DBS Group Holdings, Singapore's biggest bank, on Monday posted a better-than-expected 15 percent rise in second-quarter net profit, helped by higher interest rate margins, but warned of some uncertainty in the second half.
And improving interest margin and healthy loan growth have helped Southeast Asia's biggest lender withstand a slowing economy, a weak property market and sluggish China-related trade finance business.
DBS cautioned there was some uncertainty in its second-half outlook, but said its loan and business pipelines remain healthy.
"Despite slowing growth across the region, DBS achieved record earnings in the first half of the year driven by strong broad-based income growth," CEO Piyush Gupta said in a statement.
The bank increased its first-half dividend to 30 cents a share from 28 cents a year ago.
Net profit rose to S$1.117 billion ($814 million) for the April-June period, from S$969 million in the same period a year earlier. The result was above an average forecast of S$1.06 billion from seven analysts polled by Reuters.
First half net profit hit a record S$2.386 billion.
Net interest income rose 12 percent to S$1.74 billion, fueled by an eight basis point increase in net interest margin to 1.75 percent, while trading income surged 55 percent.
DBS said its interest rate margin was the highest in 13 quarters as more Singapore dollar loans were re-priced in line with a recent rise in interbank and swap offer rates.
Moody's Investors Service earlier this month revised its outlook for Singapore banks to stable from negative, reflecting the domestic property market's soft landing, and moderating domestic and cross-border credit growth.
Data last week showed prices of private homes in Singapore fell for a seventh straight quarter, the longest declining streak in more than a decade.