OCBC’s net profit inches up 2% to $3.91b in FY15

Thanks to associates’ increased contributions.

Oversea-Chinese Banking Corporation (OCBC)’s raked in a net profit of $3.91b, inching up 2% from FY14’s $3.84b. Excluding a one-off gain of $391m in the previous year, core net profit jumped to a record high as it climbed 13% to $3.91b.

According to the bank’s media release, the profit spike is thanks to raised net interest income, fee and commission income growth as well as strengthened trading and investment income. Further, OCBC asserts that earnings of OCBC Malaysia, OCBC NISP, and OCBC Wing Hang all reported an increase in local currency terms.

Net interest income also soared to a new record as it grew 10% to $5.19b, propelled largely by an 11% hike in customer loans’ average balances which include the full-year consolidation of OCBC Wing Hang.

Non-interest income similarly rose 10% to $3.53b before one-off gains. Fee and commission spiked 10% to a new record of $1.64b, mainly thanks to growth in wealth management, brokerage and fund management fees. Net trading income, primarily treasury related income from customer flows, skyrocketed 52% to $552m, while net gains of $204m from the sale of investment securities recorded a 53% YoY hike.

Great Eastern Holdings’ life assurance profit was the only blemish on OCBC’s record as it tumbled 18% YoY to $630m, mainly on back of unrealised mark-to-market losses in its bond investment portfolio.

OCBC’s share of results of associates and joint ventures last year was up at $323m from the preceding year’s $112m, largely thanks to the full year consolidation of income contribution from Bank of Ningbo as OCBC’s associated company.

Meanwhile, operating expenses surged 12% to $3.66b after taking into account the full year impact of consolidating OCBC Wing Hang. Excluding the consolidation, operating costs climbed 5% due primarily to an increase in staff costs in line with business volume growth.

Photo by TK Kurikawa / Shutterstock.com