OCBC Profits Jump 28%, NII 16% up

Singaporean lender OCBC reported a growth in group net profits of 28% YoY to S$1.5bn ($1.1bn) in Q2 on the back of robust performance across the Group’s banking, wealth management, and insurance businesses. Net interest income rose 16% to S$1.7bn ($1.2bn) driven by asset growth and margin expansion. Non-interest income increased 6% YoY to S$1.2bn ($870mn) on higher trading income and profits from its life insurance. Net fee income fell 15% YoY to S$477mn ($345mn) due to lower wealth management, brokerage, and investment banking fees, and weaker investment sentiments globally. Net Interest Margin (NIM) came in 13bp higher YoY to 1.71%, as asset yields outpaced higher funding costs amid a rising interest rate environment. Provisions declined to S$72mn ($52mn) vs. S$232mn ($168mn) last year. As of June, total NPAs were S$3.97bn ($2.87bn), down 3% YoY and 8% QoQ on higher recoveries with upgrades more than offsetting new NPA formation. Its NPL ratio improved 20bp to 1.3%. The lender declared an interim dividend of S$0.28/share vs. an interim dividend of S$0.25/share last year. Its CET1 ratio stood at 14.9%, down 120bp YoY. Sustainable financing commitments grew to S$37bn ($26.8) as of June.

OCBC’s SGD 4% Perps were down 0.05 points at 100.07, yielding 3.93%