OCBC net profit soars by 86% to $2.6b in first half

The net profit growth was driven by a robust banking and insurance performance.

Oversea-Chinese Banking Corporation (OCBC) reported a net profit of $2.66b for the first half of the year, an 86% growth from last year’s $1.4b.

This was driven by a 29% increase in non-interest income to $2.58b and substantially lower allowances.

“Net profit growth was driven by robust banking and insurance performance, whilst wealth management income grew strongly and private banking assets under management continued to expand. Whilst net interest margin remained relatively stable amid a low rate environment, fee- and investment-related income grew in tandem with renewed consumer and business confidence,” said OCBC CEO Helen Wong in a bourse disclosure.

Net interest income, on the other hand, was 7% lower at $2.9b due to an 11 basis point contraction in net interest margin to 1.57%, as asset yields declined faster than the drop in funding costs in the low-interest-rate environment.

The Bank of Ningbo drove the Group’s share of results of associates to expand by 29% to $422m.

Operating expenses increased by 3% to $2.29b, whilst cost-to-income ratio improved to 41.7% from 43.3%.

Total allowances were at $393m, lower than last year’s $1.4b.

Return on equity rose to 10.6% from 6.1% the previous year, and earnings per share increased to $1.19 from $0.64.