DBS Group Holdings Limited (SGX:D05), or DBS for short, needs no further introduction – all of us fellow Singaporeans should have a savings account with the bank. Apart from operations in Singapore, it also have offices in the following countries – Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Philippines, Taiwan, Thailand, United Arab Emirates, United Kingdom, United States of America, as well as in Vietnam.

This morning (13 February 2023), DBS was the first of the 3 Singapore-listed banks to release its results for the fourth quarter, as well as for the full year ended 31 December 2022 (i.e. FY2022) – with UOB releasing its results next Thursday (23 February) morning, and OCBC releasing its results next Friday (24 February) morning.

In this post, you’ll find my review of the Singapore bank’s latest results – in terms of its financial performance, financial ratios, and also its dividend payout to shareholders.

Let’s begin:

Financial Performance (Q4 FY2021 vs. Q4 FY2022, and FY2021 vs. FY2022)

In this section, let us take a look at the DBS’ financial performance first on a quarter-on-quarter (q-o-q) basis (i.e. Q4 FY2021 vs. Q4 FY2022), and then on a year-on-year (y-o-y) basis (i.e. FY2021 vs. FY2022):

Q4 FY2021 vs. Q4 FY2022:

Q4 FY2021Q4 FY2022% Variance
– Net Interest
Income (S$’mil)
$2,140m$3,280m+53.3%
– Net Fee &
Commission Income
(S$’mil)
$815m$661m-18.9%
– Other Non-Interest
Income (S$’mil)
$296m$649m> 100.0%
Total Income
(S$’mil)
$3,251m$4,590m+41.2%
Total Expenses
(S$’mil)
$1,671m$1,963m+17.5%
Net Profit
(S$’mil)
$1,389m$2,341m+68.5%

My Observations: Its net profit of $2,341m in Q4 FY2022 is a record breaking one for the bank, contributed by a 41.2% jump in its total income – which is due to huge improvements in its net interest income (due to a increase in net interest margin compared to Q4 FY2021, along with a rise in loan volume), along with its other non-interest income (as a result of growth in its trading income and investment gains from a low base in Q4 FY2021.)

The only slight negative in the bank’s results is a 18.9% decline in its net fee & commission income, as a result of lower wealth management and investment banking fees.

Total expenses went up by 17.5%, which included costs relating to non-recurring accelerated depreciation of fixed assets, a one-time special award to all staff, and some expenses for the integration of Citi Consumer Taiwan – excluding these expenses, the bank’s total expenses would have been up by 13%.

FY2021 vs. FY2022:

FY2021FY2022% Variance
– Net Interest
Income (S$’mil)
$8,440m$10,941m+29.6%
– Net Fee &
Commission Income
(S$’mil)
$3,524m$3,091m-12.3%
– Other Non-Interest
Income (S$’mil)
$2,224m$2,470m+11.1%
Total Income
(S$’mil)
$14,188m$16,502m+16.3%
Total Expenses
(S$’mil)
$6,469m$7,090m+7.9%
Net Profit
(S$’mil)
$6,801m$8,193m+20.4%

My Observations: Just like in its quarterly results, its net profit for the full year, at $8,193m, is a record for the bank – which can be attributed by a 16.3% increase in its total income, contributed by a 29.6% rise in its net interest income to $16,502m – which is also a record, contributed by a higher net interest income (due to higher net interest margin), partially offset by a dip in its net fee and commission income (from lower wealth management and investment banking fee income.)

The 7.9% increase in total expenses was due to higher staff costs.

Financial Ratios (Q3 FY2022 vs. Q4 FY2022, and FY2021 vs. FY2022)

Moving on, let us take a look at the performances of some of the key financial ratios reported by the bank – I will be comparing the numbers reported for the current quarter under review (i.e. Q4 FY2022 ended 31 December 2022) against that reported in the previous quarter 3 months ago (i.e. Q4 FY2022 ended 30 September 2022), as well as the numbers reported on a full-year basis for the current financial year under review (i.e. FY2022) compared against the reported last year (i.e. FY2021) to find out if they have continued to remain resilient, or showing signs of weakness:

Q3 FY2022Q4 FY2022Difference (in
Percentage Points – pp)
Net Interest
Margin (%)
1.90%2.05%+0.15pp
Return on
Assets (%)
1.18%1.23%+0.05pp
Return on
Equity (%)
16.3%17.2%+0.9pp
Non-Performing
Loans Ratio (%)
1.2%1.1%-0.1pp

My Observations: Compared to the previous quarter (i.e. Q3 FY2022), its key financial ratios have all recorded improvements – 2 things stood out to me: its return on equity, at 17.2%, is a record for the bank, along with a further drop in its non-performing loans ratio to 1.1% (especially in such an economic environment, to see its non-performing loans further dropping is very encouraging to note.)

