DBS Group Holdings Ltd posted higher net profit of S$1066m (+6% YoY -5% QoQ), better than consensus of S$990m based on a Bloomberg poll. Net Interest Income rose 13% YoY and 4% QoQ to S$1813m – a record high. Net Interest Margin (NIM) improved 10bp from a year ago and 3bp from a quarter ago to 1.78%.

However, improvement in Net Interest Income was offset by declines in Non-interest Income, which fell 1% YoY and 5% QoQ to S$899m. Net Fee Income fell 11% from last quarter due to market volatility which affected the group’s wealth management, investment banking and stockbroking income. Total allowances were up 30% from a quarter ago to S$178m. We have a BUY on the stock, but will review our estimates and provide more details after the analyst briefing later in the day.

Source: OCBC Research - 2 Nov 2015