Skip to main content

Advertisement

Advertisement

Business

OCBC quarterly profit drops, but wealth management fees grow

OCBC quarterly profit drops, but wealth management fees grow

File photo of a man walking past an OCBC Bank's logo outside Orchard Gateway (Photo: Jeremy Long)

SINGAPORE: Oversea-Chinese Banking Corp (OCBC), Singapore's second-biggest listed bank, said on Tuesday (Nov 5) its quarterly profit fell 6 per cent, hurt by a one-off charge for its Indonesian unit that overshadowed growth for its wealth management and lending businesses.

In particular, higher wealth management fees helped offset a challenging environment as Singapore narrowly dodged a recession in the third quarter due to the trade war between the United States and China - two of its biggest export markets.

READ: MAS sees 'fits and starts' for Singapore economy ahead with uneven growth across industries

"Our performance for this quarter underscored the competitive strength of our diversified business franchise," CEO Samuel Tsien said in a statement.

"Global and regional economic growth continued to slow, and geo-political event risks have increased. We shall remain vigilant and will maintain prudent risk management practices while exercising disciplined cost management."

Net profit came in at S$1.17 billion for the July to September quarter, the lowest level in three quarters but in line with a S$1.19 billion average estimate of five analysts, according to data from Refinitiv.

Excluding the one-off charge at its Indonesian unit which was related to changes in expected credit loss modelling, OCBC's core net profit was S$1.26 billion, slightly higher than the S$1.25 billion booked a year earlier.

Net wealth management fees rose 11 per cent year on year, while OCBC's net interest income grew 6 per cent to S$1.6 billion and net interest margin rose 5 basis points to 1.77 per cent.

After clocking robust growth rates in recent years, Singapore's banks face a challenging outlook as interest rates soften and loan growth moderates. Its central bank eased monetary policy for the first time in three years last month.

READ: The S$NEER and its slope, width and centre: Questions about Singapore’s monetary policy

The sector is also facing its biggest shake-up in two decades after the central bank in August kicked off the application process for new digital banking licenses. Ride-hailing firm Grab and Singapore Telecommunications have expressed interest in applying for the licences, sources have said.

OCBC shares were down 0.7 per cent in Tuesday morning trade, underperforming a broader market that was up 0.2 per cent.

Source: Reuters

Advertisement

Also worth reading

Advertisement