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.
It was 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.