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DBS’s record profit boosted by wealth management fees

The bank said it was restoring “a trend of consecutively higher earnings” as the effects of the pandemic ease.
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The Singaporean bank’s full year net profit for 2021 was up 44% from 2020 to S$6.8bn ($5bn), according to a media statement.

“The robust growth in our loan book, along with the solid 15% growth in fee income, speak to a recovering economic environment as well as our broadly diversified franchise,” said the bank’s CEO Piyush Gupta.

The growth in fee income was supported by improved economic and market conditions, said the bank, especially in the wealth management business.

Boosted by higher sales of investment products and bancassurance, wealth management fees reached a record of S$1.79bn in 2021, accounting for a 19% increase year-over-year.

But when segregating by business segments, DBS’s consumer banking business lagged other operations.

The full-year consumer banking and wealth management income declined 8% to S$5.32bn, while profit before tax fell 5% to S$1.92bn.

Net interest income fell 24% to S$2.55bn as higher deposit and loan volumes were offset by a lower net interest margin, while expenses increased 2% to S$3.35bn, said the bank.

In 2021, the total income fell 2% to S$14.3bn as strong business momentum mitigated the full-period impact of interest rate cuts in March 2020 and exceptional investment gains the previous year.

Quarter four

In the same statement, the bank also announced that its fourth quarter net profit increased 37% year-over-year to S$1.39bn.

Yet, the net profit fell 18% quarter-over-quarter due to seasonally lower non-interest income and a smaller general allowance write-back.

Non-interest income in the fourth quarter plummeted 21% compared with the previous quarter from seasonally lower fee income and fewer trading activities, explained the bank.

Last November, the bank experienced a two-day service outage on its digital banking services, and was recently ordered by the Monetary Authority of Singapore to set aside S$930m in regulatory capital to guard against operational risks.

Part of the Mark Allen Group.