-- Oversea-Chinese Banking Corp. or OCBC (SGX:O39), posted a 5% rise in first-quarter attributable profit as record non-interest income, led by solid growth in wealth management, cushioned the impact of thinning lending margins in a declining interest rate environment.
Net profit attributable to equity holders came in at SG$1.97 billion, up from SG$1.88 billion a year earlier, according to the company's earnings published Friday.
Earnings per share rose to SG$1.76, compared with SG$1.67 in the year-ago period. Analysts polled by Visible Alpha had projected EPS of SG$0.43 for the period.
Total income rose 5% to SG$3.83 billion from SG$3.66 billion, as non-interest income jumped 23% to SG$1.61 billion from SG$1.31 billion a year earlier.
Net interest income, however, declined 5% year over year to SG$2.22 billion from SG$2.35 billion. Analysts polled by Visible Alpha had projected net interest income of SG$2.30 billion.
"The Group's solid Q1 performance was underpinned by record non-interest income, led by strong growth in wealth management." "Operating expenses were well managed, with cost-to-income ratio below 40%. Loans and deposits were higher, supported by continued momentum in strategic growth areas," the lender said.
OCBC added that its acquisition of HSBC's wealth business in Indonesia fits well into its "Next Frontier strategy" as the lender looks to build up its wealth business in Indonesia.
Despite the strong performance, OCBC issued a cautious outlook regarding the global landscape, highlighting that global conditions remain uncertain amidst persistent geopolitical tensions and elevated inflation risks.
The lender noted that the near-term outlook will depend on the evolution of the war in the Middle East and its potential impact on energy supply and pricing.
However, OCBC reaffirmed that it remains "well positioned to navigate uncertainties and deliver sustainable long-term value."