International Business & Economy OCBC’s Q3 profits up by 12 percent

OCBC’s Q3 profits up by 12 percent

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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 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 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.

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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 $2 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 and all-currency liquidity coverage ratios have been 232 percent and 130 percent respectively. The net stable funding ratio is 108 percent.

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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.”

Read related: OCBC launches OneAdvisor Mortgage Portal

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