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| Oversea-Chinese Banking Corporation on Friday posted fourth quarter 2012 net profit of S$663 million, 12 per cent higher from S$594 million a year ago, due to strong growth from its insurance unit and fee income .
For full year 2012, net profit surged to S$3.99 billion, an increase of 73 per cent from S$2.31 billion in 2011. Core net profit after tax, which excludes gains from the divestment of non-core assets, grew 24 per cent to a record S$2.83 billion.
The results were driven by a combination of record net interest income, fee income and net trading income as well as significantly higher contributions from insurance unit Great Eastern Holdings .
Asset quality remained strong. The non performing loan rate was 0.8 per cent at end-2012, an improvement from 0.9 per cent a year ago, and stable quarter-on-quarter.
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Oversea-Chinese Banking Corporation on Friday posted fourth quarter 2012 net profit of S$663 million, 12 per cent higher from S$594 million a year ago, due to strong growth from its insurance unit and fee income .
For full year 2012, net profit surged to S$3.99 billion, an increase of 73 per cent from S$2.31 billion in 2011. Core net profit after tax, which excludes gains from the divestment of non-core assets, grew 24 per cent to a record S$2.83 billion.
The results were driven by a combination of record net interest income, fee income and net trading income as well as significantly higher contributions from insurance unit Great Eastern Holdings .
Asset quality remained strong. The non performing loan rate was 0.8 per cent at end-2012, an improvement from 0.9 per cent a year ago, and stable quarter-on-quarter.
OCBC posts 12% rise in Q2 net profit
By Linette Lim | Posted: 02 August 2012 1059 hrs
SINGAPORE: Singapore's second largest bank, Oversea-Chinese Banking Corporation (OCBC), grew its net profit by 12 per cent to S$648 million for the second quarter ended June 30.
Analysts said the increase was better than expected as many had expected the bank to allocate more money to loans provisioning.
OCBC Bank has lowered its loan growth forecast for the year, from the low teens to the high single digits.
This as a weakening global economy curbs loan demand.
Samuel Tsien, CEO, OCBC Bank, said: " The market is currently slowing down so we want to be a bit more prudent. Having said that, we continue to feel we have the ability to take market share from the industry, and therefore we will continue to see growth. The growth will not be as spectacular as last year versus the prior year but we'll continue to see growth in the high single digit area."
For the second quarter, OCBC reported a net profit of S$648 million.
Earnings were driven by broad-based loan growth and higher fee and trading income.
These gains more than offset the impact of lower net interest margins and lower contribution from its insurance unit.
Profit from life assurance had declined 33 per cent to S$71 million in the second quarter, due to weaker investment performance of Great Eastern Holdings' Non-Participating Fund.
Although OCBC's net profit beat street estimates, analysts said the result was boosted by lower provisioning for non performing loans (NPLs).
They believe this may be unsustainable going forward as the macro environment sours.
Ivan Tan, director of Financial Services Ratings, Standard & Poor's, said: " We are expecting some deterioration in NPL given the difficult operating environment this year. Provision coverage as of June this year is 125 per cent so that provides some buffer for the NPL to increase."
Separately, OCBC said it has a binding agreement to sell its stakes in F& N and APB.
CEO Samuel Tsien added that the proceeds from the divestment will be ploughed back into its core financial business.
- CNA/cc
OCBC says 2Q net profit up 12%, beats expectations
WRITTEN BY REUTERS |
| THURSDAY, 02 AUGUST 2012 08:40 |
Oversea-Chinese Banking Corp, Singapore's second-largest lender, posted a 12% rise in second-quarter net profit on Thursday, helped by strong loan growth and a surge in trading income.
OCBC earned $648 million in the three months ended June, compared to $577 million a year earlier. Its profit was higher than the $606 million average forecast of six analysts polled by Reuters.
The beat was largely due to strong rise in net trading income to $75 million, an increase of 84 percent from a year earlier, led by higher securities and derivatives trading income.
