* Q1 net profit at S$2.0 bln vs S$1.43 bln average estimate
* Profit doubles from the fourth quarter
* Results boosted by all-round performance
* Bad loan formation drops to pre-pandemic levels
* DBS CEO says will look at Citi's Asian consumer business
SINGAPORE, April 30 (Reuters) - DBS Group trounced
profit estimates thanks to strong loan growth, improved asset
quality and a bumper quarter for its wealth management business,
pushing shares in Southeast Asia's largest bank up 2.5% to a
The Singapore-based lender flagged bullish prospects in a
recovering global economy and said its new non-performing assets
formation in the first quarter was below pre-pandemic levels.
"This was a bit of a golden quarter for us. Loan and deposit
growth were robust, fees were strong and treasury had a record
performance," said Chief Executive Officer Piyush Gupta, adding
that the bank "fired on all cylinders."
It reported net profit of S$2.0 billion ($1.1 billion) for
January-March versus the S$1.43 billion average of three analyst
estimates compiled by Refinitiv, and versus S$1.16 billion in
the year-ago period.
Profit doubled from the fourth quarter. The bank also had a
write-back of past credit allowances as asset quality improved.
DBS, which earns most of its profit from Singapore and Hong
Kong, upgraded its full-year loan growth forecast to the
mid-to-high single digits and said fee income would grow at
"It's quite a strong beat. Importantly, the low credit costs
were to reverse previously very prudent and aggressive front
loading last year, that helped too," said Kevin Kwek, a senior
analyst at Stanford C. Bernstein.
"Fees were up strongly across most categories cards,
treasury, transactions, wealth," Kwek said.
The results came a day after larger Asia-focussed bank
Standard Chartered reported forecast-beating results,
beginning a recovery from its COVD-19 pandemic-hit performance.
Earlier this month, DBS agreed to buy a 13% stake in a
privately-owned Chinese bank for $814 million, marking it's
biggest acquisition in China. This came months after it
completed the takeover of distressed lender Lakshmi Vilas Bank
in India, a key growth market.
Responding to a query on whether DBS was keen to acquire
Citigroup's Asian consumer business, Gupta, who had worked
at Citi for 27 years, told reporters: "We are always open to
looking at assets that could be incremental to our franchise. In
due time, we will take a look at them."
Reuters reported this month that DBS and other banks are set
to bid for parts of Citi's consumer business in Asia, following
the U.S. bank's plans to exit from these businesses, 10 of which
are in Asia.
Analysts expect Singaporean banks' profit to rebound
strongly this year on sustained growth in wealth management. But
lenders are still hit by low market interest rates that have
crimped net interest margins - a key gauge of profitability.
The net interest margin at DBS fell to 1.49% in the latest
quarter from 1.86% a year earlier but was stable from the
($1 = 1.3265 Singapore dollars)
(Reporting by Anshuman Daga; Editing by Himani Sarkar,
Christopher Cushing and Kim Coghill)