Fri, Feb 14, 2020 - Page 10 News List

DBS says virus impact could cut revenue by 2%

Bloomberg

DBS Group Holdings Ltd (星展銀行) said it expects the COVID-19 outbreak to hurt revenue slightly this year as it unveiled steps to alleviate its impact on small businesses and home owners.

Assuming the outbreak is controlled by the summer, the virus would impact revenue by about 1 to 2 percent, chief executive officer Piyush Gupta said in a presentation yesterday after Singapore’s biggest bank posted higher fourth-quarter profit.

DBS is one of the first major Asian banks to flag the risks to earnings from the virus. The outbreak has penetrated the bank, where an employee at its Singapore headquarters was diagnosed with the disease earlier this week, prompting it to send 300 workers home.

In line with lenders in Hong Kong and Singapore that are helping clients during a virus-hit economic slowdown, DBS is offering a six-month debt moratorium on principal repayments for property loans extended to small and medium-sized businesses in Singapore and Hong Kong, as well as on mortgage loans for retail clients in Singapore, it said.

United Overseas Bank Ltd (大華銀行), a local smaller rival, has allocated S$3 billion (US$2.16 billion) of “relief assistance” to Singaporean companies aimed at addressing near-term liquidity, it said on Wednesday.

Policymakers around the world are assessing the potential economic hit from the virus, which has already disrupted travel, commerce and manufacturing throughout Asia. Singapore is bracing for a tourism slump that DBS economists say might wipe 0.5 percentage point off this year’s growth.

For DBS, the impact is not confined to the domestic market: More than a quarter of its revenue comes from Greater China, including Hong Kong.

DBS posted fourth-quarter profit that climbed 14 percent to S$1.51 billion, led by income from lending and wealth management. That compared with the S$1.49 billion average estimate of five analysts surveyed. Full-year earnings also climbed 14 percent, to a record S$6.4 billion.

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