Trade finance and housing helped fuel strong loan growth for Singapore banks this year, but analysts expect the pace of credit expansion to slacken in the second half of 2012 as Asian economies slow.
Bank loans in the wealthy city-state grew nearly 21% in June from a year earlier, central bank data shows.
Analysts expect higher dividends from OCBC in the months ahead after it agreed to sell its stakes in Fraser and Neave and Asia Pacific Breweries to a group of companies linked to Thai billionaire Charoen Sirivadhanabhakdi.
OCBC said on July 18 the banking group would make a post-tax gain of about $1.15 billion from the deal.
In 2011 it paid a total dividend of 30 cents per share, unchanged from 2010.
OCBC Q1 net profit up better-than-expected 32 pct y/y
SINGAPORE, May 11 (Reuters) - Oversea-Chinese Banking Corp , Singapore's second largest lender, on Friday posted a 32 percent rise in first quarter net profit, helped by stronger loans, trading and investment income as well as an increase in contributions from its insurance arm.
OCBC earned S$832 million ($665.7 million)in the three months ended March, up from S$628 million a year ago. Its profit exceeded the S$619 million average forecast of six analysts polled by Reuters.
" While the global economic outlook is still mixed, we expect the strength and further expansion of our customer franchise in our key markets will continue to provide us with significant growth opportunities," CEO Samuel Tsien said in a statement.
OCBC said its net interest income grew 21 percent year-on-year to S$951 million, with robust loan growth partly offset by lower net interest margin.
The Singapore bank's net interest income was 1.86 percent in the first quarter, down 4 basis points from 1.90 a year ago but up from 1.85 in the last quarter of 2011.
OCBC's insurance arm Great Eastern Holdings last week reported a 65 percent rise in net profit to S$262.5 million, helped by higher underwriting profit and gains on investments. ($1 = 1.2498 Singapore dollars) (Reporting by Kevin Lim and Leonard How)
Business Times - 20 Feb 2012
OCBC's Q4 net profit up 18%, beats forecast
SINGAPORE - Oversea-Chinese Banking Corp, Singapore's second-biggest lender, reported an 18 per cent rise in quarterly profit, its strongest since the first quarter as robust loan growth helped offset a weak interest rate environment.
OCBC joined bigger rival DBS Group Holdings to end the year on a strong note, but analysts expect this year to be a difficult one for Singapore banks as muted economic growth in Asia weighs on lending and local interest rates remain near record lows.
OCBC CEO David Conner cautioned that the bank will be mindful of the economic risks caused by concerns over sovereign debt problems in Europe and a sluggish recovery in the United States.
The bank is in the process of a leadership change as Mr Conner retires in April after a decade at the bank. Conners will be replaced by Samuel Tsien, who heads the corporate bank.
OCBC reported net profit of S$594 million (US$472 million) in October-December versus S$505 million a year ago. This compared to an average forecast of S$551 million, according to five analysts polled by Reuters.
The result comes a week after DBS, Southeast Asia's biggest bank, posted an unexpected 8 per cent rise in quarterly profit, beating expectations as strong loan growth pushed up key net interest income by 17 per cent.
OCBC's net interest income rose 20 per cent to S$925 million year-on-year as loans grew 27 per cent. This growth came despite a drop in net interest margins to 1.85 per cent in the fourth quarter from 1.96 per cent a year ago.
OCBC, which bought ING's Asian private bank in 2010, said non-interest income for the last quarter of 2011 rose 2 per cent, largely contributed by higher trading income and gains from the sale of investment securities.
OCBC shares have gained 13 per cent so far this year versus a 21 per cent rise for DBS, while shares of United Overseas Bank , which reports earnings on Feb 23, are up 16 per cent. The Singapore index is up about 13 per cent. -- REUTERS
Business Times - 03 Nov 2011
Update: OCBC Q3 disappoints on trading loss
SINGAPORE - OCBC, Singapore's second-biggest lender, suffered a bigger-than-expected 10 per cent fall in quarterly profit due to trading losses, signalling a difficult period ahead for banks on account of rocky markets and slowing economic growth.
