- Oversea-Chinese Banking Corp flagged a cautious outlook on Wednesday after Singapore’s second-largest listed lender reported a surprise 14% drop in quarterly profit, knocking its shares to a one-month low.
- Shares in OCBC, which pointed to a jump in operating expenses, fell 4.5% in early trade in a slightly weak broader market.
- “Looking ahead, we are cautiously optimistic that the operating environment will improve,” OCBC CEO Helen Wong, who took charge last year, said in a statement.
Oversea-Chinese Banking Corpflagged a cautious outlook on Wednesday after Singapore’s second-largest listed lender reported a surprise 14% drop in quarterly profit, knocking its shares to a one-month low. Shares in OCBC, which pointed to a jump in operating expenses, fell 4.5% in early trade in a slightly weak broader market. “Looking ahead, we are cautiously optimistic that the operating environment will improve,” OCBC CEO Helen Wong, who took charge last year, said in a statement. In addition to gains from rising global interest rates, Singapore lenders are benefiting from rebounding economic growth, with the city-state’s economy forecast to grow 3% to 5% this year. Singapore, recovering from the pandemic slump, is reopening its borders, with about 90% of its population fully vaccinated against the Covid-19 virus. OCBC’s net profit fell to S$973 million ($723.4 million) in October-December, down from S$1.13 billion a year earlier and well below the S$1.18 billion average of four analyst estimates compiled by Refinitiv. The bank reported a 15% rise in quarterly operating expenses, citing higher staff costs linked to its expansion, and an absence of government job supports grants.
OCBC, which counts Singapore, Greater China and Malaysia, among its key markets, said full-year net profit rose 35% to pre-pandemic levels after credit allowances more than halved, helped by an improvement in asset quality.
Last week,United Overseas Bankjoined bigger competitorDBS Groupin flagging a strong outlook after reporting a sharp rise in quarterly profit on the back of a big decline in credit charges.
OCBC’s shares have underperformed peers, dented by market worries over its credit losses from sectors such as oil and gas.
As of Tuesday’s close, the shares had gained 24% over the past year versus a 42% surge in DBS and a 36% rise in United Overseas Bank.
source :cnbc.com
$OVERSEA-CHINESE BANKING CORP(O39.SI)$
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