Singapore's DBS Group boosted by higher interest rates in Q4

By Scott Kanowsky 

Investing.com -- Singaporean lender DBS Group Holdings (SGX:DBSM) posted fourth quarter earnings that came in above analysts' expectations, as elevated interest rates helped offset weak investment banking gains.

Net profit for the three-month period grew by 69% compared to the same timeframe in the prior year to SGD 2.34 billion ($1 = SGD 1.3310). Bloomberg consensus estimates had placed the figure at SGD 2.17B.

Undergirding this uptick was a 74% year-on-year spike in net interest income to SGD 3.4B, which the company said reflected a recent rise in borrowing costs.

Singapore's central bank - like many of its counterparts around the world - lifted interest rates throughout 2022 in a bid to quell soaring inflation levels that touched a 14-year high.

However, the hikes heaped pressure on to equity markets last year, leading many investors to take a more cautious approach with their investments. DBS said this slowdown in capital market activities, in turn, caused quarterly investment banking and wealth management fees to dip by 19% on an annualized basis.

In a statement, DBS chief executive officer Piyush Gupta said he expects market confidence to recover this year as interest rate increases begin to ease and China's economy reopens after the loosening of long-time COVID-19 restrictions in the country.

DBS proposed a final dividend of SGD 0.42, an increase of six cents from the previous payout in 2021.