OCBC 4Q 2017 Net Profit Up 31% On Income From Banking, Wealth Management, Insurance - Nikkei Asian Review

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  By Kevin Lim
Nikkei Markets
  SINGAPORE (Feb 14) — Singapore’s second-largest bank Oversea-Chinese Banking Corp reported Wednesday a 31% rise in fourth-quarter net profit to S$1.03 billion compared with S$789 million a year ago on a big rise in earnings from insurance as well as increases from net interest income, non-interest income and wealth-management and investment-banking activities.

Its earnings were higher than a median estimate of S$936 million in a Reuters poll.

Profit from life assurance climbed 80% year over year for the quarter to S$259 million, the bank said in an exchange filing. Net gains from the sale of investment securities were higher at S$249 million but net trading income was 19% lower at S$99 million for the quarter.

The bank’s net interest income rose 14% to S$1.42 billion on higher income from wealth management and investment banking while fee and commission income increased 17%.

For the full year ended Dec. 31, OCBC posted a net profit of S$4.15 billion – up 19% from S$3.47 billion a year ago. Annual net interest income rose 7% to S$5.42 billion on strong asset growth. Non-interest income increased 23% to S$4.21 billion from S$3.44 billion. Fee and commission income climbed 19% to S$1.95 billion on a 45% increase in wealth-management fee income.

Profit from life assurance of S$877 million was higher than S$499 million in 2016 as insurance arm Great Eastern Holdings achieved strong underlying business growth and higher investment income from realized gains and favorable market conditions, OCBC said. Great Eastern on Tuesday reported its net profit for the quarter more than doubled to S$423.6 million.

“Sustained growth momentum across our banking, wealth management and insurance business lines delivered record earnings. Loan growth was broad-based, fee income climbed and insurance sales rose strongly,” CEO Samuel Tsien said.

“Given the continued weakness observed in the OSV sector of the oil and gas industry we…made additional specific allowances to reflect the challenging operating conditions and the uncertain market outlook. Apart from the stress in the offshore oil and gas support services portfolio the credit quality of the overall loan portfolio remained sound,” Tsien said.

“There continued to be geopolitical events and financial-market volatilities that we would need to remain watchful of,” Tsien said.

The bank proposed a final dividend of 19 Singapore cents a share compared with 18 cents the previous year – bringing the full year total dividend to 37 cents a share from 36 cents in 2016.
  – By Kevin Lim; Kevin.Lim@nikkeinewsrise.com; +65 6331 6250
– Edited by Sumathi Vaidyanathan
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