Singapore bank OCBC posts record Q1 profit, beat expectations

Singapore bank OCBC posts record Q1 profit, beat expectations
A view of the OCBC Bank signage in Singapore, May 3, 2023. (Photo: REUTERS/Caroline Chia)

SINGAPORE :Singapore’s second-biggest lender Oversea-Chinese Banking Corp (OCBC) reported on Wednesday (May 10) a better-than-expected 39 per cent jump in first-quarter profit from a year earlier on the back of strong net interest income growth.

OCBC, which is also Southeast Asia’s second-biggest bank by assets, said January to March net profit rose to a record S$1.88 billion (US$1.42 billion) from S$1.36 billion a year earlier.

That beat the mean estimate of S$1.74 billion from five analysts polled by Refinitiv.

Singapore’s banks have been benefiting from strong inflows from wealthy customers amid global economic uncertainty because of the country’s status as financial safe haven.

“Our loan portfolio was resilient and our wealth management business continued to attract net new money inflows,” OCBC Group chief executive officer Helen Wong said in a statement.

The bank reported a total net interest margin, a key gauge of profitability, of 2.30 per cent for the first quarter, up from 1.55 per cent in the same period a year earlier. OCBC expected full-year net interest margin in the region of 2.2 per cent.

The lender said it was starting to see growth in cross-border flows after China’s reopening, but it was also closely monitoring volatility in developed markets and geopolitical tensions.

“Looking ahead, we are watchful of tighter financial conditions which may slow global economic growth and elevate overall risks,” Wong said.

OCBC, which counts Singapore, greater China and Malaysia among its key markets, said net interest income rose 56 per cent to S$2.34 billion in the first quarter from a year earlier.

Return on equity rose to 14.7 per cent in the first quarter from 10.6 per cent in the same period of 2022.

The first quarter was also strong for Singapore’s other major banks, with larger peer DBS Group reporting last week a 43 per cent jump in first quarter net profit that was also a record. Smaller United Overseas Bank posted last month a 74 per cent surge in core net profit.

Source: Reuters/fh