Record quarterly earnings

Transcription

1 Record quarterly earnings DBS Group Holdings 2017 financial results May 2, 2017 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.

2 Highlights Earnings at record $1.21 billion Total income rises 1% on year and 4% on quarter to $2.89 billion Net interest income up day-adjusted 3% on quarter from three basis point improvement in net interest margin and 1% constant-currency loan growth Fee income at record $665 million, up 16% on year, as wealth management and transaction service fees reach new highs Cost-income ratio improves one percentage point on year to 43% from productivity gains Net profit including one-time items at $1.25 billion Balance sheet remains sound NPAs decline marginally to $4.83 billion and NPL stable at 1.4% as new NPA formation moderates Specific allowances ease to 26 basis points of loans, allowance coverage at 103% and at 217% with collateral LCR at 138%, NSFR above 100%, final CET 1 at 14.2% 2

3 Earnings up 1% on year to quarterly high 17 YoY % Total income 2,886 1 Expenses 1,248 (1) Profit before allowances 1,638 2 Allowances Net profit 1,210 1 Fee income rises to record, offsetting impact of lower NIM and trading income Expenses decline on sustained productivity gains SP at 26 basis points -0% 2 +16% -15% -1% Impact on earnings: positive negative 1,203 1, Net profit Net interest income Fee income Other income Expenses SP GP Tax and others 17 Net profit 3

4 Earnings up 33% on quarter 17 QoQ % Total income 2,886 4 Expenses 1,248 2 Profit before allowances 1,638 5 Allowances 200 (57) Net profit 1, Total income up 4% on fee income growth Positive jaw contributes to 5% rise in profit before allowances SP moderates from recent quarters Impact on earnings: positive negative % 7 +29% -11% % ,210 4Q16 Net profit Net interest income Fee income Other income Expenses SP GP Tax and others 17 Net profit 4

5 Net interest income up day-adjusted 3% on quarter as NIM improves 3bp 7,100 7, Net interest margin (%) ,833 1,833 1,815 1,824 1, Q 3Q 4Q

6 Loans up 1% on quarter and 7% on year in constant-currency terms (S$bn) QoQ Reported Underlying YoY Reported Underlying CBG % +1% +9% +7% Underlying loans up 1% or $2 billion on quarter, and 7% or $21 billion on year Other IBG Non-trade corporate and consumer loans stable on quarter, up 6% on year Trade Trade loans up 8% on quarter, 15% on year Loans Gross loans 6

7 Ample liquidity with LCR at 138% (S$bn) Loans Other funding Deposits Ratios (%) Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 LDR LCR Other funding comprises senior medium term notes, commercial papers, negotiable certificates of deposit, other debt securities and covered bonds 7

8 Fee income rises to quarterly record, led by wealth management and transaction services 2,350 Others Investment banking 1,850 Cards Loan-related 1,350 Wealth Management 850 Transaction 350 services ,646 2, Q 3Q 4Q 2017 QoQ YoY % +15% Gross fee income 8

9 IBG performance stable 2017 YoY % Total income 1,319 1,311 1 Corporate (3) SME Loans (3) Trade Cash / SFS Treasury (12) Investment banking 16 7 >100 Expenses Profit before allowances Allowances Profit before tax Assets (S$bn) GTS deposits (S$bn) Total income up 1% as growth in cash management offsets decline in treasury customer Expenses and allowances marginally higher Assets rise 7% or $14 billion from loan growth Cash management deposits up 10% or $13 billion SFS is Security and Fiduciary Services 9

10 CBG / Wealth income and earnings rise to new highs 2017 YoY % Total income 1,159 1, Retail Wealth Management Loans and deposits Investment products Cards Others Expenses Profit before allowances Allowances Profit before tax AUM (S$bn) SGD savings (S$bn) Total income up 13% from broadbased growth in investment products, loans and deposits Expenses up 7%; positive jaw contributes to 22% increase in profit before tax Market share gains for Singapore housing loans; SGD savings market share stable 10

11 Treasury customer income stable on year Customer income / total treasury income (%) ,369 2, Customer income 1,229 1,187 Treasury Markets income 1,140 1, QoQ YoY % -19% % 1% % -39% 2Q 3Q 4Q 2017 Treasury customer income is included under IBG/CBG segment income. It is included in this chart for a complete product view 11

12 Cost-income ratio improves 1% point on year from productivity gains Cost / income (%) Staff expenses YoY growth (%) Other expenses ,900 4, (5) (2) (1) 2,651 2,725 1,265 1,285 1,199 1,223 1, ,249 2, Q 3Q 4Q 2017 Underlying headcount 22,037 21,814 21,880 21,689 21,673 12

13 Hong Kong s earnings up 9% on year 17 YoY % Total income Expenses Profit before allowances Allowances 20 (31) Net profit Income growth of 4% from asset growth, wealth management, cards and capital markets Positive jaw as expenses rise 1% Lower SP offsets higher GP +38% -59% Impact on earnings: positive negative +6% % Net profit Net interest income Fee income Other income Minimal currency translation effects for 17 results Expenses SP GP Others 17 Net profit 13

14 New NPAs moderate, NPL ratio stable on quarter at 1.4% Q NPAs at start of period 4,856 4,330 2,792 New NPAs Upgrades, recoveries and translation (307) (66) (205) Write-offs (239) (187) (146) NPAs at end of period 4,833 4,856 3,048 NPL ratio (%) Specific allowance charges

