SINGAPORE - OCBC Bank on Monday (May 7) reported a net profit of $1.11 billion for the first quarter of 2018, an increase of 29 per cent from $861 million a year ago.
This was underpinned by strong net interest income growth, higher wealth management income, lower allowances and increased contributions from the group's overseas banking subsidiaries.
Net interest income for the first quarter grew 11 per cent to $1.42 billion from $1.27 billion a year ago, on the back of strong asset growth and increased net interest margin, which is a measure of how efficiently a bank is making money from its interest-generating assets.
Average customer loans grew 10 per cent year-on-year, driven by broad-based growth across key industries and geographical segments.
Net interest margin rose five basis points to 1.67 per cent from 1.62 per cent a year ago, thanks to better customer loan yields, higher gapping income from money market placements and a rise in the average loans-to-deposits ratio.
Profit from life assurance - mainly from Great Eastern Holdings - was significantly higher at $166 million from $49 million in the prior year.
The group's wealth management income, comprising income from insurance, private banking, asset management, stockbroking and other wealth management products, grew 22 per cent to $727 million, from $597 million a year ago. Bank of Singapore's assets under management increased 19 per cent to US$102 billion as at March 31, 2018.
The bank also reported that its allowances for loans and other assets for the quarter were $12 million, significantly lower, compared to $178 million in the preceding quarter and $168 million a year ago. This was because the prior periods included allowances set aside for corporate accounts in the offshore support services and vessels sector, it said.
The group's asset quality remains "healthy", it added. As at end-March 2018, total non-performing assets of $3.45 billion were slightly below the $3.47 billion in the quarter before. The non-performing loans ratio fell to 1.4 per cent, from 1.5 per cent as at end-December 2017.