OCBC's third-quarter net profit rose 3% from a year earlier to S$2.04 billion as record banking earnings offset weaker insurance results, the bank said in results covered by CNA.
OCBC was the only one of Singapore's three major banks to beat profit forecasts. It also raised its full-year guidance for the second time this year.
The bank now expects loan growth in the low double digits. Its loans grew 14% from a year earlier, the strongest increase among the three banks.
Profit from OCBC's banking business rose 16% to a record. That helped offset a 58% decline in the profit contribution from its insurance subsidiary, Great Eastern, which suffered bond market losses.
The results featured in CNA's “OCBC, DBS, UOB report earnings amid market sell-off,” published Nov. 6. OCBC said it was monitoring conditions in Indonesia amid concerns about a potential downgrade.
The bank was also watching the evolving Middle East conflict and energy markets. It identified technology and logistics as areas offering business opportunities in Indonesia despite uncertainty in other parts of the market.
“There are still data centers being built there,” the bank said. Indonesia's geography as an archipelago also creates opportunities in logistics, while the bank said it was managing exposure to more volatile businesses conservatively.
UOB's third-quarter net profit more than doubled from a year earlier to S$1.25 billion, the company said. The result nevertheless fell short of analyst expectations.
The increase reflected a low comparison base. A year earlier, the bank had set aside provisions, money reserved to cover potential loan losses, which reduced that quarter's profit.
DBS's third-quarter net profit fell 5% from a year earlier to S$2.81 billion, the company said. It also missed market forecasts.
The bank attributed the decline largely to weaker income from trading in financial markets amid unfavourable equity market conditions. Weaker trading and investment income weighed on its results.
All three banks earned less from the gap between their lending and funding rates than a year earlier. Banks receive interest on loans and pay interest on deposits, making that difference an important source of earnings.
DBS declared a third-quarter dividend of 81 Singapore cents a share, higher than a year earlier despite the decline in profit, the company said.
OCBC said it was well positioned for higher interest rates. It did not specify a numerical range for its revised loan growth guidance or identify the potential Indonesian downgrade it was monitoring.
