OCBC Bank reported its third quarter net profit rose 12 percent on-year to S$1.25 billion, beating some analysts’ forecasts, amid an increase in its net interest margin.
Net interest income in the quarter ended 30 September increased 9 percent on-year to S$1.51 billion, on broad-based 10 percent growth in customer loans and a 6 basis point rise in net interest margin (NIM) to 1.72 percent, it said.
“The increase in NIM was driven by improved margins in Singapore, Malaysia and Greater China, and a higher average loans-to-deposits ratio,” OCBC said in the statement filed to SGX before the market open on Thursday.
Non-interest income was nearly flat at S$1.04 billion, while fee and commission income increased 3 percent on-year in the quarter to S$502 million on higher wealth management, loan and trade-related fees, OCBC said. Wealth-management income for the quarter was S$748 million, it said.
Net trading income, which is mainly treasury-related income from customer flows, rose 80 percent on-year to S$213 million, the bank said.
Beating some forecasts
The results topped several analysts forecasts.
UOB KayHian had forecast net profit of S$1.10 billion, NIM of 1.69 percent, net interest income of S$1.50 billion and fees & commissions income of S$489 million.
Daiwa had forecast net profit of S$1.15 billion, net interest income of S$1.48 billion, non-interest income of S$1.06 billion and NIM of 1.69 percent.
Nomura had forecast net profit of S$1.26 billion and net interest income of S$1.60 billion, while Deutsche Bank had forecast net profit of S$1.17 billion.
OCBC pointed to a the performance of its wealth-management operations and its loan portfolio.
“Despite the weakened regional market sentiments as a result of global trade tensions, the growth in our wealth management franchise continued, with sustained net new money inflows that drove our assets under management to an all-time high. The overall quality of the loan portfolio remained stable and sound, while our capital ratios were further strengthened,” CEO Samuel Tsien said in the statement.
“As we remain alert to developments in the global economy and financial markets, our strong liquidity and capital base will position us well for prudent and sustainable growth,” he added.