DBS Shares Rise in Wake of Higher Profit, Surprise Bonus Shares
By Kimberley Kao
Shares of DBS Group rose in early trade after Singapore's biggest bank posted quarterly results and surprised investors with plans for bonus shares.
DBS shares were up 2.8% at S$32.54 on Wednesday afternoon, on track for their biggest one-day percentage gain since July last year. Shares are down about 2.6% so far this year, roughly in line with losses in the city-state's benchmark index.
The bank, one of Southeast Asia's largest by assets, said net profit for the fourth quarter rose 2.0% from a year earlier, helped by gains in card and wealth-management fees, while total income climbed 9.0%.
It said it will issue bonus shares instead of paying a special dividend, with plans to give investors one bonus share for every 10 ordinary shares held.
DBS also said that it has cut Chief Executive Officer Piyush Gupta's variable pay by 30%, or about US$3 million. This comes after the lender was put under review by the Monetary Authority of Singapore after suffering a wave of disruptions to its digital banking services last year. Other members of DBS's management committee took a 21% cut.
Analysts had mixed reactions to the quarterly results.
Jefferies analysts said the earnings had missed market expectations, weighed down by a softer net interest income, higher costs and one-off items. They said in a note that they see an uncertain outlook ahead for the bank's net interest margin, given a "complicated macro environment and still muted corp loan demand across the region."
Jefferies kept a hold rating and a S$31.65 price target on DBS stock.
The results were in line with Citi's estimates, analyst Yong Hong Tan said in a note, expecting the market to have a positive view of the bonus issue.
Citi maintained a sell rating on the stock, however, with a target price of S$29.20.
Write to Kimberley Kao at kimberley.kao@wsj.com
(END) Dow Jones Newswires
February 07, 2024 00:38 ET (05:38 GMT)
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