One-time gain for OCBC from stake sale expected but O&G worries remain

SINGAPORE (March 21): RHB says OCBC’s sale of its 33.33% stake in Hong Kong Life Insurance to First Origin International could provide the bank with a one-time gain of HK$1.574 billion ($283 million).

“While this one-time gain would be a positive for OCBC’s financials, we remain concern on OCBC’s need for more loan loss provisioning from rising NPL ratio and falling values of its oil & gas loan collaterals,” says RHB in a Tuesday report.

On Monday night, OCBC Bank says the consideration for the sale is HK$2.367 billion payable in cash. The unaudited NTA of HK Life was HK$793 million as at Dec 31 2016 and the sale is conditional upon regulatory approvals.

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