DBS posted record Q1 21 profit. BUT high PB ratio 1.47 and low dividend yield 2.4%

I was certainly not expecting this. DBS reported record quarterly profit of $2 billion in the 1st quarter of 2021. DBS CEO Piyush Gupta said, “This has been an extraordinary quarter for our business as we fired on all cylinders." 

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A brief summary:

- Net Interest Margin stabilised at 1.49% (same ratio as last quarter - 2020 Q4).
- Net interest Income is the only one that dropped (15%) compared to 2020 Q1.
- Net fee and commission income, and Other non-interest income exceeded pre-covid levels (compared to 2019 Q1).  This includes wealth management, transaction service fees and card fees.
- Net Book Value is $20.46.
- Dividends declared is $0.18. disappointing that MAS did not lift the dividends cap. 

The important ratios to take note of

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The ratios such as Return on Assets, Return on Equity, Non-performing loan rate, Common Equity Tier-1 ratio has shown improved.  

Based on its currently trading price of $30.10, the Price to Book ratio is 1.47 and Dividend Yield is 2.4% (if MAS does not lift the dividend cap in FY21). 

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If you look at the last 5 years of data, DBS is trading at high valuations. It is trading at a high PB ratio, reaching 2018 highs. In terms of yield, it is very low at 2.4%. If MAS lift the cap next quarter and DBS pay a dividend amount of $0.33 cents per quarter, the yield will be more decent at 3.9%. 

If we look back at past data, DBS  traded at PB ratio of 2.6 and yield of 2.1% in 2000. Is it going to trade a such valuations moving forward?