DBS third-quarter net profit falls 5% on year, misses forecasts

Singapore's largest bank, DBS Group, reported a 5 percent decline in third-quarter net profit on November 5, falling short of analyst expectations. The company's net profit for the July-to-September quarter was S$2.81 billion, compared to the forecasted S$2.90 billion. DBS attributed the shortfall to weaker trading income and heightened global uncertainty.

The bank's trading income fell 65 percent year-on-year to S$152 million due to unfavorable equity market conditions. Net interest margin, a key indicator of lending profitability, narrowed by 9 basis points to 1.87 percent. Despite these challenges, DBS's wealth management activities continued to contribute to earnings. The bank's wealth management fees grew by 9 percent to S$864 million, while transaction services fees reached a new high and loan-related and card fees also increased.

As a result, net fee income rose by 6 percent to S$1.43 billion. Looking ahead, DBS expects total income to grow in the mid-single-digit range, assuming two more U.S. Federal Reserve rate hikes, a gradual rise in domestic interest rates, and a gradual increase in the Singapore dollar.