Singapore-based DBS Group Holdings posted a 20 percent increase in second-quarter profit, according to a report by Bloomberg.
Net income of DBS rose to S$1.37 billion in the three months to June. The bank said it benefited from rising local interest rates and fee income from its expanding wealth management operations.
However, it was overshadowed by the effect of market volatility on income from trading and investment securities. This resulted in a 32 percent drop in the bank’s other non-interest income.
A flatter yield curve and wider credit spreads for the lower trading income had “created trading headwinds,” DBS said.
Chief executive officer Piyush Gupta noted the heightened macroeconomic uncertainty resulting due to the rising US-China trade tensions. In addition, DBS also expects “some impact” on loan growth due to the recent property cooling measures imposed by the Singapore government.
Loan growth this year is now forecast at between six and seven percent. This was down from the earlier eight percent projection, “due mostly to trade loans.”
Mr Gupta added that DBS’s net interest margin for the year is likely to be one to two basis points above the previous guidance of 1.85 percent, due to higher US rates.
