• DBS’ 1Q2025 adjusted earnings of S$2.9bn were in line with our estimates, with 1Q25 adjusted earnings at 26% of our FY25e forecast. 1Q25 DPS raised 39% YoY to 75 cents (comprising 60 cents ordinary dividend and 15 cents capital return dividend).
• NII rose 5% YoY from loan growth of 2% while NIM dipped 2bps YoY to 2.12%. WM fees, loan-related fees, and trading income led non-interest income growth of 8%. DBS has maintained FY25e guidance for NII at 2024 levels but lowered non-interest income growth guidance to mid to high-single-digit. PATMI will drop below 2024 levels due to higher taxes.
• Maintain ACCUMULATE with a higher target price of S$44.50 (prev. S$43.90) as we raise FY25e earnings by ~2% from higher fee income and lower expenses. We assume a 1.79x FY25e P/BV as we raise our ROE estimate to 17.8% (prev. 17.5%) and lower risk-free rate to 2.5% (prev. 3.1%) and terminal growth rate to 1% (prev. 2%) in our GGM valuation. We expect non-interest income to be the main growth driver, as heightened volatility will benefit trading income and continued WM growth from the shift in investor sentiment and AUM inflows. However, higher provisions and the global minimum tax would hurt PATMI in FY25. The capital return initiative (24 cents annual increment, 15 cents capital return dividend per quarter, and S$3bn share buyback) and a 7% dividend yield are attractive.

• 4Q24 adjusted PATMI of S$2.6bn was in line with our estimates, FY24 adjusted PATMI is 100% of our FY24e forecast. 4Q24 DPS rose 22% YoY to 60 cents and full-year FY24 DPS at S$2.22 (+27% YoY). An additional capital return dividend of 15 cents/quarter is to be given in 2025. We expect the return to sustain over the next 3 years.
• NII rose 9% YoY from NIM rising by 2bps to 2.15% and loan growth of 3%. Non-interest income growth of 21% was led by WM fees and trading income. DBS has provided FY25e guidance for NII at 2024 levels and non-interest income growth of high-single-digit. PATMI will drop below 2024 levels from higher taxes.
• Upgrade to ACCUMULATE with a higher target price of S$46.90 (prev. S$41.60) as we roll over our valuations. We lower FY25e earnings by ~2% from lower non-interest income and higher expenses and provisions. We assume a 1.88x FY25e P/BV and ROE estimate of 17.5% in our GGM valuation (prev. 18.3%). We expect non-interest income to be the main growth driver, as heightened volatility will benefit trading income and continued WM growth from the shift in investor sentiment and AUM inflows. However, higher expenses and provisions and the global minimum tax would hurt PATMI in FY25. The capital return initiative (24 cents annual DPS increase, 15 cents capital return dividend per quarter, and S$3bn share buyback) and a 6.7% dividend yield (including 15cents capital return dividend) are very attractive.

• 3Q24 adjusted PATMI of S$3.03bn was above our estimates due to higher fee income and trading income. 9M24 adjusted PATMI is 83% of our FY24e forecast. 3Q24 DPS rose 23% YoY to 54 cents.

• NII rose 3% YoY from interest earning asset growth while NIM dipped 8bps to 2.11%. Non-interest income growth of 28% was led by WM fees and trading income. DBS maintained its FY24e guidance with PATMI growth of mid to high-single digit, while providing FY25e guidance for NII at 2024 levels and non-interest income growth of high-single digit. PATMI to drop below 2024 levels.

• Maintain NEUTRAL with higher target price of S$41.60 (prev. S$38.50) as we raise our FY24e estimates. We raised FY24e earnings by ~7% from higher WM income, trading income and lower provisions. We assume a 1.98x FY24e P/BV and ROE estimate of 18.3% in our GGM valuation. We expect 4Q24 PATMI growth of ~9% YoY from stable growth in NII from the with continued fixed asset repricing and deployment of deposits into longer tenure income accretive interest earning assets, while double-digit fee and trading income growth will give a further boost to earnings. A steeper yield curve could provide tailwinds from another S$55bn of fixed assets to be repriced in FY25.

