Wealth management income rose 16% year-on-year to $3.08bn ($2.2bn), supported by fee income growth of 13%, while AUM increased 11% to S$245bn, according to DBS Group, which announced its full 2019 results yesterday.
For the full year, profit before tax in the combined consumer banking and wealth management divisions rose 16% to S$2.78bn, and income grew 11% to S$6.3bn. Non-interest income rose 10% to S$2.26bn from higher fees from investment, bancassurance and cards, compared with expenses which rose 8% to S$3.28bn due to continued investment in business capabilities, according to a performance summary released by the bank.
Late last year, DBS launched an app that allows its Hong Kong customers to set up a “fully virtual” savings and wealth management account. Earlier, it also made a hybrid robo-advisor product available to novice investors in Singapore
However, the financial results for the fourth quarter were relatively less robust than for the year as whole.
Compared with the previous quarter, profit before tax fell 21% as total income declined 7%. Net interest income fell 3% from lower net interest margin, while non-interest income decreased 13% primarily from lower sales of investment and bancassurance products, according to the summary.
However, the wealth management division remains “optimistic about Asia and the underlying themes powering its potential,” a Sim S. Lim, group head of wealth management and consumer banking told FSA.
“With [the region] facing an unprecedented inter-generational wealth transfer, themes such as succession planning and sustainability are increasingly becoming of interest to clients, and expected to persist into the coming decade and beyond,” he added.
Nevertheless, “in the near-term, the 2019 novel coronavirus remains a key concern, considering the likely negative impact from the loss of tourism receipts, and the consumption and manufacturing standstill in the first quarter of this year,” said Lim.
“Moreover, as we move into a world of slower growth and low interest rates, it is ever more imperative that we adapt our strategy to navigate key risks and opportunities.”
DBS WM maintains what its calls a “barbell strategy to build portfolio resilience”, which is a two-pronged approach composed of income-generating assets, and stocks that benefit from long-term secular growth trends, such as companies that are capitalising on the digital economy and ageing populations.
Overall, Singapore’s largest banking group posted a 14% increase in net profits for the year of S$6.39bn, spurred by a 10% rise in total income to S$14.5bn, notably comprising a pick up in trading income and investment banking fees as well as higher wealth management fees. Return on equity improved from 12.1% to a record 13.2%.
DBS Group: full year consumer business and wealth management income and earnings
Source: DBS Group