OCBC leads bank losses as STI slides 1.4%

[SINGAPORE] Shares of Singapore’s three local banks traded lower on Monday (Nov 2) morning, with OCBC recording the steepest decline, ahead of their earnings releases this week.

As at 11.43 am, OCBC was down S$1.07 or 3.7 per cent at S$28.22, while DBS fell S$1.82 or 2.5 per cent to S$71.31. UOB declined S$0.89 or 2.2 per cent to S$40.48.

OCBC’s sharper decline came after its insurance subsidiary Great Eastern reported a 72 per cent year-on-year fall in third-quarter net profit to S$102.9 million on Monday, weighed down by weaker investment valuations and a one-off loss from the partial divestment of its Indonesian subsidiary.

By noon, OCBC edged up to S$28.26. Meanwhile, DBS and UOB pared some of their declines to S$71.41 and S$40.53, respectively.

The losses among the banking heavyweights weighed on the benchmark Straits Times Index (STI), which was down 1.4 per cent or 72.9 points at 5,303.84 as at noon.

The slide comes ahead of the banks’ upcoming Q3 earnings announcements this week. UOB will be the first to report its results on Wednesday, followed by DBS and OCBC on Thursday and Friday, respectively.

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Analysts had earlier told The Business Times that wealth management fees at Singapore banks could ease in Q3 following a strong showing in the preceding three months, even as pressure on net interest margins persists.

Investors are also expected to scrutinise the banks’ exposure to artificial intelligence-related financing and the impact of rising bond yields on their investment portfolios and capital positions.

However, the analysts expect the banks’ underlying asset quality and capital positions to remain resilient.