Singaporean Lender DBS’ Net Profit Marginally Improves In FY17

A woman uses an automated teller machine (ATM) at a DBS Group Holdings Ltd. bank branch in the central business district of Singapore. (Photographer: Nicky Loh/Bloomberg)

DBS Bank's net profit rose to Rs 12.8 crore in FY17.
The bank's net NPAs nearly halved to 2.12 percent as of March 2017.
The foreign bank was severely hit by its lending bets in the infrastructure sector.

Singaporean lender DBS Bank on Monday said its net profit rose to Rs 12.8 crore in fiscal 2017 from Rs 8.6 crore a year ago, even as non-performing assets (NPAs) continued to remain elevated.

There was a marginal increase in net profit to Rs 12.8 crore from the previous year "despite continued pressure due to drag from NPAs," the bank said in a statement.

The foreign bank was severely hit by its lending bets in the infrastructure sector, which had led it to report a loss of Rs 275 crore in FY15. In FY16, its parent had to infuse over Rs 600 crore in core capital in the Indian arm.

The bank, which operates 12 branches at present in India, was the first to apply to the RBI to turn into a wholly -owned subsidiary which is preferred by the regulator. The foreign lender, however, is yet to get a go-ahead.

Also Read: Application For Wholly Owned Subsidiary In India Still Pending With Finance Ministry: DBS

The bank's net NPAs nearly halved to 2.12 percent as of March 2017, down from 4.34 percent in March 2016, on recoveries, sale of bad loans to asset reconstruction companies as well as some write-offs, it said.

"Over the previous financial year our focused approach led to an all-around growth in advances and deposits and improvement in asset quality," DBS Bank's country head Surojit Shome was quoted as saying in the statement.

The net advances increased 23.7 percent to Rs 21,838 crore from Rs 17,653 crore, while deposits rose 15.2 percent to Rs 26,991 crore.

Within deposits, the share of the low-cost current and savings accounts increased to 9.4 percent from 8.1 percent, largely on the back of a 69.8 percent growth in savings account balances to Rs 782.1 crore.

Capital adequacy ratio dipped to 16.49 percent from 18.64 percent, but the bank pointed out that the year-ago period was helped by fund infusion by the parent.

The bank's net investments came down 34.2 percent with the plateauing in rates after the decline, and this moderated its total assets growth to 1.6 percent to Rs 44,542 crore.