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OCBC beats expectations with 11% rise in net profit for Q1

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OVERSEA-CHINESE Banking Corp (OCBC) reported an 11 per cent increase in net profit to S$993 million for the first quarter of 2015, bolstered by strong earnings growth across its key markets.

OVERSEA-CHINESE Banking Corp (OCBC) reported an 11 per cent increase in net profit to S$993 million for the first quarter of 2015, bolstered by strong earnings growth across its key markets.

Its results beat expectations, with analysts projecting a profit of S$911 million, according to a Bloomberg poll of six analysts.

Net interest income rose 15 per cent year on year to S$1.25 billion on the back of strong asset growth, while customer loans were up 20 per cent to S$210 billion with broad-based growth across key customer segments and markets.

Customer deposits grew 26 per cent to S$250 billion, although net interest margin declined eight basis points to 1.62 per cent due to a lower loans-to-deposits ratio of 83 per cent and weaker income from money market gapping activities, it said.

During the quarter, non-interest income rose 7 per cent to S$859 million, which contributed to total income for the quarter clocking S$2.11 billion, up 12 per cent. Operating expenses were also higher, increasing 24 per cent to S$873 million after the consolidation of OCBC Wing Hang Bank.

Meanwhile, the group's share of results of associates and joint ventures rose to S$89 million, up from S$17 million previously, due to the Bank of Ningbo, which became an associate of the company on Sept 30 last year.

Annualised earnings per share were 99.7 Singapore cents, versus 101.6 cents a year ago.

Chief executive Samuel Tsien said: "We will further invest in our businesses and leverage synergies across the expanded OCBC franchise to better service our customers. Supported by our strong capital and funding position, we will continue to pursue a disciplined and prudent strategy of sustainable growth in our key markets."