OCBC, UOB up­beat on growth out­look

New Straits Times - - BUSINESS / WORLD -

SIN­GA­PORE: Oversea-Chi­nese Bank­ing Corp Ltd (OCBC) and United Over­seas Bank Ltd (UOB) gave up­beat pic­tures of their growth prospects yes­ter­day, af­ter re­port­ing strong quar­terly prof­its and cut­ting ex­po­sure to the weak off­shore sup­port ser­vices sec­tor.

Sin­ga­pore banks are ben­e­fit­ing from an econ­omy that clocked its fastest ex­pan­sion in three years last year, spurring an in­crease in de­mand for loans as busi­nesses grow and the prop­erty sec­tor im­proves.

South­east Asia’s largest bank by as­sets, Sin­ga­pore­based DBS Group Hold­ings Ltd, also re­ported a jump in quar­terly profit last week and gave a ro­bust out­look.

“Sen­ti­ments in the re­gion have on the whole been lifted by strong eco­nomic in­di­ca­tors and im­proved busi­ness con­fi­dence, which have spurred re­newed op­ti­mism in our key mar­kets,” said Sa­muel Tsien, the chief ex­ec­u­tive of­fi­cer of OCBC.

The three Sin­ga­porean banks re­ported record prof­its for last year, boosted by a rise in net in­ter­est in­come and broad­based growth in busi­nesses such as wealth man­age­ment and in­surance.

OCBC’s Oc­to­berDe­cem­ber net profit came in at S$1.03 bil­lion (RM3.05 bil­lion), ver­sus S$789 mil­lion a year ear­lier and com­pared with the S$958 mil­lion av­er­age es­ti­mate of seven an­a­lysts com­piled by Reuters.

The No. 2 lender how­ever said it took more pro­vi­sions to cush­ion it­self against its ex­po­sure to the off­shore sup­port ser­vices and ves­sels in­dus­try, where it saw no no­tice­able im­prove­ment in char­ter rates.

Sin­ga­porean banks have strug­gled with their ex­po­sure to the bat­tered oil ser­vices in­dus­try, with about a dozen lo­cally listed com­pa­nies re­struc­tur­ing loans and bonds in a chal­leng­ing mar­ket.

DBS had dou­bled its quar­terly pro­vi­sions to the oil and gas sec­tor in the third quar­ter and said the worst was prob­a­bly over.

UOB yes­ter­day, re­ported a 16 per cent rise in Oc­to­ber-De­cem­ber net profit to S$855 mil­lion ver­sus S$739 mil­lion a year ear­lier and com­pared with the S$897 mil­lion av­er­age es­ti­mate of five an­a­lysts com­piled by Reuters.

Sa­muel Tsien

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