Return on equity climbed from 15 per cent to a new high of 18 per cent, the firm said in a statement. Total income grew 22 per cent, exceeding S$20 billion, driven by a higher net interest margin, a rebound in fee income and record treasury customer sales. Asset quality was also resilient with specific allowances remaining low at 11 basis points of loans.

For the fourth quarter, net profit grew 2 per cent from a year ago to S$2.39 billion. A 9 per cent rise in total income to S$5.01 billion, from higher net interest income and noninterest income resulted in a 7 per cent increase in profit, before allowances to S$2.80 billion.

Wealth management fees increased by 13 per cent to S$1.51 billion, reflecting strong net new money inflows, a shift from deposits into investments and bancassurance, and the contribution from Citi Taiwan . 

Full-year consumer banking/wealth management income in Q4 rose by 35 per cent to S$8.96 billion from higher interest rates and growth in wealth management product sales and card fees. Wealth management income increased to a record, with assets under management growing 23 per cent to a new high of S$365 billion, underpinned by strong net new money inflows and the consolidation of Citi Taiwan. 

In other figures for the whole DBS group, it said total allowances of S$142 million were higher than a year ago when there had been a general allowance write-back. Nevertheless, compared to the previous quarter, net profit fell 9 per cent due to a lower net interest margin and seasonally lower non-interest income.

The board also proposed a final dividend of 54 cents per share for the fourth quarter, an increase of six cents from the previous payout. This brings the ordinary dividend for the financial full year to S$1.92 per share, an increase of 42 cents from the previous year. In addition, the board proposed a bonus issue on the basis of one bonus share for every existing 10 ordinary shares held. They will qualify for dividends starting with the first-quarter 2024 interim dividend and will increase the pace of capital returns to shareholders.

The annualised ordinary dividend going forward will be S$2.16 per share over the enlarged share base, which represents a 24 per cent increase from the S$1.92 per share for financial year 2023. Based on the closing share price on 6 February 2024, the post-bonus annualised dividend yield would be 7.5 per cent, DBS said.

The stepped-up capital returns reflect the group’s capital position and are in line with the policy of paying sustainable dividends that rise progressively with earnings.

“We achieved an outstanding financial performance in 2023 with return on equity of 18 per cent significantly above previous years. The franchise and digital transformations carried out over the past decade have reaped substantial benefits in a higher interest rate environment,” DBS CEO Piyush Gupta said. “The stronger profitability has enabled us to step up capital returns to shareholders through a bonus issue as well as make an inaugural contribution of S$100 million towards a 10-year community support initiative. While interest rates are expected to soften and geopolitical tensions persist, our franchise strengths will put us in good stead to sustain our performance in the coming year."