DBS third-quarter net profit falls 5% on year, misses forecasts

DBS third-quarter net profit falls 5% on year, misses forecasts The bank on Thursday appointed independent board director Anthony Lim as chairman from Jan 1, 2027, succeeding Peter Seah, who will step down after 16 years in the role. SINGAPORE: DBS Group, Singapore's biggest bank, warned on Thursday (Nov 5) of growing global uncertainty due to elevated energy prices, higher interest rates and geopolitical risks as market volatility pushed its earnings lower. The bank also announced on Thursday that independent director Anthony Lim would take over as chairman on Jan 1, 2027, succeeding Mr Peter Seah, who will retire after 16 years in the role. DBS, which is also Southeast Asia's biggest lender by assets, said July-September net profit fell 5 per cent to S$2.81 billion (US$2.20 billion) from a year earlier, mainly on a decline in markets trading income. The result undershot the mean estimate of S$2.90 billion from four analysts, according to LSEG data, even though its wealth management division posted a strong performance. In a media release announcing the leadership renewal, DBS said Mr Seah will retire on Dec 31 and be appointed senior advisor for a year. "As Chairman since 2010, Seah provided steadfast leadership and strategic oversight as DBS pursued a strategy of digital transformation and growth in high-return businesses," said DBS. "Over this period, DBS delivered significant growth and transformation," it added, noting that since 2010, DBS Group's income has more than tripled while net profit has increased more than fourfold. DBS said its market capitalisation crossed S$200 billion in July 2026, making it Singapore's largest listed company by a significant margin. Its market capitalisation was also approximately six times its size at the end of 2009, the bank added. Mr Lim, meanwhile, has served on the boards of DBS Group Holdings and DBS Bank since April 2020. Over the past six years, he has developed a deep understanding of DBS' culture and strategy through his involvement in the Board Executive Committee, Board Risk Management Committee and Compensation and Management Development Committee, said DBS. "UNFAVOURABLE EQUITY MARKET CONDITIONS" The group's markets trading income sank 65 per cent year-on-year to S$152 million for the quarter, which DBS attributed to "unfavourable equity market conditions". The bank's net interest margin, a key profitability gauge, fell 9 basis points year-on-year to 1.87 per cent. The decline underscores how surging global bond yields, a rout in high-flying technology stocks last quarter and the ongoing Middle East conflict are beginning to bite into Singapore lenders' earnings after strong wealth management momentum cushioned their bottom lines in the first half. DBS's result was announced a day after its smaller peer UOB posted a fall in its trading and investment income and flagged further margin pressures ahead. "While the global economy has remained resilient, the outlook has become more uncertain," DBS CEO Tan Su Shan said in a statement. "As we enter 2027, we will stay nimble to capture opportunities while prudently managing risks." Asia's ongoing wealth boom continued to bolster the earnings of Singapore's largest lender. For the quarter, wealth management fees rose 9 per cent from a high base a year ago to S$864 million, supported by growth in assets under management. Transaction services fees recorded a new high, while loan-related and card fees similarly increased, taking its net fee income up an annual 6 per cent to S$1.43 billion. For its 2027 outlook, DBS said it expects total income to rise in the mid-single-digit range, assuming two more US Federal Reserve rate hikes by the end of next year, alongside a gradual rise in domestic interest rates and the Singapore dollar. The "structural growth" in wealth management is also expected to continue, the bank said.