OCBC's NIM game falls short amidst loan growth

No thanks to a larger amount of unrecognised net interest income.

Out of the three Singapore banking giants, only OCBC saw its net interest margin (NIM) fall.

According to DBS Group Research, the 2bps QoQ decline in NIM can be attributed to a larger
amount of interest income not recognised due to non-performing loans.

"Excluding this, NIM would have been higher by 2bps q-o-q, owing largely to better yields from money market placements from its excess funds," the brokerage firm said.

Here's more from DBS:

OCBC’s Hong Kong operations’ NIM fell quite substantially due to a mismatch of 1-month and 3-month HIBOR for loans and deposits, respectively, and the lack of gapping activities.

Loan growth was surprisingly strong at 2% q-o-q (+4% in constant currency terms), the strongest among peers, driven by Singapore corporates and trade loans – partially supported by loans to individuals. Loan-to-deposit ratio rose slightly q-o-q to 84%.