OCBC shares pare gains to close 0.2% up after Q1 profit beats estimates

[SINGAPORE] Shares of OCBC Bank rose as much as 3.1 per cent on Friday (May 8) after the bank reported better-than-expected first quarter profits – but pared almost all the gains by the close of trading.

The counter climbed as high as S$22.56 within seconds of market open, adding S$0.68, with more than 1.7 million shares changing hands. It was one of the few blue chips to advance on Friday morning amid a sea of red which dragged the Straits Times Index (STI) down.

The bank’s rally was short-lived. By noon, it had given up most of its gains. By the market close, it was only 0.2 per cent up at S$21.92. Its peers DBS and UOB fared worse and were in negative territory, with the STI falling 0.4 per cent.

OCBC’s net profit for the first quarter rose 5 per cent, driven by strong growth in wealth management. Net profit for the three months ended Mar 31 stood at S$1.97 billion, from S$1.88 billion a year earlier. This was above the S$1.88 billion consensus estimate in a Bloomberg survey of five analysts.

Net interest income fell 5 per cent to S$2.2 billion amid a lower interest rate environment, and net interest margin narrowed by 28 basis points to 1.76 per cent.