2Q 2025 Interim Financial Results Media Briefing

Welcome to DBS's second-quarter 2025 financial results briefing.

Good morning.

Highlights. We delivered a strong set of results this quarter despite a challenging environment. Uncertainty around US trade policy weighed on customer sentiment, interest rates in Singapore and Hong Kong fell sharply, while currency fluctuations led to adverse translation effects. Amid these headwinds, pre-tax profit rose 5% from a year ago to $3.39 billion. Net profit was 1% higher at $2.82 billion, even with the impact of the global minimum tax.

Total income grew 5% to $5.73 billion. The growth was broad-based. Net interest income was higher, supported by strong deposit growth and proactive balance sheet hedging. Fee income and treasury customer sales reached their second highest levels while markets trading income more than doubled to a 13-quarter high.

For the first half, pre-tax profit rose 3% to a record $6.83 billion. Net profit was little changed despite higher tax expenses. Return on equity was 17.0% and return on tangible equity was 18.8%. Total income rose 5% to a new high of $11.6 billion with growth across both the commercial book and markets trading. The cost-income ratio was stable at 39%.

Asset quality was resilient. The NPL ratio improved during the quarter from 1.1% to 1.0%. Specific allowances were 15 basis points of loans for the quarter and 12 basis points for the half. Allowance coverage was 137% and 236% after considering collateral.

Capital remained strong. The CET1 ratio was 17.0% on a transitional basis and 15.1% on a fully phased-in basis. The Board declared a total dividend of $0.75 per share for the second quarter, comprising a 60-cent ordinary dividend and a 15-cent Capital Return dividend.

Second-quarter year-on-year. Compared to a year ago, second quarter net profit rose 1% to $2.82 billion. Within the commercial book, a 4% or $144 million decline in net interest income from sharply lower rates was offset by higher non-interest income. Fee income rose 11% or $119 million led by wealth management, while treasury customer sales and other income increased 9% or $44 million.

Markets trading income was significantly higher, rising $231 million to $418 million as funding costs fell and trading opportunities were captured. Together with stable commercial book income, total income rose 5%.

Expenses increased 5% or $98 million to $2.27 billion led by staff costs.

Total allowances fell 10% to $133 million. Specific allowances remain low at $150 million or 15 basis points of loans, while $17 million of general allowances were written back this quarter compared to a charge a year ago.

Second-quarter quarter-on-quarter. Compared to the previous quarter, net profit was 3% lower.

Total income declined 3%, with commercial book contribution moderating from a record first quarter, partially offset by stronger markets trading income.

Commercial book net interest income fell 3% or $94 million as the impact of sharply lower interest rates were mitigated by proactive hedging and strong deposit growth.

Fee income declined 8% or $108 million, largely due to lower wealth management and loan-related fees compared to record first-quarter performances. Treasury customer sales and other income were also softer, down 5% or $26 million.

Markets trading income rose 15% or $55 million on lower funding costs. And more conducive trading conditions.

Expenses rose 3% or $56 million, driven by higher non-staff costs.

Total allowances fell $192 million, reflecting a general allowance writeback this quarter, compared to the $205 million set aside last quarter to prudently strengthen reserves.

First-half performance. For the first half, net profit fell 1% to $5.72 billion due to higher tax expenses. Profit before tax rose 3% to a new high of $6.83 billion.

Total income grew 5% to record $11.6 billion.