• 2Q24 adjusted PATMI of S$2.79bn was slightly above our estimates due to higher NII, fee income, and other non-interest income. 1H24 adjusted PATMI is 54% of our FY24e forecast. 2Q24 DPS raised 23% YoY to 54 cents.
• NII rose 5% YoY on loan growth of 2% YoY despite NIM dipping 2bps to 2.14%. Fee income rose 27% YoY from WM, cards and loan-related fees, while other non-interest income grew 6% YoY. DBS maintained its FY24e guidance of double-digit fee income growth (from wealth management and credit card fees) and credit cost of 17-20bps but increased its guidance for FY24e NII and PATMI to be above FY23 levels.
• Upgrade to BUY with an unchanged target price of S$38.50 as we account for recent share price performance. Our FY24e estimates remain unchanged. We assume a 1.83x FY24e P/BV and ROE estimate of 17.1% in our GGM valuation. We expect stable growth in NII from the continued fixed asset repricing and deployment of deposits into longer tenure income accretive interest earning assets, while loan growth to recover from rate cuts in 2H24. Double digit fee income growth will give a further boost to earnings.

The Positives
+ NII rises from loan and deposit growth. Despite NIM dipping 2bps YoY to 2.14%, NII rose 5% YoY to S$3.6bn due to loan and deposit growth of 3% and 6% respectively. Commercial book NIM was 2bps higher YoY mainly from fixed-rate asset repricing, but Group NIM dipped slightly due to deployment into lower yielding high-quality assets which are accretive to earnings but diluted NIM slightly. Management said that loan growth was broad-based but was seen more in Singapore and India, offset by Hong Kong loans shifting to mainland China.
+ WM leads fee income growth. Wealth management fees (+37% YoY) led fee income growth as there was a continued shift from deposits into investments and bancassurance as well as an expansion in assets under management (AUM). As a result, fee income rose 27% YoY to S$1,048mn. Card fees rose 32% YoY from higher spending, while loan-related fees grew 40% YoY. The consolidation of Citi Taiwan benefitted both WM and card fees. 2Q24 AUM grew 24% YoY to S$396bn while interest earning assets rose 20% YoY to S$447bn.
+ Credit cost and SPs improve YoY. SPs dipped 15% YoY to S$97mn, while new NPAs formation was more than offset by higher upgrades, settlements and recoveries. As a result, credit costs improved by 2bps YoY to 8bps. DBS said that the NPA formation was
idiosyncratic, and it did not see particular stress in any sector. However, 2Q24 total allowances rose to S$148mn (2Q23: S$114mn) as the lower SP was more than offset by higher GP of S$51mn (2Q23: write-back of S$42mn). The NPL ratio was flat at 1.1% (1Q24:
1.1%), while GP reserves grew 5% YoY to S$3.98bn. DBS has ~S$2bn of management overlay, which could be released if SP comes in higher than expected

The Negatives
- Expenses climb up. Higher staff costs due to salary increments and higher bonus accruals, as well as headcount growth including the addition of staff from Citi Taiwan resulted in expenses climbing 12% YoY to S$2,172mn. Notably, Citi Taiwan accounted for 5% points of the YoY increase. Non-staff costs were also higher from higher revenue-related expenses. As a result, the cost-to-income ratio (CIR) rose 2% points YoY to 40%. Nonetheless, this is still within DBS’ guidance of around 40%.
- CASA ratio decline continues. The Current Account Savings Accounts (CASA) ratio fell 6% points YoY to 50%, mainly due to the high-interest rate environment and a continued move towards fixed deposits (FDs). The declining CASA ratio could further increase funding cost and there could be an increased dependence on FDs, which usually comes at a higher interest rate. Nonetheless, total customer deposits grew 6% YoY to S$551bn as the growth in FDs more than offset the decline in CASA deposits.

• 1Q24 adjusted PATMI of S$2.96bn was slightly above our estimates due to higher NII, fee income, and other non-interest income offset by higher expenses. 1Q24 adjusted PATMI is 28% of our FY24e forecast. 1Q24 DPS raised 29% YoY to 54 cents.
• NII rose 7% YoY on NIM expansion of 2bps and loan growth of 2% YoY. Fee income rose 23% YoY from WM and card fees, while other non-interest income grew 24% YoY. DBS has maintained its FY24e guidance of double-digit fee income growth (from wealth management and credit card fees) and credit cost of 17-20bps but increased its guidance for FY24e NII and PATMI to be above FY23 levels.
• Downgrade to ACCUMULATE with a lower target price of S$38.50 (prev. S$38.90) as we account for recent share price performance and 1-for-10 bonus share issue. We increased FY24e earnings by 2% as we increased NII estimates due to higher NIMs, fee income, and loan growth estimates. We assume a 1.83x FY24e P/BV and ROE estimate of 17.1% in our GGM valuation. Modest growth in NII from stable NIMs, low-single-digit loan growth, and double-digit growth in fee income will sustain earnings momentum.