Two of Singapore's three listed banks have missed earnings forecasts for the quarter, with only the biggest lender DBS Group beating expectations due to strong interest income and a one-time gain.
'The earnings outlook seems to be more challenging, with rising cost of funds, slower loan growth and provisions that are likely going to trend up,' RBS analyst Trevor Kalcic said in a client note about OCBC.
Shares of OCBC opened 1.7 per cent lower, while United Overseas Bank (UOB) , which posted a 24 per cent decline in quarterly earnings, fell 3.7 per cent in early trade.
DBS shares were down about 0.5 per cent.
Oversea-Chinese Banking Corp (OCBC) posted a net profit of S$513 million (US$403 million) for July-September, down from S$570 million a year earlier.
That compared with the S$538 million average forecast from four analysts surveyed by Reuters.
Contributions from its 87 per cent-owned insurance arm Great Eastern fell 51 per cent from a year earlier, while volatile markets caused a S$68 million loss in trading activities.
DBS posted on Wednesday a 6 per cent rise in quarterly net profit to S$762 million.
UOB, the smallest of the three listed banks, reported a 24 per cent fall in third-quarter net profit as trading income fell and the bank booked losses on its investment holdings.
Wealth management boost
OCBC's net interest income rose about 16 per cent to S$874 million as loans grew 27 per cent during the same period. This growth came despite a 13 basis point decline in net interest margin from a year earlier to 1.85 per cent.
OCBC, which bought ING's Asian private bank last year, said wealth management activities partly fuelled a 20 per cent rise in fee and commission income.
Singapore bank shares have mostly underperformed the broader market this year amid a global market selloff and concerns about an economic slowdown in the region.
As of Wednesday's close, OCBC shares were down 16 per cent so far this year compared with a 13 per cent decline for DBS, while UOB shares are down about 8 per cent.
The overall Singapore index had fallen about 11 per cent year-to-date as of Wednesday's close. -- REUTERS
OCBC’s 3Q profit down 10%, misses view on trading lossesv WRITTEN BY THE EDGE THURSDAY, 03 NOVEMBER 2011 08:13 Oversea-Chinese Banking Corp, Singapore’s second-biggest lender, posted a 10% fall in quarterly profit, missing expectations due to losses in trading and a drop in profit from its insurance arm, reported Reuters.
Two of Singapore’s three listed banks have missed earnings forecasts for the quarter, and with the economy stalling, analysts expect the lenders to face tougher times in the quarters ahead.
OCBC posted a net profit of $513 million for July-September, down from $570 million a year earlier.
That compared with the $538 million average forecast from four analysts surveyed by Reuters.
Contributions from its 87%-owned insurance arm Great Eastern fell 51% from a year earlier, while volatile markets caused a $68 million loss in trading activities.
OCBC profit misses analyst forecast Shares fall WRITTEN BY BLOOMBERG
FRIDAY, 18 FEBRUARY 2011 18:28
Oversea-Chinese Banking Corp., Singapore’s second-biggest bank by stock market value, said its fourth-quarter profit rose 1% from the previous year, missing analysts’ estimates. The stock fell to a 15-week low.
Net income increased to $505 million in the three months ended Dec. 31 from $502 million a year earlier, the bank, which owns Singapore’s biggest life insurer, said in a statement today. Net profit excluding amortization gained 1% to $521 million from $514 million. The earnings fell short of the $558.3 million average estimate of seven analysts surveyed by Bloomberg.
Oversea-Chinese Chief Executive Officer David Conner boosted profit last year with the purchase of ING Groep NV’s private banking assets in Asia, which allowed the company to tap into a surge in wealth among the region’s richest people. The increase in headcount also drove up salaries and staffing costs by 27% to $336 million, while demand for loans helped compensate for narrower profit margins on lending, it said.
