OCBC Q1 profit falls 5% to S$1.88 billion; beats expectations

[SINGAPORE] OCBC’s net profit for the first quarter fell on lower net interest income and higher operating expenses.

Net profit for the three months ended Mar 31, 2025, stood at S$1.88 billion, compared with S$1.98 billion from the year-ago period, it said on Friday (May 9).

The earnings were 12 per cent up from Q4’s S$1.69 billion and beat the S$1.86 billion consensus forecast in a Bloomberg survey of five analysts.

It was the last of Singapore’s three lenders – together with UOB and DBS – to release its quarterly results this season.

Net interest income for the quarter fell 4 per cent to S$2.35 billion, due to a falling interest rate environment. Net interest margin was down 23 basis points to 2.04 per cent for the quarter, from 2.27 per cent in the previous corresponding period.

Non-interest income was up 10 per cent to S$1.31 billion, on stronger fees, trading and insurance income.

The bank’s non-performing loans ratio was 0.9 per cent, down from 1 per cent in the same period a year ago.

Operating expenses rose 5 per cent from the same period a year ago to S$1.42 billion, driven by higher staff costs from annual salary adjustments and volume-related compensation, as well as “continued investments in technology”.

Total allowances grew by 25 per cent to S$212 million for the quarter. This comprised S$94 million in allowances for impaired assets, lower than in the previous quarter and the year before.

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It also included S$118 million in allowances for non-impaired assets, arising from changes in credit risk profiles and management overlays set aside amid heightened macroeconomic uncertainties.

Helen Wong, group chief executive officer at OCBC, said: “Looking ahead, the heightened uncertainties brought about by the shifts in trade policies and geopolitical risks are expected to have a dampening effect on overall economic growth in the region.”

Shares of OCBC closed 0.7 per cent or S$0.11 lower at S$16.16 on Thursday, before the announcement.