DBS posted lower profits in the fourth quarter of 2020 due to higher allowances set aside for potential bad loans.
Net profit fell 33 percent year-on-year to S$1.01 billion due to a lower net interest margin and high total allowances set aside, according to a statement from DBS.
The bank’s earnings were in line with the average estimate of S$1.02 billion, according to Refinitiv’s compilation of four analyst forecasts.
For the full year of 2020, DBS posted a net profit of S$4.72 billion, 26 percent below the record performance of 2019 as total allowances more than quadrupled to S$3.07 billion due to risks from the pandemic. Total income was stable at S$14.6 billion.
According to the bank’s CEO Piyush Gupta, its pipeline for loans and fee income is healthy and it has also been actively positioning itself for growth.
We have been proactive through the crisis and enter the year with new growth platforms, Gupta said.
Lakshmi Vilas Bank in India and the securities joint venture in China will enhance our presence in both key markets. Initiatives such as the Digital Exchange, supply chain digitalization, and efforts to broaden wealth management to the mass market will reinforce our leadership in digital finance. These platforms will strengthen our ability to continue supporting customers and delivering shareholder returns.