“Generally, it is still a rocky road ahead for the Singapore banking sector, my view is net interest margin probably may flatten,” said Magdalene Choong, an analyst at Singapore-based Phillip Securities Pte, who rates the stock a “hold.” “What can really make us change the rating for the banking sector will be an increase in interest rates.”
February 18, 2011, 1.56 pm (Singapore time) 
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Update: OCBC's Q4 net profit hit by higher costs, optimistic about 2011
SINGAPORE - OCBC Bank, Singapore's second-biggest lender, missed market forecasts for its quarterly profit as higher costs offset strong loan income and falling bad debts.
The bank said operating expenses grew 33 per cent in the fourth-quarter due to higher staff costs, consolidation of its private bank and a one-time charge linked to the merger of its Indonesian units.
The result trailed DBS, Southeast Asia's biggest bank, which last week announced a 38 per cent rise in quarterly profit on falling bad-debt charges and higher trading income, beating expectations.
OCBC said it is optimistic about 2011 despite risks from higher commodity prices.
'While mindful of commodity price increases and other factors causing inflationary pressures, on balance, we are optimistic for the outlook for 2011 given the healthy economic growth prospects in Asia,' CEO David Conner said in a statement.
OCBC posted a net profit of S$505 million (US$396 million) in October-December, compared to S$502 million in the same period a year earlier.
That compared with an average forecast of S$556 million, according to six analysts polled by Reuters.
OCBC, which completed the purchase of ING's Asian private banking unit in early 2010, has benefitted from the recovery in Asian markets and an economic rebound which has encouraged the region's rich to tap wealth management services.
OCBC's net interest income rose 12 per cent to S$769 million as loans grew 29 per cent, which overcame a fall in interest rate margins, versus DBS's 16 per cent loan growth. United Overseas Bank will report earnings on Feb 25.
Fee and commission income climbed 33 per cent to S$256 million, leading non-interest income higher even though contributions from its insurance unit Great Eastern declined as the insurer's profit slumped.
As of Thursday, shares of OCBC had fallen 3.3 per cent since the start of the year, underperforming a 1.8 per cent rise in DBS shares while shares of UOB have risen about 2.9 per cent. OCBC shares gained 9 per cent in 2010 when it outperformed rivals. -- REUTERS
February 18, 2011, 1.13 pm (Singapore time)
| OCBC's Q4 net profit up slightly, misses forecast on costs
SINGAPORE - Oversea-Chinese Banking Corp, Singapore's second-biggest lender, on Friday posted only a slight rise in quarterly profit, missing expectations, hit by a 33 per cent increase in expenses.
OCBC posted a net profit of S$505 million (US$396 million) in October-December, compared to S$502 million a year earlier.
That compared with an average forecast of S$556 million, according to six analysts polled by Reuters.
DBS, Southeast Asia's biggest bank, last week announced a 38 per cent rise in quarterly profit on falling bad-debt charges and higher trading income, beating expectations.
OCBC said operating expenses rose by 33 per cent due to higher staff costs and a one-time charge related to the merger of its Indonesian units.
OCBC, which completed the purchase of ING's Asian private banking unit in early 2010, has benefited from the recovery in Asian markets and an economic rebound which has increased demand for wealth management services among the region's rich. -- REUTERS |
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OCBC reports 27% rise in 3Q net profit of $570mOversea-Chinese Banking Corporation (OCBC Bank) today reported a net profit of $570 million for the third quarter of 2010 (3Q10), an increase of 27% from $450 million a year ago.
Earnings growth was underpinned by higher net interest income, strong fee and commission income, and lower credit losses. The 3Q10 results included the consolidation of Bank of Singapore, acquired in January this year.
Net interest income increased 10% year-on-year to $754 million, driven by asset growth which more than offset the impact of lower interest margins.
Loans grew by 29% year-on-year, and 7% from the previous quarter, with broad-based increases across all geographies and segments. Non-interest income was $621 million, an increase of 59% as the prior year period included a one-time loss of $213 million ($154 million after tax and non-controlling interests) from the redemption of the GreatLink Choice (GLC) policies by Great Eastern Holdings (GEH), which was reflected under “other income”.
