DBS breaking records in 2014
MAYUKO TANI, Nikkei staff writer
SINGAPORE -- As its half-year earnings crossed the 2 billion Singapore dollar mark ($1.6 billion) for the first time, DBS Group Holdings has seen net profit for the second quarter ending in June rise 9% year on year to S$969 million. The result was supported by strong growth in the bank's loans and improved lending margins in the past year.
The DBS loan book was up 2% on the first quarter and 10% on a year ago, DBS said on Friday. Growth came from loans to consumers and non-trade corporate while trade loans declined and the bank opted to not take on some higher risk deals.
The net interest margin -- or the profitability of the loan interest -- for the quarter was stable at 1.67%.
Despite widespread concern over mortgages as Singapore's real estate market cools, DBS reduced nonperforming loans by 12% in the quarter. By contrast, United Overseas Bank announced on Thursday that its nonperforming loans were up 11.2%.
DBS Chief Executive Officer Piyush Gupta said on Friday that the majority of the bank's mortgage customers are not property "investors" but owner-occupiers who are considered more conservative.
Gupta said the second half outlook is positive, noting early signs of a pick-up in China, a growth engine for DBS. Greater China, including Hong Kong, accounts for 36% of the bank's lending.