OCBC 2Q net profit up by 10%

OCBC Bank reported a net profit of US$325.3 million in the second quarter of 2009, up 10 percent from the US$296.6 million profit a year ago. Excluding the non-core gains and tax refunds of US$30.7 million in the year ago period, core net profit increased 22 percent, driven by growth in net interest income, higher insurance income contributions and lower expenses.

Compared to 1Q09, net profit was 15 percent lower, as the previous quarter's profit of US$380.4 million including US$122 million of non-recurring gains from Great Eastern Holdings, arising mainly from the implementation of the new Risk Based Capital framework in Malaysia.

Second quarter net interest income increased by 5 percent and non-interest income grew 37 percent, while expenses fell 5 percent. Allowances were US$72.6 million, higher than the US$38.39 million a year ago but well below the US$137.5 million in the first quarter. The non-performing loans ratio increased moderately during the quarter from 1.8 percent to 2.1 percent.

Compared with 1Q09, net interest income fell by 4 percent as average interest-earning assets were largely flat and net interest margin narrowed by 13 bps from 2.42 percent. The margin decline was mainly due to lower gapping income.

For the first half of 2009, the Oversea-Chinese Banking Corporation achieved core net profit of US$705.7 million, 20 percent higher than last year's first half results of US$587 million. Net interest income grew 10 percent while non-interest income increased by 50 percent, boosted by the non-recurring gains from GEH in 1Q09.