Fee and commission income surged 37% to a record $260 million, led by wealth management income, which more than doubled, investment banking, loan-related and trade-related income. Insurance income, trading income and investment gains were lower, as the prior year results were boosted by the strong market recovery from the global financial crisis.
Operating expenses increased 23%, reflecting the consolidation of Bank of Singapore, the stepping up of business expansion in key markets following a period of cost restraint during the financial crisis, and higher business volumes. Allowances for loans and other assets fell from $52 million to $43 million, with a significant reduction in specific allowances partly offset by higher portfolio allowances set aside for loan growth. The non-performing loans (NPL) ratio improved further during the quarter from 1.3% to 1.1%.
Compared to 2Q10, net profit increased by a robust 13%. Net interest income grew 5% on higher asset volumes and stable margins. Growth in loan-related, trade-related and wealth management income lifted fee and commission income by 3% compared to the previous quarter. Insurance and trading income also improved as the unstable market conditions in the previous quarter receded. Expenses rose 3%, while allowances were higher than in the previous quarter as a result of increased portfolio allowances.
GEH made significant contributions to the group’s improved results for the quarter as well as the nine months period. Net profit contribution from GEH increased 146% quarter-on-quarter to $137 million in 3Q10, and 16% year-on-year to $340 million in 9M10. For the nine months, GEH accounted for 19% of the Group’s net profit. GEH also achieved robust growth in new business premiums and embedded value. Total weighted new business premiums rose 12% year-on-year for the quarter and 19% for the nine months, while new business embedded value increased 29% year-on-year for the quarter and 31% for the nine months.
Net Interest Income
Net interest income in 3Q10 grew 10% year-on-year to $754 million, driven by a 20% growth in average interest-earning assets, which more than offset a decline in net interest margin. Customer loans grew 29% from a year ago, and 7% from the previous quarter, to $102 billion. Excluding the consolidation effect of Bank of Singapore, loan growth would have been 23% year-on-year. The growth was broad-based across all geographies and across the consumer, corporate and SME loan segments. By industry, the biggest increases came from the housing and general commerce sectors, and lending to non-bank financial institutions, investment and holding companies.
Net interest margin declined 18 basis points year-on-year, from 2.16% to 1.98%. The decline was partly due to the inclusion of Bank of Singapore’s lower-yielding, well collateralised assets. Excluding the consolidation effect, net interest margin would have recorded a smaller year-on-year decline of 12 basis points, attributable mainly to reduced average asset yields in a sustained low interest rate environment.
Compared with 2Q10, net interest income grew a robust 5%, contributed mainly by higher asset volumes. Net interest margin improved marginally by 2 basis points from the previous quarter, helped by better margins in Malaysia.
Non-Interest Income
Non-interest income increased 59% year-on-year to $621 million. Excluding the $213 million GLC loss in 3Q09, the year-on-year increase in non-interest income was 3%.
Fee and commission income surged 37% to $260 million, partly a result of contributions from Bank of Singapore. Wealth management income more than doubled to $50 million, while investment banking, loan-related and trade-related activities also grew strongly. Profit from life assurance fell 26% to $156 million, as the investment performance of the Singapore non-participating fund was exceptionally strong in the prior year period. Net trading income fell from $94 million to $82 million, and gains from sale of investment securities declined from $35 million to $23 million.
Compared to 2Q10, non-interest income grew strongly by 20%. Profit from life assurance and net trading income recovered as the unstable market conditions in the previous quarter, caused by the European sovereign debt crisis, receded. In particular, the investment performance of GEH’s Singapore non-participating fund improved as credit spreads narrowed and equity prices rose during the third quarter. Fee and commission income rose 3% over the previous quarter, led by higher loan- related and trade-related income and wealth management income.
