Tan says diversification is even more urgent post &lsquo Liberation Day&rsquo

 

[SINGAPORE] China&rsquo s push into deep technology and artificial intelligence is creating pockets of growth despite an uneven recovery in its property sector and subdued consumer sentiment, DBS Group chief executive Tan Su Shan said on Tuesday (Nov 11).

 

Speaking at a Reuters NEXT Newsmaker interview, Tan said: &ldquo You&rsquo ve got pockets of exciting growth, all driven by technology and fully supported by the government. And I think that&rsquo s where you focus your growth on.&rdquo

 

Tan, who became the first woman to lead South-east Asia&rsquo s largest bank by assets in March, said she sees signs of recovery in cities such as Shanghai, where DBS recently opened a wealth centre to expand its onshore wealth management business.

 

&ldquo Rates are very low, and so the money has to be invested somewhere, and it&rsquo s not going to the property market, so it will probably go into wealth management products,&rdquo she said.

 

Tan said it was important to listen to what the Chinese government says. &ldquo I always take notes, because I know if they put their mind to it, they will do it.&rdquo

 

Chinese technologies with &ldquo exciting growth&rdquo include deep tech AI, biotechnology, small language models, humanoid robots and drones, she said.

 

Tan also said that Shenzhen Rural Commercial Bank, a Chinese bank in which DBS holds a 19.4 per cent stake, subject to regulatory approval, is a &ldquo very complementary&rdquo partnership, with DBS helping SRCB&rsquo s clients expand overseas.

 

DBS in January said it raised its stake in Shenzhen Rural Commercial Bank to 19.4 per cent from 16.7 per cent, strengthening its presence in China&rsquo s Greater Bay Area as part of its long-term growth strategy.

 

She also reiterated the need for businesses to diversify supply chains and revenue sources, especially after the US imposed sweeping tariffs on dozens of countries in April, which President Donald Trump called &ldquo Liberation Day&rdquo .

&ldquo Covid was a dry run,&rdquo Tan said, adding that when the tariffs hit, the strategy was to &ldquo press that diversification button even harder, especially on the demand side&rdquo .

 

DBS, ranked as Singapore and South-east Asia&rsquo s largest bank in terms of assets, reported better-than-expected third-quarter earnings on Thursday, sending its shares to a record high, but guided that 2026 net interest margins will be slightly below 2025 levels. 

 

SINGAPORE - Singapore&rsquo s three largest banks &ndash DBS Bank, OCBC Bank and UOB &ndash posted mixed third-quarter results last week as moderating interest rates and an uncertain macroeconomic outlook weighed on performance.

 

DBS on Nov 6 posted a better-than-expected profit of $2.95 billion for the July to September quarter, sending its shares to a record high of $55.59 on Nov 7.

 

The bank&rsquo s total income grew 3 per cent year on year to $5.93 billion, supported by wealth and deposit growth, even as net interest margin &ndash the difference between what a bank earns from loans and what it pays on deposits &ndash fell to 1.96 per cent from 2.11 per cent a year earlier.

 

DBS shares pared gains to rise 1.95 per cent through the week to close $54.98 on Nov 7.

 

In contrast, UOB on Nov 6 posted a sharp 72 per cent drop in net profit to $443 million from $1.61 billion in the year-ago period, on a surge in credit provisions. The results fell short of a Bloomberg forecast.

 

Allowances for credit and other losses more than quadrupled to $1.36 billion from $304 million a year earlier, as the bank &ldquo took proactive steps to strengthen its provision coverage amid ongoing macroeconomic uncertainties and sector-specific headwinds&rdquo .

 

The stock closed at $33.86 on Nov 7, down 2.34 per cent from the previous week&rsquo s close.

 

OCBC&rsquo s profit of $1.98 billion was little changed from the year-ago period on the back of higher non-interest income and lower allowances, but beat analysts&rsquo expectations.

 

Non-interest income rose 15 per cent year on year to $1.57 billion from fee, trading and insurance income growth. Total allowances of $139 million were 18 per cent lower year on year.

 

Its shares reached an all-time high of $17.94 on Nov 7 before trimming gains to close at $17.78, 4.4 per cent higher than the previous week&rsquo s close.

 

The benchmark Straits Times Index, which the local banks are heavyweights of, was lifted to a fresh record of 4,520.49 on Nov 7 before closing 1.44 per cent higher at 4,492.24 from the previous week&rsquo s close.

