Ramla SoniThe coronavirus outbreak could affect the revenue of DBS, south-east Asia’s largest bank this year, according to its CEO Piyush Gupta.
Gupta, the CEO of the Singaporean bank, said the impact on its full-year revenue is estimated to be 1 per cent to 2 per cent, assuming the spread of the virus has slowed by summer.
Much of that impact will come from the bank’s credit card and wealth management businesses, he said.
“There are certainly some business lines where you can see the slowdown. The obvious one is credit card where fewer people are going out to restaurants, fewer people are buying things in the shops – that obviously filters through to our card spend and our fees,” Gupta said.
In the wealth management space, he said the fall in activity would be due to “psychology,” as clients tend to hold back investing when there’s “doom and gloom.”
DBS recently posted fourth-quarter net profit of 1.51bn Singapore dollars ($1.09bn), a 14 per cent increase from the same period a year ago.
Total income for the October to December quarter rose 7 per cent year on year to 3.46bn Singapore dollars, helped by growth in loans and fee income business.
Gupta said prior to the coronavirus epidemic, the bank had been on track to meet its 2020 target of mid-single percentage growth in loans. He added that the additional economic challenge by the virus spread could hurt the ability of some small businesses and consumers to repay their loans.
As a result, Gupta said that DBS would allow certain clients subject to criteria such as credit profile to suspend their loan repayments for six months. This is available for property loans for small and medium-sized enterprises in Singapore and Hong Kong, and mortgages for retail customers in Singapore.
Singapore has 50 confirmed coronavirus cases, with 15 already recovered and discharged, according to the country’s Ministry of Health.
DBS shares were up by 0.35 per cent.
