SINGAPORE, Feb 9 (Reuters) - Singapore's biggest bank DBS Group on Monday maintained expectation that net profit this year will dip slightly from 2025's, after posting a 10% drop in fourth-quarter earnings that was weighed down by a lower net interest margin.

DBS, which is also Southeast Asia's largest bank by assets, said October-December net profit dropped to S$2.26 billion ($1.78 billion) from S$2.52 billion a year earlier.

That missed the mean estimate of nearly S$2.55 billion from two analysts, according to LSEG data.

For the period, overall group net interest margin, a key profitability gauge, stood at 1.93% as compared to 2.15% the previous year, with net interest income impacted by lower domestic rates. Return on equity declined to 13.5% from 15.8% a year ago.

The lender's wealth segment's assets under management meanwhile grew 19% in constant-currency terms to a new high of S$488 billion in the fourth quarter.

In slides accompanying the results, CEO Tan Su Shan said group net interest income in 2026 is expected to be "slightly below 2025 levels", assuming a Singapore overnight rate average (SORA) of around 1.25%, two Federal Reserve rate cuts and a stronger Singapore dollar.

Net profit for the year is similarly expected to come in lower than in 2025, Tan added.

According to the bank's financial statement, provisions for bad loans jumped 81% to S$415 million in the fourth quarter, mainly due to real-estate exposure, while DBS wrote back S$206 million in general allowances, including amounts previously set aside for that exposure.

The bank declared an ordinary dividend of S$0.66 per share and a capital return dividend of S$0.15 per share for the fourth quarter.

DBS is the first Singapore lender to start this earnings season. Smaller peers United Overseas Bank and Oversea-Chinese Banking Corp are due to announce their results on February 24 and 25, respectively.

($1 = 1.2707 Singapore dollars)