OCBC posts 30% fall in Q4 net profit to S$301m
By 938 LIVE | Posted: 18 February 2009 1337 hrs

SINGAPORE: OCBC bank has posted a worst-than-expected 30 per cent decline in fourth quarter net earnings on lower contributions from its insurance arm and higher provisions for bad debt amid the economic downturn.

Net profit for the three months ended December fell to S$301 million, from S$428 million a year earlier.

Net interest income grew 28 per cent during the quarter to S$783 million.

However, this was offset by a 44 per cent drop in non-interest income to S$259 million as challenging market conditions affected trading income and life assurance profits.

Net allowances rose to S$243 million in the fourth quarter, up from S$13 million a year ago as more provisions were set aside for doubtful loans.

For the full year, the bank's net profit fell 16 per cent to S$1.7 billion.

The result would have been better if not for much smaller profit contributions from its insurance subsidiary Great Eastern.

CEO David Conner said in a statement that the fourth quarter results were impacted by the global financial crisis and economic downturn.

He said the bank plans to tighten expenses and maintain high alert for risk management given the uncertain outlook.

The bank has proposed a final dividend of 14 cents per share for the financial year.

This brings the full year dividend to 28 cents per share, unchanged from the previous financial year.