DBS’s Share Price Hit an All-Time High Above S$45: What’s Next for Singapore’s Largest Bank?

The Smart Investor01-20

2025 has just arrived, and DBS Group (SGX: D05) is already setting new records.Singapore’s largest bank saw its share price surpass the S$45 level for the first time, closing at S$45.44 on 8 January....

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MultiBaggers
·01-20
Tan Su Shan has extremely big shoes to fill when Piyush Gupta retires this year and she takes over.
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For 9M 2024, the dividend of S$1.62 was 28.6% higher than the previous year’s S$1.26.CEO Piyush Gupta was sanguine about the bank’s prospects.He expects group net interest income to hover around 2024 levels although DBS’s NIM should decline slightly.The decline, however, will be offset by loan growth.Non-interest income is expected to rise by high-single-digits year on year, with pretax profits coming in around last year’s levels.“Higher for longer” interest ratesWith the latest strong economic data coming out of the US, pundits now believe that the US Federal Reserve may hesitate to cut interest rates.US nonfarm payrolls showed an addition of 256,000 jobs in December, far exceeding economists’ expectations of 155,000.The unemployment rate fell to 4.1%, underscoring the continued strength of the US economy despite overall higher interest rates.But with core inflation at 2.9% for the trailing 12-month period, the central bank will also not be overeager in raising rates.Hence, we may be in a situation where interest rates stay “higher for longer” until inflation dips towards the Federal Reserve’s desired 2% level.Meanwhile, the upcoming inauguration of Donald Trump as US president may also result in higher inflation over time.Economists expect his planned tariff policies to be inflationary and could result in the central bank having to either keep rates higher for longer, or to even raise rates should inflation reignite.Should interest rates hover at current levels for an extended period, it will benefit DBS’s NIM and boost net interest income.Good prospects for non-interest incomeOver at the non-interest income side, healthy consumer spending should see fee income continue to climb this year.Singaporeans are spending more on their credit cards with rollover balances hitting a record high of S$7.9 billion in 3Q 2024.Total credit card billings have also increased from 2Q 2024 to S$24 billion.These rollover balances are charged an interest of 30.8% per year, thus allowing DBS to enjoy higher fee income from this segment.Wealth management fees is another area of growth for DBS.The number of single-family offices in Singapore grew by 43% year on year for 2024 and shot past 2,000.Second Finance Minister Chee Hong Tat emphasized that Singapore’s pro-business stance will attract more wealth to the nation and this trend will help to boost DBS’s wealth management fee income in the medium term.Excess capital = higher dividends?Gupta made it clear during the bank’s previous annual general meeting in 2024 that DBS has excess capital of around S$5.9 billion, or around S$2 per share.He does not rule out the possibility of a special dividend declaration, increasing the bank’s share buybacks, or raising the core ordinary dividend.A recent catalystThe recently-announced Singapore-Johor Special Economic Zone (SEZ) will act as an additional catalyst for DBS.The SEZ will encourage more Singapore firms to expand operations into Malaysia while the Malaysian side will set up a fund to support infrastructure investments in Johor.A special corporate tax rate along with a lower workers’ tax rate should also attract more companies and people to cross the Causeway and work in Johor.Of the 11 economic sectors that will be promoted, one of them is “financial services” which should benefit the bank.With more businesses set to expand, DBS can capitalise on this to grow its loan book.Get Smart: A bright outlookThe verdict is in.DBS look set to benefit from the prolonged high-interest-rate environment that should sustain its net interest income.Non-interest income should also see a boost from higher credit card spending and the influx of family offices into the city-state.Investors could be in for a pleasant surprise when DBS announces its 2024 results on 10 February as the bank has excess capital to reward shareholders.