The group’s NPL and coverage ratios improved further. The level of NPLs fell 12% from the previous quarter to $1,115 million, while the NPL ratio improved to 1.1%, below the pre-financial crisis low of 1.3%. Cumulative allowances amounted to 126% of total NPAs and 350% of unsecured NPAs, up from 112% and 288%, respectively, in the previous quarter.
Capital Ratios
The group remains strongly capitalised, with a Tier 1 ratio of 15.2% and total capital adequacy ratio of 15.5% as at 30 September 2010, well above the corresponding regulatory minimums of 6% and 10%. Core Tier 1 ratio, excluding perpetual and innovative preference shares, was 11.5%.
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August 2, 2010, 1.18 pm (Singapore time)
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OCBC's Q2 net profit slightly below estimates
Oversea-Chinese Banking Corp clocked a net profit of S$503 million between April-June, compared with S$466 million in the year-ago period. Analysts had predicted a net profit of S$508 million, according to an average of eight forecasts compiled by Reuters.
The result came after rival DBS, Southeast Asia's biggest bank, last week posted an unexpected loss due to a one-time goodwill charge on its Hong Kong business.
Excluding the charge, DBS's net profit was up 30 per cent to S$718 million, the highest quarterly profit ever, versus S$552 million a year ago.
Singapore banks are struggling to take full advantage of fast loan growth and a drop in bad debt charges due to historically low interest rates.
Shares in OCBC are little changed this year compared with a 5.2 per cent decline in rival DBS Group and a 1.4 per cent rise for UOB. The benchmark Straits Times Index is up about 4 per cent this year. -- REUTERS
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August 2, 2010, 2.17 pm (Singapore time)
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Update: OCBC says outlook positive
Singapore banks are benefiting from the city-state's best-ever economic expansion and reduced bad debt charges, but historically low interest rates are keeping interest rate margins under pressure.
'While we are alert to the possibility of renewed volatility in financial markets, on balance we have a positive outlook in light of the growth prospects in our key markets,' said Oversea-Chinese Banking Corp (OCBC) CEO David Conner in a statement.
Singapore's economy is set to grow as much as 15 per cent in 2010, making the city-state one of the fastest-growing economies in the world this year.
OCBC said operating expenses rose 24 per cent from a year earlier, led by staff costs due to higher salaries and hiring of bankers as it consolidated the newly acquired ING's private bank in Asia into the business.
OCBC, which bought ING's Asia private banking unit earlier this year for US$1.4 billion, is betting heavily on wealth management to serve Asia's growing ranks of millionaires.
But it faces stiff competition from foreign and Asian players who are also aggressively expanding in the region.
Wealth management
Singapore's DBS, Southeast Asia's biggest bank, hired Morgan Stanley's well-known private banker Tan Su Shan this year and foreign rivals such as Credit Suisse are also hiring bankers and boosting their presence in India and Indonesia.
They are all keen to grab more business from Asian millionaires, whose combined wealth surged 31 per cent to US$9.7 trillion in 2009, surpassing Europe's US$9.5 trillion, according to the Merrill Lynch-Capgemini's 2009 world wealth report.
'We like stocks such as OCBC for quality and potential upsides from acquisitions and UOB (United Overseas Bank) for a low-risk exposure,' said Nomura analyst Anand Pathmakanthan said before the earnings. Nomura is neutral on DBS.
UOB is Singapore's third-biggest bank by assets.
Mr Pathmakanthan expects OCBC's private bank's earnings will grow 25 per cent next year.
OCBC clocked a net profit of S$503 million (US$370 million) in April-June, compared with S$466 million in the year-ago period. Analysts had predicted a net profit of S$508 million, according to the average of eight forecasts compiled by Reuters.
The result came after rival DBS last week posted an unexpected loss due to one-time goodwill charge on its Hong Kong business.
Excluding the charge, DBS's net profit was up 30 per cent to S$718 million, the highest quarterly profit ever, versus S$552 million a year ago.
UOB will unveil second-quarter earnings on Aug 10.
