DBS Group Holdings Limited (SGX:D05) is the first Singapore-listed bank to release its results for the fourth quarter, and for the full year ended 31 December 2021 early this morning (14 February 2022 – on that note, Happy Valentine’s Day!) – in case you’re wondering when will UOB and OCBC release their results, it will be on the morning of 16th and 23rd February respectively.

Being a shareholder of DBS (since March 2020), I have studied its latest set of results and in today’s post, you’ll find a summary of the most important points to take note of about its financial performance and financial ratios, along with dividend payout declared for the period under review:

Financial Performance (Q4 FY2020 vs. Q4 FY2021, and FY2020 vs. FY2021)

In this section, you’ll find a comparison of the Singapore-listed bank’s financial performance on a quarter-on-quarter (q-o-q) basis (i.e. Q4 FY2020 vs. Q4 FY2021), as well as on a year-on-year (y-o-y) basis (i.e. FY2020 vs. FY2021):

Q4 FY2020 vs. Q4 FY2021:

Q4 FY2020Q4 FY2021% Variance
– Net Interest
Income (S$’mil)
$2,120m$2,140m+0.9%
– Net Fee &
Commission Income
(S$’mil)
$747m$815m+9.1%
– Other Non-
Interest Income
(S$’mil)
$396m$338m-14.6%
Total Income
(S$’mil)
$3,263m$3,293m+0.9%
Total Expenses
(S$’mil)
$1,580m$1,671m+5.6%
Net Profit
(S$’mil)
$1,012m$1,389m+37.3%

The bank’s total income comprises of 3 components – net interest income, net fee and commission income, as well as other non-interest income. Compared to the same time period last year (i.e. Q4 FY2020), the latest set of results was a bit of a mixed bag – particularly, the q-o-q increase in its net interest income (due to a 9% increase in loan volume in constant currency terms compared to the same time period last year), along with its net fee and commission income (where growth was broad-based led by wealth management and transaction services) was offset by a drop in its other non-interest income (as a result of lower trading income and gains from investment securities.)

Total expenses went up by 5.6% due to government grants in the previous year.

Finally, the 37% q-o-q spike in its net profit was driven by higher business volumes and lower allowances (which fell by 94.3% from $577m in Q4 FY2020 to $33m in Q4 FY2021.)

FY2020 vs. FY2021:

FY2020FY2021% Variance
– Net Interest
Income (S$’mil)
$9,076m$8,440m-7.0%
– Net Fee &
Commission Income
(S$’mil)
$3,058m$3,524m+15.2%
– Other Non-
Interest Income
(S$’mil)
$2,458m$2,333m-5.1%
Total Income
(S$’mil)
$14,592m$14,297m-2.0%
Total Expenses
(S$’mil)
$6,258m$6,469m+5.1%
Net Profit
(S$’mil)
$4,721m$6,801m+44.1%

Similar to its results on a q-o-q basis, the Singapore-listed bank’s full year results (as far as the 3 components making up its total income is concerned) was also, in my opinion, a mixed one – with its total income edging down by 2.0% due to declines in its net interest income (as the full impact of interest rate cuts more than offset the 9% loan growth, which was the highest in 7 years), as well as in its other non-interest income (as a record trading income was offset by lower investment gains from a high base recorded last year), offset by improvements in its net fee and commission income (as most fee activities grow – particularly, its wealth management fees and transaction services fees rose to new highs for the bank.)

On the other hand, the bank’s total expenses grew by 5.1% compared to last year due to base salary increments, along with investments for further growth, partly offset by lower occupancy expenses.

Finally, its net profit recorded for FY2021, at $6,801m, was a record for the bank as well – largely attributed to a huge decline in allowances for credit and other losses (by 98.3% from $3,066m in FY2020 to just $52m in FY2021.)

Financial Ratios (Q3 FY2021 vs. Q4 FY2021, and FY2020 vs. FY2021)

While there are quite a number of financial ratios reported by the bank, as a retail investor, I focus my attention on just a couple of them, all of which you’ll learn about in this section – where I will be comparing the ratios reported for the current quarter under review (i.e. Q4 FY2021 ended 31 December 2021) against the previous quarter 3 months ago (i.e. Q3 FY2021 ended 30 September 2021), as well as the ratios reported reported for the current financial year under review (i.e. FY2021) against the previous financial year (i.e. FY2020) to find out whether they have continued to remain resilient, or have deteriorated:

Q3 FY2021Q4 FY2021Difference (in
Percentage Points – pp)
Net Interest
Margin (%)
1.43%1.43%+0.0pp
Return on
Assets (%)
1.01%0.81%-0.2pp
Return on
Equity (%)
12.1%9.9%-2.2pp
Non-Performing
Loans Ratio (%)
1.5%1.3%-0.2pp

My Observations: 2 positives to note about its key financial ratios recorded for the quarter ended 31 December 2021 compared to the previous quarter 3 months ago – first, its net interest margin has stabilised (and in my opinion, the impending interest rate hikes by the Fed starting from March should see the bank’s net interest margin heading back up in the coming quarters ahead – which will also see its net interest income climbing); second, its non-performing loans ratio have also saw a 0.2pp drop compared to the previous quarter.

