OCBC's Q2 net profit up 14% to a record S$1.05 billion

Oversea-Chinese Banking Corporation Limited (OCBC Bank) reported a net profit of S$1.05 billion for the second quarter of 2015, which was 14 per cent higher than S$921 million a year ago.

The robust second quarter performance was driven by new highs in both net interest income and non-interest income. The group also saw an increased pre-tax contributions from its key overseas markets of Greater China and Indonesia, which grew 102 per cent and 21 per cent respectively, from a year ago.

Net interest income increased 14 per cent to S$1.28 billion from S$1.13 billion a year ago. Customer loans rose 18 per cent from a year ago to S$210 billion, contributed by broad-based growth across key customer segments and geographies.

Net interest margin of 1.67 per cent increased 5 basis points quarter-on-quarter basis, but narrowed 3 basis points from a year ago. The year-on-year decline in net interest margin was the result of a lower loan-to-deposit ratio and reduced money market gapping activities, which more than offset an improvement in customer loan spreads, mainly in Singapore.

Non-interest income rose 10% to S$939 million from S$850 million a year ago. Fee and commission income increased 24 per cent to a new high of S$438 million, led by robust wealth management, brokerage and loan related fee income. Treasury-related income from customer flows rose 25 per cent, although net trading income declined to S$70 million from S$133 million in 2Q14.

Net realised gains from the sale of investment securities were S$166 million, higher as compared to S$13 million in 2Q14, primarily attributable to the realisation of a S$136 million gain from the sale of an investment in Great Eastern Holdings' equity portfolio.

An interim dividend of 18 cents per share has been declared for the first half of 2015.