DBS posts record Q2 profit, lifts 2026 outlook

DBS Group delivered a record quarterly net profit of S$3.08 billion for the second quarter of FY2026, representing a 9% increase compared with the same period a year earlier. The strong profit outcome was supported by total income of S$6.09 billion in the quarter, which pushed first-half FY2026 total income to about S$12.04 billion.

The results marked a record first half for the bank, reflecting contributions from multiple business lines. Growth in loans and deposits, together with higher non-interest income, helped offset headwinds from a softer interest rate environment.

For the second quarter of FY2026, DBS declared a total dividend of S$0.81 per share. This is made up of an ordinary dividend of S$0.66 per share and a capital return dividend of S$0.15 per share.

The dividend declaration represents an estimated payout of about S$2.3 billion to shareholders. The mix of ordinary dividend and capital return highlights the bank’s decision to distribute part of its capital position while continuing regular cash returns.

Despite the record profit, DBS experienced margin pressure during the quarter. Net interest margin narrowed to about 1.87%, compared with roughly 2.05% a year earlier, reflecting the impact of lower interest rates.

Group net interest income declined around 2% to roughly S$3.58 billion in the second quarter of FY2026. However, the reduction in net interest income was mitigated by expansion in other income streams and growth across the balance sheet.

Wealth management was a key driver of performance in the period. Assets under management in the Wealth segment surpassed S$500 billion for the first time, underscoring continued client inflows and market-related gains.

Fee income from wealth management, treasury customer sales and stronger markets trading activity contributed to higher non-interest income. This diversification of revenue helped compensate for the narrower net interest margin and softer net interest income.

Following the strong first-half performance, DBS raised its FY2026 guidance. The bank now expects total income for FY2026 to exceed 2025 levels and lifted its commercial-book non-interest income growth forecast to the mid-teens percentage range.

Management indicated expectations that interest rates will remain at current levels and that deposit growth will be in the high-single-digit range. The bank also aims to keep its cost-to-income ratio in the low-40% range, while specific provisions in the second half of FY2026 are projected to be within 17–20 basis points of loans.