DBS - A Resilient Singapore Stock To Buy and Hold Long Term

🌟🌟🌟There is optimism in the air as I await DBS $DBS Group Holdings(D05.SI)$  Q3 24 Earnings scheduled on November 7.  DBS's share price has been on a tear this year, reaching an all time high of SGD 39.70 on October 17.    DBS is currently up 28% year todate, outperforming STI ETF $STI ETF(ES3.SI)$  which is only up 14.7% year todate.  In fact when comparing the 3 Big Singapore banks, DBS is the top performer at 28% year todate compared to$ocbc bank(O39.SI)$  at 17% and $UOB(U11.SI)$  at 14% year todate. 

On 7 August 2024, DBS reported a sterling Q2 24 earnings with a Net Profit of SGD 2.80 billion, up 4% from previous year quarter.  Return on Equity was 18.2%.  Total income increased 9% to SGD 5.48 billion. 

For the 1st half 2024, DBS's Net Profit rose 9% to a new high of SGD 5.76 billion with Return on Equity at 18.8%.  Total income increased 11% to SGD 11.0 billion due to broad based growth in net interest income, fee income and treasury customer sales.  The cost income ratio was 39% and Profit before allowances rose 10% to a record SGD 6.79 billion. 

Asset quality continues to be resilient with non performing ratio at 1.1% and specific allowances at 8 basis points of loans for Q2 24 and 9 basis points for 1H 2024.

Commercial book net fee income rose 27% from a year ago to a record SGD 1.05 billion.  Wealth Management fees grew 37% to SGD 518 million.  This was attributed to the shift from deposits into investments as well as an expansion in Assets.  Card fees increased 32% to SGD 313 million from higher spending.  

The consolidation of Citi Taiwan benefited wealth management and card fees.  Loan fees were also higher, rising 40% to SGD 186 million. 

DBS's Capital remained healthy with Common Equity Tier 1 ratio at 14.8%.  The leverage ratio was at 6.5%, more than twice the regulatory minimum of 3%.

The Board of Directors declared a dividend of 54 cents per share for Q2 24, bringing the 1st half dividend to SGD 1.08 per share. 

DBS CEO Piyush Gupta said that DBS had delivered a strong set of results for Q2 24, bringing the 1st half earnings to a new high with ROE at 18.8%.

Despite the recent market volatility and ongoing geopolitical tensions, DBS has built resilience against the risks of an economic slowdown and lower interest rates.  DBS's high general allowance reserves, reduced interest rate sensitivity, strong capital position with ample liquidity will enable DBS to continue its growth and future expansion. 

DBS has been upgraded to a Zacks Rank No. 1 which is a Strong Buy.  This reflects the growing optimism about DBS's earnings prospects.    Analysts are also bullish on DBS, with a Buy rating, Average Target price of SGD 40.63, an upside potential of 4.8%.

DBS is poised to benefit from the stimulus measures by the Chinese authorities in late September.  With North Asia accounting for 29% of DBS's loan books, higher economic activity in Hong Kong and China will see higher growth in loans for DBS. 

Falling Feds interest rates plus the catalyst of the Johor Singapore Special Economic Zone will have the huge potential to drive more revenue for DBS. 

I have invested in DBS 4 years ago and have not sold a single share since then.   This is due to my firm belief that DBS will continue to grow exponentially in the future and reward me with capital growth.  So far, my belief has panned out well  as DBS has rewarded me with capital growth plus nice juicy dividends paid every 3 months.  The current dividend yield is 5.18%, which is much better than putting money into savings and Singapore Treasury Bills. 

Investing does not have to be complicated.  Just buy and hold great stocks like DBS and enjoy the magic of compounding with a long term horizon. DBS is certainly a resilient Singapore stock for me to buy and hold long term. 

Go Long Go Strong Go DBS! 🚀🚀🚀🌛🌛🌛🌈🌈🌈💰💰💰🇸🇬🇸🇬🇸🇬

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