Singapore's DBS Group Holdings blames the decline in its loan volume in the past three months, the first in three years, on the mortgage wars in Hong Kong and Singapore.
The group posted a net profit of S$518 million ($2.53 billion) for the first quarter, up 39 per cent from a year ago, while DBS Bank (Hong Kong) recorded a 29 per cent increase in net profit to S$156 million.
But with housing loan volume falling 2 per cent from December, the group's customer loans shrank 1 per cent to S$78.8 billion during the quarter, ending three years of positive growth.
A group spokeswoman said the decline in home loans came after 'DBS exercised discipline amid intense mortgage competitive pricing pressures'.
DBS Bank (Hong Kong), which incorporates the former Dao Heng Bank in its operations, had 6.4 per cent of the local home loan market last month, down from 6.6 per cent in February.
Industry players expect the mortgage price war in Hong Kong to intensify.