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"2","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":394459757719992,"gmtCreate":1737340875750,"gmtModify":1737340879457,"author":{"id":"3554939006845853","authorId":"3554939006845853","name":"MultiBaggers","avatar":"https://static.tigerbbs.com/86270a3d55dc49ab5a1df140d4a7e80d","vip":1,"crmLevel":2,"crmLevelSwitch":1,"idStr":"3554939006845853","authorIdStr":"3554939006845853"},"htmlText":"Tan Su Shan has extremely big shoes to fill when Piyush Gupta retires this year and she takes over.","listText":"Tan Su Shan has extremely big shoes to fill when Piyush Gupta retires this year and she takes over.","text":"Tan Su Shan has extremely big shoes to fill when Piyush Gupta retires this year and she takes over.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/394459757719992","repostId":2504416107,"repostType":2,"repost":{"id":"2504416107","kind":"highlight","pubTimestamp":1737336972,"share":"https://ttm.financial/m/news/2504416107?lang=&edition=fundamental","pubTime":"2025-01-20 09:36","market":"sg","language":"en","title":"DBS’s Share Price Hit an All-Time High Above S$45: What’s Next for Singapore’s Largest Bank?","url":"https://stock-news.laohu8.com/highlight/detail?id=2504416107","media":"The Smart Investor","summary":"Can DBS repeat last year’s share price increase of 43.9%? Read on to find out.","content":"<html><head></head><body><p>2025 has just arrived, and <strong>DBS Group</strong> (SGX: D05) is already setting new records.</p><p>Singapore’s largest bank saw its share price surpass the S$45 level for the first time, closing at S$45.44 on 8 January.</p><p>DBS produced a stellar performance last year that saw its share price surge nearly 44% to close at S$43.72.</p><p>Investors may be wondering though: what’s next for the lender, and can it pull off a similar feat this year?</p><p>Let’s dig deeper to find out.</p><h2 id=\"id_2452360605\">A record-high net profit</h2><p>DBS reported an impressive set of earnings for its third quarter (3Q 2024) and the first nine months of 2024 (9M 2024).</p><p>For 9M 2024, commercial book net interest income rose 5% year on year to S$11.2 billion, buoyed by higher interest rates that benefitted its net interest margin (NIM).</p><p>Commercial book net fee income jumped 27% year on year to hit S$3.2 billion.</p><p>This combination of better net interest income and non-interest income led to an 11% year-on-year increase in total income to S$16.8 billion.</p><p>The blue-chip bank saw its net profit for 9M 2024 climb 12% year on year to a record S$8.8 billion.</p><p>DBS raised its quarterly dividend for 3Q 2024 by 22.7% year on year to S$0.54. For 9M 2024, the dividend of S$1.62 was 28.6% higher than the previous year’s S$1.26.</p><p>CEO Piyush Gupta was sanguine about the bank’s prospects.</p><p>He expects group net interest income to hover around 2024 levels although DBS’s NIM should decline slightly.</p><p>The decline, however, will be offset by loan growth.</p><p>Non-interest income is expected to rise by high-single-digits year on year, with pretax profits coming in around last year’s levels.</p><h2 id=\"id_2573645794\">“Higher for longer” interest rates</h2><p>With the latest strong economic data coming out of the US, pundits now believe that the US Federal Reserve may hesitate to cut interest rates.</p><p>US nonfarm payrolls showed an addition of 256,000 jobs in December, far exceeding economists’ expectations of 155,000.</p><p>The unemployment rate fell to 4.1%, underscoring the continued strength of the US economy despite overall higher interest rates.</p><p>But with core inflation at 2.9% for the trailing 12-month period, the central bank will also not be overeager in raising rates.</p><p>Hence, we may be in a situation where interest rates stay “higher for longer” until inflation dips towards the Federal Reserve’s desired 2% level.</p><p>Meanwhile, the upcoming inauguration of Donald Trump as US president may also result in higher inflation over time.</p><p>Economists expect his planned tariff policies to be inflationary and could result in the central bank having to either keep rates higher for longer, or to even raise rates should inflation reignite.</p><p>Should interest rates hover at current levels for an extended period, it will benefit DBS’s NIM and boost net interest income.</p><h2 id=\"id_2683904296\">Good prospects for non-interest income</h2><p>Over at the non-interest income side, healthy consumer spending should see fee income continue to climb this year.</p><p>Singaporeans are spending more on their credit cards with rollover balances hitting a record high of S$7.9 billion in 3Q 2024.</p><p>Total credit card billings have also increased from 2Q 2024 to S$24 billion.</p><p>These rollover balances are charged an interest of 30.8% per year, thus allowing DBS to enjoy higher fee income from this segment.</p><p>Wealth management fees is another area of growth for DBS.