DBS Group achieved a record profit before tax of SGD 3.48 billion ($2.67 billion) in the third quarter of 2025, up 1% from a year ago, as total income reached a new high of SGD 5.93 billion ($4.55 billion). Group net interest income was little changed as strong deposit momentum was sustained, and proactive hedging mitigated the impact of lower rates. Fee income and treasury customer sales reached new highs led by wealth management, while markets trading income increased due to lower funding costs and a more conducive trading environment. The cost-income ratio was 40%. Net profit of SGD 2.95 billion ($2.27 billion) was 2% lower due to the impact of the global minimum tax. Return on equity was 17.1% and return on tangible equity was 18.9%. Compared to the previous quarter, total income and net profit grew 3% and 5%, respectively.

For the nine months, total income and profit before tax rose 5% and 3% to new highs of SGD 17.6 billion ($13.5 billion) and SGD 10.3 billion ($7.9 billion), respectively. Net profit was 1% lower due to higher tax expenses.

Asset quality remained resilient, with the NPL ratio unchanged at 1.0% and specific allowances at 15 basis points of loans for the third quarter and 13 basis points for the nine months.

Third quarter 2025 vs. third quarter 2024

Group net interest income of SGD 3.58 billion ($2.75 billion) was little changed as the impact of lower SORA and HIBOR was offset by balance-sheet hedging and strong deposit growth. Group net interest margin declined 15 basis points to 1.96%. Commercial book interest income of SGD 3.56 billion ($2.73 billion) was 6% lower as commercial book net interest margin declined 43 basis points to 2.40%.

Loans expanded SGD 17 billion ($13.0 billion) or 4% in constant-currency terms to SGD 437 billion ($335.5 billion), led by broad-based growth in non-trade corporate loans. Deposits grew SGD 50 billion ($38.4 billion) or 9% in constant-currency terms to SGD 596 billion ($457.8 billion) from both CASA and fixed deposits. Surplus deposits were deployed into liquid assets, which was accretive to net interest income and return on equity but modestly reduced net interest margin.

Commercial book net fee income grew 22% to a record SGD 1.36 billion ($1.04 billion). The increase was broad-based and led by wealth-management fees, which rose 31% to SGD 796 million ($611 million) from growth in investment products and bancassurance. Loan-related fees grew 25% to SGD 183 million ($141 million) due to increased deal activity. Transaction services rose 9% to SGD 248 million ($190 million) while investment-banking fees were up 65% from increased debt and equity capital-market activity.

Commercial book other non-interest income of SGD 578 million ($444 million) rose 12% from the previous year as treasury-customer sales to wealth-management and corporate customers grew 21% to a new high.

Markets-trading income rose 33% to SGD 439 million ($337 million) due mainly to higher equity-derivative activity.

Expenses rose 6% to SGD 2.39 billion ($1.84 billion) led by higher staff costs as bonus accruals grew in tandem with stronger performance. The cost-income ratio was 40%. Profit before allowances was 1% higher at SGD 3.54 billion ($2.72 billion).

Third quarter 2025 vs. second quarter 2025

Group net interest income fell 2% as net-interest margin declined 9 basis points from lower SORA. Commercial book net interest income also declined 2%.

Loans were little changed in constant-currency terms, as increases in trade and wealth-management loans were partially offset by a decline in non-trade corporate loans due to higher repayments. Deposits grew 3% or SGD 19 billion ($14.6 billion) led by strong CASA inflows.

Commercial book net-fee income rose 16%, led by a 23% increase in wealth management. Commercial book other non-interest income grew 11% from record treasury-customer sales.

Markets-trading income grew 5% due mainly to higher equity-derivative activity.

Expenses rose 5% as staff costs increased from higher bonus accruals. The cost-income ratio was stable. Profit before allowances grew 2%.

Nine months 2025 vs. nine months 2024

Group net-interest income rose 2% to SGD 10.9 billion ($8.36 billion) despite a 9-basis-point compression in net-interest margin to 2.04%. The impact of lower interest rates was more than offset by balance-sheet hedging and strong deposit growth. Commercial book net-interest income declined 3% to SGD 10.9 billion ($8.36 billion) due to a 27-basis-point compression in commercial-book net-interest margin. Over the nine months, deposits grew 9% or SGD 48 billion ($36.9 billion) in constant-currency terms while loans rose 3% or SGD 14 billion ($10.8 billion).

Commercial book net-fee income increased 19% to a record SGD 3.80 billion ($2.92 billion) led by new highs in wealth management and loan-related fees.

Commercial book other non-interest income of SGD 1.65 billion ($1.27 billion) rose 2% compared to the previous year, which included non-recurring items. Treasury-customer sales to wealth and corporate customers grew 14% to a new high.

Markets-trading income of SGD 1.22 billion ($0.94 billion) rose 60% and was the second highest on record, due mainly to higher interest-rate and equity-derivative activities.

Expenses grew 6% to SGD 6.88 billion ($5.28 billion) due to higher staff costs from salary increments and bonus accruals. The cost-income ratio was stable at 39%, and profit before allowances rose 4% to a new high of SGD 10.7 billion ($8.20 billion).

Balance sheet

Asset quality was resilient. Non-performing assets declined 1% from the previous quarter to SGD 4.63 billion ($3.56 billion) as repayments and write-offs more than offset new non-performing-asset formation. The NPL ratio was stable at 1.0%. Specific allowances were SGD 169 million ($130 million) or 15 basis points of loans for the third quarter, bringing the nine months to SGD 439 million ($337 million) or 13 basis points. Allowance coverage was 139% and 229% after considering collateral.

Liquidity remained ample. The liquidity coverage ratio of 149% and the net stable funding ratio of 114% were both well above the regulatory requirement of 100%.

Capital remained healthy. The reported Common Equity Tier-1 ratio was 16.9% based on transitional arrangements, while the pro forma ratio on a fully phased-in basis was 15.1%. The leverage ratio was 6.2%, more than twice the regulatory minimum of 3%.

The board declared a total dividend of SGD 0.75 ($0.58) per share for the third quarter, comprising an ordinary dividend of SGD 0.60 ($0.46) per share and a Capital Return dividend of SGD 0.15 ($0.12) per share. This brings the total dividend for the nine months to SGD 2.25 ($1.73) per share, comprising ordinary dividends of SGD 1.80 ($1.38) per share and Capital Return dividends of SGD 0.45 ($0.35) per share.

DBS CEO Tan Su Shan said, “We delivered a strong set of results for the third quarter with record pre-tax profit and ROE above 17%. Total income reached a new high as we sustained the strong momentum in wealth management and deposit growth while mitigating external-rate pressures through proactive balance-sheet hedging. As we enter the coming year, we will continue to navigate the pressures of declining interest rates with nimble balance-sheet management and our ability to capture structural opportunities across wealth management and institutional banking.”

Redisseminated by The Asian Banker