• Sat
  • Nov 1, 2014
  • Updated: 10:26am

Soaring provisions and costs bite into DBS unit's interim

PUBLISHED : Saturday, 04 August, 2001, 12:00am
UPDATED : Saturday, 04 August, 2001, 12:00am
 

A huge jump in expenses and bad loan charges has thrown DBS Kwong On Bank's interim profit sharply into reverse.


The bank revealed operating expenses surged 40.9 per cent to HK$349.3 million in the half to June 30.


That big jump in costs extinguished the 20.5 per cent increase, to HK$549.8 million, in operating income.


With bad and doubtful debt charges soaring to HK$58.1 million, from HK$18.75 million a year earlier, post-provision operating profit was down 24.9 per cent at HK$142.51 million.


A HK$51,000 one-off gain from asset disposals left the bottom-line after-tax profit attributable to shareholders down 29 per cent at HK$117.4 million.


No comment could be obtained from bank management last night on the increase in expenses or the reason for the big rise in bad loan charges.


However, during the half the bank launched its first credit card, and a breakdown of the loan portfolio shows credit card advances were HK$405.7 million as of June 30. That helped lift total customer advances 8.3 per cent, to HK$22.8 billion, and interest income 8.9 per cent to HK$1.08 billion.


Specific provisioning against non-performing loans was down by about HK$100 million - to HK$246.7 million from HK$351.2 million, and the non-performing loan portfolio was down from HK$1.05 billion, or 4.9 per cent of advances, to HK$739.2 million - 3.2 per cent of advances.


Kwong On was acquired by Singapore's DBS Group in July 1999 and became DBS Kwong On in March last year.


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