August 1, 2018 / 11:45 PM / a year ago

DBS second quarter profit jumps 20 percent, misses estimates due to weak trading

FILE PHOTO: A worker walks past a DBS logo before an event in Mumbai, India, April 26, 2016. REUTERS/Danish Siddiqui/File Photo

SINGAPORE (Reuters) - DBS Group Holdings Ltd (DBSM.SI), Southeast Asia’s biggest lender, reported a 20 percent jump in net profit on Thursday, missing market expectations as the impact of business volume growth was moderated by lower trading income.

Singaporean banks reported record profits last year but the outlook for the sector has been clouded by curbs on property investment imposed last month and a slowdown in economic growth due to international trade tensions, analysts said.

DBS’s net profit came in at S$1.37 billion (766.66 million pounds)in the three months ending June versus S$1.14 billion a year earlier, and an average estimate of S$1.47 billion from three analysts, according to Thomson Reuters I/B/E/S.

“Amidst heightened uncertainty and market volatility, business momentum was sustained in the second quarter,” DBS CEO Piyush Gupta said in a statement.

DBS’s net interest margin, a key gauge of profitability, increased 11 basis points to 1.85 percent. DBS however eased its loan growth forecast to 6 percent to 7 percent for this year, from a previous estimate of 8 percent.

The latest quarter’s net profit was 10 percent below the first-quarter’s record due to the weaker trading performance and the absence of a property disposal gain, the bank said.

The bank, about 29 percent-owned by Singaporean state investor Temasek Holdings, kicks off the quarterly results reporting season for lenders in the regional financial hub.

United Overseas Bank (UOBH.SI) reports results on Friday, followed by Oversea-Chinese Banking Corp (OCBC.SI) next week.

Reporting by Anshuman Daga; Editing by Stephen Coates

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