UPDATE 3-DBS sees net profit rising this year after Q1 beats forecasts

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Q1 net profit rises to S$2.69 bln vs S$2.48 bln estimate

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Net interest margin climbs to 2.14%

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Return on equity hits record high of 19.4%

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DBS declares dividend of 54 Singapore cents per share

(Adds CEO's comments in paragraphs 2-3, background and context in paragraphs 7-10 and 17)

By Yantoultra Ngui

SINGAPORE, May 2 (Reuters) - Singapore's biggest bank DBS Group expects its net profit to grow this year, it said on Thursday, after posting a 15% rise in first quarter net profit that beat expectations, driven by strong total income growth.

"While geopolitical tensions persist, macroeconomic conditions remain resilient and our franchise is well positioned to capture business opportunities," DBS Chief Executive Officer Piyush Gupta said in a statement.

"We are optimistic that total income and earnings will be better than previously guided and we will be able to deliver another year of strong shareholder returns," he added.

Total income growth was projected to be 1 to 2 percentage points above previous guidance of the mid-single-digits, according to Gupta's outlook observations slides accompanying the results.

Group net interest income is expected to be modestly better than 2023 levels, he said in the slides.

Commercial book non-interest income growth was expected to be in the mid-to high teens percent on better-than-expected momentum in wealth management and treasury customer sales, according to the slides.

In 2023, DBS reported a record high full-year annual profit of S$10.3 billion.

Singapore has benefited from strong inflows of wealth from Asia, including China, as well as Europe and the Americas, drawn in by the city-state's political stability in recent years.

The country's central bank kept monetary policy settings unchanged for a fourth straight time in April amid still elevated price pressures and said it saw prospects for the city-state's economy to strengthen over 2024.

DBS kicked off earnings season among Singapore's lenders. Peers United Overseas Bank and Oversea-Chinese Banking Corporation report results next week.

DBS' January-March net profit rose to S$2.96 billion ($2.18 billion) from S$2.57 billion a year earlier on the back of a stable net interest margin, higher fee income and treasury customer sales.

This beat the mean estimate of S$2.48 billion from five analysts, LSEG data showed.

The quarterly net profit was the highest since the S$2.69 billion it reported in the second quarter of 2023.

Return on equity, or ROE, also hit a record high of 19.4% in the first quarter, up from 18.6% a year ago.

DBS, which is also Southeast Asia's biggest lender, announced a dividend of 54 Singapore cents per share for the first quarter.

DBS's net interest margin, a key profitability gauge, rose slightly to 2.14% during the quarter from 2.12% a year earlier.

On Tuesday, Singapore's central bank ended DBS's six-month pause from acquiring new businesses or making non-essential IT changes after DBS addressed problems related to repeated and prolonged disruptions to its digital banking services last year.

($1 = 1.3600 Singapore dollars) (Reporting by Yantoultra Ngui; Editing by Richard Chang and Sonali Paul)