DBS Group reported on Tuesday that its net profit for the first quarter of 2016 was S$1.20 billion, down 5 per cent from a year ago.
Excluding the one-time items of about S$136 million related to the gain from disposal of a property investment a year ago, the earnings were a record and 6 per cent higher. Total income also reached a new high, rising 5 per cent to S$2.87 billion as net interest income grew 8 per cent to S$1.83 billion.
Compared with the previous quarter, net profit rose 20 per cent from higher non-interest income and a lower cost-income ratio.
DBS CEO Piyush Gupta said: "While we have had a succession of record earnings, this quarter's performance is particularly satisfying because it was achieved in unusually challenging market conditions."
"We are proud of the depth and quality of the franchise we have systematically built over the past few years. Our continuing investments in regional businesses and efforts to reinforce risk management, together with a robust balance sheet, put us in a strong position to continue supporting customers and delivering consistent shareholder returns," he added.
Underlying loans were little changed as a 23 per cent decline in trade loans was offset by a 3 per cent growth in non-trade loans from higher corporate borrowing and a 13 per cent increase in Singapore housing loans.
Net fee income rose 3 per cent to a new high of S$574 million, led by growth in cards and wealth management. These increases were partially offset by lower fees from trade, brokerage and investment banking activities. Other non-interest income fell 7 per cent to S$458 million as financial market volatility affected treasury customer flows.
The non-performing loan rate rose slightly from the previous quarter to one per cent. Specific allowances of S$170 million were 6 per cent higher than a year ago and 6 per cent below the previous quarter. Allowance coverage was at 134 per cent and at 286 per cent if collateral was considered. The Common Equity Tier 1 ratio was at 14 per cent, while the leverage ratio was at 7.8 per cent.
Geographically, Singapore generated a net profit of S$936 million, up 17 per cent from a year ago. Net profit for the rest of China, excluding Hong Kong, fell 67 per cent to S$23 million from a year ago. Net profit from Hong Kong slipped 13 per cent to S$209 million from a year ago.