Income at the wealth management arm of the Singapore-based bank rose by more than a quarter last year.

The wealth management arm of Singapore-based DBS Group today reported a 26 per cent year-on-year rise in income to S$2.661 billion ($1.96 billion) for 2018’s calendar year, while total assets under management rose to S$220 billion, a 7 per cent rise that defied volatile markets.

For all entities of DBS, the group logged a record net profit of S$5.63 billion for 2018, a 28 per cent year-on-year increase, while fourth-quarter earnings rose by 8 per cent to S$1.32 billion. Return on equity rose more than two percentage points to 12.1 per cent, the highest in more than a decade.

Total income increased by 11 per cent to S$13.2 billion from loan and fee income growth as well as a higher net interest margin, which were partially offset by weaker Treasury Markets income. 

Card fees increased by 31 per cent to S$714 million from higher customer transactions in Singapore and the consolidation of the retail and wealth management business of ANZ. Wealth management fees grew by 18 per cent to S$1.14 billion mainly from higher bancassurance income. Transaction service fees increased by 5 per cent to S$647 million as a 13 per cent rise in cash management fees was moderated by lower trade finance fees. These increases were partially offset by a 41 per cent fall in investment banking fees to S$128 million because market falls hit debt and equity capital activities.

Other non-interest income fell by 4 per cent to S$1.45 billion due to lower gains on investment securities, partially offset by property disposal gains.

By business unit, consumer banking/wealth management income rose by 21 per cent to S$5.65 billion from increases in all product categories led by deposits, cards and bancassurance. Costs rose by 13 per cent to S$5.80 billion. The ANZ acquisition and integration made up five percentage points of the cost rise.

“We achieved financial results befitting our fiftieth anniversary, a year when we were also recognised as the world’s best bank and best digital bank. Return on equity of 12.1 per cent was near the historical high of 2007, when interest rates were twice the levels today and capital requirements less stringent. The structural improvements we have made to the profitability of our franchise – a shift towards higher-returns businesses, deeper customer relationships and more nimble execution – put us in good stead to navigate the challenges of the coming year,” DBS chief executive Piyush Gupta said.