OCBC’s wealth business drives Q1 profit up 5% to $1.97 billion, more than expected

SINGAPORE – Strong growth in wealth management boosted OCBC Bank’s non-interest income to a new high in the first quarter, lifting the bank’s net profit by 5 per cent.

Earnings for the quarter ended March 31 were $1.97 billion, up from $1.88 billion a year ago and beating analysts’ forecast of $1.88 billion in a Bloomberg poll.

OCBC shares rose as much as 3.1 per cent to $22.56 on the news, before paring gains to close 0.2 per cent higher at $21.92 on May 8. DBS Bank shares closed down 0.3 per cent at $58.68, while UOB dipped 0.4 per cent to $36.56.

Net interest income at OCBC declined 5 per cent to $2.22 billion amid a lower interest-rate environment. Net interest margin fell to 1.76 per cent, 28 basis points below 2.04 per cent a year ago.

Non-interest income rose 23 per cent to $1.61 billion and accounted for more than 40 per cent of total income.

Net fee income grew 24 per cent to $675 million on broad-based growth. Of this, wealth management fees surged 34 per cent. Investment banking, trade-related and loan-related fees were also higher compared with the previous year.

The group’s wealth management income – from private banking, premier private client, premier banking, insurance, asset management and stockbroking – surged 11 per cent to $1.48 billion.

The wealth business’ share of the bank’s total income rose to 39 per cent from 37 per cent a year ago.

For 2026, OCBC aims to achieve double-digit year-on-year growth in wealth fees and assets under management (AUM).

In his first quarter as OCBC group chief executive, Mr Tan Teck Long said resilient performance across banking, wealth management and insurance helped cushion the impact of lower interest rates.

“We achieved a new high for non-interest income, led by our wealth business, which helped us offset lower net interest income amid a low-interest-rate environment,” he said.

Wealth fees grew 34 per cent year on year to hit $422 million.

OCBC last week struck a deal to acquire parts of HSBC’s wealth and premier banking portfolio in Indonesia, reportedly beating out UOB and other banks such as DBS, Malaysia’s CIMB Group and Japan’s Sumitomo Mitsui.

Mr Tan said the acquisition aligns with the bank’s new corporate strategy to grow and deepen its wealth business in Indonesia, while strengthening its position as one of the top privately owned banks in the country.

He noted that HSBC’s wealth and premier banking portfolio in Indonesia is a high-quality one with AUM of $6.6 billion, bringing scale and synergy to the group.

Commenting on the acquisition at the results briefing, Mr Tan said most portfolios in the marketplace available for mergers and acquisitions tend to be a mix of loans and deposits.

“But this HSBC portfolio is very clean – it’s largely deposits and AUM,” he said.

“What I really like about the deposits part of the acquisition is that it includes sizeable CASA (current and savings accounts) balances. If we bolt on the CASA, we will start making money straight away, because CASA is a low-cost source of funds that helps finance our loan business.”

Mr Tan said the bank expects the acquisition to be earnings-accretive, excluding one-time integration costs. He added that products, channels and insights belonging to any wealth unit of the OCBC group will be tapped to support the enlarged wealth group. OCBC will also leverage the product capabilities and insights of its private banking arm, Bank of Singapore.

The acquisition comes with a small retail loan book of $300 million, largely related to the credit card business.

“It is a nice addition to our credit card business. Our credit card balance will increase by 1.5 times,” said Mr Tan.

He added that Indonesia, the largest economy in the region, and the rest of ASEAN are important markets to the bank despite short-term economic headwinds.

OCBC kept its 2026 guidance unchanged, including expectations for stable-to-growing total income and a slight-to-moderate decline in net interest income. It expects credit costs to be in the range of 20 to 25 basis points and loan growth in the mid-single digits.

Looking ahead, Mr Tan said global conditions remain uncertain amid geopolitical tensions and elevated inflation risks.

Much of the near-term outlook will depend on how the war in the Middle East, with its impact on energy supply and prices, evolves, while the ongoing trade tariff situation is also being closely monitored, he noted.

Still, OCBC is well positioned to navigate the uncertainties with its strong capital, funding and liquidity position, as well as diversified income streams and disciplined risk management, he said.

OCBC chief financial officer Goh Chin Yee said at the briefing that the first-order impact from the Middle East conflict is “not material”, at less than 3 per cent of loans or 1 per cent of total assets. This includes exposure to the petrochemical and refinery sectors.

The bank is actively engaging customers and closely monitoring for potential second- and third-order impacts, should the situation become protracted, she said.

OCBC was the last of the three local banks to report first-quarter earnings.

UOB posted a 4 per cent fall in net profit to $1.44 billion, citing a softer operating environment, while DBS’ earnings grew 1 per cent to $2.93 billion on record wealth management fees.