Financial Services  

Oversea-Chinese Banking Corp Q1 net profit up 32%

Co reported rise in its quarterly profit on higher income from corporate borrowing, insurance, trading and investments
 Oversea-Chinese Banking Corp Q1 net profit up 32%
 
 

Oversea-Chinese Banking Corp. Ltd reported a 32% rise in first-quarter profit because of higher income from corporate borrowing, insurance, trading and investments, the news reports said.

Southeast Asia’s second-largest lender’s net income advanced to S$832 million ($664 million) as against S$628 million reported in the year ago period.

The bank follows domestic rivals DBS Group Holdings Ltd, and United Overseas Bank Ltd in posting the first-quarter increases higher than analysts estimates.

The insurance unit led the profit gains across all the OCBC’s main businesses with a 66% rise, the bank said in a statement.

OCBC’s net interest income surged 21% from a year earlier to S$951 million as the loans grew.

The margins on loans contracted to 1.86% from 1.9% a year earlier. Meanwhile, the provisions for credit and other losses jumped 98% last quarter to S$96 million from a year earlier.

The bank follows domestic rivals like DBS Group Holdings Ltd and United Overseas Bank Ltd in posting the first-quarter increases higher than analysts estimates.

Samuel Tsien, OCBC Chief Executive Officer, boosted the non-interest income from businesses like wealth management, trading. The company’s Great Eastern Holdings Ltd unit surged 28% while the higher lending offset lower interest margins.

Hong Kong-based analyst at Barclays Plc said, “Overall, the results were good as the trading gains and income from the insurance came in strong,” said Sharnie Wong, a Hong Kong-based analyst at Barclays Plc. Ms. Wong also said, “The underlying operating trends were not as strong as peers though.”

Oversea-Chinese Banking Corp. Ltd is one of Singapore’s leading local banks with group assets of over 224 billion SGD. The company is also one of the highest bank credit ratings in the region.

By market capitalisation, Oversea-Chinese Banking Corporation is the largest local bank as of November 2010. 

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