DBS shares cross $55 mark for first time as Q3 earnings beat forecast

Shares of DBS surged past $55 for the first time on Nov 6 after Singapore’s largest bank posted a smaller-than-expected drop in third-quarter earnings as lower interest rates squeeze margins.

- Sheila Chiang Business Correspondent

The stock opened at $53.90, crossed the $55 mark at 9.15am and continued to rise. At the close of trading, DBS was up 3.8 per cent or $2.04 to $55.54, after 13.1 million shares changed hands.

The bank’s net profit for the three months to Sept 30 dipped 2 per cent to $2.95 billion, from $3.03 billion in the year-ago period, but beat the $2.79 billion forecast by analysts in a Bloomberg poll.

The bank declared an interim one-tier dividend of 60 cents and a one-tier capital return dividend of 15 cents for each ordinary share.

This brings the quarter’s total dividend payout to 75 cents per share, compared with the 54 cents in the year-ago period.

The dividend payable is expected to be $2.13 billion.

DBS said commercial book net interest income in the quarter fell 6 per cent to $3.56 billion as lower rates were mitigated by hedging and deposit growth.

Commercial book net interest margin declined 43 basis points to 2.4 per cent, from 2.83 per cent in the year-ago period.

Banks face squeezed net interest margins - the difference between what banks earn on loans and what they pay on deposits — as rates fall.