OCBC profits down 6% to $1.25b in Q3

This was due to a one time charge of $91m for its Indonesian subsidiary.

Oversea-Chinese Banking Corporation (OCBC) exhibited a more subdued Q3 after profits for the quarter fell 6% YoY to $1.17b, compared to the $1.25b recorded in Q3 2018, its financial statement revealed.

This was attributed to the one time charge of $91m for its Indonesian banking subsidiary, Bank OCBC NISP, to conform to the new financial reporting standard.

Also read: OCBC H1 profits up 6% to $2.45b

In contrast, the bank’s net interest income climbed 6% YoY to $1.6b in Q3 from $1.51b in Q3 2018, driven by a 5 basis points rise in net interest margin to 1.77% from improved asset yields and a 2% increase in customer loans. Operating expenses also climbed 6% YoY to $1.13b, mainly from a rise in staff costs associated with its expanding headcount, which in turn is in line with OCBC’s investments in digitalisation, technology infrastructure and compliance capabilities.

Non-interest income edged up 2% YoY to $1.06b in Q3 from $1.04b in the previous year. But the net trading income of $182m was lower than $213m a year ago, as a decline in treasury income offset a rise in customer-related income.

Meanwhile, net gains from the sale of investment securities skyrocketed to $55 m from only $4m in Q3 2018.

For the first nine months of 2019 net profit rose to $3.72b, a 4% YoY rise from $3.47b in 9M 2018. Net interest income also edged up 8% YoY to $4.72b in 9M 2019 from $4.37b over the same period last year.

Annualised return on equity was 11.6% for 9M 2019, as compared to 11.5% for the full year of 2018. Annualised earnings per share was $1.15, an increase from $1.06 for FY18.