Singapore-based lender DBS has reported net profit of SGD1.05bn for the second quarter of 2016, down 6% from SGD1.11bn a year ago.
The bank said the decline in profit was driven by a net allowance charge of SGD150m for the bank’s exposure to the troubled oilfield services firm Swiber group.
Pre-tax profit declined 6% to SGD1.27bn from SGD1.34bn in the year-ago period.
The bank's total income stood at SGD2.92bn, an increase of 8% from SGD2.70bn a year earlier. Net interest income rose 5% to SGD1.83bn from SGD1.74bn a year ago.
Net fee and commission income increased 8% to SGD628m from SGD582m a year ago, while other non-interest income surged 22% to SGD458m from SGD375m a year ago.
The lender's expenses for the period increased 6% to SGD1.28bn from SGD1.22bn in the second quarter of 2015.
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The bank's consumer banking /wealth management unit registered pre-tax profit of SGD456m in the second quarter of 2016, up 35.7% from SGD336m in the prior-year quarter. The unit’s total income jumped 18.5% year-on-year to SGD1.07bn from SGD903m.
Pre-tax profit at the bank’s institutional banking segment slumped 64.3% to SGD284m from SGD797m in the corresponding quarter of 2015, while total income increased 1.3% to SGD1.34bn from SGD1.32bn a year ago.
DBS CEO Piyush Gupta said: “We achieved two consecutive quarters of record total income despite a challenging operating environment in the first half. The strong income growth in the second quarter enabled profit before allowances to grow 10%. Despite an unexpected significant allowance charge, first-half earnings were at a record.
“The performance demonstrates our ability to consistently capture opportunities across our businesses and effectively manage costs. While there remains some uncertainty in the second half, our business momentum is good and our balance sheet healthy. We are well prepared to meet the challenges ahead.”