“Extraordinary” first quarter at DBS bodes well for bonuses

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“Extraordinary” first quarter at DBS bodes well for bonuses

If Standard Chartered staff were mildly impressed with their firm’s 18% year-on-year rise in Q1 profits, DBS employees are likely to be overjoyed when they look back on a record opening quarter.

Net profit for the three months to end-March increased 72% to S$2.01bn, the first growth in more than a year and the first time quarterly earnings have topped S$2bn. “This has been an extraordinary quarter for our business as we fired on all cylinders,” DBS CEO Piyush Gupta said. “We are in a position of strength to support customers and deliver shareholder returns as the economic recovery takes hold,” he added.

Fee income hit a new high of S$1.08bn. As at Standard Chartered, wealth management staff at DBS can take much of the credit for this gain. Wealth management fee income rose 24% to a record S$519m as “strong investor sentiment drove demand across a wide range of investment products in a low interest rate environment”.

Similar to most other banks, it was a good Q1 for traders. Trading income doubled as non-interest income and treasury customer income “rose to new highs”. DBS did not provide further details. Investment banking fee income was up 36% to S$49m, although it still only contributed 4.5% of the firm’s overall income.

While it’s too early to be estimating the size of 2021 bonuses, Q1 has got DBS’s bonus pool off to a good start. There were “higher bonus accruals in line with the better financial performance”, according to the bank’s earnings results. Overall staff expenses were up 10%, but DBS will not release its latest headcount numbers until its half-year earnings are published, so it’s not possible to calculate pay per head.

Meanwhile, blockchain skills are in demand at DBS. Among the hottest tech projects to work on at the bank is the “digital exchange”, which was highlighted by CEO Gupta during his results presentation as a driver of “new growth”. The exchange, which uses blockchain technology for trading cryptocurrencies, has experienced a 10-fold rise in daily trading value since its launch in January. Gupta expects “further scaling” of the business over the coming quarters. He also drew attention to DBS’s new collaboration with JP Morgan and Temasek on Partior, an open-industry blockchain platform for payments, trade and foreign exchange settlement.

Digital transactions have “accelerated” during the pandemic, according to DBS’s earnings report. The bank is one of the largest recruiters of tech professionals in the Singapore banking sector. Technology, digital and analytics roles make up 55% of DBS’s current Singapore-based vacancies, according to its careers site.

If you want an international transfer within DBS, the bank has more options for you than it did this time last year. In November, DBS acquired India’s Lakshmi Vilas Bank. More significantly, in January, DBS finalised the legal incorporation of DBS Securities (China) Limited, a joint venture securities company in which DBS has a controlling stake. DBS has already hired 100 staff and a business license is anticipated shortly, said Gupta.

DBS’s record opening quarter far exceeded analysts’ expectations. It follows strong earnings results in Asia for global banks – including Credit Suisse, Morgan Stanley and Goldman Sachs – and points to a rebound in the Asian banking sector.

Image: unsplash

Have a confidential story, tip, or comment you’d like to share? Email: smortlock@efinancialcareers.com or Telegram: @simonmortlock. You can also follow me on LinkedIn.

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