Oversea-Chinese Banking Corporation Limited reported a net profit after tax of $1.11 billion for the first quarter of 2018 (“1Q18”), an increase of 29% from $861 million a year ago (“1Q17”). The robust year-on-year performance was underpinned by strong net interest income growth, higher wealth management income, lower allowances and increased contributions from the Group’s overseas banking subsidiaries.
Net interest income for the first quarter grew 11% to $1.42 billion from $1.27 billion a year ago, underscored by strong asset growth and increased net interest margin. Average customer loans grew 10% year-on-year, driven by broad-based growth across key industries and geographical segments. Net interest margin rose 5 basis points to 1.67% from 1.62% a year ago, attributable to improved customer loan yields, higher gapping income from money market placements and a rise in the average loans-to deposits ratio.
Non-interest income was 8% higher at $918 million as compared to $850 million a year ago. Fee and commission income increased 11% to $536 million, led by a 19% rise in wealth management fee income. Higher income from brokerage, fund management and loan-related activities also contributed to the strong fee income growth. Net trading income of $94 million declined from $158 million a year ago, attributed to lower treasury income whereas income from customer-related flows increased. Net realised gains from the sale of investment securities was lower at $8 million for the quarter. Profit from life assurance was significantly higher at $166 million from $49 million in the prior year. Great Eastern Holdings’ (“GEH”) total weighted new sales and new business embedded value were $231 million and $101 million respectively, and new business embedded value margin rose to 43.6% from 39.6% a year ago. The Group’s overall wealth management income, comprising income from insurance, private banking, asset management, stockbroking and other wealth management products, grew 22% to $727 million, from $597 million a year ago. Bank of Singapore’s assets under management increased 19% to $102 billion ($133 billion) as at 31 March 2018, from $85 billion ($119 billion) of the previous year. As a proportion of the Group’s total income, wealth management income which included income from insurance operations, contributed 31%, up from 28% a year ago.
Re-disseminated by The Asian Banker