SINGAPORE: Oversea-Chinese Banking Corp (OCBC) reported a fourth quarterly profit increase as it absorbed loans from its Wing Hang Bank Ltd acquisition and booked a gain from a stake in a Chinese bank.
Net income climbed 62 per cent to S$1.23 billion (RM3.2 billion) for the three months ended September 30 from S$759 million a year earlier, the bank said in an exchange statement yesterday.
Profit excluding gains from the stake in Bank of Ningbo Co was S$841 million. The average of four analysts’ estimates compiled by Bloomberg was S$839 million.
Chief executive officer Samuel Tsien is seeking growth in overseas markets from China to Indonesia and in fee businesses, such as wealth management, as the bank grapples at home with the lowest loan profitability in Southeast Asia.
OCBC completed this year its US$5 billion purchase of Wing Hang in Hong Kong.
“Even after stripping out profits from Wing Hang and the one-off gains, these are a strong set of numbers,” said Paul Dowling, principal analyst at Sydney-based bank research firm East & Partners Pty yesterday. “All the core boxes have been ticked.”
Shares of OCBC, Southeast Asia’s second-largest lender, advanced 0.5 per cent to S$9.74 at 9.13am here yesterday, paring their drop this year to two per cent. The benchmark Straits Times Index gained 0.1 per cent.
The bank is the first of Singapore’s three lenders to report third-quarter profit. United Overseas Bank Ltd may say its earnings rose 0.8 per cent to S$736 million, according to the mean of three analysts’ estimates. DBS Group Holdings Ltd, Southeast Asia’s largest bank, is due to report today.
OCBC’s net interest income, the difference between what it makes on deposits and pays on loans, rose 27 per cent to S$1.25 billion, the bank said. Loans advanced 27 per cent from a year ago to S$205 billion, with its OCBC Wing Hang Bank unit contributing 58 per cent to the increase.
Excluding Wing Hang’s contributions, OCBC’s loans grew 11 per cent in the quarter.
Monthly loan growth here this year through August slowed to an average 13.2 per cent from 17.7 per cent las tyear, as lending to the housing sector and businesses slowed, data from the Monetary Authority of Singapore showed. Bloomberg