 

Sheng Siong shares hit new peak

Sheng Siong was in the limelight last week after its shares on Nov 4 reached $2.59 &ndash its highest since the supermarket operator listed on the Singapore Exchange (SGX) in August 2011.

 

The stock closed at $2.56 on Nov 7, 10.3 per cent higher than the previous week&rsquo s close of $2.32.

 

Sheng Siong on Oct 30 reported that net profit had risen 12 per cent to $43.8 million for the third quarter, compared with $39.1 million a year earlier. For the three months ended Sept 30, revenue grew 14.4 per cent to $415.5 million.

 

The growth was primarily driven by a net increase in the total number of Sheng Siong stores to 90 during the quarter, up from 79 in the same period in 2024.

 

Analysts view Sheng Siong Group as a defensive play amid rising inflation and slower economic growth.

 

OCBC said demand for groceries could be supported by a shift in consumption patterns, as inflationary pressures and higher living costs steer consumers towards value-focused spending.

 

RHB analyst Alfie Yeo said that the pipeline for new HDB stores continues to be robust, with three new outlets expected to be released by June 2026. Sheng Siong&rsquo s newly announced Sungei Kadut facility is expected to support at least 120 stores.

 

In the latest turn of events at Fu Yu, the plastic and metal components and products manufacturer said it received two letters of demand from sacked chief executive David Seow, claiming about $2 million in total over his alleged wrongful termination and defamation.

 

The firm on Nov 6 said that it received the letter of demand dated Nov 4, in which Mr Seow sought $1,853,548.39 in unpaid salary.

 

Mr Seow also sent a letter of demand dated Nov 5 to Fu Yu, its independent directors and corporate secretary, alleging defamation and demanding a bourse filing on Nov 1 announcing his termination be retracted.

 

Fu Yu added that Mr Seow also demanded a signed apology to be published on SGXNet and damages of $200,000, among other things.

 

Mr Seow&rsquo s dismissal comes after an internal investigation launched by Fu Yu&rsquo s newly appointed independent directors after they took office in late June.

 

Shareholders had questioned the company&rsquo s financial performance at its annual general meeting in June, noting that the remuneration for Fu Yu&rsquo s directors and key management personnel &ldquo appeared to be high in contrast to the low revenue of the company&rdquo .

 

Shares of Fu Yu closed at 10 cents on Nov 7, 4.8 per cent lower than the previous week&rsquo s close of 10.5 cents.

 

Coliwoo shares dip after SGX debut

Shares of co-living operator Coliwoo fell 2.5 per cent below their initial public offering (IPO) price on their first day of trading on the SGX.

 

The counter on Nov 6 opened at 61.5 cents, above its IPO price of 60 cents, before closing at 58.5 cents.

 

The shares then gained 0.86 per cent on Nov 7 to close at 59 cents.

 

Coliwoo said the IPO received strong interest and commitment from various institutional investors. Nine cornerstone investors, including Avanda Investment Management and UOB Asset Management, subscribed for around 88 million cornerstone shares at the offering price of 60 cents.

 

Coliwoo is a spin-off from mainboard-listed LHN Group, a real estate management company.

 

Co-founder Kelvin Lim, who is also the executive chairman and group managing director of LHN, previously told The Straits Times the main reason for hiving off Coliwoo was to improve the allocation of resources within the group.

 

Coliwoo plans to use the proceeds primarily for expansion, growth and asset enhancement of its co-living business.

 

Other market movers

Yangzijiang Shipbuilding shares fell 4.26 per cent over last week to close at $3.37 on Nov 7.

 

Yangzijiang Shipbuilding, in a Nov 4 filing, noted that the Oct 31 sale of about 27.5 million shares by BlackRock meant that the asset manager ceased to be a substantial shareholder of the company.

 

BlackRock also sold about 10.3 million shares in the shipbuilder on Oct 29.

 

Singtel in a bourse filing on Nov 7 confirmed that it is having ongoing discussions in relation to ST Telemedia Global Data Centres, following media reports that the telco and private equity firm KKR are in advanced talks to acquire about 80 per cent of the data centre operator.

 

&ldquo There is no certainty that such discussions will lead to any definitive or binding agreement,&rdquo Singtel said, adding that it regularly explores and reviews business opportunities, projects and proposals.

 

Singtel said it will make an announcement if and when there are any material developments that warrant disclosure, and that investors should exercise caution in their review of any media reports relating to potential transactions ahead of any definitive announcement.

