OCBC's net profit climbs 22% to S$1.08b in Q2

OCBC CEO said the strong business momentum was achieved across all three business pillars – banking, wealth management and insurance.

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A view of an Oversea-Chinese Banking Corporation (OCBC) signage at their premises in Singapore Reuters

Singapore banking giant OCBC reported a robust growth in terms of net profit for the second quarter ending in June, up 22 percent to S$1.08b.

The improvement in its bottom line is brought about by the growth in net interest income, fees and commissions, net trading income and profit from life assurance.

OCBC CEO Samuel Tsien said the strong business momentum was achieved across all three business pillars – banking, wealth management and insurance.

"Income growth was broad-based, lending activities were up, AUM continued to rise, and underlying insurance business growth continued. OCBC Group maintained its healthy capital, funding and liquidity positions, and the overall loan portfolio remained sound, with the NPL ratio stable over the last three quarters," Tsien said in a statement.

According to the group's financial result, its net interest income rose 7 percent to S$1.35b, thanks to the strong lending growth across its corporate and consumer businesses.

On the other hand, non-interest income rose 34 percent to S$ 1.05b, as fees and commission climbed 18 percent to S$492m from the higher income associated with loan and trade-related activities, wealth and fund management, credit card and brokerage.

Particularly, wealth management fee income recorded 45 percent growth, on the back of the inclusion of the former wealth and investment management business of Barclays PLC in Singapore and Hong Kong acquired in November last year.

Meanwhile, the group's net trading income which comprises y treasury-related income from customer flows registered a 14 percent growth to S$140m.

The group's yields from life assurance were significantly higher at S$240m due to the higher operating profit from Great Eastern Holdings' investment portfolio.

OCBC's operating expenses also grew in the quarter albeit only slightly at 6% to S$992m. This is due to an increase in staff costs associated with the inclusion of Barclays WIM.

Looking ahead, Tsien noted that stronger consumer sentiments were noted in key economies, but overall economic growth in the region is expected to only be moderate and event risks remain.

"We will pursue prudent business growth, focusing on our key markets and core business lines," he noted.