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Opinion

Reality bites for Singapore banks but diversification dims the pain

As expected, DBS and UOB reported dramatic year-on-year declines in profitability, but both were protected by their range.

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DBS CEO Piyush Gupta says: 'If people feel they can’t travel, they don’t spend'



The headline numbers were ugly in Singapore this morning.

At 8.30am, UOB chief executive Wee Ee Cheong explained why his bank’s first-half profit was down 30% year-on-year. Two hours later, Piyush Gupta narrated a 26% decline in the same metric at DBS. “This,” began the CEO, “was a tough quarter.”

The reasons are easily understood: the fact that the Covid-19 pandemic and associated lockdowns brought many of the Asian economies within which the two banks operate to a standstill in April and May, coupled with the central bank response to the pandemic.

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Piyush Gupta,
DBS

“The full impact of the interest-rate cuts flowed through our entire book,” Gupta says.




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