DBS shares slide after bank's Q4 profit falls 10%, missing forecast

Earnings for the quarter fall to $2.26 billion amid rate headwinds, higher tax expenses

- Sheila Chiang Business Correspondent

DBS Group, Singapore's largest bank by assets, missed analysts' expectations with a 10 per cent year-on-year fall in fourth-quarter net profit as sharply lower interest rates and a stronger Singapore dollar hit loan margins.

Earnings for the three months ended December were $2.26 billion, down from $2.52 billion a year ago, as stronger fee income and treasury customer sales were more than offset by rate headwinds, higher tax expenses and the absence of nonrecurring gains recorded a year ago.

Excluding $100 million set aside as part of the bank's corporate social responsibility commitment, net profit would have been $2.36 billion.

The net profit figure missed the $2.59 billion forecast by analysts in a Bloomberg poll.

DBS shares fell $1.11 or 1.9 per cent to $58.19, with 11.4 million shares traded. The stock is down 2.7 per cent since hitting a record closing high of $59.79 on Jan 29.

Rival OCBC Bank was up 0.7 per cent to $21.38, while UOB rose 0.5 per cent to $38.70.

Looking ahead, DBS expects 2026 net profit to be slightly below 2025 levels, but total income to be around 2025 levels despite rate headwinds.

Group net interest income is expected to be slightly below 2025 levels, as the bank assumes Singapore Overnight Rate Average of 1.25 per cent, two US Federal Reserve rate cuts and a strong Singapore dollar.

But the bank further expects full-year impact of lower rates to be mitigated by deposit growth and to continue to capture hedging opportunities.

DBS chief executive Tan Su Shan said: "While rate pressures and geopolitical tensions are expected to persist, the quality of our franchise and strong balance sheet provide a solid foundation for the year ahead."