Is DBS A Buy Ahead of Q4 24 Earnings?

🌟🌟🌟DBS $DBS Group Holdings(D05.SI)$  is set to release its Q4 24 earnings on Monday February 10, before the market opens.  On January 8, DBS reached its all time high at SGD 45.44 but since then it has retraced and closed at SGD 44.32 on Thursday.

Is DBS A Buy Ahead of its earnings next week?

In Q3 24, DBS announced an excellent earnings report with its net profit rising to 15% to surpass SGD 3 billion for the first time.  DBS' 9 month net profit was up 11% to a record SGD 8.79 billion with Return on Equity at 18.8%.

The increases were driven by Balance Sheet growth, record fee income led by wealth management, higher treasury customer sales and the strongest market trading income in 10 quarters.  The cost income ratio was 39%.

DBS' asset quality continues to be resilient with the Non Performing Loan ratio declining to 1.0%.  Specific allowances were at 14 basis points of loans for Q3 24 and 11 basis points for the 9 months.

Capital remained healthy.  DBS CET-1 ratio was 17.2%.

DBS CEO Piyush Gupta said that DBS achieved another record performance in Q3 24.  Commercial book net interest margin at 2.83%, was supported by reduced interest rate sensitivity of DBS Balance Sheet.  Wealth management drove fee income to a new high as  the macroeconomic and interest rate outlook buoyed investor confidence.

DBS Board declared a quarterly dividend of 54 cents per share for Q3 34, bringing the dividends for the 9 months to SGD 1.62 per share.

DBS also announced the establishment of a new SGD 3 billion share buyback programme.  Under the new programme, shares will be purchased in the open market and cancelled.  This share buy back programme is underpinned by DBS' strong capital position and ongoing earnings generation.  It is an affirmation of DBS' commitment to capital management. 

Analysts are bullish on DBS with a Buy rating,  Target price ranging from SGD 44.70 to SGD 46.91.

The bulk of DBS earnings remains driven by net interest income which is expected to stay resilient amidst the higher for longer interest rate environment.  The market expectations have adjusted to reflect a slower pace of rate cuts from the US Federal Reserve as the Feds wants to monitor the progress towards the 2% inflation target and the continued strength of the US Labour Market.  This supports a more gradual decline in loan yields with the spread between loan and deposit rates likely to narrow at a measured pace.

Piyush Gupta will be retiring on March 28 and will be succeeded by Tan Su Shan at DBS next Annual General Meeting. 

Going forward, DBS is looking to expand into Malaysia with an eye to acquire Alliance Bank as reported by the Edge in January.  I believe that this is a good move especially with the Special Economic Zone that is being established in Johor.  

I have invested in DBS since 2021 and seen its share price grow exponentially.  DBS has even rewarded me with bonus shares in addition to the nice, juicy dividends which are paid every 3 months.    The current dividend yield is 4.76% which is much better than the bank interests paid on my savings accounts and even beats the Singapore Treasury Bills. 

DBS is my best performing Singapore Bank stock todate.  My strategy of buying and holding DBS long term is beginning to pay off.   

As the late great Charlie Munger likes to say - The Big Money is not in the Buying and Selling but in the Waiting. 

It is patience and time in the markets that count ultimately. 

Go Long Go Strong Go DBS! 🚀🚀🚀🌛🌛🌛🌈🌈🌈💰💰💰🇸🇬🇸🇬🇸🇬

@Daily_Discussion  @TigerStars  @Tiger_SG @Tiger_comments  @TigerClub  @MillionaireTiger  @TigerTradingNotes