DBS Group (DBSDF) (SG:D05) reported a third-quarter net profit of S$2.63 billion ($1.94 billion), which increased by 18% on a year-over-year basis. The company’s performance benefited from higher interest rates and non-interest income growth. DBS is a Singapore-based banking and financial services provider.
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The bank’s net interest margin (NIM), a key profitability measure, expanded by 52 basis points from the prior-year quarter. Further, commercial book net interest income (NII) rose 23% from the year-ago period.
Meanwhile, fee income rose 9% from the previous year to S$843 million. Card fees climbed 21% year-over-year due to a rise in spending, whereas wealth management fees rose 22%. Also, DBS recorded a 12% jump in loan-related fees to S$137 million. On the other hand, investment banking fees declined by 16% on slower capital market activities.
2024 Outlook
Going forward, the bank anticipates 2024 net profit to remain stable year-over-year due to uncertainty about the macro environment and geopolitical concerns. Further, DBS expects NII to remain around the 2023 level. Elevated interest rates might support NIM, but this is expected to be partially offset by sluggish loan growth.
Additionally, the bank has guided fee income growth in 2024, driven by a recovery in wealth management and investment banking, and card fee growth.
Is DBS a Good Buy Now?
On TipRanks, the stock’s average analyst price target of $25.89 implies an upside potential of 2.5% from the current level. Overall, DBS stock has a Hold consensus rating based on three Buy, two Hold, and two Sell ratings assigned in the past three months.
