SINGAPORE - OCBC Bank's earnings have continued to bounce back from the troughs of the pandemic despite lingering Covid-19 uncertainties.
The bank posted on Wednesday (Nov 3) a 19 per cent year-on-year increase in third-quarter net profit to $1.22 billion, partly driven by lower allowances amid an improving credit outlook.
Its earnings topped the $1.19 billion average estimate of four analysts polled by Bloomberg.
Group chief executive Helen Wong said the bank's results were resilient, despite challenging conditions associated with the Delta variant of the coronavirus.
"This quarter, the momentum across our banking, wealth management and insurance business has continued to grow, as reflected by loan, net new money, fee and insurance sales growth," she said.
Ms Wong noted that asset quality is stabilising as the economic situation improves.
"We remain positive on the long-term outlook but are watchful of the near-term headwinds from the pandemic," she added.
Net interest income climbed 3 per cent to $1.46 billion amid an increase in average loan volumes. Net interest margin, a key gauge of banks' profitability, declined two basis points to 1.52 per cent.
Non-interest income dipped 2 per cent to $1.1 billion in the third quarter amid lower net trading income - largely due to unrealised mark-to-market losses in insurance arm Great Eastern Holdings' investment portfolio. However, profit from life insurance rose 22 per cent to $262 million.
Overall, Great Eastern on Tuesday reported a 26 per cent year-on-year fall in third quarter net profit to $213.3 million.
OCBC's lower net trading income was also partly offset by a 14 per cent increase in net fees and commissions to $569 million, driven by broad-based fee growth from a rise in customer transactions and business activities.
Total allowances dropped 54 per cent to $163 million as the credit environment improved.
The group's net profit rose 5 per cent from the previous quarter. Its earnings for the first nine months of this year climbed 58 per cent to $3.89 billion.
Ms Wong told a media briefing on Wednesday that OCBC expects its loan pipeline to pick up further in its markets across both consumer and corporate banking.
The bank's green financing loans, in particular, made up close to $6 billion or one-third of its year-to-date overall loan increase.
"Sustainability is no longer optional. There is increased global focus on climate change... There's a lot of demand for sustainable financing, products and investments," she said.
Ms Wong added that the bank will support increasing trade and investment flows between Greater China - the lender's second-largest market after Singapore - and South-east Asia.
OCBC's Hong Kong subsidiary, OCBC Wing Hang Bank, last month partnered China's Ping An Bank to provide two-way wealth-management services in the Greater Bay Area.
Ping An has a network of more than 300 branches in the area and over 107 million retail customers.
Singapore also continues to be a hub for wealth management, said Ms Wong, with some clients served by relationship managers in the bank's overseas units choosing to park their wealth here.
"We have been seeing a lot more family offices coming to Singapore... We'll be able to serve high-net-worth clients not just in their own investments or family needs, but we'll help them with the business they own as well," she added.
