OCBC hits record net profit, declares S$1.68 EPS for Q1
Net profit of S$1.88b is 39% higher than in Q1 2022.
Oversea-Chinese Banking Corporate or OCBC has reported a record net profit of S$1.88b for Q1, a 39% increase from the first quarter of 2022. Net income is also 44% higher than the S$1.31b in Q4 2022.
This was largely driven by a rise in noninterest income and lower allowances, OCBC said in its latest financial report.
The group has declared an annualised earnings per share of S$1.68 for the period, 39% higher than in Q1 2022 and 44% higher compared to Q4’s EPS.
“We are pleased to achieve a record quarter on the back of a strong operating performance. Total income reached a new high and expenses were well controlled, whilst we maintained prudent levels of allowance,” CEO Helen Wong commented on the bank’s latest financial results.
Looking ahead, Wong said that OCBC are watchful of tighter financial conditions which may slow global economic growth and elevate overall risks.
“We remain confident of the long-term prospects of our key markets in Asia. Our capital position is strong and our liquidity positions are healthy. These provide ample buffer for uncertainties and allow us to pursue growth opportunities as they arise,” Wong added.
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OCBC’s non-interest income was S$1.01b, up 65% from Q4. Net fee income also rose by 14% to S$453m, driven by higher wealth management fees.
Wealth management fee income rose 33% to S$1.1b. This is equivalent to 33% of OCBC group’s total income.
However, these were partially offset by net interest income falling 2% to S$2.34b against a record Q4. OCBC said that this was due to the “shorter quarter,” and adjusted for the shorter-days effect, net interest income was largely unchanged from Q4.
Net interest margin (“NIM”) of 2.3% was 1 basis point below 2.31% in Q4 2022, as a rise in asset yields was offset by higher funding costs, as well as lower loans-to-deposits ratio as the increase in deposits outpaced that of loans.
Credit costs in Q1 were an annualised 12 basis points. Operating expenses fell 4% at S$1.24b.
Non-performing loans (NPL) ratio improved to 1.1%.
For Q1, customer loans were S$294b. This marks a marginal rise of 0.2% compared to Q4 2022. It is also 3% higher from Q1 2022.
Customer deposits grew by 5% from both the previous quarter and a year ago to S$367b,
underpinned by strong growth in fixed deposits, OCBC said.
Sustainable financing commitments were up 34% from a year ago and 7% from the previous quarter to S$47b
Profit from OCBC’s insurance subsidiary Great Eastern Holdings was S$238m.