DBS released its 2Q net earnings this morning which came in better-than-expected at S$969m versus consensus estimate of S$938m (based on Bloomberg). This resulted in 1H earnings of S$2200m, up 20%. At the net earnings level, there was a QoQ drop in 2Q14 net earnings largely because of the one-off item in 1Q14 (from the sale of its stake in the Bank of the Philippines Islands).

Net Interest Margin (NIM) improved marginally from 1.62% in 2Q13 and 1.66% in 1Q14 to 1.67% in 2Q14. Net Interest Income showed both good YoY and QoQ growth to S$1557m in 2Q14.

DBS has declared a 1H dividend of 28 cents, unchanged from 1H13. The ex-date is 13 Aug 2014. The dividends will be payable on or about 3 Oct 2014. We will provide more information after the analysts’ briefing later this morning. Our previous rating for the stock is a BUY, but we will be re-looking our estimates after the briefing.

Source: OCBC Research - 1 Aug 2014