Singapore's DBS Group Holdings on Friday posted better-than-expected 11 per cent rise in third-quarter profit, after South-east Asia's biggest bank wrote down some investments in structured credit and took a charge on its investment in Thailand's TMB Bank.
Without the $38 million impairment charge on TMB, DBS' net profit would have been up 17 per cent at $648 million.The Singapore-based bank, in which state investor Temasek Holdings has a 28 per cent stake, posted a net profit of $610 million for its third quarter from July to September, compared with $552 million a year ago and against an average forecast of $481 million from five analysts polled by Reuters.
Excluding the $38 million impairment charge on TMB, the net profit was up 17 per cent at $648 million.
The stock was hit in August after it disclosed that it had US$1.6 billion of holdings in collateralised debt obligations including US$188 million exposure to US sub-prime mortgages.
DBS said that its exposure to CDOs was almost double what it had initially declared after it had to inject cash into a special-purpose vehicle that invests in CDOs.
This was the second straight quarter of write-downs for the bank after it took an impairment on the value of its 16 per cent stake in Thailand's TMB Bank in the second quarter.
DBS derives about one-third of its earnings from Hong Kong, where it has around a third of its assets. The bank is also in the process of building up its China operation. -- REUTERS
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