OCBC Q2 net profit up 22% to S$1.08b

Profit was driven by growth in net interest income, fees and commissions, net trading income and profit from life assurance.

File photo of OCBC Bank's logo. 

SINGAPORE: The Oversea-Chinese Banking Corp (OCBC) reported a 22 per cent rise in its second-quarter net profit on Thursday (Jul 27), driven by growth in net interest income, fees and commissions, net trading income and profit from life assurance.

The bank, Singapore's second-biggest lender, said net profit came at S$1.08 billion in the three months that ended Jun 30 compared to S$885 million the previous year. The figure was also 11 per cent more than that of the first quarter, which was S$973 million. 

Net interest income rose 7 per cent to S$1.35 billion, largely due to strong lending growth across the group's corporate and consumer businesses. Customer loans growth was broad-based, said OCBC, rising 11 per cent from the previous year. 

Non-interest income rose 34 per cent to S$1.05 billion compared to S$788 million the previous year. Fees and commissions was up 18 per cent to S$492 million from higher income associated with loan and trade-related activities, wealth and fund management, credit card and brokerage. 

The bank said that wealth management in particular rose 45 per cent year-on-year, "partly attributable to the inclusion of the former wealth and investment businesses of Barclays in Singapore and Hong Kong acquired in November 2016. 

Life assurance profit was "significantly higher" at S$240 million compared to the S$108 million of the previous year, it said, adding that this was due to higher operating profit and positive performance from Great Eastern Holdings' investment portfolio.  

CEO Samuel Tsien said the group achieved "strong business momentum ... across all three business pillars - banking, wealth management and insurance". 

"Income growth was broad-based, lending activities were up, AUM (assets under management) continued to rise and underlying insurance business growth continued.

"OCBC Group maintained its healthy capital, funding and liquidity positions, and the overall loan portfolio remained sound, with the NPL (non-performing loan) ratio stable over the last three quarters," he added. 

Mr Tsien said the group noted stronger consumer sentiments in key economies, but that overall economic growth in the region is expected to "only be moderate", with event risks remaining. 

Source: CNA/hs