 

The telco on Nov 7 also confirmed that it sold approximately 0.8 per cent of its direct stake in regional associate Airtel, as it continues to proactively optimise its portfolio through asset recycling. The resultant gain from the sale is estimated to be $1.1 billion.

 

Following the transaction, Singtel&rsquo s stake in Airtel stands at 27.5 per cent and is valued at an estimated $51 billion.

 

Singtel shares closed 8.94 per cent higher at $4.63 on Nov 7 from the previous week&rsquo s close.

 

What to look out for this week

This week&rsquo s line-up of Singapore blue chips scheduled to report earnings includes Singtel, StarHub, Singapore Post and Singapore Airlines.

 

Singtel will release its half-year results on Nov 12, while StarHub is scheduled to announce its business performance update for the third quarter and nine months ended Sept 30 on Nov 14.

 

SingPost will announce its unaudited half-year results on Nov 10 before the market opens. Singapore Airlines will report its half-year financial results for the year ending March 31, 2026, on Nov 13 after trading hours.

Total allowance stands at S$6.4 billion, comprising S$4.1 billion in general provisions and S$2.4 billion in specific allowances

[SINGAPORE] DBS&rsquo general allowance reserves are &ldquo more than adequate&rdquo , said its chief executive Tan Su Shan.

 

Chief financial officer Chng Sok Hui noted that the bank will also not top up its general allowances any further, especially after it increased its overlay general provisions by S$200 million earlier in 2025 to incorporate uncertainty over US tariffs.

 

&ldquo (The general allowances) are more than adequate because we actually exceeded the (regulatory requirement),&rdquo Chng said at a briefing for the lender&rsquo s third-quarter results on Thursday (Nov 6).

 

This comes as UOB on the same day posted a 72 per cent decline in net profit to S$443 million, after it took S$1 billion in additional provisions. 

 

The provisions include an additional S$615 million in &ldquo pre-emptive&rdquo general allowance in view of ongoing macroeconomic uncertainties and sector-specific headwinds.

 

The bank also had higher specific allowance for a few non-systemic corporate accounts, which largely include its commercial real estate clients in the US and Greater China.

 

Overall, UOB&rsquo s total allowances as at Sep 30 was S$1.17 billion, more than four times or S$885 million higher than the S$281 million set aside in the same period the previous year.

 

Meanwhile, DBS&rsquo total allowance stood at S$6.4 billion, comprising S$4.1 billion in general allowances and S$2.4 billion in specific allowances. 

 

DBS&rsquo general allowance reserves also comprise two components. The baseline general provision is set aside for base scenarios, while the overlay component covers stress scenarios such as macro uncertainty and sector-specific headwinds.

 

As at Sep 30, DBS&rsquo total general provision stack of S$4.1 billion comprised a baseline segment of S$1.6 billion, and an overlay provision of S$2.5 billion.

 

This brings its allowance coverage ratio to 139 per cent.

 

Tan also noted that the bank could write back some of its general provisions in 2026 if conditions stay resilient.

 

&ldquo And if conditions soften, we have quite a bit of buffer, through our allowance reserve and our strong capital ratios,&rdquo she added.  

 

Lender&rsquo s Q3 net profit is S$2.95 billion &ndash higher than the S$2.79 billion estimated in survey

 

[SINGAPORE] Shares of   DBS   : D05 +3.81% rocketed more than 3 per cent on Thursday (Nov 6), after the bank posted net profit that beat analyst forecasts.

 

The stock soared to S$54.68 at about 9.11 am, from DBS&rsquo closing price of S$53.50 on Wednesday. 

 

At around 9.15 am, the stock reached S$55.10, according to ShareInvestor data, compared to its last record of S$54.80 at close on Oct 7. 

 

The counter was trading at S$55.38 at 1.07 pm, around 3.4 per cent higher, shortly after the mid-day break. 

 

It then hit a record-high of S$55.55 at 1.13pm, which would be a S$2.05 or 3.8 per cent increase.

 

The lender reported 2 per cent lower net profit for the third quarter ended Sep 30 at S$2.95 billion, compared with S$3.03 billion in the year-ago period. It beat the S$2.79 billion consensus forecast in a Bloomberg survey of six analysts.

 

Total income reached a new high of S$5.93 billion, although net profit was down due to the impact of the global minimum tax, DBS said.

 

According to a note from Citi, DBS&rsquo Q3 results beat consensus estimates by 8 per cent, driven by a 23 per cent quarterly surge in wealth management fees and a S$32 billion influx of new client assets.

