3 things that offset DBS' flat NIMs

It managed to stay at 1.74% due to softer HIBOR.

The softer Hong Kong Interbank Offer Rates led to DBS' flat net interest margin growth to linger at a flat 1.74% QoQ in the past quarter.

However, Maybank Kim Eng analyst Ng Li Hiang noted a few positives that offset this underwhelming NIM growth.

Firstly, DBS' loans managed to grow 5% in constant currency terms. Additionally, its cost-income ratio was maintained at 43% from strategic cost management and improved productivity from digitalisation efforts.

Lastly, the analyst cited that the group's fully-loaded remains the strongest among peers at 14%.

"For FY17, management guided mid-single digit loan growth, NIM of 1.75- 1.76% on average, and cost-income ratio of 43%. Management expects specific provisions to be around $1.1b mainly from exposures to the O&G support services sector," the analyst said.

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