DBS Group recorded a 10% year-on-year decrease in fourth-quarter net profit, with the bank reporting S$2.36 billion in net earnings. The result fell short of Reuters/LSEG estimates of S$2.55 billion, reflecting the impact of lower interest rates on core lending profitability even as fee-generating businesses contributed positively.
Net interest income (NII) declined 4% from the prior year to S$3.59 billion. At the same time, the bank’s net interest margin (NIM) narrowed by 22 points to 1.93%, a contraction that the bank said was linked to the weaker policy environment and reduced lending spreads.
On the fee side, commercial book net fee income, which captures charges related to accounts, transactions and advisory services, increased by 14% to S$1.10 billion. DBS attributed that growth to robust performance in its wealth management business, with investment banking also contributing to returns.
Looking forward, DBS provided guidance for 2026 that signals limited upside given the present rate backdrop. The bank said total income in 2026 is likely to be around 2025 levels despite facing headwinds from lower rates. Management expects net interest income for 2026 to be slightly below 2025 levels, and it similarly expects net profit to be slightly lower than the prior year.
The Monetary Authority of Singapore eased policy in early 2025 and maintained a looser stance through the year, which the bank cited as a factor that weighed on the lending margins of local banks.
Shareholders will receive a final dividend of 66 cents, up from 60 cents a year earlier.
Financial snapshot
- Net profit: S$2.36 billion, down 10% year-on-year; missed S$2.55 billion estimates
- Net interest income: S$3.59 billion, down 4% year-on-year
- Net interest margin: 1.93%, narrowed by 22 points
- Commercial book net fee income: S$1.10 billion, up 14%
- Final dividend: 66 cents, up from 60 cents
DBS’ results reflect a familiar trade-off for banks operating in a lower-rate environment: fee-based businesses can cushion revenue, but reductions in policy rates directly compress lending margins and net interest income. The bank’s forward guidance suggests management anticipates continued pressure on core interest-related revenue in 2026.