February 8, 2018

DBS delivered a good set of FY17 results this morning. Net profit of S$4,371m was up 3% from the previous year, fairly in line with market and our expectations. Net Interest Income rose 7% to S$7791m, while Non-interest Income gained 7% to S$4483m. The final quarter’s performance was led by an increase in wealth management and higher unit trust and other investment product sales. In addition, Investment Banking also saw a doubling in fees from higher equity market and fixed income activities. For the final dividend of 2017, management has proposed a payout of 60 cents per share, bringing full-year dividends to 93 cents, up 55% from 60 cents in the previous year. In addition, it also proposed a special dividend of 50 cents. DBS remains our pick in the sector. Our fair value estimate remains changed at S$29.50. We have a BUY on DBS by OCBC Investment Research. Share price closed at S$26.710