OCBC posts record quarterly profit of $899 million in Q1

SINGAPORE - Fresh from making a major acquisition, Oversea-Chinese Banking Corporation's (OCBC) latest quarterly results showed its current stable of assets still has potential for growth.

The local lender reported that net profit in the first quarter rose 29 per cent from a year ago to a record $899 million.

It said in a statement on Wednesday that sustained momentum across all customer-related businesses contributed to total income, which rose 19 per cent to $1.89 billion, also a record high.

Net interest income, or the earnings derived from its core lending business, jumped 19 per cent to $1.09 billion, driven by broad-based asset growth for the three months to Mar 31.

A widening of spreads helped to lift its net interest margin by six basis points to 1.7 per cent.

OCBC said the improvement in net interest margin "was mainly attributable to higher loan spreads as well as increased income from money market activities and gapping opportunities."

Non-interest income also contributed to the growth, rising 18 per cent to $800 million. This was aided by a 12 per cent growth in fees and commission income to a record $353 million.

Wealth management was another segment that boosted earnings, rising to a quarterly record of $572 million, a 10 per cent hike from the same period a year ago.

Allowances, however, nearly doubled to $41 million from $21 million a year ago.

OCBC's total non-performing assets stood at $1.23 billion, a 10 per cent increase from last year though its non-performing loans ratio stayed unchanged at 0.7 per cent.

Chief executive Samuel Tsien said in the statement: "The momentum across our customer franchise is strong and sustaining. Our operating profit from all our key markets increased, our asset quality is sound and our capital, funding and liquidity base remains robust."

OCBC, which announced earlier in April that it offered $6.23 billion in cash to buy Hong Kong's Wing Hang Bank, is gearing up for regional expansion.

"We believe that this potential acquisition, which brings two complementary franchises together, will provide us with an expanded platform to deepen and broaden our foothold in the region. In addition to strengthening our local market presence including access to offshore renminbi, the acquisition will also allow us to capture the growing trade, investment, capital and wealth flows between Greater China and our other key markets," added Mr Tsien.