OCBC (Oversea-Chinese Banking Corp), the second largest bank of Singapore, registered a net profit of SGD973 million in the first quarter of the current year. This is a nearly 14 per cent rise in quarterly profit fuelled by sustained growth in its wealth management business and remarkable results in insurance operations.
The bank showed a net profit of SGD973 million from January to March, up from SGD856 million a year ago, and 23 per cent higher than SGD789 million in the previous quarter. Net interest margin, however, contracted 13 basis points to 1.62 per cent from 1.75 per cent a year ago, largely attributed to reduced customer loan yields and excess liquidity.
Reacting to the performance of the bank, Samuel Tsien, CEO of OCBC Bank, said, “We are pleased to report a rise in first quarter earnings. Our results reflect the underlying strength and diversity of our banking, wealth management and insurance franchise. We achieved broad-based loan growth, grew our private banking AUM, and reported significantly higher fee income.”
OCBC Bank in a press release said, “Fee and commission income climbed 29 per cent to SGD481 million, led by a 70 per cent rise in wealth management fee income, partly contributed by the acquisition of the former wealth and investment management business of Barclays PLC in Singapore and Hong Kong (‘Barclays WIM’) in November 2016.
While speaking about wealth management income, the bank said, “Overall wealth management income, comprising income from insurance, private banking, asset management, stockbroking and other wealth management products, grew 50 per cent to SGD724 million, from SGD482 million a year ago. As a proportion of the Group’s total income, wealth management contributed 32 per cent, as compared with 23 per cent in first quarter of last year.
However, total non-performing assets of SGD2.87 billion were slightly lower than SGD2.89 billion in the previous quarter but higher than SGD2.22 billion a year ago. The overall non-performing loan ratio was 1.3 per cent, unchanged from the previous quarter.
Pointedly, OCBC is the last Singapore bank to report results after DBS Group beat market estimates and United Overseas Bank posted an increase in quarterly profit.
Also read: DBS makes whopping net profit of SGD1.21 billion in first quarter
The encouraging quarterly result sent OCBC’s share price up to SGD10.46, its highest level since July 2015.