 

Citi highlighted the bank&rsquo s &ldquo robust&rdquo asset quality, with new bad loans from corporate clients falling to a &ldquo multi-year low&rdquo .

 

DBS has hit multiple highs this year, and the new record continues a rally that has seen the stock climb nearly 25.8 per cent in the year to date. 

 

In June, DBS became the first listed company in Singapore to cross the US$100 billion market capitalisation milestone, supported by a weaker US dollar.

CEO Tan Su Shan sees opportunities within the equities capital markets and debt capital markets, as corporates return to these segments amid lower rates

[SINGAPORE] DBS expects its total income for 2026 to be around 2025 levels, as lower interest rates ahead can likely be mitigated by a growth in deposits, said chief executive Tan Su Shan.

 

Group net interest income (NII) will likely be weighed down by rate cuts in the US, a stronger Singapore dollar and based on the current Singapore Overnight Rate Average levels.

 

But the bank will make up for it with volume growth and fee growth, said Tan at a briefing for the lender&rsquo s third-quarter results on Thursday (Nov 6).

 

She sees opportunities within the equities capital markets and debt capital markets, as corporates come back to these segments amid lower rates.

 

The bank should also continue to see growth in loan fees as it focuses on winning market share, wallet share and mind share.

 

Meanwhile, Tan noted &ldquo a lot of momentum&rdquo in potential trade flows, as customers diversify their supply chains and look for new markets.

 

DBS is looking at growing the pipeline for intra-regional trade between Asian countries, which include Asean nations and China, she added.

 

The lender also expects to post high single-digit growth in commercial book non-interest income for 2026 amid tailwinds in its cost of funds, while gains in wealth management should be in the mid-teens.

 

Tan noted that the bank has refreshed its digital wealth strategy, which is now &ldquo yielding fruit&rdquo as momentum travels to DBS&rsquo retail and retail wealth segments.

 

Q3 results

In the third quarter of 2025, DBS&rsquo net profit fell 2 per cent on the year to S$2.95 billion, which beat the S$2.79 billion consensus forecast in a Bloomberg survey of six analysts.

 

This comes as total income reached a new high of S$5.93 billion, although net profit was lower due to the impact of the global minimum tax.

 

&ldquo Both the structural and cyclical growth came into gear in Q3 because the capital markets were very strong, so we saw strong momentum,&rdquo said Tan.

 

&ldquo The fact that we had some nimble hedging and we were able to capture some opportunities when the market became volatile speak to our resiliency&hellip and what was also pleasing was the fact that we saw huge amounts of deposits coming back to us.&rdquo

 

Group NII was little changed at S$3.58 billion, as strong deposit growth and proactive balance-sheet hedging mitigated the impact of lower rates.

 

Customer deposits rose 9 per cent on the year on a constant-currency basis to S$596.07 billion, led by current and savings account inflows.

 

Meanwhile, total customer loans were up 4 per cent at S$437.03 billion.

 

As a result, surplus deposits were deployed into high-quality liquid assets, which was accretive to NII and return on equity, though it modestly reduced net interest margin (NIM). 

 

But, for the commercial book segment, NII fell 6 per cent to S$3.56 billion, as its NIM declined 43 basis points to 2.4 per cent. 

 

Overall, group NIM stood at 1.96 per cent for the quarter, from 2.11 per cent in the corresponding period last year.

 

DBS also saw record fee income and treasury customer sales in Q3.

 

These two segments, which the bank calls its &ldquo customer-driven non-interest income&rdquo , is up 22 per cent on the year at S$1.94 billion.

 

&ldquo Fee income and treasury customer sales fall under different lines of the financial statement due to accounting treatment, (but) should be viewed equally as they are both driven by consumer and corporate customers&rsquo demand for financial products,&rdquo said DBS chief financial officer Chng Sok Hui.

 

Commercial book net fee and commission income was up 22 per cent at S$1.36 billion, with the increase broad-based and led by wealth management fees.

 

Commercial book other non-interest income rose 12 per cent to S$578 million, as treasury customers sales to wealth management and corporate customers grew 21 per cent to a new high.

 

Meanwhile, markets trading income rose 33 per cent to S$439 million due mainly to higher equity derivative activity.

 

The lender declared an ordinary dividend of S$0.60 per share and a capital return dividend of S$0.15 per share for the period. 

 

This brings the quarter&rsquo s total dividend payout to S$0.75 per share, compared with the S$0.54 per share in the year-ago period.

 

The bank&rsquo s non-performing loans ratio was flat at 1 per cent.