There are signs that higher prices will become “more entrenched” and harder to reverse, according to the chief executive of Singapore’s largest bank.
There are signs that higher prices will become “more entrenched” and harder to reverse, according to the chief executive of Singapore’s largest bank.
“You’re beginning to see more entrenched inflation coming through,” Piyush Gupta, CEO of DBS Group Holdings, told CNBC’s “Capital Connection” Friday. “Some of the inflation that we’re seeing is really wage inflation. Salaries are beginning to dial up and I don’t think those are so easy to reverse.”
My own sense is we have seen the worst of the rate cycle, from our standpoint of course, and you will see some pick up.Piyush GuptaCEO, DBS GROUP HOLDINGS
Net interest margin, a measure of lending profitability, was two basis points lower than the previous quarter at 1.43% due to lower short-term interest rates.
“My own sense is we have seen the worst of the rate cycle, from our standpoint of course, and you will see some pick up,” said the CEO.
“I do think central bank policy action is bias towards tightening, the pace of it is a little bit uncertain,” he added.
Here are other highlights of the bank’s third-quarter earnings:
- The bank wrote back 70 million Singapore dollars in allowances — previously set aside for potential loan losses — as economic recovery continues.
- The DBS board declared a quarterly dividend of 33 Singapore cents per share.
The release of DBS’ financial results rounded up the reporting season for Singapore’s top banks.
Earlier this week, the other two banks — Oversea-Chinese Banking Corp and United Overseas Bank — also reported third-quarter earnings that beat expectations.
OCBC’s net profit rose 19% from a year ago to 1.22 billion Singapore dollars ($904.5 million), while UOB reported a 57% rise in net profit to 1.05 billion Singapore dollars in the same period.
