Best quarter: People pass an OCBC branch. Singapore banks are benefiting from the influx of wealthy customers amid the global economic uncertainty. — Reuters
SINGAPORE: Singapore’s second-biggest lender Oversea-Chinese Banking Corp (OCBC) has reported its best-ever quarterly profit and upgraded its net interest margin guidance for the full-year on the back of strong first-quarter growth.
OCBC, which is also South-East Asia’s second-biggest bank by assets, said January-March net profit rose 39% to S$1.88bil (RM6.3bil), beating the mean estimate of S$1.74bil (RM5.8bil) from five analysts polled by Refinitiv.
The bank’s shares opened 1.6% higher on the positive earnings surprise and higher margin guidance, outperforming the local benchmark stock index, which was up 0.2%.
Singapore’s banks have been benefiting from the strong inflows of wealthy customers amid the global economic uncertainty because of the city-state’s status as a financial safe haven.
OCBC reported a total net interest margin, a key gauge of profitability, of 2.30% for the first quarter, up from 1.55% in the same period a year earlier.
The bank forecast a full-year net interest margin of about 2.2%, up from 2.1% previously.
“Our loan portfolio was resilient and our wealth management business continued to attract net new money inflows,” OCBC Group chief executive officer Helen Wong said in a statement.
The lender said it was starting to see growth in cross-border flows after China’s reopening, but it was also closely monitoring volatility in developed markets and geopolitical tensions.
“Looking ahead, we are watchful of tighter financial conditions which may slow global economic growth and elevate overall risks,” Wong said.
OCBC, which counts Singapore, greater China and Malaysia among its key markets, said net interest income rose 56% to S$2.34bil (RM7.9bil) in the first quarter from a year earlier.
Return on equity rose to 14.7% in the first quarter from 10.6% in the same period of 2022.
The first quarter was also strong for Singapore’s other major banks, with larger peer DBS Group reporting last week a 43% jump in first quarter net profit that was also a record. Smaller United Overseas Bank posted last month a 74% surge in core net profit. — Reuters
