OCBC should expect $205m contribution from insurance

This will come as bond yields ease.

The wealth management business of OCBC has continued to shine, UOB Kay Hian analyst Jonathan Koh said.

As high net worth clients remained on a risk-on mode, wealth management and bancassurance fees were encouraging.

"There was healthy growth in trade-related fees," Koh noted.

He furthered, "We expect a stable contribution of S$205m from insurance as bond yields eased but only marginally in both Singapore and Malaysia."

Additionally, OCBC benefitted from a pick-up in corporate loans in 2Q17, mainly from short-term trade finance and working capital loans. On the consumer front, there was healthy growth from residential mortgages and financing of leveraged investments for high net worth clients.

"OCBC is on track to meet its guidance of mid-single-digit loan growth for 2017," Koh said.

Koh also said OCBC is expected to have clocked in a net profit of $946m in2Q17, up 6.9% YoY but down marginally by 2.8% QoQ.

“We believe investors would take note of the stabilisation in asset quality and react positively,” the analyst concluded.