OCBC Profits Climb Higher on Lower Allowances
In this article (5)
OCBC’s posted a robust profit increase in the third quarter, which was fueled by a significant reduction in allowances.
OCBC registered S$1.22 billion ($904 million) in net profit for the third quarter, according to its latest results, marking a 19 percent year-on-year increase.
A significant reduction of allowances by 54 percent to S$163 million due to an improved credit outlook was a major contributor to profit growth.
Total income was flat at 1 percent growth to S$2.56 billion while operating expenses and associates grew 8 percent and 33 percent, respectively. As a result, pre-allowance operating profit was flat, decreasing 1 percent to S$1.576 billion.
Overall wealth management income – including insurance, premier and private banking, asset management and stockbroking – was down 7.4 percent to S$897 million.
OCBC’s private wealth arm, Bank of Singapore, saw assets under management increase 6 percent to S$167 billion ($123 billion) driven by inflows of net new money and positive market valuations.
Our third-quarter results were resilient, despite the challenging conditions associated with the Delta virus variant,» said OCBC chief executive Helen Wong. We remain positive on the long-term outlook but are watchful of the near-term headwinds from the pandemic.
Questions & Answers
Q.What was the main reason for OCBC's increase in net profit this quarter?
What was the main reason for OCBC's increase in net profit this quarter?
The significant reduction in allowances, which dropped by 54 percent to S$163 million, was the major contributor to the profit growth. This was attributed to an improved credit outlook for the company.
Q.Did OCBC's overall income grow significantly this quarter?
Did OCBC's overall income grow significantly this quarter?
No, total income remained largely flat, growing by only 1 percent to S$2.56 billion. Operating expenses and associates also grew, leading to a flat pre-allowance operating profit.
Q.How did OCBC's wealth management income perform in the third quarter?
How did OCBC's wealth management income perform in the third quarter?
Overall wealth management income, which includes various services like insurance and private banking, was down by 7.4 percent to S$897 million. This indicates a decline in this specific business segment.
Q.What was the performance of Bank of Singapore, OCBC's private wealth arm?
What was the performance of Bank of Singapore, OCBC's private wealth arm?
Bank of Singapore's assets under management increased by 6 percent to S$167 billion. This growth was primarily driven by inflows of net new money and positive market valuations.
Reader pulse
What does OCBC's profit signal for retail in Q4?
22,916 votes so far