DBS' mortgage sales surge to new high, market share rises

DBS Group Holdings is selling more home loans despite a sluggish property market with new mortgage bookings at S$3 billion in Q2, said chief executive Piyush Gupta.

The S$3 billion of new bookings was a "quarterly record", of which S$1 billion came from refinancing sales, said Mr Gupta on Monday at the bank's Q2 results.

This brings the bank's first half 2015 new mortgage sales to S$5.2 billion.

Elaborating on the bank's success in home loans amid a slowdown in the property market, he said DBS' strength came from its huge deposits.

DBS, the largest bank in South-east Asia, has customer deposits of S$306 billion, down 6 per cent from the previous quarter as surplus deposits were "managed out".

DBS' "biggest advantage" is in refinancing because "we can do three-year fixed rate loans" and at competitive rates, he said. Another avenue is from HDB home loan sales through its POSB franchise, he said.

DBS' mortgage market share as at May 15 has risen to 25.3 per cent, its highest since 2010. It was 24.56 per cent in Q1.

Total housing loans rose to S$54.6 billion at June 30, 2015, up from S$53.9 billion at March 31, 2015, and S$50.8 billion a year ago.

Total gross customer loans rose 9 per cent to S$284 billion from a year ago. Growth in regional corporate and Singapore housing loans was partially offset by a fall in trade loans. Trade loans rose S$2 billion during the quarter but they had fallen S$9 billion in Q1.

Mr Gupta said he expects the trade book to be flat for the year on slower China growth.

Compared to the previous quarter, loans rose one per cent in constant currency terms as trade and Singapore housing loans grew.

Mr Gupta said he expects full year loans growth to come in at 5 per cent.

On DBS' bancassurance business, he said it grew the annual premium in the first half by 32 per cent year-on-year. DBS' bancassurance market share is 35 per cent, making it number one in bancassurance sales.

DBS signed a Manulife bancassurance partnership in April and expects insurance sales to reach half a billion dollars in a few years, said Mr Gupta then.

This year the bank expects to sell S$250 million of bancassurance and it will also get S$106 million from Manulife. DBS gets a total of S$1.6 billion from the 15-year tie-up with Manulife.

Insurance penetration in Singapore is low at 4 per cent while it is 12 per cent in a country with similar per capita, he said in April.

DBS posted Q2 net profit of S$1.12 billion, up 15 per cent.