Singapore's second largest bank Oversea-Chinese Banking Corp, or OCBC, reported on Wednesday a 3% rise in net profit in the fourth quarter from a year earlier, driven by higher non-interest income amid growth across fee, trading and insurance income.
OCBC, which is also Southeast Asia's second largest lender by assets, said October-December net profit rose to S$1.75 billion ($1.37 billion) from S$1.69 billion a year earlier.
This beat the mean estimate of around S$1.69 billion from two analysts polled by LSEG.
The lender declared a final dividend of S$0.42 per share, up from S$0.41 in the year-ago period.
OCBC is also proposing a special dividend of S$0.16 per share, lifting its total FY2025 dividend payout to 99 cents per share and representing 60 per cent of group net profit.
Net interest income fell 6 per cent to S$2.3 billion, as asset yields compressed at a faster pace than deposit costs in a declining interest rate environment.
Net interest margin narrowed by 29 basis points to 1.86 per cent from 2.15 per cent previously.
Non-interest income surged 37 per cent to S$1.32 billion on broad-based growth across fee, trading and insurance income.
The non-performing loan ratio remained unchanged at 0.9 per cent. Total allowances fell 4 per cent to S$200 million.
For the full year, net profit was S$7.42 billion, down 2 per cent from the record S$7.59 billion a year ago. Earnings per share came in at S$1.63, lower than S$1.67 previously.
Tan Teck Long, group chief executive officer of OCBC, said: “Looking ahead, we remain cautious yet positive. Global conditions are likely to remain uncertain, shaped by geopolitical tensions, evolving trade dynamics and interest rate uncertainty.”
This marks Tan’s first earnings statement as group CEO, after formally taking over the reins of South-east Asia’s second-largest lender in January.
OCBC rounded off the earnings season for Singapore’s three local banks, following DBS on Feb 9 and UOB on Tuesday.
Shares of OCBC closed 1.2 per cent or S$0.26 lower at S$21.43 on Tuesday.