Singapore bank OCBC flags recovery signs after fourth-quarter profit decline

25-Feb-2021 Intellasia | Reuters | 7:03 AM Print This Post

Singapore’s second-biggest listed-lender, Oversea-Chinese Banking Corp Ltd, reported a 9 percent decline in quarterly profit, dragged down by lower total income in pandemic-hit markets, but showed growth in its wealth business.

OCBC’s lower-than-expected fall in net profit came after larger peer DBS Group also posted a profit decline on weak margins but flagged a pick-up in growth.

“While economic conditions have started to show signs of stabilisation and we are seeing increased activities in some pockets of the economy, the recovery is not yet broad-based,” said OCBC’s Group CEO Samuel Tsien, who will be succeeded by deputy president Helen Wong in mid-April.

Analysts expect Singapore banks to show a profit rebound this year led by sustained growth in their wealth-management business and as improved economic prospects cushion the impact of net interest margins hovering near record lows.

OCBC’s October-December net profit came in at S$1.13 billion ($856.1 million) versus S$1.24 billion a year earlier, and compared with the S$955.9 million average estimate of four analysts, according to data from Refinitiv.

The bank’s net interest margin, a key gauge of profitability, dipped to 1.56 percent from 1.77 percent a year earlier. Full-year net profit at OCBC, which counts Singapore, Greater China and Malaysia, among its key markets, shrunk 26 percent from a record.

OCBC’s provisions for credit losses rose 37 percent in the fourth quarter from a year earlier but declined from the third quarter.

($1 = 1.3199 Singapore dollars)

https://www.reuters.com/article/us-ocbc-results/singapore-bank-ocbc-flags-recovery-signs-after-fourth-quarter-profit-decline-idUSKBN2AO000

 

Category: Singapore

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