Key Takeaways
- • DBS Group CEO Tan Su Shan said on November 5, 2026 that the Singapore bank is weighing a move into prime brokerage for hedge funds and other institutional investors, but has not chosen a structure.
- • DBS's markets trading income fell 65% year on year to S$152 million from S$439 million in the third quarter, which the bank attributed to unfavorable equity market conditions.
- • Net profit fell 5% to S$2.81 billion for the three months to September 30, below the S$2.95 billion average forecast in a Bloomberg survey of eight analysts.
- • Prime brokerage is concentrated among Goldman Sachs, JPMorgan and Morgan Stanley; Goldman's equities financing line alone brought in $3.37 billion, or 52% of its equities revenue, per FinanceMagnates.com's calculation.
- • DBS already has stock custody, market access, trading capabilities and surveillance infrastructure that it says it can combine for institutional clients.
Summary
DBS Group is weighing a move into prime brokerage for hedge funds and other institutional investors, chief executive Tan Su Shan said on Thursday at a briefing on third-quarter results. A prime broker finances funds' positions, lends them securities, and handles custody and clearing. DBS does not run a traditional prime brokerage today, but Tan said the bank already has stock custody, market access and trading capabilities and is still considering its options. She described the idea as assembling businesses DBS already operates for institutional clients, saying that "in Asia we have all the building blocks and we may put it together," according to The Business Times. Part of that base includes trade surveillance software the bank acquired from Nasdaq in 2022, which monitors equities, derivatives and over-the-counter currencies.
Any new entrant would compete with lenders that already earn a large share of equities revenue from financing funds. According to FinanceMagnates.com, Goldman Sachs reported a 72% year-on-year rise in equities revenue to $6.44 billion in the quarter, driven mainly by prime and portfolio financing, with its equities financing line contributing $3.37 billion, or 52% of equities revenue. The business is concentrated among Goldman Sachs, JPMorgan and Morgan Stanley. Standard Chartered has begun a smaller pilot in digital assets, acting as credit intermediary on its first prime brokerage trades in spot bitcoin and ether through LMAX Digital in July.
Tan linked the proposal to growth in DBS's foreign institutional investor and financial institutions franchises and to the financialization of Asian markets, describing the bank's prospects in institutional equities as promising. Singapore is competing with Hong Kong to host Asia's hedge fund managers, offering its variable capital company structure and predictable regulation.
The quarter was weaker on the trading line. Net profit fell 5% from a year earlier to S$2.81 billion, below the S$2.95 billion average forecast in a Bloomberg survey of eight analysts. Markets trading income dropped to S$152 million from S$439 million, which Tan attributed to unfavorable equity market conditions, softer Asian asset markets and a sharp rise in interest rates late in the quarter. Trading accounts for about 6% of total income, Tan said. Treasury customer income, which includes equity capital markets, DBS Vickers and DBS Digital Exchange, rose 21% to a record S$2.62 billion in the first nine months. Net interest income rose 4% to S$3.71 billion, though net interest margin narrowed to 1.87% from 1.96%; Tan said net interest income had passed its trough. Nine-month net profit reached a record S$8.82 billion, up 2%, and DBS expects total income to grow by a mid-single-digit percentage in 2027. Chairman Peter Seah will retire after 16 years, with board member Anthony Lim succeeding him on January 1.
Any new entrant would compete with lenders that already earn a large share of equities revenue from financing funds. According to FinanceMagnates.com, Goldman Sachs reported a 72% year-on-year rise in equities revenue to $6.44 billion in the quarter, driven mainly by prime and portfolio financing, with its equities financing line contributing $3.37 billion, or 52% of equities revenue. The business is concentrated among Goldman Sachs, JPMorgan and Morgan Stanley. Standard Chartered has begun a smaller pilot in digital assets, acting as credit intermediary on its first prime brokerage trades in spot bitcoin and ether through LMAX Digital in July.
Tan linked the proposal to growth in DBS's foreign institutional investor and financial institutions franchises and to the financialization of Asian markets, describing the bank's prospects in institutional equities as promising. Singapore is competing with Hong Kong to host Asia's hedge fund managers, offering its variable capital company structure and predictable regulation.
The quarter was weaker on the trading line. Net profit fell 5% from a year earlier to S$2.81 billion, below the S$2.95 billion average forecast in a Bloomberg survey of eight analysts. Markets trading income dropped to S$152 million from S$439 million, which Tan attributed to unfavorable equity market conditions, softer Asian asset markets and a sharp rise in interest rates late in the quarter. Trading accounts for about 6% of total income, Tan said. Treasury customer income, which includes equity capital markets, DBS Vickers and DBS Digital Exchange, rose 21% to a record S$2.62 billion in the first nine months. Net interest income rose 4% to S$3.71 billion, though net interest margin narrowed to 1.87% from 1.96%; Tan said net interest income had passed its trough. Nine-month net profit reached a record S$8.82 billion, up 2%, and DBS expects total income to grow by a mid-single-digit percentage in 2027. Chairman Peter Seah will retire after 16 years, with board member Anthony Lim succeeding him on January 1.
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