(Singapore) – Singapore’s smallest lender, OCBC Bank, has a bigger than expected fall in first half profit due to a jump in provisions and expected divestment of non-core assets.The Bank has come in with a 30.4 percent fall in net profit to S$301.6 million (US$171.8 million) for the six months to June 30 and is currently undertaking a review of its China market strategy.
Discussions are underway with Singapore’s central bank (MAS) which has ordered banks in the country to sell non-financial assets that are in excess of 20 percent of any bank’s shareholders’ funds by mid-2004.
Results included a sizeable 131 percent leap in provisions to S$288.99 million, although its cost to income ratio fell to 38.8 percent from 40.1 percent last year.
Operating profit, before provisions and goodwill amortisation related to OCBC’s acquisition of Keppel Capital Holdings (KCH) last year, was a quarter (25.4 percent) up to S$672.34 million.