Piyush Gupta sees strength in most of DBS’ markets

ANASTASIA ZYG


SINGAPORE — Some Asian countries have bounced back from the economic pain of the coronavirus pandemic and that bodes well for the 2021 outlook, according to Piyush Gupta, the chief executive officer of DBS.

He told CNBC’s Tanvir Gill that there has “quite clearly” been an economic rebound in most of the bank’s markets, and that gives him some confidence.

“I’m a little bit more optimistic about asset quality and the credit environment than I was a few months ago,” he said on Wednesday.

Gupta said the recovery can be observed through a pick up in loan demand, consumer spending and commodity prices.

“Oil in fact has recovered quite nicely, so some sectors which were more vulnerable are showing better signs of strength,” he said.

Piyush Gupta, chief executive officer of DBS Group Holdings.

Paul Miller | Bloomberg | Getty Images

Singapore’s largest lender is also seeing borrowers start to repay their loans instead of continuing on to extended moratorium schemes. Many banks allowed customers to defer debt repayments or only pay interest on their loans last year as part of Covid relief packages.

Only a “very small percentage” of individuals and businesses are moving on to the new programs, and those who exited the moratoriums have been able to service their debt, said Gupta.

“That gives me some degree of comfort, that in the SME space, in the individual space, things are not that bad,” he said.

He also noted that the sharp increase in loan delinquencies for unsecured consumer credit came down “quite markedly” by the end of the year.

Earlier Wednesday, DBS reported that its fourth-quarter net profit fell 33%, in line with analyst estimates, amid the coronavirus pandemic.

Like many banks globally, DBS set aside billions to cushion the pandemic’s economic blow. In the fourth quarter, the bank said it set aside another 577 million Singapore dollars (about $435 million) for potential losses. That brings DBS’ total allowances for 2020 to 3.07 billion Singapore dollars (about $2.32 billion).

Shares of DBS rose slightly on Wednesday, gaining about 0.27%.



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