The Positives

+ NII rises 7% YoY. NII rose 7% YoY to S$3.5bn due to a 2bps NIM increase to 2.14% (4Q23: 2.13%) as interest rates continue to remain high and loan growth grew modestly by 2% YoY. Loan growth came from higher non-trade corporate loans and the consolidation of Citi Taiwan. Management noted that loan growth was broad-based but was seen more in Singapore and India, which was offset by Hong Kong loans shifting to mainland China.

+ Fee income continues to recover. Fee income rose 23% YoY to a record level of S$1,043mn. The growth was led by wealth management (WM) fees surging 47% YoY from stronger market sentiment and an increase in assets under management (AUM). Card fees rose 33% YoY from higher spending, while loan-related fees grew 30% YoY. The consolidation of Citi Taiwan benefitted both WM and card fees. This was offset slightly by a decline in investment banking fees (-59% YoY) due to slower capital market activities while transaction services were flat YoY.

+ Other non-interest income rose 24% YoY. This growth was mainly due to higher treasury customer sales, partially offset by a decline in market trading income from higher funding costs. Notably, commercial book continues to account for the majority of other non-interest income at 62% (1Q23: 53%), while treasury markets account for 38% (1Q23: 47%).

The Negatives

- SPs and NPAs rise YoY. SPs rose 82% YoY to S$113mn, while new NPAs rose 45% YoY to S$317mn from broad-based increases across all sectors. As a result, credit costs rose from 4bps YoY to 10bps. DBS has mentioned that the NPA formation was idiosyncratic, and they do not see particular stress in any sector. Nonetheless, 1Q24 total allowances were lower by 16% YoY as the higher SP was more than offset by a lower GP of S$22mn (1Q23: S$99mn). The NPL ratio was flat at 1.1% (4Q22: 1.1%), while GP reserves grew 4% YoY to S$3.93bn. Notably, management mentioned ~S$2bn of management overlay, which could be released if SP comes in higher than expected.

- The decline in the CASA ratio continues. The Current Account Savings Accounts (CASA) ratio fell 6% points YoY to 51%, mainly due to the high-interest rate environment and a continued move towards fixed deposits (FDs). The declining CASA ratio could further increase funding cost and there could be an increased dependence on FDs, which usually comes at a higher interest rate. Nonetheless, total customer deposits grew 3% YoY to S$547bn as the decline in CASA deposits was offset by growth in FDs and a contribution of S$12bn from the Citi Taiwan consolidation.

• 4Q23 adjusted PATMI of S$2.39bn was slightly above our estimates due to higher NII, fee income, and other non-interest income offset by higher allowances. FY23 adjusted PATMI is 102% of our FY23e forecast. 4Q23 DPS is raised 29% YoY to 54 cents with an additional 1-for-10 bonus issue, dividend payout ratio was higher at 48.5% in FY23 (FY22: 47.7% excluding special dividends).
• NII rose 5% YoY on NIM expansion of 8bps despite loan growth remaining flat. Fee income rose 31% YoY, while other non-interest income grew 9% YoY. DBS has maintained its FY24e guidance of double-digit fee income growth (from wealth management and credit card fees), stable NII as higher NIMs from higher-for-longer rates will be offset by lower loan growth and total allowances to normalise to 17-20bps of loans. FY24e PATMI to be maintained at around the current levels in FY23.
• Maintain BUY with a lower target price of S$38.90 (prev. S$41.60). We lower FY24e earnings by 1% as we lower NII estimates for FY24e due to lower NIMs, and increase allowances and OPEX estimates, offset by higher fees, and other non-interest income. We assume 2.14x FY24e P/BV and ROE estimate of 16.0% in our GGM valuation. Stable NII from a recovery in loan growth and double-digit growth in fee income will sustain earnings momentum.

The Positives

+ NIM and NII continue to increase YoY. NII rose 5% YoY to S$3.4bn due to an 8bps NIM increase to 2.13% (3Q23: 2.19%) as interest rates continue to remain high, despite loan growth remaining flat YoY. Loan growth was stable as higher trade and consumer loans were offset by lower non-trade corporate loans. Nonetheless, the Citi Taiwan consolidation contributed S$10bn to loans.

