Oversea-Chinese Banking Corp. (SGX:O39) posted a 22% year-over-year increase in second-quarter net profit, boosted by record fee and trading income that more than offset a drop in net interest income.

Net profit climbed to SG$2.22 billion from SG$1.82 billion a year earlier, with earnings per share rising to SG$1.96 from SG$1.60, the Singaporean lender said in bourse filings on Friday.

Net interest income fell 1% year over year to SG$2.26 billion as net interest margin narrowed 22 basis points to 1.70% in a lower interest rate environment. However, the decline was offset by a 12% growth in average assets.

Non-interest income jumped 51% to SG$1.91 billion, driven by an 85% growth in trading income to a record SG$695 million, while fee income rose 28% to a record SG$739 million. Insurance income grew 68% year over year to SG$382 million.

For the first half of 2026, attributable net profit rose 13% year over year to a record SG$4.19 billion, with annualized earnings per share growing to SG$1.86 from SG$1.64.

Total income for the first half grew 11% to SG$8 billion, with non-interest income surging 36% to a record SG$3.51 billion, accounting for nearly 44% of total income.

Net interest income in the first half fell 3% year over year to SG$4.49 billion due to lower interest rates. Net interest margin shrank 25 basis points to 1.73%.

The board declared an interim dividend of SG$0.47 per share, up 15% from SG$0.41 a year earlier, representing a payout ratio of 50%.

OCBC reaffirmed that it remains committed to completing its previously announced SG$2.5 billion capital return by fiscal year 2026.

"Looking ahead, global conditions remain uncertain amid geopolitical tensions and elevated inflation risks. Much of the near-term outlook will depend on the easing of Asia's energy crunch brought about by the war in the Middle East. Meanwhile, AI and related technology sectors continue to register strong growth," said Group CEO Tan Teck Long.