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Thursday, November 05, 2020 – 8:01 am
SINGAPORE banks posted lower profits for the third quarter of this year compared to the previous year, as the trio continued to accumulate provisions to cushion bad loans as a result of the Covid-19 crisis.
Although they remain cautious, they point to a recovery in business momentum as regional economies emerge from lockdowns, noting that provisions are sufficient to cushion uncertainties about the extent of recovery next year.
DBS
DBS’s net profit for its third quarter fell 20 percent as the bank continued to accumulate allocations from the prior-year period, it said Thursday. The bank will pay a dividend per share of 18 Singapore cents, unchanged from a quarter ago.
Net profit for the three months ended September 30, 2020 was S $ 1.30 billion, compared to S $ 1.63 billion in the prior year period. Total revenue was down 6 percent, hurting both net income and fee income, while business income increased.
Total allocations more than doubled from a year ago to S $ 554 million for the quarter.
During the quarter, net profit increased 4 percent.
In a statement, DBS Chief Executive Officer (CEO) Piyush Gupta said third-quarter results reflect a recovery in business momentum as regional economies emerge from lockdowns.
“The rebound in fee income to pre-Covid levels has allowed us to cushion the full impact of lower interest rates. At the same time, the accelerated accumulation of appropriations has strengthened our ability to meet the challenges of an economic recovery. uneven in next year. “
OCBC
OCBC posted a 12 percent drop in net earnings for the third quarter on Thursday due to lower revenue and a slight increase in appropriations.
Net profit for the three months ended September 30, 2020 was S $ 1.03 billion, compared to S $ 1.17 billion for the prior year period. Total revenue decreased 4 percent from the prior year period.
Total allocations increased by 8% to S $ 350 million.
During the quarter, net income increased 40 percent due to lower allocations.
In a statement, OCBC CEO Samuel Tsien said that while the third quarter saw a recovery from the lowest point of the previous quarter, “we may not have yet seen the full extent of the lagging economic impact of the crisis,” which will have more visibility next year. ” .
“In the meantime, we are proactively tracking and responding to exits from the government aid program in all markets.”
UOB
UOB reported a 40 percent drop in net earnings for its third quarter on Wednesday as it racked up allocations. Net income for the three months ended September 30, 2020 was S $ 668 million, compared to S $ 1.12 billion for the prior year period. Both net income and non-financial income were lower.
An additional provision of S $ 339 million was set aside for non-impaired assets to strengthen the provision coverage, the bank said.
During the quarter, net income was 5% lower, although third quarter operating income improved 3% compared to the second quarter.
UOB Chief Executive Wee Ee Cheong said in a press release on Wednesday that the economic trajectory remains uneven and unclear, despite the first signs of recovery in the world economy.
“Given the evolving geopolitical and pandemic situation, we remain vigilant, especially in our key regional markets. However, the quality of our assets is manageable and we are adequately provisioned even with the expiration of moratorium programs in the region,” said.
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