OCBC’s Q1 profits drop 14% to $856m

Blame it on lower insurance, increased allowances.

OCBC closed 1Q16 with soft results as net earnings of $856m. This reflects a plunge of 14% YoY and 11% QoQ.

According to a news release by OCBC, though net interest income inched up 5% YoY to $1.31b, non-interest fell 12% to $753m.

The latter was due partly due to lower income from Great Eastern Holdings (GEH), which crashed 58% YoY and 65% QoQ to $83m. This, in turn, was on back of unrealised mark-to-market losses from its bond & equity investment portfolio.

Meanwhile, allowances skyrocketed 162% to $167m in Q1, but was down from $193m in the previous quarter.

Moreover, net interest margin improved from 1Q15’s 1.62% and 4Q15’s 1.74% to 1.75% in 1Q16. NPL ratio inched up from 0.9% in the previous quarter to 1% this quarter.

OCBC asserts it outperformed its peers year-to-date, as its share price appreciation came in at 1.1% versus DBS’ -7.5% and UOB’s -3.9%.