</p><p>The number of single-family offices in Singapore grew by 43% year on year for 2024 and shot past 2,000.</p><p>Second Finance Minister Chee Hong Tat emphasized that Singapore’s pro-business stance will attract more wealth to the nation and this trend will help to boost DBS’s wealth management fee income in the medium term.</p><h2 id=\"id_1931117290\">Excess capital = higher dividends?</h2><p>Gupta made it clear during the bank’s previous annual general meeting in 2024 that DBS has excess capital of around S$5.9 billion, or around S$2 per share.</p><p>He does not rule out the possibility of a special dividend declaration, increasing the bank’s share buybacks, or raising the core ordinary dividend.</p><h2 id=\"id_856336319\">A recent catalyst</h2><p>The recently-announced Singapore-Johor Special Economic Zone (SEZ) will act as an additional catalyst for DBS.</p><p>The SEZ will encourage more Singapore firms to expand operations into Malaysia while the Malaysian side will set up a fund to support infrastructure investments in Johor.</p><p>A special corporate tax rate along with a lower workers’ tax rate should also attract more companies and people to cross the Causeway and work in Johor.</p><p>Of the 11 economic sectors that will be promoted, one of them is “financial services” which should benefit the bank.</p><p>With more businesses set to expand, DBS can capitalise on this to grow its loan book.</p><h2 id=\"id_1009262840\">Get Smart: A bright outlook</h2><p>The verdict is in.</p><p>DBS look set to benefit from the prolonged high-interest-rate environment that should sustain its net interest income.</p><p>Non-interest income should also see a boost from higher credit card spending and the influx of family offices into the city-state.</p><p>Investors could be in for a pleasant surprise when DBS announces its 2024 results on 10 February as the bank has excess capital to reward shareholders.</p></body></html>","source":"thesmartinvestor_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>DBS’s Share Price Hit an All-Time High Above S$45: What’s Next for Singapore’s Largest Bank?</title>\n<style 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margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDBS’s Share Price Hit an All-Time High Above S$45: What’s Next for Singapore’s Largest Bank?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-20 09:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/dbss-share-price-hit-an-all-time-high-above-s45-whats-next-for-singapores-largest-bank/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>2025 has just arrived, and DBS Group (SGX: D05) is already setting new records.Singapore’s largest bank saw its share price surpass the S$45 level for the first time, closing at S$45.44 on 8 January....</p>\n\n<a href=\"https://thesmartinvestor.com.sg/dbss-share-price-hit-an-all-time-high-above-s45-whats-next-for-singapores-largest-bank/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0532188223.SGD":"JPMorgan Funds - ASEAN Equity A (acc) SGD","IE00BGHQDM52.EUR":"GUINNESS ASIAN EQUITY INCOME \"C\" (EUR) ACC","D05.SI":"星展集团控股","IE00BKZH1Z71.USD":"BNY MELLON ASIAN INCOME \"B\" (USD) ACC","LU0823417653.USD":"BNP PARIBAS SUSTAINABLE GLOBAL LOW VOL EQUITY \"C\" (USD) ACC","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD","IE0031814969.USD":"FSSA ASEAN ALL CAP FUND \"I\" (USD) ACC","SG9999001135.SGD":"United ASEAN Fund SGD","LU0557290698.USD":"施罗德环球可持续增长基金","LU0955648018.USD":"SCHRODER ISF ASIAN DIVIDEND MAX \"A\" (USD) INC MF","LU0873338254.USD":"FULLERTON LUX FUNDS - ASIA GROWTH & INCOME EQUITIE \"I\" (USD) 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Growth A (acc) SGD","SG9999003826.SGD":"日兴资管新加坡股息基金 SGD","SG9999003800.SGD":"Nikko AM Global Dividend Equity Acc SGD-H","IE00BVYPNP33.GBP":"GUINNESS ASIAN EQUITY INCOME \"C\" (GBP) ACC","LU1504937902.USD":"CT (LUX) I ASIAN EQUITY INCOME \"DUP\" (EUR) INC","LU0950375773.USD":"BNP PARIBAS SUSTAINABLE GLOBAL LOW VOL EQUITY \"C\" (USD) INC A"},"source_url":"https://thesmartinvestor.com.sg/dbss-share-price-hit-an-all-time-high-above-s45-whats-next-for-singapores-largest-bank/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2504416107","content_text":"2025 has just arrived, and DBS Group (SGX: D05) is already setting new records.Singapore’s largest bank saw its share price surpass the S$45 level for the first time, closing at S$45.44 on 8 January.DBS produced a stellar performance last year that saw its share price surge nearly 44% to close at S$43.72.Investors may be wondering though: what’s next for the lender, and can it pull off a similar feat this year?Let’s dig deeper to find out.A record-high net