OCBC pops the champagne on 8% profit rise to $715m

Subsidiaries had stellar results.

According to a release, OCBC Bank reported a net profit after tax of S$715 million for the fourth quarter of 2013 (“4Q13”), 8% higher than S$663 million a year ago (“4Q12”).

This was underpinned by a 22% year-on-year increase in net profit after tax from banking operations that included record quarterly earnings from Malaysian and Indonesian banking subsidiaries which grew 37% and 17% respectively in local currency terms (34% and 6% in SGD terms).

The Group’s net profit after tax for the financial year ended 31 December 2013 (“FY13”) was S$2.77 billion. The strong momentum from customer-related businesses lifted net interest income and fee income to record high levels.

Malaysian and Indonesian banking subsidiaries also reported record full year results, while insurance subsidiary Great Eastern Holdings (“GEH”) achieved strong underlying business growth.

Excluding non-core divestment gains of S$1.17 billion a year ago (“FY12”), core net profit after tax was 2% lower, as the strong customer-related business results throughout the year were offset by lower net trading income and unrealised mark-to-market losses from GEH’s Non-Participating Fund.

Net interest income achieved a new quarterly high from robust asset and deposit growth, rising 12% to S$1.03 billion. Non-interest income was lower at S$679 million, down 10% from S$757 million in 4Q12.

This was largely attributed to lower net trading income that fell 49% to S$69 million and lower life assurance profit that declined 22% to S$165 million.

Fees and commissions rose 12% to S$341 million, led by higher wealth management, loan-related and trade-related fees. Operating expenses
for the quarter declined 1% to S$713 million and net allowances were unchanged year-on-year at S$68 million.

Compared to the previous quarter, net profit after tax from banking operations grew 11% as a result of increases in net interest income and net trading income. The Group’s net profit after tax was 6% lower, which was attributed to a decline in profit from life assurance.

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