OCBC Q1 profit rises 5% to S$1.97 billion, beats estimates
Non-interest income up 23% at a record S$1.61 billion
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[SINGAPORE] OCBC’s net profit for the first quarter rose 5 per cent, driven by strong growth in wealth management, the lender said on Friday (May 8).
Net profit for the three months ended Mar 31, stood at S$1.97 billion, versus 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, as net interest margin narrowed by 28 basis points to 1.76 per cent, from 2.04 per cent previously.
Non-interest income rose 23 per cent to a record S$1.61 billion, as wealth management fees increased by 34 per cent to S$422 million, with contributions across all wealth product channels on increased customer activities.
The non-performing loan ratio was unchanged at 0.9 per cent. Total allowances rose 2 per cent to S$216 million, largely due to higher allowances for non-impaired assets.
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Tan Teck Long, group CEO of OCBC, said: “We achieved a new high for non-interest income, led by our wealth business, which helped us offset lower net interest income amid a low-interest rate environment.”
However, he noted that global conditions “remain uncertain amid geopolitical tensions and elevated inflation risks”.
“Much of the near-term outlook will depend on how the war in the Middle East, with its impact on energy supply and prices, evolves, while the ongoing trade tariff situation is also being closely monitored,” he added.
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OCBC rounded off the first-quarter earnings season for Singapore’s three local banks, following DBS on Apr 30 and UOB on May 7.
Earlier this week, on May 4, OCBC announced that its subsidiary, Bank OCBC NISP Tbk, will acquire the assets and liabilities of HSBC’s retail and wealth management operations in Indonesia.
Shares of OCBC closed 0.6 per cent, or S$0.12, lower at S$21.88 on Thursday.
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