+ Fee income recovers strongly. Fee income rose 31% YoY to S$867mn. WM fees increased 41% YoY driven by strong net new money inflows as customers shifted deposits into bancassurance and investments, while card fees grew 27% YoY from higher spending and the integration of Citi Taiwan. Loan-related fees rose 80% YoY, while investment banking fees were up 26% YoY. These increases were moderated by a 4% YoY decline in transaction fees as trade finance slowed.

+ Other non-interest income rose 9% YoY. Other non-interest income growth was mainly due to higher treasury customer sales and gains from investment securities. Notably, commercial book accounts for a majority of other non-interest income was at 55%, while treasury markets accounts for 45%.

The Negatives

- Allowances rose 438% YoY. 4Q23 total allowances were higher 438% YoY due to normalised GP of S$3mn (4Q22: writeback of S$116mn) and higher SP of S$139mn (4Q22: S$74mn). As a result, 4Q23 credit costs rose to 11bps, with FY23 credit costs at 11bps. The NPL ratio was flat at 1.1% (4Q22: 1.1%), while GP reserves grew 4% YoY to S$3.90bn. Notably, management mentioned S$2.2bn of management overlay, which could be released if SP comes in higher than expected.

- CASA ratio decline continues. The Current Account Savings Accounts (CASA) ratio fell 8% points YoY to 52.3%, mainly due to the high-interest rate environment and a continued move towards fixed deposits (FDs). Nonetheless, total customer deposits grew 2% YoY to S$535bn as the decline in CASA deposits was offset by growth in FDs and a contribution of S$12bn from the Citi Taiwan consolidation.

• 3Q23 adjusted PATMI of S$2.63bn was above our estimates due to higher NII, fee income and other non-interest income offset by higher allowances. 9M23 adjusted PATMI is 78% of our FY23e forecast. 3Q23 DPS is raised 14% YoY to 48 cents.
• NII rose 16% YoY on NIM expansion of 29bps despite loan growth dipping slightly. Fee income rose 9% YoY, while other non-interest income grew 21% YoY. DBS has maintained its FY23e guidance. It provided FY24e guidance of double-digit fee income growth (from wealth management and credit card fees), stable NII as higher NIMs from higher-for-longer rates will be offset by lower loan growth and total allowances to normalise to 17-20bps of loans. FY24e PATMI to be maintained at around the current levels in FY23.
• Maintain BUY with an unchanged target price of S$41.60. Our FY23e estimates remain unchanged. We assume 1.90x FY23e P/BV and ROE estimate of 16.6% in our GGM valuation. Continued NIM growth from higher-for-longer interest rates and a recovery in fee income will sustain earnings momentum.

The Positives

+ NIM and NII continue to increase YoY. NII rose 16% YoY to S$3.5bn due to a 29bps NIM increase to 2.19% (2Q23: 2.16%) as interest rates continue to remain high, despite loan growth dipping 2% YoY. Loan growth dipped due to a decline in customer and trade loans due to unattractive pricing while non-trade corporate loans were lower due to higher repayments. Nonetheless, the Citi Taiwan consolidation contributed S$10bn to loans.

+ Fee income continues to grow. Fee income rose 9% YoY to S$843mn. WM fees increased 22% YoY from higher bancassurance and investment product sales, while card fees grew 21% YoY from higher spending and the integration of Citi Taiwan. Loan-related fees rose 12% YoY, while transaction fees were flat YoY. These increases were moderated by a 16% YoY decline in investment banking fees due to slower capital market activities.

+ Other non-interest income rose 21% YoY. Other non-interest income rose 21% YoY mainly due to an increase in net trading income from higher trading gains and an increase in treasury customer sales to both wealth management and corporate customers. Notably, commercial book accounts for majority of other non-interest income was at 59%, while treasury markets accounts for 41%.

The Negatives

- Allowances rose 21% YoY. 3Q23 total allowances were higher 21% YoY due to higher SP of S$197mn (3Q22: S$25mn). Resultantly, 3Q23 credit costs rose to 18bps, with 9M23 credit costs at 11bps. The rise in SP was due to allowances being prudently taken for exposures linked to the recent money laundering case in Singapore. The NPL ratio rose slightly to 1.2% (3Q22: 1.1%), while GP reserves were stable YoY at S$3.91bn.

