Battle of the banks: OCBC lags DBS and UOB in 3Q15 profit results

OCBC’s net profit reflects the weakest performance.

According to a report by Barclays, DBS’s net profit stood at $1.07b, reflecting a 5% QoQ fall but a 6% YoY rise. Compared to UOB and OCBC, DBS is the only one to experience a positive YoY growth. UOB walks away from 3Q15 with the smallest net profit of $859m - a 13% QoQ growth but a 1% YoY dip. OCBC’s net profit reflects the weakest performance, however, as it slipped 14% QoQ and 27% YoY to $902m.

“DBS and UOB benefited from stronger-than-expected trading gains and lower-than-expected credit cost. OCBC was adversely affected by unrealized MTM (market-to-market) losses in Great Eastern’s Non-Participating Fund. Market-related fee income including brokerage, wealth and insurance, declined QoQ during the market volatility,” the report said.

Macro headwinds in Asia caused all three banks’ management teams to expect slower loan demand. DBS guided 1.5% loan growth per quarter, which previously stood at 2%, “while OCBC and UOB maintained their guidance for mid single-digit YoY loan growth on a constant currency basis.”

DBS and UOB’s nonperforming loan ratio were stable QoQ, but OCBC had few NPLs related to large corporate exposure in the gas- and oil-related industries.

Barclays asserts, though, that DBS, UOB, and OCBC’s performance in 2015’s third quarter shows that Singapore banks are still able to deliver steady returns despite revenue growth outlook ebbing in line with macro slowdown.