OCBC profits up 16% to $885.47m in Q2

Its retail, wealth management, and insurance units performed well.

OCBC’s profits for the second quarter of 2018 jumped by 16% YoY to $885.47m (S$1.21b) on the back of robust performance of its retail banking, wealth management, and insurance businesses.

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According to its financial statement, net interest income grew by 8% to a record-high $1.06b (S$1.45b) driven by loan growth and a higher net interest margin (NIM). Customer loans jumped by 11% amidst broad-based growth across most industries and geographical segments, whilst NIM gained 2 bps to 1.67% thanks to higher asset yields in Singapore and Malaysia.

Non-interest income hit $746.54m (S$1.02b), led by growth in wealth management as income from fees and commissions rose 5% to $518m due to trade-related and investment banking fees. 

Meanwhile, net realised gains from the sale of investment securities plummeted from $39.52m (S$54m) to $1.46m (S$2m). Profit from life assurance also dipped to $139.8m (S$191m). 

OCBC’s operating expenses grew by 4% to $761.21m (S$1.04b) due to higher staff costs, along with higher technology-related expenses related to the bank’s digitalisation strategy. 

The asset quality of the loan portfolio was stable, OCBC noted. Total non-performing assets (NPA) of $2.57b (S$3.51b) as of end-June, whilst non-performing loans (NPL) ratio remained stable QoQ at 1.4%.

The operating environment is increasingly challenging and OCBC is watchful of the “severe implications” to the global economy and financial markets from the escalating trade and political tensions, OCBC CEO Samuel Tsien noted.

“With our strong and diversified franchise, capital and balance sheet, we are well-positioned and committed to supporting our customers and pursuing long-term sustainable and stable growth for our shareholders,” Tsien added.