15 Allowance coverage at 103% 3,182 2,947 3,128 3,166 3,494 General allowances Specific allowances 908 1,404 1,212 1,541 1,492 NPA Mar 16 Cumulative general and specific allowances as % of: 134 Jun Sep 16 Dec Mar 17 Unsecured NPA

16 Strong CET-1 and leverage ratios (%) Total Tier 2 Tier Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Common Equity Tier 1 (%) Transitional Fully phased-in RWA (S$bn) Leverage ratio (%)

17 In summary Record quarterly earnings Sustained business momentum and productivity gains enable earnings to be maintained at year-ago quarterly high, offsetting impact of lower net interest margin and a weak trading quarter Healthy business pipeline Asset quality pressures moderate, remaining vigilant Positioned for growth in coming year with strong capital and liquidity, as well as nimble execution across multiple business lines 17

18 Supplementary slides DBS Group Holdings 2017 financial results May 2, 2017 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.

19 Earnings at quarterly high 2017 YoY % 4Q QoQ % Net interest income 1,831 1,833-1,824 - Fee income Trading income (14) 397 (32) Other income (16) 40 >100 Non-interest income 1,055 1, Total income 2,886 2, ,776 4 Staff expenses Other expenses (4) 559 (4) Expenses 1,248 1,265 (1) 1,223 2 Profit before allowances 1,638 1, ,553 5 General allowances Specific allowances (57) Allowances (57) Net profit 1,210 1, One-time items 35 - NM - NM Net profit incl. one-time items 1,245 1,

20 ROE at 11.1% (%) Q Net interest margin Fee income/total income Non-interest income/total income Cost/income ROE Loan/deposit SP/loans (bp) NPL ratio

21 Hong Kong s earnings up 9% on year and double on quarter Constant-currency terms 2017 YoY % YoY % 4Q QoQ QoQ % % Net interest income Non-interest income (1) (2) Total income Expenses (16) (15) Profit before allowances General allowances 12 (23) NM NM - NM NM Specific allowances 8 52 (85) (83) 107 (93) (92) Allowances (31) (31) 107 (81) (81) Net profit >100 >100 Net interest margin (%) Loan growth (%) 3 0 Non-trade growth (%) 1 (2) Trade growth (%) 12 9 Deposit growth (%) 3 (1) 21

22 Regional earnings double on year 2017 YoY % 4Q QoQ % Net interest income Non-interest income Total income Expenses (8) Profit before allowances Allowances (55) 158 (75) Net profit >100 (20) NM Figures for operations outside of Singapore and Hong Kong 22

23 NPL ratio stable on quarter, allowance coverage at 103% NPL ratio (%) NPA Not overdue <90 days overdue >90 days overdue 1.0 3,048 20% 17% 63% 1.1 3,854 29% 13% 58% 1.3 4,330 20% 25% 55% ,856 4,833 15% 12% 14% 20% 71% 68% Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 SP / loans (bp) Cumulative general and specific allowances as % of: NPA Unsecured NPA

24 Specific allowances for loans moderate to 26 bp Add charges for Q New NPLs Existing NPLs Subtract charges for Upgrading Settlements Recoveries Total SP charges for loans SP/loans (bp)

25 AFS duration remains short Mar 17 Dec 16 Government securities 24,893 22,441 Less than 3 years 16,452 14,652 3 to 5 years 3,449 3,432 5 to 10 years 4,723 3,369 More than 10 years Supranational, bank and corporate bonds 14,879 14,897 Equities 1,530 1,568 Total 41,302 38,906 AFS reserves Time-banding is based on maturity date from reporting date 25

26 European AFS exposure mostly in AAA and AA entities Government / Govt-owned Bank / Corporates Total Supranational 606 * France Germany 438 * Netherlands United Kingdom 300 * Total 1, ,492 * Supranational and German entities rated AAA/Aaa by S&P, Moody s and Fitch. UK entities rated AA by S&P, AA1 by Moody s and AA by Fitch 26

27 Deposits little changed on quarter and up 7% on year in constant-currency terms QoQ YoY (S$bn) Mar 17 Reported Underlying Reported Underlying Deposits 342 (5) By product CASA 214 (1) Fixed deposits 125 (5) (2) 8 4 Others By currency Singapore dollar US dollar 109 (3) HK dollar 33 (3) (2) 0 (1) Chinese yuan (2) (1) Others 36 (1) (1) 4 3 LDR (%) Mar 17 Dec 16 Mar 16 Overall Singapore dollar US dollar

28 Wealth Management segment Income QoQ +22% YoY +35% Q16 3Q16 4Q16 17 Quarterly average AUM (S$b) % +16% Total Earning Assets (S$b) % +14% Comprising Treasures, Treasures Private Client and Private Bank Total earning assets and AUMs at end of period 28

29 SME segment Income QoQ +9% YoY +9% Q16 3Q16 4Q16 17 Quarterly average 29

30 Global transaction services Income Cash/ SFS QoQ +6% YoY +9% Trade Q16 3Q16 4Q16 17 Quarterly average Assets (S$b) (a) % +15% Deposits (S$b) % +10% Assets and deposits at end of period (a) Trade assets; includes bank exposures and loans of financial institutions 30

31 Record quarterly earnings DBS Group Holdings 2017 financial results May 2, 2017 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.