Summary: DBS reported 2Q19 net earnings of S$1.60b, up 20% YoY and -3% QoQ. This was higher than market consensus expectation for 2Q19 net earnings of S$1.51b (based on Bloomberg poll). This gives 1H19 net earnings of S$3.25b, +14% YoY.

Net Interest Income delivered an expected strong performance, up 9% YoY and 5% QoQ to S$2.43b and accounted for 65.5% of total income. Noninterest Income also performed well, up 31% YoY and 3% QoQ to S$1.28b. However, allowances rose from S$76m in 1Q19 to S$251m in 2Q19.

An interim dividend of 30 cents was declared. Management is maintaining its outlook for 2019, that is, mid-singledigit loans growth, mid-single-digit basis point NIM improvement with modest impact from 2H interest rate cuts, high-single-digit percent income growth, cost-to-income ratio of 43%, and ROE approaching 13%.

Please note that DBS trades ex-dividend on 5 Aug 2019.

Source: OCBC Research - 29 Jul 2019