By Kimberley Kao
DBS Group Holdings is scheduled to report full-year results on Wednesday. Here is what you need to know:
NET PROFIT FORECAST: The Singapore lender’s 2023 net profit likely rose 25% to 10.25 billion Singapore dollars (US$7.61 billion), according to the median estimate of analysts surveyed by FactSet. Through the first nine months of the year, net profit was S$7.89 billion.
REVENUE FORECAST: Total revenue for the year is expected to haven risen 22% to S$20.11 billion, according to FactSet. For the first nine months of 2023, total revenue was S$15.17 billion.
The stock rose 0.8% during the fourth quarter and closed at S$31.65 on Tuesday.
WHAT TO WATCH:
–In November, DBS Chief Executive Piyush Gupta said lower loan growth offset the increase in net interest income in the third quarter. CGS-CIMB analysts said in a note that loan growth will likely slow to 0.5% in the fourth quarter from 1.0% in the third quarter. Glenn Thum, senior research analyst at Phillip Securities Research, said the net interest margin and loan growth figures will be key indicators of whether loan growth recovery is likely in 2024.
–DBS has historically declared a special dividend of S$0.50, a move Citigroup expects to be repeated for the fourth quarter. Its base case is for a S$0.50 special dividend plus an ordinary dividend of S$0.54.
–The Monetary Authority of Singapore in November imposed a six-month review of the bank, including a pause on merger-and-acquisition activity, after repeated outages to its digital-banking services. That will likely “lower the probability of a meaningful excess capital distribution,” Citi said in a note.
Write to Kimberley Kao at [email protected]
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