OCBC reports S$1.36b net profit in Q1

Profits were 10% lower than last year, but 39% higher than Q4 2021.

Oversea-Chinese Banking Corporation reported a group net profit of S$1.36b (approximately US$980m) in Q1, 39% higher than the preceding quarter, its latest interim results showed.

Profits were 10% lower–a similar percentage of decline to local peers DBS and UOB– than the S$1.5b reported in Q1 2021, with fees, trading income, and profit from life insurance all coming lower than the same period in 2021.

Non-interest income came at S$1.14b, 8% higher than in Q4 2021, thanks to growth in trading income and insurance income.

Net fee income declined 1% to S$522m, led by a fall in credit card, loan, and trade-related fees which offset a rise in wealth management and brokerage fees.

This was offset by the group’s wealth management income coming at S$911m–a 1% growth compared to the preceding quarter–to make up 34% of the group’s income in Q1. Wealth management income comprises income from insurance, private banking, premier private client, premier banking, asset management, and stockbroking.

Net trading income rose 48% to S$225m in Q1 from only S$152m in Q4 2021, driven by an increase in customer and non-customer flow treasury income.

Profit from life insurance from subsidiary Great Eastern Holdings of S$277m was higher than the S$248m reported in Q4, on the back of higher operating profit and mark-to-market gains from a decline in insurance contract liabilities.

The bank’s asset quality remains stable. OCBC’s total non-performing assets (NPA) were S$4.31b as of 31 March, 1% lower from S$4.34b a quarter ago.

New NPA for Q1 came at S$296m, below the S$375m in Q1 2021 and the S$1.06b in Q4 2020.

Non-performing loans (NPL) ratio also inched down 0.1 percentage point to 1.4% from 1.5% in Q1 2021 and Q4 2020, respectively.

(US$1 = S$1.38)