DBS Group Third-Quarter Profit Slips But Shares Hit Record High

By Megan Cheah

DBS Group's shares hit a record intraday high after better-than-expected third quarter earnings, even though the bank expects to face headwinds next year.

The bank's chief executive Tan Su Shan said its net profit next year is expected to weaken slightly, weighed by lower group net interest income, which make up a large chunk of DBS's earnings.

Net interest income is likely to slip in 2026 based on expectations that Singapore's benchmark interest rate would stay around current levels and a strengthening Singapore dollar, she said. That view is also based on expectations that the U.S. Federal Reserve would cut rates three times next year.

While Singapore's largest lender by assets could face significant interest-rate and foreign-exchange headwinds, it aims to offset this with volume and fee growth, Tan said at a media briefing on Thursday.

"We're comfortable, but we're not complacent. We're still watching constantly, stress testing on different exposures," she said.

Her comments came after Singapore's largest lender by assets reported third-quarter net profit of 2.95 billion Singapore dollars, equivalent to US$2.26 billion. The result beat market expectations even though it was 2.0% lower compared with the same period a year earlier.

The bank's total income hit a new high mainly thanks to strong momentum in its wealth management business and deposit growth but its bottom line was weighed by the impact of the global minimum tax, which is an international tax reform imposed on large multinational corporations.

"If macro conditions stay resilient, we could actually also have some room for [general provisions] write-backs," she said.

Analysts said DBS is likely to deliver on its guidance next year and its shares remain attractive due to their dividend yield, with payouts expected to rise next year.

DBS's plans for a S$3 billion share buyback appears to be going smoothly. The bank has bought back around 8.7 million shares to date, said CGS International's Tay Wee Kuang, and should have ample funds to continue doing so over 2025 to 2027, which should support its share price.

DBS shares gained around 3.8% and hit a record intraday high after the results. The stock's move brings the counter's year-to-date gains to over 27%.

Local peer United Overseas Bank also reported a fall in third-quarter net profit on Thursday and the market's focus now turns to another major lender, Oversea-Chinese Banking Corp., which reports earnings Friday.

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

November 06, 2025 02:41 ET (07:41 GMT)