DBS Group Holdings has demonstrated remarkable share price momentum throughout this year. While not leading the Straits Times Index in percentage gains - with a 14% increase compared to ST Engineering's 80% surge and Hongkong Land's over 50% rise - DBS has maintained consistent upward trajectory over the past decade. The bank's share price has multiplied 3.5 times over ten years, excluding dividend distributions.
Following a special dividend payment in 2017 that initially seemed like a singular event, DBS has consistently enhanced its dividend distributions. The bank announced a quarterly increase of six cents in 2023, representing an annual boost of 24 cents. During the second quarter of 2025, DBS distributed a core dividend of 60 cents per share quarterly, alongside a 15-cent capital return dividend, bringing the first-half 2025 total payout to $1.50, equivalent to $3 annually. This represents approximately a 6% dividend yield based on the $50 share price.
DBS also initiated a $3 billion share buyback program in November of the previous year. "We provided clear communication regarding our approach to surplus capital management within our Common Equity Tier 1 operating range of 12.5% to 13.5%. Beyond regular dividends, excess capital will be returned through buybacks and Capital Return dividends over a three-year period. The market clearly understands our capital return trajectory, which serves as a significant differentiator since we can communicate our capital return framework with precision," stated Chng Sok Hui, group CFO of DBS Group Holdings, during a recent interview.
Local investors benefit from the 6% dividend yield, while USD-based investors may experience enhanced returns. The weakening US dollar, driven by current administrative policies, means US investors converting dollars to Singapore dollars achieve higher returns than domestic investors. Singapore has also experienced increased liquidity inflows seeking investment opportunities, with these funds likely gravitating toward large-cap index stocks. Since announcing its second quarter 2025 results, DBS has consistently traded above $50.
"Our capital management strategy's transparency, balance sheet approach, investor day presentations, and guidance are underpinned by comprehensive nowcasting and forecasting models. We continuously validate assumptions regarding deposit growth, pass-through rates from the US, SGD and USD interest rate sensitivities, and the timing of loan and hedge rollovers. We demonstrate how various rate scenarios impact outcomes. Our robust modeling capabilities enable consistent guidance and delivery, building credibility through reliable execution," Chng elaborated.
The complete interview with DBS's CFO will be published in The Edge Singapore's The CFO Interview series at a future date.