DBS full-year profit up 15%

DBS Group Holdings reported net profit of S$3.04b for 2011.

The results report said:

Net interest income rose 12% to a record SGD 4.83 billion. Loans increased 28% or SGD 43 billion to SGD 195 billion. The increase was led by corporate loans across the region, with trade finance accounting for half of the growth. Net interest margins fell seven basis points to 1.77% as interest rates remained soft in Singapore and deposit costs were higher in Hong Kong.

Non-interest income grew 2% to SGD 2.81 billion as higher customer-driven income was offset by a decline in stockbroking commissions and lower trading gains. Fee income rose 10% to a record SGD 1.54 billion from improvements in a wide range of activities, led by wealth management and trade and remittances in line with efforts to develop these businesses.

Income from cross-selling treasury products rose 20% to SGD 822 million, accounting for 42% of total treasury income compared to 36% in 2010. Gains from the sale of investment securities increased 46% to SGD 454 million; the available-for-sale investment portfolio had unrealised marked-to-market gains of SGD 411 million at end-2011, compared to SGD 387 million at end-2010.

Total income rose 8% to SGD 7.63 billion. Expenses grew 13% to SGD 3.30 billion as headcount and infrastructure investments were made to support higher business volumes and future growth. The cost-income ratio was healthy at 43%. Profit before allowances rose 5% to a record SGD 4.33 billion.

Asset quality improved with the non-performing loan rate falling to 1.3% from 1.9% at end-2010. General allowances more than doubled to SGD 478 million, reflecting a more prudent provisioning policy. Together with specific allowances of SGD 244 million, which were one-third the charge taken in 2010, allowance coverage was at 126% or at 165% if collateral was included.

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