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2021 Was One Of The Best Years For Singapore’s DBS Bank, Says CEO

2021 Was One Of The Best Years For Singapore’s DBS Bank, Says CEO
DBS Group, Singapore's largest lender, recorded a record full-year profit in 2021, and CEO Piyush Gupta told CNBC that it was "one of the best years" he'd ever seen.
“That has been a solid year, perhaps one of the best years I’ve seen in a long time. And that includes a very robust growth in the balance sheet,” Gupta told CNBC’s “Capital Connection” after the earnings numbers were out.
On Monday, the bank announced that its full-year net profit for 2021 increased by 44 per cent year on year to a new high of 6.8 billion Singapore dollars ($5.04 billion).
The company's fourth-quarter net profit increased by 37 per cent year over year to SG$1.39 billion ($1.03 billion). However, this fell short of a Reuters poll's average prediction of SG$1.47 billion.
Gupta also emphasized the growth of loans of the bank, which increased by 9 per cent year over year, was the fastest since 2014, according to the bank.
“We had outstanding deposit growth,” he said, adding there’s been a SG$140 billion surge in the bank’s current account savings account base in the last two years.
This pushed the bank's current account and savings account (CASA) ratio to a new high of 76 per cent of total deposits. A bank's profitability is measured by this indicator.
“Now, as you can imagine, that portends really well for a rising interest rate environment,” he said.
DBS also reported a decline in its net interest margin for the year by 17 basis points to 1.45 per cent. This is a measure of lending profitability.
According to DBS, the annualized dividend, which will be approved at the annual general meeting in March, would increase by 9 per cent to SG$1.44 per share.
Following the earnings report, DBS stock rose 0.27 per cent.
Rate hikes are expected this year, which might mean bigger dividends for shareholders, according to Piyush.
“Of course, as rates go up, you know, we are already extremely well-capitalized. And if you wind up creating even more capital through the better bottom line and income growth, then there is a real likelihood that we will be able to reflect that in better payouts to our shareholders,” he said.
OCBC and UOB, Singapore's two other big banks, are expected to publish fourth-quarter earnings later in February.

Christopher J. Mitchell

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