OCBC logs record net profit of S$1.98b in Q1; EPS is S$1.76

Higher wealth management and insurance income pushed up fee income.

Oversea-Chinese Banking Corporation saw its net profit rise to a record S$1.98b in Q1, as total income rose to a new quarterly high and thanks to lower allowances.

An annualised earnings per share (EPS) of S$1.76 has been announced for Q1, which is 24% higher than in Q4 2023 a nd 5% higher than in Q1 2023.

OCBC’s profits for the quarter are 5% higher than in Q1 2023 (S$1.88b) and 22% higher from Q4 2023 (S$1.62b).

Banking operations’ net profit was $1.72b in Q1, 3% higher than in Q1 2023, and 15% higher compared to Q4 2023.

OCBC CEO Helen Wong said that the bank is pleased to start the year “on a strong footing”, adding that this demonstrates the ability of OCBC’s diversified franchise to deliver resilient earnings growth.

“We achieved record net profit which lifted return on equity higher, underpinned by income growth and strict cost discipline. Asset quality remained sound and we prudently maintained our credit allowances. Our performance was driven by the deep synergies across banking, wealth management and insurance,” Wong said.

Total income rose 8% year-on-year (YoY) to S$3.63b, driven by higher net interest income and non-interest income. 

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Net interest income rose by 4% to S$2.44b, although it was 1% lower than in Q4 due to the “shorter quarter”, OCBC said. Average assets grew by 1%, which largely compensated for a 2 basis-point moderation in net interest margin (NIM) to 2.27% as a rise in asset yields was outpaced by higher funding costs.

Meanwhile, non-interest income jumped 17% to S$1.19b in Q1 compared to a year ago, propelled by a 67% surge in net trading income and record wealth management income.

Net fee income was S$479m for the quarter, 17% above Q1 2023 levels, driven by an increase in wealth management brokerage, fund management fees, and insurance income.

OCBC’s wealth management income–comprising income from insurance, private banking, premier private client, premier banking, asset management and stockbroking–was a record S$1.29b in Q1.

Insurance income was S$289m for the quarter, which OCBC attributed to better investment performance and improvement in claims experience. Total weighted sales grew to S$524m thanks to higher premium sales in Singapore.

Customer loans and customer deposits remained stable. Customer loans edged up 2% to S$301b as of 31 March compared to a year earlier. Customer deposits were S$370b by the end of Q1.

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As of 31 March, sustainable financing loans grew 34% from a year ago to S$43.1b, against a total loan commitment of S$60.5 billion.

Looking ahead, Wong noted some near-term risks such as heightening geopolitical volatility from ongoing wars and the outcome of key elections.

“Our key markets in Asia are expected to be resilient, benefitting from increasing capital flows and supply chain diversification. Our healthy balance sheet position provides us the flexibility to manage uncertainties, and capacity for growth as we continue to support our customers across our network,” Wong concluded.