The third quarter of 2018 has been very good for OCBC Bank Singapore, as its profits rose 12 percent to $1.25 billion, while its net interest income rose 9 percent to $1.51 billion.
Year-on-year, the bank’s profits rose from $1.11 billion, and on a Year-to-date basis, it rose by 18 percent from $3.01billion to $3.57 billion in September.
According to OCBC CEO Samuel Tsien, “Record quarterly and year to date net profit were achieved through improved NIM, continued loan growth, higher non-interest income, and continued cost management discipline.”
OCBC’s rise in net interest income has been supported by a 6 basis points rise in net interest margin (NIM) to 1.72%, as well as broad-based growth in customer loans of 10%. Improved margins in the country, as well as in Greater China and Malaysia, plus a higher average loans-to-deposits ratio have caused the rise in NIM.
The bank’s operating expenses have also increased by 7 percent year on year, and is now at $1.07 billion, due to a rise in staff costs because of annual base salary increments as well as increasing expenses connected to business volume growth.
Allowances for loans and other assets have decreased, currently at $ 49 million. Last year they were at $ 156 million.
OCBC’s third quarter non-interest income has remained the same at $1.04 billion.
Due to higher wealth management and loan and trade-related fees, the bank’s fee and commission income rose by 3 percent to $502 million.
Net trading income has gone up dramatically, by 80 percent to $213 million. This is composed primarily of treasury-related income from customer flows.
However, profit from life insurance dropped from $253 million last year to $184 million, due to greater mark-to-market gains from a more favourable market condition in 2017.
In the third quarter of 2018, the average Singapore dollar and all-currency liquidity coverage ratios have been 232 percent and 130 percent respectively. The net stable funding ratio is 108 percent.
Mr. Tsien also said, “Despite the weakened regional market sentiments as a result of global trade tensions, the growth in our wealth management franchise continued, with sustained net new money inflows that drove our assets under management to an all-time high.”