Singapore-based DBS Group has reported a net profit of SGD1.17bn ($829m) for the first quarter of this, which is a drop of 29% compared to last year.

The profits fell as the bank ‘pre-emptively’ set aside S$1.09bn ($772.5m) for covering potential risk arising from the ongoing coronavirus pandemic.

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The charge, the bank said in its financial report, raised the amount of general allowance reserves by 29% to S$3.23bn.

However, DBS Bank reported a 20% surge in ‘profit before allowances’ to S$2.47bn ($1.75bn) compared to same quarter last year.

It also declared an interim dividend of $0.23 per share, unchanged from the previous quarter.

DBS Bank’s shares soared more than 4% after its earnings release.

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Key financial metrics

For the quarter ended 31 March 2020, the group reported a 13% year-on-year (YoY) rise in total income to S$4.03bn ($2.86bn).

The non-performing loans inched up to 1.6% of total outstanding loans, as against 1.5% in the year-ago quarter.

The banking groups’ net Interest Margin at the end of the first quarter stood stable at 1.86%.

DBS CEO Piyush Gupta said: “Our record operating performance in the first quarter has given us a head start to face the challenges of the coming year.

“While the economic outlook remains uncertain and credit risks have increased, the digital investments we have made have strengthened the resilience and efficiency of our franchise and we remain committed to serving our customers.

“We will maintain a solid balance sheet with ample capital, liquidity and loss allowance reserves that give us strong buffers to absorb external shocks.”