You can’t live in Singapore and not know DBS Bank. The nation’s biggest bank, it’s popular with not just the older folks, but also the young working adults who use the DBS Multiplier to credit their income for bonus interest. Every citizen has or has had at some point a ubiquitous POSB or DBS something.
DBS is also Southeast Asia’s biggest bank in terms of assets, and has consistently been ranked as one of the Asia-Pacific region’s safest banks. Given the Covid-19 panic right now, that’s comforting news for many shareholders.
Whether an existing shareholder or a new investor hoping to join the fray, if you’re considering investing in DBS/POSB, here’s a quick overview of their stock profile.
Disclaimer: This article contains information on DBS stock prices as well as its recent performance trends. It is meant as a guide for readers only, not financial advice. Please practise your own discretion when making investment decisions.
DBS (D05) overview
|Sector||Banking and investment services, banks|
|Year of incorporation||1968|
|Total Market Cap||48,278.92 million|
|Historical share price||Mostly above 25 SGD in the past year, peaking at 24.4 SGD in May 2019. Since Covid-19, price has plunged to below 20 SGD.|
|Current share price||19.14 SGD|
|Current dividend yield||6.373%|
|Dividend yield 5-year average||4.242%|
Note: The figures are accurate at the time of writing (Apr 2020), but due to the nature of this industry, this information changes very frequently. For the latest updates, do check the DBS (D05) SGX listing.
DBS (D05) share prices, dividends and market news
DBS is Singapore’s biggest local bank, with a huge market capitalisation of $48.28 billion.
The bank enjoys some of Southeast Asia’s highest credit ratings, and also has exposure to most of the Asia Pacific region’s major markets, with more than 250 branches worldwide.
DBS stocks are featured on the Straits Times Index, which has recently plunged due to Covid-19, thanks in no small part to the decline in stock prices of DBS, OCBC and UOB.
Over the past five years, DBS’s stock price have been consistently high. Stock prices climbed steadily from November 2016 until reaching a peak in April 2018 at $30.03. Since then, they have declined a little but have still remained strong, at about $25 for most of 2019.
Sadly, nobody is immortal, and share prices have fallen sharply thanks to Covid-19, reaching a low of $16.88 in March before rebounding to the $18 to $19 range.
DBS’s current dividend yield of 6.373% is attractive, and the bank has also demonstrated steady dividend growth over the years. Whether they can maintain their dividends is anybody’s guess, but the fact that they’ve been quite conservative about the proportion of their earnings to be paid out as dividends is a good sign as it means they’ve still got wiggle room when it comes to maintaining their dividend payouts.
About DBS (D05) as a company
It feels like DBS has been around forever, but they were actually incorporated post-independence in 1968.
They were originally set up by the government to handle EDB’s financing activities, but have since become Singapore’s biggest player in consumer banking, asset management, equity, treasury and markets. DBS also acquired POSB, Singapore’s oldest local bank, so POSB customers get to use DBS’s ATMs and branch facilities and vice versa.
Unsurprisingly, given its origins, DBS’s biggest shareholder is Temasek Holdings Pte. Ltd., Singapore’s sovereign wealth fund, with a 29.87% holding.
Today, DBS is a massive organisation with over 28,000 employees offering a full suite of consumer, SME and corporate banking services and products.
The bank also has a strong presence in the region with full-service branches in numerous cities in China, including Beijing, Guangzhou, Shanghai, Shenzhou and Hong Kong, in addition to Taiwan, India and Indonesia.
DBS has seen strong growth over the past five years, which has been reflected in its rising dividends and increased dividend payout ratio.
As one of the region’s strongest banks, my opinion is that DBS is not going to fail, no matter how serious the Covid-19 recession will be. The bank has consistently received excellent credit ratings, and has also diversified its portfolio locally and abroad, with a strong focus on Greater China.
Despite DBS’s strong fundamentals, it is still a bank, which means that its stock price is going to closely be tied to the general financial climate.
What this means is that the impending Covid-19 recession is likely to continue to depress stock prices and perhaps send them even lower. But when the economy does eventually rebound, DBS’s share prices will do likewise.
The only question now is how long and how severe the virus-induced recession is going to be.
Do you have any stock investment tips to share? Leave them in the comments!