DBS Group Announce $2.26 Billion Share Buyback Programme

Singapore-headquartered DBS Group on Thursday said that the Board of Directors has established a new share buyback programme of $2.26 billion. Under the programme, shares will be purchased in the open market and cancelled. The buybacks will be carried out at management’s discretion and subject to market conditions.

The programme, which was announced along with the financial results for the third quarter, marks the first time that repurchased shares are cancelled. The programme is over and above share buybacks periodically carried out for the purpose of vesting employee share plans.

Based on the balance sheet as at September 2024, the programme will reduce the fully phased-in Common Equity Tier-1 (CET-1) ratio by around 0.8 percentage points when completed, the Group, which is listed on Singapore Exchange, said.

The programme is the latest in a series of capital management initiatives undertaken by the Board, which included a doubling of the ordinary dividend over the past five years, occasional special dividends, and a recent bonus issue that effectively raised dividends.

The Board also affirmed the policy of paying ordinary dividends that are sustainable and progressively rise with earnings.

DBS CEO Piyush Gupta said that they have been returning a substantial amount of capital to shareholders in recent years, reflecting the significant structural improvements our franchise has achieved.

“The buyback programme is underpinned by our strong capital position and ongoing capital generation, and it is another affirmation of our commitment to capital management,” Gupta added.

DBS Deputy CEO Tan Su Shan said that the buyback programme expands DBS Group’s toolkit for capital management. The considerable amount of capital the Group has returned in recent years has been a distinguishing hallmark that remains well supported by its financial strength.

Shares Prices Jump

Meanwhile, the shares of DBS Group hit a record on the share buyback plan and higher-than-forecast profit. They closed at $31.44 on Thursday (November 7), up 6.5%. The stock has gained more than 37% this year.

According to LSEG, beating the expectations of the five analysts, the DBS Group said that net profit surged 15% to $2.28 billion, beating the mean estimate of nearly $2.11 billion.

It also broke the previous quarterly record of $2.23 billion it set in the first quarter of 2024, even though its net interest margin, a key profitability gauge, declined to 2.11% during the third quarter from 2.19% the same quarter a year earlier.

The net profit for the first nine months of this year rose 11% y-o-y to a record $6.63 billion, DBS said.

Asset quality continued to be resilient during this period, with the NPL ratio declining to 1% as non-performing assets fell 8% from the previous quarter. Specific allowances were at 14 basis points of loans for the third quarter and 11 basis points for the nine months.

Expenses between January and September 2024 rose 11% to $4.9 billion, with Citi Taiwan accounting for four percentage points of the increase. The cost-income ratio was stable at 39%, and profit before allowances rose 10% to $7.77 billion.