OCBC's net interest income rose only 1 per cent to S$720 million, despite a 21 per cent jump in loans, faster than DBS's 14 per cent growth.
However interest rate margins fell 33 basis points, more than DBS's 17 basis points decline in margins.
Fee and commission income rose 30 per cent.
Shares in OCBC are little changed this year compared with a 5.2 per cent decline in DBS and a 1.4 per cent rise for UOB. The benchmark Straits Times Index is up about 4 per cent this year. -- REUTERS
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May 5, 2010, 1.44 pm (Singapore time)
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Update: OCBC Q1 net profit up 24%, beats forecasts
The bank said it was seeing revenue momentum after its first quarter profit climbed 24 per cent, but warned about risks emanating from slow growth prospects for Europe and the United States.
Singapore banks are forecast to see better earnings in 2010 as loans expand and bad loans decline helped by the rebound in an economy that could grow as much as 9 per cent.
But inflationary expectations are also rising in Southeast Asia, where OCBC largely operates, which may raise medium-term risks for interest rates and squeeze margins.
'While slow growth prospects for the European and US economies warrant caution, Asia's economic recovery continues to build momentum, signalling a positive outlook for the rest of the year,' CEO David Conner said in a statement.
Oversea-Chinese Banking Corp (OCBC), which kicked off first quarter earnings for Singapore banks, clocked a net profit of S$676 million (US$489.8 million) between Jan-March, compared with S$545 million in the year-ago period.
Analysts had predicted a net profit of S$519 million, according to the average of five forecasts compiled by Reuters.
Rivals DBS Group and United Overseas Bank will report earnings on Friday.
OCBC's net interest income fell 5 per cent to S$704 million, due to weaker margins, though loans grew 12 per cent in the first quarter. Fee and commission income jumped 46 per cent, helped by wealth management and stock broking income. OCBC also completed the purchase of ING's Asia private bank in the first quarter.
Shares in OCBC are down 7 per cent this year compared with a 5 per cent decline in rival DBS Group and a 0.3 per cent slip for UOB. The benchmark Straits Times Index STI has slipped 1.4 per cent this year. -- REUTERS
SINGAPORE - OCBC, Singapore's second-biggest bank, beat forecasts to post its best quarterly profit in nearly four years on Wednesday as fee income surged, and saw strong loan growth as Asian economies pick up speed.
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| OCBC CEO sees more branches in Malaysia, Indonesia, China |
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Tags:
Oversea-Chinese Banking Corp.
| Written by Bloomberg |
| Friday, 19 February 2010 18:00 |
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Oversea-Chinese Banking Corp., the lender that owns Singapore’s biggest life insurer, expects to open more branches in Malaysia, Indonesia and China, Chief Executive Officer David Conner said at a briefing in Singapore today. He forecast 20 new branches in Indonesia, five to six new branches in China and four new branches in Malaysia.
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February 19, 2010, 1.00 pm (Singapore time)
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OCBC Q4 profit up 67%; cautiously optimistic
OCBC, which completed a US$1.4 billion deal last month to buy the Asian private banking unit of Dutch financial services company ING, is banking on a recovery in Asia's wealth management activity to boost earnings in 2010.
'While we remain watchful of developments in Europe, the US and China, we are cautiously optimistic for a gradual recovery in Asia's economy and in our key markets,' CEO David Conner said in a statement.
Oversea-Chinese Banking Corp (OCBC) clocked a fourth quarter net profit of S$502 million, up 67 per cent from S$301 million a year ago. It was its best result since the second quarter of 2007 if one-time gains are excluded.
The earnings were in line with the S$504 million average forecast of six analysts compiled by Reuters.
OCBC said its net interest income for October-December quarter fell 12 per cent from a year ago to S$687 million as interest rates remained low. Its net interest income margin was 2.08 per cent, down from 2.47 per cent a year ago and 2.16 per cent in the third quarter.
