DBS Warns of Uncertain Outlook After First-Quarter Profit Beat — 2nd Update

By Amanda Lee

DBS Group reported better-than-expected net profit in the first quarter but cautioned that the outlook was uncertain amid global instability stemming from the conflict in the Middle East.

The warning by Singapore's largest bank comes as the city-state, a small, trade-dependent hub, braces for the economic fallout of the energy shock triggered by the Iran war. The country could face slower growth and higher inflation, and a volatile global environment would weigh on Singapore's key trade partners, leading to weaker trading activity.

The war in the Middle East and potential second-order effects have added uncertainty to the outlook, DBS Chief Executive Tan Su Shan said Thursday. However, the bank's Middle East exposure is limited, and stress tests show that our credit portfolio remains sound, she said.

"I'd like to think that we have built a fortress balance sheet, so we are underpinned by a very strong foundation that will weather the storms ahead," Tan said on an earnings call.

Her comments came shortly after the bank, which is also Southeast Asia's largest by assets, posted higher net profit for the three months ended March.

Net profit rose 1.1% from a year earlier to 2.93 billion Singapore dollars, equivalent to US$2.29 billion, DBS said Thursday. That beat the S$2.78 billion consensus estimate in a Visible Alpha poll. Total income edged 0.7% higher to S$5.95 billion.

Net interest income--the difference between what banks earn on loans and pay on deposits--for its commercial book fell 6.6% to S$3.48 billion.

Meanwhile, commercial book net fee and commission income rose 16% to S$1.48 billion, and commercial book treasury customer sales and other income rose 9.85% to S$602 million. The bank's strong wealth-management performance drove fee income and treasury customer sales to new highs, it said.

Tan said DBS has been quite aggressive in expanding its wealth footprint, adding that the bank has launched new wealth centers in China, Hong Kong and Taiwan. The bank's total income this year should be at or around 2025 levels, she said.

Analysts say Singapore lenders stand to benefit indirectly from the conflict as investors look for stability.

DBS on Thursday offered a more nuanced forecast for full-year net profit, after previously guiding for a slightly weaker bottom line.

"Things may still pan out as far as we can see," said Chief Financial Officer Chng Sok Hui. "It's actually turned slightly more positive than the last guidance...they are getting close to 2025 levels."

DBS shares rose as much as 4.3% to S$59.00 after the results, putting the stock within striking distance of its all-time high reached in January.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

April 30, 2026 02:38 ET (06:38 GMT)