Q2 net profit at S2.69 bln vs S2.41 bln estimate
ROE hit new quarterly high of 19.2, up from 13.4 a year ago
DBS declared a dividend of 48 Singapore cents a share
Customer loans dropped 2 onyear in Q2
Wealth management AUM up 9 to record S320 bln

SINGAPORE, Aug 3 Reuters Singapore39;s biggest bank DBS Group said on Thursday its secondquarter profit jumped a forecastbeating 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 profitability, 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 onefifth of its commercial book yet to reprice and lower deposit repricing pressure than it had expected.

DBS shares rose 0.5 by midday on Thursday amid a slightly lower broader market.

DBS39; views followed that of smaller peer United Overseas Bank, 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 secondquarter earnings.

Besides higher interest rates, Singapore banks have also benefited from strong inflow of wealth amid global uncertainty due to the citystate39;s status as a financial safehaven.

OverseaChinese Banking Corp is due to announce its secondquarter results on Friday.

DBS, which is also Southeast Asia39;s largest lender by assets,…