout plan.

However, net interest income in Hong Kong fell 4 percent to nearly S$2.1 billion and net interest margin narrowed by 11 basis points to 1.8 percent. Net fee and commission income rose 25 percent to S$830 million.

Southeast Asia’s biggest lender plans to introduce a dividend of 15 Singapore cents per share per quarter to be paid out over 2025 as a start, DBS said Monday.

A similar amount of capital either through this or other mechanisms in the subsequent two years is expected to be distributed, showing commitment to managing down its stock of excess capital, it said.

The group's net profit hit a record-high of S$11.08 billion last year, up 10.91 percent from the previous year.

The bank’s results “demonstrated strong underlying business performance,” according to a report by Jefferies analysts Sam Wong and Shujin Chen. Singapore banks’ capital return is tied to longer-term growth, they said.

Stocks rose as much as 4.1 percent at the market open, the most since November. DBS has gained more than 5 percent since the start of the year, taking the market value just about US$4 billion (HK$31.2 billion) short of the US$100 billion mark that would make DBS the first lender from Southeast Asia to reach such a level.

BLOOMBERG AND STAFF REPORTER