profitDBS reported an impressive set of earnings for its third quarter (3Q 2024) and the first nine months of 2024 (9M 2024).For 9M 2024, commercial book net interest income rose 5% year on year to S$11.2 billion, buoyed by higher interest rates that benefitted its net interest margin (NIM).Commercial book net fee income jumped 27% year on year to hit S$3.2 billion.This combination of better net interest income and non-interest income led to an 11% year-on-year increase in total income to S$16.8 billion.The blue-chip bank saw its net profit for 9M 2024 climb 12% year on year to a record S$8.8 billion.DBS raised its quarterly dividend for 3Q 2024 by 22.7% year on year to S$0.54. For 9M 2024, the dividend of S$1.62 was 28.6% higher than the previous year’s S$1.26.CEO Piyush Gupta was sanguine about the bank’s prospects.He expects group net interest income to hover around 2024 levels although DBS’s NIM should decline slightly.The decline, however, will be offset by loan growth.Non-interest income is expected to rise by high-single-digits year on year, with pretax profits coming in around last year’s levels.“Higher for longer” interest ratesWith the latest strong economic data coming out of the US, pundits now believe that the US Federal Reserve may hesitate to cut interest rates.US nonfarm payrolls showed an addition of 256,000 jobs in December, far exceeding economists’ expectations of 155,000.The unemployment rate fell to 4.1%, underscoring the continued strength of the US economy despite overall higher interest rates.But with core inflation at 2.9% for the trailing 12-month period, the central bank will also not be overeager in raising rates.Hence, we may be in a situation where interest rates stay “higher for longer” until inflation dips towards the Federal Reserve’s desired 2% level.Meanwhile, the upcoming inauguration of Donald Trump as US president may also result in higher inflation over time.Economists expect his planned tariff policies to be inflationary and could result in the central bank having to either keep rates higher for longer, or to even raise rates should inflation reignite.Should interest rates hover at current levels for an extended period, it will benefit DBS’s NIM and boost net interest income.Good prospects for non-interest incomeOver at the non-interest income side, healthy consumer spending should see fee income continue to climb this year.Singaporeans are spending more on their credit cards with rollover balances hitting a record high of S$7.9 billion in 3Q 2024.Total credit card billings have also increased from 2Q 2024 to S$24 billion.These rollover balances are charged an interest of 30.8% per year, thus allowing DBS to enjoy higher fee income from this segment.Wealth management fees is another area of growth for DBS.The number of single-family offices in Singapore grew by 43% year on year for 2024 and shot past 2,000.Second Finance Minister Chee Hong Tat emphasized that Singapore’s pro-business stance will attract more wealth to the nation and this trend will help to boost DBS’s wealth management fee income in the medium term.Excess capital = higher dividends?Gupta made it clear during the bank’s previous annual general meeting in 2024 that DBS has excess capital of around S$5.9 billion, or around S$2 per share.He does not rule out the possibility of a special dividend declaration, increasing the bank’s share buybacks, or raising the core ordinary dividend.A recent catalystThe recently-announced Singapore-Johor Special Economic Zone (SEZ) will act as an additional catalyst for DBS.The SEZ will encourage more Singapore firms to expand operations into Malaysia while the Malaysian side will set up a fund to support infrastructure investments in Johor.A special corporate tax rate along with a lower workers’ tax rate should also attract more companies and people to cross the Causeway and work in Johor.Of the 11 economic sectors that will be promoted, one of them is “financial services” which should benefit the bank.With more businesses set to expand, DBS can capitalise on this to grow its loan book.Get Smart: A bright outlookThe verdict is in.DBS look set to benefit from the prolonged high-interest-rate environment that should sustain its net interest income.Non-interest income should also see a boost from higher credit card spending and the influx of family offices into the city-state.Investors could be in for a pleasant surprise when DBS announces its 2024 results on 10 February as the bank has excess capital to reward shareholders.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":10,"commentSize":1,"repostSize":1,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false}}