Singapore's DBS Reverses COVID Woes with Record Q1 Profit

Southeast Asia's largest lender, DBS Group Holdings, reported a 72% surge in net profit for the three months ending in March, keenly eyeing a strong recovery in 2021 after a tough year last year due to the COVID-19 pandemic, Nikkei Asia reported. The bank booked a record net profit of 2 billion Singapore dollars ($1.51 billion) for the period, compared with SG$1.17 billion the year before, marking a shift toward performance levels seen before the new coronavirus outbreak overshadowed most of 2020. The Monetary Authority of Singapore said the city-state's gross domestic product growth could exceed 6% in 2021, at the upper end of official projections, if the global economic recovery does not suffer a setback. As the COVID health crisis dragged on last year, DBS stepped up loan loss provisions, anticipating that customers might have difficulty paying their debts given the poor economic conditions. But with prospects looking up this year, the lender set aside allowances of SG$10 million in the first quarter, down from the SG$577 million in the previous three months. Its nonperforming loan ratio also declined from 1.6 in the final quarter of last year to 1.5 during the January to March period. However, the persistent low interest rates environment has been a drag for the bank, with the net interest income, or the income earned from providing loans minus interest paid to depositors, declining 15% on the year to SG$2.11 billion in the first quarter. Read more.