DBS, OCBC shares climb after their earnings beat forecasts; UOB slips

First-quarter net profit at all three Singapore banks fell 10 per cent. PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - DBS Group Holdings and OCBC Bank shares rose as the lenders reported better-than-expected earnings, with UOB falling as it missed forecasts.

DBS' shares rose as much as 4.3 per cent and OCBC was up as much as 3.7 per cent at market open, outpacing the gain in the benchmark Straits Times Index. UOB's shares fell as much as 3.1 per cent.

First-quarter net profit at all three Singapore banks fell 10 per cent, amid market volatility and ongoing concerns over inflation and supply disruptions.

"We believe Singapore banks' asset quality may stay resilient as regional reopening gathers pace," said Bloomberg Intelligence analyst Rena Kwok. "These lenders' management overlay of general provisions could offset possible slippages should macroeconomic headwinds stiffen."

The banks' results come as global lenders grapple with fallouts from the Russia-Ukraine war and market swings linked to United States monetary policy tightening.

Slower growth, higher inflation and supply chain disruptions are key risks to watch amid lingering uncertainty over the Covid-19 pandemic, DBS chief executive officer Piyush Gupta said in a statement on Friday (April 29).

"Geopolitical developments in recent weeks have created macroeconomic headwinds and financial market volatility," he said.

DBS' portfolio remains resilient as stress tests of vulnerable sectors and countries reveal no imminent areas of concern, according to Mr Gupta. There is also no material impact from China's lockdown, he added.

UOB CEO Wee Ee Cheong said that current disruptions to global supply chains will shore up the importance of South-east Asia, and the bank remains optimistic of the recovery and longer-term potential of the region.

DBS said it expects to benefit "significantly" from interest rate increases in the coming quarters. OCBC and UOB are upbeat about the reopening that is under way in much of South-east Asia, as countries seek to jump-start their economies coming out of the pandemic.

For OCBC, which saw its results bolstered by lower allowances that fell 73 per cent from a year ago, its CEO Helen Wong said the bank's overall loan portfolio remains sound.

"The gradual reopening of economies and borders in South-east Asia will drive a further rise in economic activities and we continue to closely monitor the evolving pandemic situation in Greater China," Ms Wong said.

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