OCBC profit up 29% to S$1b in first quarter

SINGAPORE: Singapore’s Oversea-Chinese Banking Corp Ltd (OCBC) reported a 29% rise in quarterly profit, underpinned by strong growth in net interest income and wealth management, but missed market estimates, sending its shares down 3.2%.

The results from Singapore’s second-largest listed lender followed forecast-beating numbers from DBS Group Holdings Ltd and United Overseas Bank. Singapore banks are benefiting from an improving economy and higher local interest rates.

“The group’s income growth was broad-based, loan growth was sustained, assets under management growth continued and allowances were much lower,” OCBC CEO Samuel Tsien said in a statement yesterday.

OCBC’s net profit came in at S$1.11 billion (RM3.3 billion) in the three months ended March 31 versus S$861 million reported a year ago, and was the highest since the quarter ending September 2014.

This was short of the average estimate of S$1.18 billion from five analysts compiled by Thomson Reuters. The year-ago number was restated from a reported profit of S$973 million.

OCBC said the changes were a result of Singaporeincorporated companies listed on the Singapore Exchange being required to adopt a new financial reporting framework.

The bank’s net interest margin rose five basis points to 1.67%. Fee and commission income increased 11%, led by a 19% jump in wealth management fee income.

OCBC’s allowances for loans and other assets declined to S$12 million from S$168 million a year ago. – Reuters