DBS Shares Hit Record S$50 After Q2 Profit Beat, Dividend Raise

DBS Group, Southeast Asia's largest bank by assets, reported a 1% year-on-year rise in second-quarter net profit to S$2.82 billion, surpassing market expectations and driving its shares to record highs above the S$50 mark. Despite a decline in net interest margin due to US Federal Reserve rate cuts and lower regional benchmark rates, the bank's net interest income is expected to be slightly higher in 2025, supported by strong deposit growth and effective balance sheet hedging. CEO Tan Su Shan highlighted volume growth, particularly in deposits, as a key factor mitigating the impact of falling interest rates, while also emphasizing the need for nimble management of interest rate swaps and forex hedging amid external uncertainties. DBS also increased its dividend payout, with a total of S$0.75 per share for Q2, including an 11% rise in ordinary dividends and a capital return dividend, reflecting confidence despite global challenges such as the US-China trade tensions. The bank's broad-based income growth was supported by wealth management fees and market trading performance, positioning it well to navigate the interest rate cycle and support customers. Overall, DBS reaffirmed its 2025 outlook, expecting net interest income to slightly exceed 2024 levels but forecasting full-year net profit to be lower due to the global minimum tax.