DBS reported 4Q15 earnings of S$1002m, better than a Bloomberg consensus of S$965m. This is up 20% YoY and -6% QoQ. Full year earnings came in at S$4454m, up 10%. Net Interest Margin (NIM) improved from 1.71% in 4Q14 and 1.78% in 3Q15 to 1.84% in 4Q15. Allowances rose 17% YoY and 39% QoQ to S$247m. NPL ratio was flat at 0.9% YoY and QoQ.

On its China portfolio, this has come off from S$43b as of Sep 2015 to S$37b by end-2105. Of this, trade loans accounted for S$21b (or 57% versus 60% in 3Q15). Total exposure to Oil & Gas was unchanged from last quarter at S$22b. Of this, there was no NPL for its producers, traders, processors segment. However, for the support services portfolio which amounted to S$9b, NPL was at 1.3% as at end 2015.

On commodities, total portfolio remained unchanged from last quarter at S$12b with NPL at 1.7%. A final dividend of 30 cents has been declared, bringing full year to 60 cents. Ex-dividend date is 5 May 2016. We will provide more details after the results briefing. We have a BUY rating on DBS and will review our FY16 estimates post briefing.

Source: OCBC Research - 22 Feb 2016