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OCBC Bank registered a profit of S$1.25 billion for the third quarter of this year, overshooting analyst’s expectations of a S$1.13 billion profit.
Following the premarket results announcement, OCBC shares rose 3.724% or S$0.40 to S$11.14 around an hour after the market opened for trading.
Profit for the third quarter was 12% higher than the S$1.11 billion a year ago, and up 3% from S$1.21 billion in the previous quarter. The bank’s net interest income gained 9% year-on-year to S$1.51 billion, led by broad based growth in customer loans of 10%, and a 6-basis point rise in net interest margin (NIM) to 1.72%.
Improved margins in Singapore, Malaysia and Greater China, as well as a higher average loans-to-deposits ratio supported NIM’s increase, said OCBC.
OCBC's chief executive Samuel Tsien said: "Record quarterly and year to date net profit were achieved through improved NIM, continued loan growth, higher non-interest income, and continued cost management discipline. Profit contributions from our key markets of Singapore, Malaysia, Indonesia and Greater China were higher than the prior year."
Mr Tsien added that the group’s investments on technology and digitalization has supported its expansion and yielded increased loyalty from customers.
Despite the weakened regional market sentiments as a result of global trade tensions, the growth in the bank’s wealth management franchise continued, with sustained net new money inflows that drove its assets under management to an all-time high, Mr Tsien claimed. “The overall quality of the loan portfolio remained stable and sound, while our capital ratios were further strengthened,” he said.
“As we remain alert to developments in the global economy and financial markets, our strong liquidity and capital base will position us well for prudent and sustainable growth,” Mr Tsien said.
For the third quarter, the group’s non-interest income was S$1.04 billion, somewhat unchanged from a year ago.
OCBC’s insurance arm Great Eastern Holdings total weighted new sales rose 14% year-on-year to S$347 million, supported by a higher proportion of sales in single premium products in Singapore.
Operating expenses meanwhile, rose 7% from S$1.00 billion a year ago to S$1.07 billion, due to increased staff costs led by annual base salary increments and a rise in expenses as business volume grew.