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DBS Q2 net profit slips 6% after Swiber impact

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DBS Group reported on Monday that its net profit for the second quarter of 2016 was S$1.05 billion, down 6 per cent from a year ago due to a net allowance charge of S$150 million for DBS' exposure to the Swiber group, it said.

DBS Group reported on Monday that its net profit for the second quarter of 2016 was S$1.05 billion, down 6 per cent from a year ago due to a net allowance charge of S$150 million for DBS' exposure to the Swiber group, it said.

This was after drawing S$250 million from its general allowance reserves.

The group stressed that cumulative general allowance reserves continued to be high at S$2.95 billion.

Total income in Q2 rose 8 per cent to S$2.92 billion as net interest income grew 5 per cent to S$1.83 billion.

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For the first half, this meant a net profit of S$2.25 billion, the same as a year ago, while total income grew 6 per cent to S$5.78 billion. Net interest margin was at a six-year high and fee income at a record, it noted.

In a statement, the group said: "Excluding one-time items a year ago, net profit was slightly higher and a record."

Total allowances for the half year rose 69 per cent to S$536 million.

"The strong profit before allowances for the quarter and the half year provided a substantial cushion for absorbing the additional net allowances," DBS added. "While the non-performing loan rate rose to 1.1 per cent, allowance coverage continued to be sound at 113 per cent and at 226 per cent if collateral was considered."

For the first half of 2016, the directors have declared a dividend of 30 Singapore cents per share, payable on or about Oct 6, 2016.

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