The bank, however, saw a 92 per cent rise in non-interest income to S$497 million due to higher profits from insurance arm Great Eastern and an increase in net trading income.
OCBC booked S$77 million in allowances for bad loans and impairments during the fourth quarter, down from S$243 million a year ago but up from S$52 million in the third quarter.
Earlier this month, DBS Group, Southeast Asia's biggest bank, posted a forecast-beating 67 per cent rise in quarterly profit, as strong fee income and a tax writeback helped offset an about 40 per cent jump in bad-debt charges.
Singapore banks are forecast to see better earnings in 2010 because of strong economic recovery in Asia, strong capital markets and a likely decline in bad loans.
Singapore bank shares have weakened this year after a sharp rally last year when financials globally recovered from the market meltdown in 2008.
OCBC shares have fallen about 7 per cent this year after surging 82 per cent in 2009. Singapore shares are down about 4.5 per cent so far this year. -- REUTERS
SINGAPORE - OCBC Bank, Singapore's No 2 lender, said it was cautiously optimistic on prospects after posting its best profit in six quarters, helped by stronger trading profit and gains from its insurance unit.
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Good sentiment in europe/UK --- HSBC and Barclays good results..
Business Times - 03 Aug 2009
OCBC Q2 net up 10%, signals banking recovery
SINGAPORE -
OCBC Bank, Singapore's smallest listed bank, signalled the worst may be over for the banking sector as it posted an unexpected 10 per cent rise in quarterly profit fuelled by strong trading gains and loan margins.
Shares of Oversea-Chinese Banking Corp fell ahead of the result after it shocked investors with a late Friday announcement that it will take a one-time charge in the third quarter linked to its insurance arm that is redeeming policy holders burnt by risky debt products.
But OCBC CEO David Conner said on Monday there is growing consensus the worst is over for the global economy and financial markets, although the pace of recovery remains uncertain.
For the last quarter, OCBC's result was broadly in line with several Asian banks, which have escaped a sharp deterioration in credit quality and are seeing improving prospects for loan growth as the region crawls out of an economic slump.
'It signals that the revenue is coming back from the non-interest side and things are stable as far as non-performing loans are concerned,' said Brian Hunsaker, banking analyst at Fox-Pitt Kelton in Hong Kong. 'Certainly you can expect the same trend for the other banks.'
April-June net profit rose to $466 million (US$325 million) from $425 million a year ago, OCBC said.
Analysts had predicted a net profit of $356 million, according to the average of six forecasts compiled by Reuters.
OCBC kicked off the earnings season for Singapore banks.
Second-ranked United Overseas Bank will announce earnings on Wednesday and DBS, Southeast Asia's biggest bank, on Friday.
'We are more bullish compared to a month ago as more signs have emerged in the past month to fuel the market's confidence on the outlook ahead,' Alistair Scarff, research analyst at Bank of America-Merrill Lynch, said in a note ahead of the earnings.
'Recent second quarter GDP and property data reaffirm that the economy is already past the trough. Meanwhile, our own channel checks suggest that asset quality is holding up better than we thought.'
Bad debt
Bad debt charges rose to $104 million in the second-quarter from $55 million a year earlier, but below $197 million recorded in the first quarter.
OCBC's net interest income rose 5 per cent from a year ago to $710 million in the last quarter, as interest rate margins widened by 5 basis points to 2.29 per cent.
But non-interest income, which includes commissions and fees on investment products such as mutual funds, surged 37 per cent.
OCBC saw an almost four times higher contribution from its insurance arm Great Eastern of $125 million from $33 million a year earlier, while trading income almost tripled.
OCBC shares were down 1.4 per cent at the midday break, after slumping by as much as 2.7 per cent on news that it will take a $218 million hit in its third quarter linked to Great Eastern.
Shares of OCBC are up 54 per cent so far this year, underperforming DBS's 65 per cent surge, but outperforming UOB's 35 per cent rise.
Singapore's benchmark Straits Times Index is up by half so far this year. -- REUTERS
