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Southeast Asia’s biggest bank, posted a bigger -than-expected 40 percent drop in quarterly profit, hit by losses from bad debts amid the global financial turmoil.
October-December net profit fell to S$295 million ($195.2 million) from S$491 million a year ago. Analysts had forecast net profit of S$324 million, according to the average of six forecasts compiled by Reuters.
DBS, 28 percent-owned by state investor Temasek Holdings, recorded faster loan growth than the industry average in the last two years, but it now faces the risk of rising bad loans amid a deepening recession in its main markets, Singapore and Hong Kong.
Fee income is also under threat because of faltering capital markets.
DBS shares dropped 42 percent in October-December, more than the 23 percent drop in rival United Overseas Bank and a 30 percent fall in Oversea-Chinese Banking Corp. The benchmark Straits Times Index lost 25 percent in the quarter.
Singapore retail sales fall 1.6 pct in December
Singapore retail sales fell 1.6 percent in December from a year earlier as consumer spending suffered amid the city-state’s worst recession in decades.
Compared to November, sales rose 20 percent, reflecting the traditional increase in commerce ahead of the Christmas holiday, the statistics department said in a statement Friday. Sales in November fell 3.4 percent from a year earlier.
Singapore is facing its worst recession since splitting from Malaysia in 1965 as a global slowdown chokes off demand for exports. Gross domestic product shrank a seasonally adjusted, annualized 16.9 percent in the fourth quarter.
The government expects GDP in 2009 to contract as much as 5 percent. Manufacturing fell 13.5 percent in December while non-oil exports plunged 21 percent.