Singapore based DSB Group Holding Ltd delivered record profits in 2018 and according to the company’s forecasts for 2019; it believes that loans will grow at a steady pace. The latest announcement would definitely come as a huge boost for investors. In 2018, DSB earned a record annual profit, and in the fourth quarter alone, the company delivered an 8% in the profits. However, 2019 is going to be a challenging year for banks in one of Asia’s biggest financial hubs due to the current trade war that is raging between the United States and China.
The financial sector in the country has recorded excellent loan growth over the past few years, but the current trade climate is going to test most companies. In such a situation, the forecast from Singapore’s biggest lender about steady growth in the loan is definitely something to cheer about. According to date published by the Singapore authorities on Monday, the country recorded a 10.1% decline in exports in 2019 alone and needless to say, it will have a big say in loan growth in the manufacturing sector.
In 2018 alone, the loans increased by as much as 6% and stood at S$ 345 billion and in the final quarter of the years, DSB recorded net profits of S$ 1.32 billion. Annual profits rose by 28% as the bank returned a net annual profit of S$ 5.63 billion. The fourth quarter results of DSB Group is definitely a sign that the wider financial industry in Singapore could well be in much better health to combat the threat of the US-China trade tensions. It was pointed out by an analyst at Jeffries as well. The analyst said, “We believe the result reads well for peers, for which street expectations are a lot lower.” DSB’s smaller rivals in the industry, United Overseas Bank and Overseas Chinese Bank Corp are also going to release their quarterly results this week.
One of the most important things to point out regarding DSB’s robust health is that the bank clocked a return of equity of 12.1% at a time when interest rates are at record lows. The last time DSB recorded such numbers was way back in 2007 when interests were much higher. This was pointed out by the CEO of DSB Group Piyush Gupta as well. Following the release of the results and the forecasts, DSB shares rose by 1.7%, while the rest of the market recorded an upswing of only 0.9%.
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