SINGAPORE: DBS Group expects to report higher profit before allowances next year after Southeast Asia's largest bank beat estimates with a 31% rise in third quarter net profit, aided by growth in fee income and improving asset quality.
Friday's result rounded out a robust quarter for Singapore banks such as OCBC and United Overseas Bank, just as global lenders are rebounding in markets hit by the COVID-19 pandemic and amid improved economic activity.
The performance of Singapore banks is being powered by a strong showing in their wealth management businesses, while they are also set to benefit from interest rates ticking up from record lows. "Our pipeline as we go forward into next year reflects that the momentum should continue," DBS CEO Piyush Gupta told reporters, adding that the bank is likely to post 6-7% loan growth next year versus 4-5% in a normal pre-pandemic year.
"We were originally planning not to do salary hikes this year but the market situation and conditions compelled us to take salary actions in the middle of the year," Gupta said, highlighting higher costs."As the revenue drivers further strengthen and if credit cost stays below normal, the group looks poised to deliver steady growth next year," Krishna Guha, an analyst at Jefferies," said in a report.
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