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SINGAPORE: Singapore’s biggest bank DBS Group said on Thursday (Aug 3) its second-quarter profit jumped a forecast-beating 48 per cent to a new record as higher interest rates helped drive income growth, and forecast growth in its net interest margin (NIM).
DBS said the outlook for NIM, a key indicator of profitability, had improved due to unexpected US interest rate increases in the second half and a rise in the Hong Kong Interbank Offered Rate.
It looked forward to continued support from one-fifth of its commercial book yet to reprice and lower deposit repricing pressure than it had expected, according to presentation slides accompanying its results.
“The commercial book benefited from higher interest rates and broad-based growth in non-interest income activities, which was moderated by higher funding costs for treasury markets,” DBS Chief Executive Officer Piyush Gupta said in a statement.
“While there is some macroeconomic uncertainty, our prospects for the rest of the year are anchored on a franchise with a proven ability to capture business opportunities,” Mr Gupta added.
Mr Gupta also said during the second quarter, the bank started work to strengthen the resilience of its technology while awaiting the completion of the independent review of its recent digital disruptions.
Last month, a preliminary probe by the Monetary Authority of Singapore (MAS) found that human error was the cause of the bank’s digital banking disruption in May.
MAS had imposed an additional capital requirement on the bank in the wake of two successive service disruptions in the space of just over a month.
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