Anshuman Daga

SINGAPORE, Reuters – DBS Group’s (OTC) strong business momentum was confirmed last year when its record profit surpassed $1 million. This demonstrates that Southeast Asia’s biggest lender is now in a position to recover from the pandemic and improve asset quality and loan growth.

Rising interest rates are expected to benefit Singapore’s lenders, and the economy of Singapore is predicted to expand 3%-5% in 2018, after growing at an unprecedented pace for over a decade.

Krishna Guha, analyst with Jefferies stated that, while fourth-quarter profits were slightly lower than forecasts due to lower-than-expected noninterest income, the bank experienced “outstanding” revenue growth.

Guha wrote in a note, “Guidance to 2022 is consistent with our current inputs and for the credit cost. This is likely the next driver for positive earnings revisions.”

DBS is the first Singapore bank that reported this season. The report follows the fallout from a pandemic year in which profit plunged to an all-time low of three years.

The average estimate for S$1.47billion from the four Refinitiv analysts was incorrect. It also fell 18% below what Refinitiv had predicted. This is due in part to 41% fall in noninterest income. DBS shares dropped 0.6% during Monday’s early trade.

Piyush Gupta, DBS CEO, stated that they look forward to the next year with a balanced balance sheet that has been prudently managed and is well positioned to take advantage of rising interest rates. He also said that DBS expects to see a mid-to high-single-digit increase in loan growth this year after last year’s 9% increase.

DBS, which makes most of its income from Singapore, Hong Kong and Hong Kong has reached a deal to spend S$956 Million to acquire the property. Citigroup (NYSE: ) Taiwanese consumer business. It supports growth by acquiring regional businesses.

Singapore’s lender saw a 44% increase in full-year profit to S$6.8 billion due to an unprecedented 9% loan growth. Wealth management and transaction bank services fees grew more than the negative impact of the low interest rates.

The allowances for loan loss decreased from S$577million a year ago to S$33m in the most recent quarter.

Investors have driven up Singapore’s bank stocks in anticipation of a better outlook, as UOB and DBS trade at record levels.