- CASA ratio decline continues. The Current Account Savings Accounts (CASA) ratio fell 12.5% points YoY to 47.8%, mainly due to the high interest rate environment and a continued move towards fixed deposits (FDs). Resultantly, total customer deposits were flat YoY at S$531bn as the decline in CASA deposits were partially offset by growth in FDs.

• 2Q23 adjusted PATMI of S$2.69bn was above our estimates due to higher net interest income (NII). 1H23 adjusted PATMI is 57% of our FY23e forecast. 2Q23 DPS is raised 33% YoY to 48 cents, bringing 1H23 dividend to 90 cents. We raise our FY23e DPS from S$1.68 to S$1.86.
• NII surged 40% YoY to S$3.43bn on NIM expansion of 58bps to 2.16% despite loan growth dipping 2% YoY. Fee income rose 7% YoY, the first YoY increase in six quarters, while other non-interest income grew 52% YoY. DBS increased its NIM guidance from 2.05-2.10% to around 2.15%, lowered loan growth guidance from 3-5% to low single-digit and maintained fee income guidance at high-single digit for FY23e.
• Maintain BUY with an unchanged target price of S$41.60. We raise FY23e earnings by 9% as we raise NII estimates for FY23e due to higher NIMs, offset by lower fee income, higher provisions, and higher expenses estimates. We assume 1.90x FY23e P/BV and ROE estimate of 16.6% in our GGM valuation.

The Positives

+ NIM and NII continue to increase. NII spiked 40% YoY to S$3.43bn due to a NIM surge of 58bps YoY to 2.16% (3Q22: +32bps, 4Q22: +15bps, 1Q23: +7bps, 2Q23: +4bps) despite loan growth dipping 2% YoY. Increases in non-trade corporate loans were offset by lower trade loans. Housing loans were stable, while wealth management loans declined modestly. Management spoke of an upside bias to NIM from its current levels and indicated that NIM will likely peak in 2H23.

+ Fee income rose 7% YoY, first in 6 quarters. Fee income increased 7% YoY, the first YoY increase in six quarters. WM fees increased 12% YoY to S$377mn from higher bancassurance and investment product sales. Card fees grew 17% YoY to S$237mn from higher spending including for travel while loan-related fees rose 17% YoY to S$133mn. These increases were moderated by a 5% YoY decline in transaction service fees led by trade finance.

+ Other non-interest income rose 52% YoY. Other non-interest income rose 52% YoY mainly due to an increase in net trading income from higher trading gains and an increase in treasury customer sales to both wealth management and corporate customers. Additionally, gains from investment securities more than doubled due to improved market opportunities.

The Negatives

- Allowances rose 57% YoY. 2Q23 total allowances were higher 57% YoY due to an increase in SP to S$114mn (2Q22: S$69mn) offset by higher GP write-back of S$42mn for the quarter (2Q22: write-back of S$23mn). Resultantly, 2Q23 credit costs rose by 2bps YoY to 10bps. Nonetheless, the NPL ratio declined to 1.1% (2Q22: 1.3%) as new NPA formation fell by 39% YoY. GP reserves rose slightly to S$3.80bn, with NPA reserves at 127% and unsecured NPA reserves at 224%.

- CASA ratio decline continues. The Current Account Savings Accounts (CASA) ratio fell 14.9% points YoY to 51.5%, mainly due to the high interest rate environment and a continued move towards fixed deposits (FDs). Resultantly, total customer deposits fell 2% YoY to S$520bn as the decline in CASA deposits were partially offset by growth in FDs.

We attended DBS’ Investor Day on 22 May 2023 where management shared their digital-led strategy in growth markets, how new businesses with potential have evolved from the previous Investor Day in 2017 and addressed some of the questions from investors and analysts. The key takeaways from DBS Investor Day 2023 are:

• Guidance of a medium-term (3 to 5 years) ROE of 15-17% and a baseline for dividends to increase by 24 cents per year. Further upside of S$3bn based on optimal CET-1 operating range which could be distributed in further ordinary dividend step-up, special dividend or share buyback.
• Technology has transformed the way they manage with the use of a hybrid multi-cloud strategy with in-house infrastructure as a service. Other business segments such as Consumer and SME, Private banking, Global transaction services, and Treasury markets have also benefited from the digital transformation.

