© Reuters. A view of the OCBC Bank signage in Singapore May 3, 2023. REUTERS/Caroline Chia
By Yantoultra Ngui
SINGAPORE (Reuters) -Singapore’s second-biggest lender Oversea-Chinese Banking Corp (OCBC) reported on Wednesday a better-than-expected 39% jump in first-quarter profit from a year earlier on the back of strong net interest income growth.
OCBC, which is also Southeast Asia’s second-biggest bank by assets, said January-March net profit rose to a record S$1.88 billion ($1.42 billion) from S$1.36 billion a year earlier.
That beat the mean estimate of S$1.74 billion from five analysts polled by Refinitiv.
Singapore’s banks have been benefiting from strong inflows from wealthy customers amid global economic uncertainty because of the city-state’s status as financial safe haven.
“Our loan portfolio was resilient and our wealth management business continued to attract net new money inflows,” OCBC Group Chief Executive Officer Helen Wong said in a statement.
The bank reported a total net interest margin, a key gauge of profitability, of 2.30% for the first quarter, up from 1.55% in the same period a year earlier. OCBC expected full-year net interest margin in the region of 2.2%.
The lender said it was starting to see growth in cross-border flows after China’s reopening, but it was also closely monitoring volatility in developed markets and geopolitical tensions.
“Looking ahead, we are watchful of tighter financial conditions which may slow global economic growth and elevate overall risks,” Wong said.
OCBC, which counts Singapore, greater China and Malaysia among its key markets, said net interest income rose 56% to S$2.34 billion in the first quarter from a year earlier.
Return on equity rose to 14.7% in the first quarter from 10.6% in the same period of 2022.
The first quarter was also strong for Singapore’s other major banks, with larger peer DBS Group (OTC:) reporting last week a 43% jump in first quarter net profit that was also a record. Smaller United Overseas Bank (OTC:) posted last month a 74% surge in core net profit.
($1 = 1.3245 Singapore dollars)
This story originally appeared on Investing