OCBC posts 5% jump in Q3 profit, beating expectations

OCBC posts 5% jump in Q3 profit, beating expectations

Net profit for Singapore's second-biggest bank came in at S$943 million in the third quarter as its insurance and wealth management business powered a 25 per cent climb in non-interest income.

OCBC file

SINGAPORE: The Oversea-Chinese Banking Corp (OCBC) beat estimates with a 5 per cent rise in quarterly profit in the third quarter of the year, helped by gains from its insurance and wealth management units, according to its financial results released on Thursday (Oct 27).

However, the bank warned of a challenging operating environment. The city-state's lenders must contend with growing risks to earnings as credit woes deepen for the offshore services sector, which has been hit hard by a drop-off in orders due to a near-two-year rout in oil prices until early this year.

Net profit for Singapore's second-biggest bank came in at S$943 million in the third quarter as its insurance and wealth management business powered a 25 per cent climb in non-interest income.

The result handily beat expectations for a decline in profit, with the average estimate at S$834 million from five analysts polled by Reuters.

But provisions for bad debt jumped almost 11 per cent to S$166 million, while net interest income dropped 6 per cent due to lower loan volumes and a weaker net interest margin.

"We continue to keep a firm grip on cost, maintain strong liquidity and capital, and ensure prudent levels of provisioning," OCBC Chief Executive Samuel Tsien said in a statement.

Offshore firms that have said they are struggling with debt payments include oilfield services company Swiber Holdings, which was placed under judicial management this month.

Signs of weakness in a trade-dependent economy and the domestic property market are also further squeezing loan demand.

Source: Reuters/mz

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