By P.R. Venkat and Amanda Lee
DBS Group, Singapore's biggest bank, beat expectations for first-quarter earnings even as it warned that heightened uncertainty due to U.S. tariffs could hit borrowing and investments.
Chief Executive Tan Su Shan flagged the tariff risks during an earnings call Thursday, saying that "recent escalations in trade tensions have heightened macroeconomic risks and market volatility."
Tan said DBS, Southeast Asia's largest bank by asset size, has seen a pause in some longer-term investments until there's more clarity on the reciprocal tariffs that U.S. President Trump announced--and then paused--on dozens of countries.
"Clients are now looking at reconfiguration of both their trade flows and their payments and technology [stacks]," the CEO added.
Against that backdrop, DBS is focusing on high return-on-equity businesses such as wealth management, Tan said. Business momentum has been resilient in April, she added.
Net profit for the January-March period fell 2% on the year to 2.90 billion Singapore dollars, equivalent to US$2.24 billion, DBS said. The lender attributed the decline to higher tax expenses stemming from the adoption of a 15% global minimum tax on corporate profits. The tax was introduced for large Singapore multinationals in 2025.
The result beat a S$2.71 billion estimate provided by Visible Alpha, helping send DBS's stock 2.2% higher. It has since pared gains and was last up 0.9% at S$43.13.
For the quarter, the bank made a general allowance provision of S$205 million to factor in economic and geopolitical uncertainty.
The bank reiterated that it expects full-year net profit to be below 2024's, mainly due to the global minimum tax. Net interest income is forecast to be slightly higher than last year's, Tan said, based on market expectations of three interest-rate cuts in the U.S.
Net interest margins could be lower, but this will be offset by balance-sheet growth, Tan added.
DBS's total income rose 6% on the year to S$5.91 billion during the first quarter, supported by higher fee income and the performance of its wealth-management business. Net interest income climbed 2% to S$3.72 billion over the period, while net fee and commission income surged 22% to S$1.28 billion.
DBS's results followed those of Singapore peer UOB, which posted flat net profit and paused its 2025 guidance due to the prevailing economic uncertainty.
Write to P.R. Venkat at venkat.pr@wsj.com and Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
May 08, 2025 02:52 ET (06:52 GMT)
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