On the other hand, its return on assets and return on equity saw declines compared to the previous quarter.

FY2020 vs. FY2021:

FY2020FY2021Difference (in
Percentage Points – pp)
Net Interest
Margin (%)
1.62%1.45%-0.17pp
Return on
Assets (%)
0.75%1.02%+0.27pp
Return on
Equity (%)
9.1%12.5%+3.4pp
Non-Performing
Loans Ratio (%)
1.6%1.3%-0.3pp

My Observations: Compared to last year, key financial ratios have largely improved – with the exception of net interest margin (due to interest rate cuts by the Fed, with most of the decline occurring in the first half of the year.)

The 0.3pp drop in its non-performing loans ratio was due to new non-performing asset formation more than offset by repayments and write-offs.

Dividend Payout to Shareholders

For the current period under review, the management of DBS Group Holdings have declared a dividend payout of 36.0 cents/share – a 100.0% improvement from the 18.0 cents/share declared for the same time period last year (i.e. Q4 FY2020) – do take note that the reason for the dip in its dividend payout in Q4 FY2020 was due to the Monetary Authority of Singapore’s (MAS) guidance for the banks and financial institutions to payout no more than 60.0% of what was paid out in FY2019 for prudence due to the Covid-19 pandemic.

On a full-year basis, the bank’s payout saw an improvement by 37.9% to 120.0 cents/share, compared to a payout of 87.0 cents/share in FY2020 – again, the reduced dividend payout by the bank in FY2020 was due to MAS’ guidance to reduce it to 60.0% of what was paid out in FY2019. However, if you compare the dividend payouts this year against that in FY2019 (which was 123.0 cents), its still a 2.4% decline.

If you are a shareholder of DBS Group Holdings, do take note of the following dates on its dividend payout (scrip dividend scheme will not be applied this time round, so shareholders will only be able to receive their dividend payouts in cash):

Ex-Date: 08 April 2022
Record Date: 11 April 2022
Payout Date: 22 April 2022

Closing Thoughts

Looking at DBS’ latest set of results on the whole – as a shareholder, I must say I am pleased to note of a couple of record breaking feats the bank have made this time round in terms of its full-year results: its net trading income for FY2021 a new high for the bank. The same can also be said for its wealth management fees and transaction fees – both contributing to a 15.2% y-o-y climb in its net fee and commission income. Finally, its net income (at $6,801m) also beat the bank’s previous high of $6,391m in FY2019, setting another new high for the bank.

Another thing that surprised me was the hike in terms of its dividend payout for the quarter under review – up from 33.0 cents to 36.0 cents (I was initially expecting a one-off special dividend payout to shareholders as a reward for their confidence in the bank in navigating through the headwinds posed by Covid-19 in 2020.)

The 0.2pp drop in its non-performing loans ratio to 1.3% for FY2021 was also a pleasant surprise for me too.

In terms of the bank’s outlook in the financial year ahead, I am optimistic of it recording further improvements in terms of its results – largely due to Fed’s impending interest rate hikes (with the first one coming in March, and the guidance is that there will be a total of 3 interest rate hikes in 2021, and another 3 in 2022.) With that, the bank should see its net interest margin rebounding in the quarters ahead, as a result, its net interest income should start to climb once again (after declining since the year 2020 as a result of Fed reducing interest rates to near-zero to minimise impacts of Covid-19 on the economy.) However, one key risk which may impact the bank’s performance in the year ahead will be any escalation in geopolitical tensions – particularly that between Russia and Ukraine – where the economy will take huge tumble if a war were to break out.

With that, I have come to the end of my review of DBS Group Holdings’ latest financial results for the fourth quarter, as well as for the full year ended 31 December 2021. As always, do note that everything that you’ve just read above are purely for educational purposes only, and they do not constitute of any buy or sell recommendations for the bank’s shares. You’re strongly advised to do your own due diligence before engaging in any investment decisions.

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Disclaimer: At the time of writing, I am a shareholder of DBS Group Holdings Limited.

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