It also sees more ultra-high-net-worth families committed to using their wealth as a &lsquo force for good&rsquo

 

[SINGAPORE] DBS Private Bank&rsquo s multi-family office (MFO) service has attracted S$1 billion in assets under management (AUM) from more than 25 ultra-high-net-worth (UHNW) families in two years since its launch in 2023.

 

Lee Woon Shiu, DBS Private Bank group head of wealth planning, family office and insurance solutions, is confident AUM under the DBS Multi Family Office Foundry VCC would hit S$2 billion by next year.

 

&ldquo It&rsquo s very promising, because the pipeline is there&hellip We&rsquo ve seen a lot of traction in many markets we travel to. Many people have heard of VCC (variable capital company) in Singapore and want to understand more.&rdquo

 

In a statement, DBS said some families who have signed on were originally considering a single family office (SFO) but were persuaded by cost optimisation, manpower benefits and ease of administration which DBS MFO offers.

 

The cost of establishing and running SFOs in Singapore has risen since regulations were tightened in 2023, following a high-profile money laundering case involving S$3 billion in assets. In addition to broader due diligence checks, the processing time for tax incentives under the Monetary Authority of Singapore has also lengthened. All that is in addition to rising overhead costs, and the challenge of hiring qualified investment professionals.  

 

DBS MFO claims to be the world&rsquo s first bank-backed MFO that leverages Singapore&rsquo s VCC structure. It is designed as a &ldquo plug-and-play&rdquo offering, where DBS will set up sub-funds which automatically benefit from the VCC&rsquo s tax incentives. Ongoing regulatory reporting requirements are also managed on the client&rsquo s behalf. The minimum asset threshold is S$15 million.

 

Elsewhere in the market, families may have to set up their own fund entities and apply separately for tax incentives.

 

DBS MFO does not impose any pre-determined investment philosophy, and clients are not required to invest in DBS products. Clients are free to customise their own investment strategies that are aligned with the family&rsquo s long-term vision. Capital is held and managed professionally by DBS.

 

Lee said: &ldquo While the traditional SFO model still appeals to many, we anticipated very early on that there would be growing demand for cost efficient yet institutionally supported solutions&hellip Response has exceeded expectations.&rdquo

 

&ldquo Client interest in succession planning and wealth preservation has intensified, and we&rsquo re currently in talks with more than 15 prospects who see DBS MFO as an attractive solution.

 

&ldquo With this in mind, we&rsquo re on track to double our AUM to S$2 billion by end-2026, achieving in just over half the time what it took to reach our first billion,&rdquo said Lee.

 

In its family office practice, the bank offers other structures such as family trusts, private trust companies and donor-advised funds to address wealth and legacy planning needs.

 

DBS said it has also seen more UHNW families committed to using their wealth as a &ldquo force for good&rdquo , either through impact investment or philanthropy. DBS MFO&rsquo s efforts will focus on &ldquo unlocking strategic structural advantages&rdquo for clients in priority markets such as Taiwan, Japan and the United Kingdom.

It&rsquo s committed to S$0.24 annual core dividend step-up while OCBC, UOB remain on payout ratios pegged to earnings, which could fluctuate

 

[SINGAPORE] There is more room for DBS&rsquo share price to continue rising in the months ahead given the bank&rsquo s strong dividend outlook, analysts said.

 

Market watchers noted that DBS&rsquo capital return plans are the strongest among the three local banks, and that investors also appear to remain confident in the bank&rsquo s fundamentals.

 

&ldquo The bank has outlined its intended step-up in dividends for the next three years,&rdquo said Jayden Vantarakis, head of Asean equity research at Macquarie Capital. 

 

&ldquo In comparison, the two local peers remain on a payout-ratio based methodology of 50 per cent, implying absolute dividends could decline if earnings do,&rdquo he added.

 

Over the past few quarters, DBS has used various methods to return excess capital to shareholders. It committed to a S$0.24 annual step-up in its core dividend per share conducted a bonus share issue and started a share buyback programme.

 

It also announced a series of special dividends &ndash this includes a capital return dividend of S$0.15 per share per quarter in 2025, with expectations to pay out a similar amount of capital in the next two years.

 

Granted, OCBC and UOB have also announced various forms of capital return plans in recent quarters, ranging from special dividends to share buybacks.

 

But both banks committed to paying dividends at a payout ratio of 50 per cent of net income. 

 

Hence, yields are not guaranteed due to the headwinds of lower interest rates for the banks&rsquo earnings in the near term, said CGS International (CGSI) analyst Tay Wee Kuang.

 

&ldquo This means (DBS is) the only bank of the three that will see growing dividend yield in the next two to three years,&rdquo Tay said.

 

This has caused DBS&rsquo share price to rally in recent weeks. The counter surged past S$50 after posting strong second-quarter earnings that beat estimates, and is currently trading near all-time highs.

 

Higher price target

Some analysts raised their targets on the counter.

