Singapore's biggest bank DBS Group reported record first-quarter profit on Tuesday, rising a stronger-than-expected 43% from a year earlier on a higher net interest margin, sustained business momentum and resilient asset quality.
Southeast Asia's largest lender by assets however said its net interest margin likely peaked in the first quarter and there would be a gradual decline.
It also said housing loan bookings may see some impact from latest cooling measures by the government.
"We delivered a record performance and benefited from safehaven deposit inflows during a quarter marked by increased market volatility," DBS Chief Executive Officer Piyush Gupta said in a statement.
January-March net profit rose to S$2.57 billion ($1.9 billion) from S$1.8 billion a year ago, beating a mean estimate of S$2.44 billion from five analysts polled by Refinitiv.
Return on equity rose to a new high of 18.6% in the first quarter from 13.1% the same quarter a year earlier. Full-year return on equity likely to be above 17%, it added.
DBS reported a total net interest margin, a key gauge of profitability, of 2.12% for the first quarter, up from 1.46% in the same period a year earlier. DBS expected full-year net interest margin at 2.05% to 2.10%.
Singapore banks have benefited from a strong inflow of deposits amid global uncertainty due to their status as a financial safe haven.
Smaller peer United Overseas Bank (UOBH.SI) reported on Thursday a 74% surge in core net profit in the first quarter from a year earlier on the back of strong net interest and non- interest income growth.
Oversea-Chinese Banking Corp (OCBC.SI) announces its first-quarter results on May 10.
DBS, which earns most of its profit from Singapore and Hong Kong, declared a dividend of 42 Singapore cents per share for the first quarter.
($1 = 1.3362 Singapore dollars)