SINGAPORE, Aug 3 (Reuters) – Singapore’s biggest bank DBS Group (DBSM.SI) said on Thursday its second-quarter profit jumped a forecast-beating 48% to a new record as higher interest rates helped drive income growth, and forecast growth in its net interest margin (NIM).

DBS said the outlook for NIM, a key indicator of profitibility, had improved due to unexpected U.S. interest rate increases in the second half and a rise in the Hong Kong Interbank Offered Rate.

It looked forward to continued support from one-fifth of its commercial book yet to reprice and lower deposit repricing pressure than it had expected, according to presentation slides accompanying its results.

DBS’ views followed that of smaller peer United Overseas Bank (UOBH.SI), which last Thursday said it had a more positive outlook for NIM following the latest U.S. rate rise after it chalked up a 27% increase in second-quarter earnings.

Besides higher interest rates, Singapore banks have also benefited from strong inflow of wealth amid global uncertaintiy due to the city-state’s status as a financial safe-haven.

Oversea-Chinese Banking Corp (OCBC.SI) is due to announces its second-quarter results on Friday.

DBS, which is also Southeast Asia’s largest lender by assets, expects another record year as first-half drivers sustained into the second half, projecting full-year return on equity at above 17%, according to the slides.

“While there is some macroeconomic uncertainty, our prospects for the rest of the year are anchored on a franchise with a proven ability to capture business opportunities,” DBS Chief Executive Officer Piyush Gupta said in a statement.

DBS said April-June net profit hit a quarterly record high S$2.69 billion ($2.69 billion) compared to S$1.82 billion a year earlier.

This exceeded the average estimate of S$2.41 billion from four analysts surveyed by Refinitiv.

DBS’ NIM rose for sixth consecutive quarter to 2.16% during the quarter from 1.58% a year earlier.

Return on equity hit new quarterly high of 19.2%, up from 13.4% the same quarter a year ago.

It declared a dividend of 48 Singapore cents per share.

($1 = 1.3411 Singapore dollars)

Reporting by Yantoultra Ngui; Editing by Stephen Coates

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