OCBC Jumps After Profit Beats Forecast on Lending Gains
(Bloomberg) -- Shares in Oversea-Chinese Banking Corp. gained the most in nearly three months after third-quarter profit beat analyst expectations, helped by an increase in lending income.
- Net income at Singapore’s second-largest bank climbed 12 percent to S$1.25 billion ($902 million); average forecast in a Bloomberg survey of seven analysts was S$1.13 billion.
- OCBC’s net interest margin rose from the previous quarter, diverging from its smaller rival United Overseas Bank Ltd., which saw its shares drop last week after reporting a slightly lower figure.
- The five basis point quarterly increase in NIM was “impressive,” and will boost the share price, Nomura analyst Marcus Chua wrote after the results
- The bank also benefited from a decline in provisions against bad debts, which had ballooned after several local oil and gas services firms ran into difficulties in 2016.
- Wealth management again provided a cushion, with income up 6 percent; OCBC has been expanding the service to serve rich clients especially in the Greater China region.
- OCBC shares rose as much as 3.5 percent, the most since Aug. 7. That pared this year’s decline to 11 percent, still the worst performance among the three major local banks.
- For more of the results, click here.
©2018 Bloomberg L.P.