OCBC’s Q1 profit rises 11%, tallying up a robust quarter for Singapore banks
Net profit for the quarter came in at S$1.23 billion, higher than the S$1.11 billion a year ago.
Singapore’s second-largest bank Oversea-Chinese Banking Corporation (OCBC) posted an 11% increase in net profit for the first quarter of this year, releasing positive results that are in line with the performance of local banks DBS Holdings and United Overseas Bank (UOB).
Net profit for the quarter came in at S$1.23 billion, higher than the S$1.11 billion a year ago, driven by a record operating profit before allowances that was supported by strong income growth across the group’s banking, wealth management and insurance business. Analysts had been expecting net profit to come in at S$1.16 billion.
Total income for the quarter gained 15% from a year ago to a record S$2.68 billion, from S$2.33 billion in the same period a year ago, said OCBC.
Net interest income increased by 8% from S$1.42 billion a year ago to S$1.53 billion, due to healthy asset growth and a rise in net interest margin (NIM).
A higher asset yields in a rising interest rate environment supported NIM to rise by 9 basis points to 1.76%.
Commenting on the group’s performance, OCBC’s chief executive Samuel Tsien said the strong first quarter 2019 results “demonstrated” the underlying strength of the group’s banking, wealth management and insurance franchise which drove its operating profit to a new high.
‘Our wealth management business continued to perform well, as fee income strongly rebounded from the previous quarter and private banking assets under management (AUM) climbed to new highs, driven by sustained net new money inflows in Bank of Singapore,’ said Mr Tsien.
The bank will continue to stay watchful of the progress of trade negotiations between the United States and China, developments in financial markets and conclusion of a number of elections in the region, he added.
Robust Q1 results for DBS and UOB banks
Last week, DBS and UOB reported robust earnings for the first quarter, at net profit gains of 9% and 8%, respectively, compared to a year ago.
Singapore’s largest bank DBS said a healthy business momentum and a higher NIM more than offset the impact of a high base for wealth management, brokerage and investment banking fee income as well as a property gain a year ago.
The country’s third-largest bank UOB said the bank started 2019 with strong quarter earnings, underpinned by its continued focus on ‘fundamentals and prudence in managing (the) business’.
UOB’s NIM – which is a common measure for profitability - has been trending lower for the past four quarters, compared to a gradual increase in NIM for DBS, for example. UOB’s NIM narrowed by 5 basis points from last year's 1.84% to 1.79% this quarter.
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