OCBC Bank registers RM1 bln pre-tax profit
KUCHING: OCBC Bank ( Malaysia) Bhd (OCBC Bank) and its subsidiaries (OCBC Malaysia) registered over RM1 billion in pre-tax profit for the financial year ended December 31, 2012, up five per cent from the previous year.
According to a press statement, its net profit grew by four per cent to RM811 million owing to strong growth in operating profit and also due to a reduction in impairment losses and provisions.
Total gross loans, advances and financing grew 12 per cent to RM48 billion as at year end due mainly to additional consumer and business loans of RM3.5 billion and RM1.6 billion respectively. Total assets grew 13 per cent to RM73 billion.
Commenting on OCBC Malaysia’s performance, director and chief executive officer Jeffrey Chew said the bank remained committed to its long-term diversification strategy to build a more balanced portfolio of customers and would continue to invest in activities to deliver a differentiated experience for its customers.
“This means, for example, building a stronger and larger retail base vis-a-vis our existing corporate customers, which has been our traditional area of strength. Not surprisingly, our expansion-oriented overhead expenses rose 14 per cent last year.
“Moving ahead, we are looking to move further beyond our traditional business banking strength to enhance our growing consumer banking and Islamic banking presence,” Chew added.
Currently, business banking contributes about 55 per cent to the top line, followed by 25 per cent from the consumer business and the remaining 20 per cent from treasury.
OCBC was working towards the more balanced ratio of 40 per cent
This means, for example, building a stronger and larger retail base vis-a-vis our existing corporate customers, which has been our traditional area of strength. Not surprisingly, our expansion-oriented overhead expenses rose 14 per cent last year.
Jeffrey Chew, OCBC Malaysia’s performance, director and chief executive officer
for business banking, 40 per cent for the consumer business and 20 per cent for treasury.
“This diversification approach, especially into the consumer business, will result in loans growth percentages in the business banking segment being less robust than that previously achieved. This may also result in lower spreads on the overall portfolio but we are comfortable with this impact in light of the long term diversification gains,” he said.
Chew pointed out that in line with this strategy the bank’s wealth management business continued to shine with new-to-bank wealth management customers growing substantially in 2012.
He added that although 2012 was a tough year for the global economy, things were looking up.
OCBC Malaysia’s total income for the year rose eight per cent to slightly over RM2 billion, driven by a two per cent increase in net interest income to RM1.25 billion and a 34 per cent jump in Islamic banking income to RM243 million.
Compared with a year ago, non-interest income grew by 12 per cent to RM531 million while overhead expenses expanded 14 per cent to RM851 million as OCBC Malaysia continued to build its capabilities and systems alongside the opening of new branches.
Meanwhile, OCBC Al- Amin Bank Bhd (OCBC Al-Amin), OCBC Malaysia’s wholly-owned Islamic banking subsidiary, achieved operating profit of RM99 million in its fourth full year of operation, an increase of 93 per cent over the previous year. As at December 31, 2012, total assets grew 22 per cent to RM7 billion, the statement revealed.
OCBC Malaysia continued to maintain a strong capital position, with shareholders’ funds strengthening to RM5.3 billion and risk weighted capital ratio of 17.8 per cent ( before dividends ) as at the end of the year.