Group Financials

• Medium-term ROE of 15-17%, dividends to increase by 24 cents per year. DBS has guided for a medium-term ROE of 15-17%, with the uplift coming from: (a) faster growth in capital-light high-ROE businesses such as wealth management, global transaction services and treasury market sales; (b) increasing ROE with scale in growth markets such as transaction banking, wealth management, SME lending and unsecured retail lending, and; (c) capital headroom to support profitable growth and higher distributions. Notably, ordinary dividends would be lifted by 24 cents to S$1.68 in 2023. There is also a further upside of S$3bn based on the optimal CET-1 operating range of 12.5-13.5% (1Q23: 14.1%), which could be distributed in further ordinary dividend step-up, special dividend or share buyback.
• Group ROE structurally improved by 250bps. ROE improved by 380bps to 15.0% in 2022 (2015: 11.2%) from a 220bps uplift in external drivers and a 250bps increase in structural drivers offset slightly by a 90bps dip in financial leverage. External drivers include higher interest rates, credit cycle and market growth. Structural drivers include extended superior deposit franchise to foreign currency, growth in high-ROE fee income and new capabilities in credit risk management.

• 1Q23 earnings of S$2.57bn were above our estimates due to higher net interest income (NII) and fee income. 1Q23 PATMI is 28% of our FY23e forecast. 1Q23 DPS is raised 17% YoY to 42 cents.
• NII surged 50% YoY to S$3.27bn on NIM expansion of 66bps to 2.12% despite loan growth remaining flat YoY. Fee income decline moderated to 4% YoY and grew 29% QoQ, while other non-interest income grew 39% YoY. DBS lowered its guidance for FY23e, with NIM guidance from 2.10% to 2.05-2.10%; loan growth guidance from mid-single digit to 3-5%; and fee income guidance from double-digit to high-single digit.
• Maintain BUY with an unchanged target price of S$41.60. We maintain FY23e earnings as we lower NII estimates for FY23e due to lower loans growth and NIMs, offset by lower operating expenses and provisions estimates. We assume 1.90x FY23e P/BV and ROE estimate of 16.6% in our GGM valuation.

The Positives

+ NIM and NII continue to increase. NII spiked 50% YoY to S$3.27bn due to a NIM surge of 66bps YoY to 2.12% (2Q22: +12bps, 3Q22: +32bps, 4Q22: +15bps, 1Q23: +7bps) despite loan growth remaining flat YoY. Increases in trade and non-trade corporate loans led by Singapore real estate acquisition financing were offset by lower consumer loans as wealth management loans declined. Management has lowered its NIM guidance from 2.10% to 2.05-2.10% and indicated that NIM has likely peaked in 1Q23 with the NIM decline to be gradual for the rest of 2023 due to an increase in funding costs.

+ Fee income rose 29% QoQ, YoY decline moderated to 4%. Fee income declined 4% YoY (3Q22: -13%, 4Q22: -19%) due to weaker market sentiment affecting wealth management and transaction service fees, which more than offset increases in card and investment banking fees. Nonetheless, fee income saw a recovery of 29% QoQ from broad-based growth. WM fees increased 39% QoQ to S$365mn due partly to seasonal effects, while investment banking fees spiked 91% QoQ to S$44mn from higher equity and debt capital market activity. Loan-related fees surged 80% QoQ to S$142mn, while transaction service fees rose 2% QoQ. However, card fees fell 7% QoQ to S$227mn due to seasonally-higher spending in 4Q22.

+ Other non-interest income rose 35% YoY. Other non-interest income rose 35% YoY and 25% QoQ, mainly due to an increase in treasury customer income and it being a seasonally higher quarter.

The Negatives

- Allowances rose 193% YoY. 1Q23 total allowances were higher 193% YoY due to higher GP of S$99mn for the quarter (1Q22: write- back of S$112mn) offset by a decline in SP to S$62mn (1Q22: S$167mn). Nonetheless, 1Q23 credit costs improved by 9bps YoY to 6bps as there was a decline in new NPLs by 89% to S$17mn for 1Q23. The NPL ratio declined to 1.1% (1Q22: 1.3%) as new NPA formation fell by 53% YoY. GP reserves rose slightly to S$3.83bn, with NPA reserves at 127% and unsecured NPA reserves at 229%.

- CASA ratio decline continues. The Current Account Savings Accounts (CASA) ratio fell 24% YoY to 52.4%, mainly due to the high interest rate environment and a continued move towards fixed deposits (FD). Nonetheless, total customer deposits increased 2% YoY to S$529bn. Management said that deposits and wealth management net new money benefited from flight-to-safety inflows in March 2023.