Although underlying results showed robust performance, the headline figures for the consumer and wealth management business showed that higher provisioning linked to the pandemic had taken a toll.

Singapore-based DBS said yesterday that the consumer banking and wealth management division logged a pre-tax profit of S$2.023 billion ($1.052 billion) for 2020, falling from S$2.777 billion a year ago; this was  affected by a rise in allowance for credit and other losses, as well as a drop in net interest income. 

Allowances for credit and other losses stood at S$456 million in 2020, against S$242 million a year ago, the bank said in a statement. Net interest income stood at S$3.339 billion, down from S$4.037 billion.

For the banking group as a whole, DBS reported net profit of S$4.72 billion for full-year 2020, falling by 26 per cent from the previous year. Total allowances more than quadrupled to S$3.07 billion as general allowances of S$1.71 billion were set aside for potential risks arising from the pandemic. Profit before allowances rose by 2 per cent to S$8.43 billion.

At the end of December 2020, the bank’s Common Equity Tier 1 ratio – a standard measure of a bank’s financial strength – was 13.9 per cent, compared with 14.1 per cent a year earlier.