SINGAPORE - DBS Group Holdings, Southeast Asia's biggest bank by assets, said Friday that fourth-quarter net profit fell 40 percent compared with a year earlier as weak financial markets hit income.
Including one-time items, net profit was 295 million Singapore dollars (US$197 million) against 491 million dollars for the same period a year earlier, the bank said.
The figure was lower than the 326 million dollars estimated in a Dow Jones Newswires poll of analysts.
Net profit before the one-time items was 383 million dollars, or 31 percent below the same quarter a year earlier, said DBS, the first of three local banks to report on earnings.
The one-time items included a 45-million-dollar charge for "restructuring." In November the bank announced it was cutting 900 staff to trim costs during the global credit crisis.
DBS also took a 47-million-dollar impairment charge for its investment in TMB Bank of Thailand but gained four million from the sale of Hong Kong properties.
Net interest income rose to 1.12 billion dollars from 1.06 billion a year earlier despite lower interest rates in a slower economy, the bank said.
But recent trends in non-interest income continued.
"Net fee income fell 17 percent as wealth management and loan syndication revenues slowed, while trading results remained weak," the bank said.
The net fee and commission income dropped to 263 million dollars from 379 million.
DBS said there were no charges for collateralised debt obligation investments, for which allowance of 129 million dollars was made in the previous quarter.
Collateralised debt obligations are securities backed by a range of assets, including risky home mortgages, which helped bring about the worldwide economic crisis.
However, DBS said specific loan allowances rose to 224 million dollars from 106 million because of higher charges made for business loans in Hong Kong and China, as well as private banking loans.
DBS said its ratio of non-performing loans remained low at 1.5 percent, up from 1.1 percent.
It said that higher general allowances were set aside during the year "to buffer the balance sheet against potential asset quality deterioration."
Full-year net profit, including one-time items, was 1.93 billion dollars, down 15 percent from the previous year on total income of 6.03 billion dollars, two percent less than a year ago.
In December DBS announced a rights issue, which raised four billion dollars.
"DBS is well placed to weather the uncertainties of 2009, having taken early action to fortify our balance sheet and streamline the organisation for greater efficiency last year," DBS chairman Koh Boon Hwee said.
"As one of the best capitalized banks in Asia, we are determined to strengthen our franchise in the region and stand by our customers during these challenging times."