 

JPMorgan on Tuesday (Sep 9) upgraded the stock to &ldquo overweight&rdquo from &ldquo neutral&rdquo , and revised its target price to S$56 from S$50.50. On Wednesday, UOB Kay Hian revised its target price to S$54.40 from S$52.80.

 

A research analyst from RHB estimates DBS will have a &ldquo very decent yield&rdquo of 5.1 per cent for 2026, with potential for further upsides due to more capital return dividends.

 

Meanwhile, CGSI&rsquo s Tay forecasts the yield will reach 6.7 per cent in 2027, which &ldquo seems to be within DBS&rsquo comfort zone&rdquo even with the potential of declining earnings.

 

At the current price, DBS is still offering a yield of 5.8 per cent this year, Tay said.

 

&ldquo Given the yield of DBS remains superior to its peers as well as other usual candidates for high yield, such as real estate investment trusts, we do think the share price could potentially continue to rise,&rdquo he said.

 

CGSI has an &ldquo add&rdquo call on DBS with a target price of S$54.90.

 

Furthermore, DBS could continue to rise if it can hold its third-quarter net interest margins and net interest income at current levels from the deposit inflows it is benefiting from, said Glenn Thum, research manager at Phillip Securities Research.

 

Phillip&rsquo s target price on DBS is S$52.

 

But Macquarie&rsquo s Vantarakis warned that the market may be overlooking the pressure that lower interest rates will have on earnings and dividends beyond the next two years.

 

His target price for DBS is S$44, but noted that it is possible the shares continue to overshoot on the upside on inflows into quality dividend payers, in the meantime.

 

&ldquo We are continuing to see inflows into Singapore equities. DBS is one of the highest quality names and one of investors&rsquo first choices when considering the market,&rdquo Vantarakis said.

 

According to a Bloomberg analyst consensus as at Friday, the 12-month target price for DBS was S$53.07. 

 

Goldman Sachs has the highest target price for DBS on the street. In August, analyst Melissa Kuang put out a &ldquo buy&rdquo call on the bank with a target price of S$57.20.

 

Also in August, Citi analyst Tan Yong Hong and Maybank Securities analyst Thilan Wickramasinghe set their target prices at S$56.50 and S$56.15, respectively.

Shares of South-east Asia&rsquo s biggest banking group are more than 20% up in the year to date

 

[SINGAPORE]   DBS   : D05 -0.4% shares hit a new all-time high on Thursday (Sep 11), climbing S$0.51 to S$53.24 under a minute after the market opened.

 

The   Straits Times Index   : *STI +0.07% also hit a peak at 4,367.51 points, jumping 21.05 points within seconds of the start of trading on Thursday. 

 

This followed a jump on Wednesday, when DBS hit its previous peak of S$52.87. That rise helped the STI to scale a high of 4,355.84 points.

 

&ldquo Income-seeking flows continue to support DBS, thanks to visible, sizeable dividends and deep liquidity,&rdquo said Charu Chanana, chief investment strategist at Saxo. &ldquo Yet with policy rates heading lower, the sustainability of that edge is in question as net interest margin compression could cap the dividend upside of Singapore banks.&rdquo

 

Chanana added that rate-cut beneficiaries like real estate investment trusts are also starting to look more interesting, with easing funding costs setting the stage for distribution growth.

 

Shares of DBS reversed gains and closed 0.3 per cent, or S$0.16, down at S$52.57. The STI also pared most of its gains, but closed 0.2 per cent or 9.36 points up at 4,355.82.

 

The bank&rsquo s shares are more than 20 per cent up in the year to date, while the STI is now 15 per cent up since the start of 2025.

 

In comparison, OCBC is up 1 per cent year to date while UOB is down 2.4 per cent. Combined, the three banks comprise more than half of the STI.

 

DBS shares have been on an upswing since the bank released strong results for the second quarter. It posted a 1 per cent rise in net profit to S$2.82 billion, compared with S$2.79 billion from the year-ago period.

 

The earnings had marginally beat the S$2.79 billion consensus forecast in a Bloomberg survey of six analysts. The positive results helped the bank&rsquo s shares cross the S$50 mark for the first time last month.

 

In comparison, OCBC&rsquo s Q2 profit slipped seven per cent to S$1.82 billion, while that of UOB fell 6 per cent to S$1.34.

 

A research analyst from RHB said that DBS has &ldquo done well&rdquo to protect its net interest income and earnings, adding that &ldquo strong dividend visibility&rdquo is likely welcomed by investors. The analyst cited remarks from the bank&rsquo s management that its S$0.24 increase in annual dividend per share (DPS) should be sustainable for 2026.

 

RHB forecast a full-year dividend per share of S$2.70 for FY2026, which incorporates the higher DPS and translates to a &ldquo very decent yield&rdquo of 5.1 per cent. There could be further upside to the yield, as RHB has yet to factor in DBS&rsquo potential capital return dividends.

 

DBS last month also launched tokenised structured notes on the Ethereum public blockchain. This followed its launch of cryptocurrency-linked structured notes in September 2024 for eligible clients, alongside cryptocurrency options trading.

 

In June, it became the first listed company in Singapore to cross US$100 billion in market value.