DBS Group Holdings Ltd.'s (D05.SG) second-quarter net profit rose 8% from a year earlier on a rise in net interest income and loans, helping Southeast Asia's biggest bank beat expectations.
Net profit in the three months ended June 30 rose to 1.14 billion Singapore dollars (US$838.81 million) from S$1.05 billion a year earlier, it said in a filing to the stock exchange on Friday.
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According to consensus estimate on FactSet, the bank was expected to post a net profit of S$1.12 billion.
DBS said net interest income rose 3% to S$1.89 billion, while fees and commission income was 1% higher at S$636 million. Other non-interest income, however, fell 13% to S$400 million, taking total income to S$2.92 billion, little changed from a year earlier.
Net interest margin fell to 1.74% in the second quarter from 1.87% a year earlier, while the ratio of bad loans rose to 1.5% of total loans from 1.1% a year earlier, DBS said.
Customer loans grew 6% from a year earlier to S$302.97 billion, DBS said. The bank said its allowances for credit and other losses fell 17% from a year earlier to S$304 million.
"For the second quarter, continued business momentum was offset by lower net interest margin, trading income and gains on investment securities," the bank said.
DBS Chief Executive Piyush Gupta said the bank continues to face asset-quality pressures and the "risk of heightened credit costs in the oil and gas support services sector will persist with low oil prices."
Write to Saurabh Chaturvedi at firstname.lastname@example.org
(END) Dow Jones Newswires
August 03, 2017 21:00 ET (01:00 GMT)