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Stocks to watch: OCBC, UOB, Yangzijiang

OCBC, UOB and Yangzijiang all released their results before the Singapore market opened on Thursday.

OCBC, UOB and Yangzijiang all released their results before the Singapore market opened on Thursday.

OCBC Bank beat expectations to clock a 11 per cent year-on-year increase in net profit to S$993 million for the first quarter of 2015, thanks to strong earnings growth across key markets. Its results beat expectations, with a Bloomberg poll of six analysts projecting S$911 million. 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. Meanwhile, non-interest income rose 7 per cent during the quarter to S$859 million.

UOB reported a net profit of S$801 million for Q1 2015, up 1.6 per cent year on year, narrowly missing market expectations. A Reuters poll of six analysts expected S$807 million. During the quarter, net interest income rose 8.3 per cent to S$1.2 billion, while loans grew at 7.8 per cent to S$203 billion. Non-interest income expanded 17.5 per cent to S$755 million, boosted by a 9.5 per cent increase in fee income. However, share of associates' profits fell from S$43 million in the corresponding quarter a year ago to S$4 million during the quarter owing to a divestment gain in the prior period.

Yangzijiang Shipbuilding reported that its net profit for the first quarter ended March 31, 2015, fell 12 per cent from a year ago to 706.88 million yuan (S$150.52 million). Revenue was 14 per cent lower at three billion yuan. The Chinese shipbuilder delivered 10 vessels in the first quarter according to schedule, compared to seven delivered a year ago. As a result, revenue derived from shipbuilding business increased by 26 per cent to 2.3 billion yuan. Revenue from its trading business fell by 64 per cent to 0.36 billion yuan.

Other income increased by 38 per cent to 127 million yuan due to the recognition of 88 million yuan advances during the quarter. Yangzijiang said China's shipbuilding industry still faces an overcapacity issue, with utilisation rate falling to 60 per cent in 2015 from 75 per cent in 2010.