FY2021 vs. FY2022:

FY2021FY2022Difference (in
Percentage Points – pp)
Net Interest
Margin (%)
1.45%1.75%+0.3pp
Return on
Assets (%)
1.02%1.12%+0.1pp
Return on
Equity (%)
12.5%15.0%+2.5pp
Non-Performing
Loans Ratio (%)
1.3%1.1%-0.2pp

My Observations: On a full-year basis, DBS’ key financial ratios is also very impressive – the 0.3pp improvement in net interest margin is very much within my expectation, considering a series of interest rate hikes by the Federal Reserve for the whole of last year.

The Return on Equity, at 15.0%, is a record high for the bank. Also, it’s encouraging to note the drop in its non-performing loans ratio to 1.1% (compared to 1.3% last year.)

Dividend Payout to Shareholders

DBS Group Holdings Limited is the only Singapore-listed bank where its management declares a dividend payout to shareholders on a quarterly basis.

For the fourth quarter of FY2022, a dividend payout of 42.0 cents/share was declared. On top of that, the management have also declared a special dividend payout of 50.0 cents/share, given its strong capital base – this is a huge jump from the 36.0 cents/share declared in the same time period last year (i.e. Q4 FY2021.) However, if you exclude the special dividend payout, the increase would have been 16.7%.

On a full-year basis, its dividend payout amounts to a total of 200.0 cents/share (36.0 cents/share declared in the first 3 quarters, 42.0 cents/share in the fourth quarter, along with a special dividend payout of 50.0 cents/share). Compared to last year (which is 120.0 cents/share), its dividend payout have grown by 66.7%. If you strip out the special dividend, then its dividend payout have grown by 25.0%

If you are a shareholder of the Singapore-listed bank, do take note of the following dates regarding its dividend payout:

Ex-Date: 10 April 2023
Record Date: 11 April 2023
Payout Date: 21 April 2023

For FY2023 ahead, barring unforeseen circumstances, the annualised dividend will rise to 168.0 cents/share – meaning a payout of 42.0 cents/share every quarter.

CEO Piyush Gupta’s Comments & Outlook (from the Bank’s Press Release)

“The record return on equity of 17% for the fourth quarter and 15% for the full year reflect the benefit of higher interest rates as well as significant structural gains from our decade-long transformation initiatives. The Commercial book total income growth of 21% for the full year and 43% for the fourth quarter attest to the strength of our franchise.

Our business pipelines are healthy and asset quality robust. We expect confidence to return to markets in the coming year as interest rate increases ease and China reopens. The substantial increase in our ordinary dividend and the special dividend to a total of 92 cents per share reflect our robust earnings profile and the strength of our capital position. This brings the total payout for the financial full year to SGD 2.00 per share.”

Closing Thoughts

Wow, what a quarter and year it has been for Singapore’s largest bank, with many new records being set: a record high net profit of $4,590m in Q4 FY2022, along with a record total income of $16,502m, and net profit of $8,193m for the full-year. Its return on equity for Q4 (at 17.2%), and for the full year (at 15.0%) are also record highs.

The dividend hike in the final quarter (from 36.0 cents to 42.0 cents) was also a pleasant surprise for me, and I’m sure every one who is reading this article will be very happy with the special dividend payout of 50.0 cents being declared as well.

I’m sure all shareholders will rejoice to the news that quarterly dividend payouts in the coming quarters ahead will be hiked by another 16.7% to 42.0 cents/share.

All in all, as a shareholder, I’m very happy with the bank’s latest report card (and I’m sure you share the same opinion as me.) Looking ahead, I’m of the opinion that interest rates will continue to remain high at least over the next 2 years or so (which bodes well for the bank.) On the other hand, the challenging economic outlook in the near-term may see individuals and businesses be more cautious in taking up loans and as a result, loan volumes may see a decline. Another thing to look out for will be defaults by both individuals and businesses as a result of their inability to service their interest payments – we may see the bank’s non-performing loans increasing in the quarters ahead. But despite having said that, I have complete confident in the management’s ability to navigate through these headwinds.

With that, I have come to the end of my review of DBS’ latest fourth quarter, and full-year results. As always, I do hope you’ve found the contents above useful and at the same time, do note that all the opinions above are purely mine which I am sharing for educational purposes only. They do not represent any buy or sell calls for the bank’s shares. You’re strongly advised to do your own due diligence before you make 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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