SINGAPORE: DBS Group Holdings has set aside S$1.09 billion to cover the impact of the coronavirus pandemic as Southeast Asia's biggest lender reported a 29 per cent fall in first-quarter profit to the lowest in two-and-a-half years.
DBS said provisions for credit losses surged in January-March from S$76 million a year earlier. They were well above an average estimate of S$605 million, according to Refinitiv data.
AdvertisementAdvertisementFirst-quarter profit fell to S$1.16 billion compared with S$1.65 billion a year earlier, in line with an average estimate of S$1.13 billion from four analysts, according to Refinitiv data.
Total income grew 13 per cent from a year ago to a new high of S$4.03 billion.
[h=3]READ: COVID-19: Banks to lend money to SMEs at lower interest rate under MAS, Enterprise Singapore initiative[/h][h=3]WATCH: Record number of digital banking transactions during COVID-19 period | Video[/h] AdvertisementAdvertisementDBS said it set aside the allowances "to accelerate the build-up of reserves", with two-thirds of the amount kept for general allowances to anticipate a "deeper and more prolonged economic impact from the pandemic".
The remainder was for specific allowances, mainly for new exposures recognised as non-performing during the quarter.
“Our record operating performance in the first quarter has given us a head start to face the challenges of the coming year. While the economic outlook remains uncertain and credit risks have increased, the digital investments we have made have strengthened the resilience and efficiency of our franchise and we remain committed to serving our customers," said DBS CEO Piyush Gupta.
"We will maintain a solid balance sheet with ample capital, liquidity and loss allowance reserves that give us strong buffers to absorb external shocks,” he said.
[h=3]READ: Moody's cuts outlook for Singapore banks on COVID-19 fallout[/h]DBS, which pays quarterly dividends, retained its proposed dividend of 33 Singapore cents per share for the latest quarter.
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