OCBC’s net profit for the second quarter ended June rose 14 per cent to S$1.94 billion, from S$1.71 billion in the previous corresponding period.
The bank on Friday (Aug 2) said this was underpinned by income growth and a decline in allowances.
The earnings beat the S$1.81 billion consensus forecast in a Bloomberg survey of four analysts.
Total income rose 5 per cent on the year to S$3.63 billion from S$3.46 billion, with net interest income inching up 2 per cent to S$2.43 billion, from S$2.39 billion previously.
The slightly-higher net interest income was led by a 5 per cent increase in average assets, and partially offset by a six basis point (bps) drop in net interest margin to 2.2 per cent.
Non-interest income grew 13 per cent to S$1.2 billion, mainly from higher fee, trading and insurance income growth.
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The bank’s non-performing loans ratio stood at 0.9 per cent, down from 1.1 per cent the previous year.
Annualised earnings per share stood at S$1.72 for the quarter, up from S$1.51 a year earlier.
Total allowances fell 43 per cent on the year to S$144 million from S$252 million, as a result of a decline in allowances for non-impaired assets.
Operating expenses rose 3 per cent to S$1.37 billion, driven mainly by higher staff and information technology-related costs. Cost-to-income ratio was lower at 37.8 per cent; this was 0.7 percentage point lower than the 38.5 per cent in Q2 FY2023.
Credit costs for the quarter stood at 15 bps, 6 bps lower than in Q2 FY2023, and one bps lower than in Q1 FY2024.
Annualised return on equity rose 0.7 percentage point to 14.2 per cent for the quarter, from 13.5 per cent in the prior year.
The lender has declared a higher interim dividend of S$0.44 per share for the first half-year, up 10 per cent from S$0.40 the year before. This represents a payout ratio of 50 per cent of the group’s net profit for the first half of the fiscal year 2024.
For the first half of the year, net profit rose 9 per cent year on year to S$3.93 billion. Meanwhile, total income was 7 per cent higher at S$7.26 billion, from S$6.81 billion.
The lender said this came on the back of strong contributions from the banking, wealth management and insurance franchise.
Group chief executive Helen Wong noted that total income and net profit for the first half reachec new highs.
While she warned about greater geopolitical uncertainties, she is positive that the bank is well-positioned to navigate the challenging macroeconomic landscape.
As at end-June, customer loans grew 3 per cent on a constant currency basis to S$304 billion from S$297 billion in the previous corresponding period, driven mainly by non-trade corporate and housing loans.
The loans-to-deposits ratio stood at 81.1 per cent, higher than 78.8 per cent in the previous year.
Shares of OCBC ended Thursday down S$0.03 or 0.2 per cent at S$14.82.
