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Strong profit growth for OCBC

Strong profit growth for OCBC

(4 May 2015 – China)  Oversea-Chinese Banking Corp (OCBC) reported a net profit after tax of S$993 million (A$939 million) for the first quarter of 2015.

The result is up 11 percent from S$899 million a year ago and 26 percent higher than the S$791 million the previous quarter (4Q14).

Strong growth in the Group’s customer-related businesses across a more diversified earnings base including key markets in Singapore, Malaysia, Indonesia and Greater China delivered positive profit growth.

The first quarter results included the consolidation of OCBC Wing Hang Bank, which became a subsidiary in the third quarter of 2014.

Net interest income increased 15 percent to S$1.25 billion from S$1.09 billion a year ago, mainly from robust asset growth.

Customer loans rose 20 percent from a year ago to S$210 billion, with broad-based growth across the Group’s key customer segments and markets.

The Group continued to strengthen its funding position and grew customer deposits by 26 percent to S$250 billion from S$199 billion in 1Q14.

Non-interest income rose 7 percent to S$859 million from S$800 million a year ago.

Fee and commission income increased 12 percent to S$395 million from strong growth in wealth management, brokerage, fund management and trade fees.

Net trading income, primarily treasury-related income from customer flows, grew 25 percent to S$123 million from S$99 million in 1Q14.

Profit from life assurance grew 9 percent year-on-year to S$199 million, lifted by higher operating profit from Great Eastern Holdings (GEH) and mark-to-market gains in its Non-participating Fund.

The Group’s share of results of associates and joint ventures rose to S$89 million from S$17 million in the previous year, largely attributable to Bank of Ningbo, which became a 20 percent-owned associated company of the Group on 30 September 2014.

The Group’s overall income from wealth management activities (comprising income from insurance, private banking, asset management, stockbroking and other wealth management products) grew from S$572 million a year ago to a new quarterly high of S$583 million.

OCBC’s private banking business continued to expand, with assets under management increasing 4 percent to US$51 billion (S$70 billion) as at 31 March 2015, up from US$49 billion the previous year.

OCBC Group chief executive Samuel Tsien said the bank was pleased with its strong start to 2015.

“The solid set of results demonstrates the increased diversity of our earnings base, and the progress that we are making in deepening our presence in our key markets.

“We will further invest in our businesses and leverage synergies across the expanded OCBC franchise to better serve our customers. Supported by our strong capital and funding position, we will continue to pursue a disciplined and prudent strategy of sustainable growth in our key markets.”

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