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DBS Group posted weaker-than-expected fourth-quarter earnings, underscoring the growing impact of lower interest rates on Singapore banks and flagging continued profit headwinds into 2026.
The lender reported 4Q net profit of S$2.26 billion, down 10% year-on-year, missing analysts’ estimates of nearly S$2.55 billion. The decline was driven mainly by a sharp drop in net interest margin (NIM) as domestic interest rates eased.
DBS’ group NIM fell to 1.93%, from 2.15% a year earlier, dragging net interest income lower. Return on equity slipped to 13.5%, compared with 15.8% in the prior year.
Looking ahead, CEO Tan Su Shan said 2026 net interest income and net profit are expected to come in slightly below 2025 levels, assuming:
Singapore overnight rate (SORA) averages ~1.25%
Two US Federal Reserve rate cuts
A stronger Singapore dollar
On asset quality, loan-loss provisions jumped 81% to S$415 million, mainly due to real estate exposure, although DBS also wrote back S$206 million in general allowances.
A bright spot came from wealth management, with assets under management rising 19% in constant-currency terms to a record US$488 billion, highlighting DBS’ growing fee-based income base.
The bank declared:
Ordinary dividend: S$0.66 per share
Capital return dividend: S$0.15 per share
DBS is the first Singapore bank to report this earnings season, with United Overseas Bank and Oversea-Chinese Banking Corp set to follow later in February.
Simple Summary
DBS 4Q profit fell 10% and missed forecasts
Lower interest rates squeezed margins
2026 profit expected to dip slightly
Wealth business remains a key growth driver
Key Takeaways
Net interest margin fell to 1.93%
Provisions surged on real estate exposure
Wealth AUM hit record highs
Rate environment is the main 2026 headwind
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