Oversea-Chinese Banking Corporation has joined the other two local banks in reporting record quarterly earnings, as higher interest rates lifted the bottomline.
For its 3QFY2022 ended Sept 30, OCBC reported earnings of $1.6 billion, up 31% y-o-y; revenue was up 23% y-o-y to $3.15 billion.
For 9MFY2022, the bank's earnings increased by 14% y-o-y to $4.44 billion.
With rising rates on one hand and trailing funding costs on the other, OCBC's net interest margin increased by 54 basis points to 2.06% for 3QFY2022. This helped lift quarterly net interest income to more than $2 billion for the first time, with a gain of 44% y-o-y to $2.10 billion.
However, non-interest income for the same period was down 4% y-o-y to $1.05 billion. Net fee income, for one, was down 20% y-o-y to $453 million, as the bank's wealth management customers not as active amid the "risk-off" market environment.
The decline was partly offset though, by growth in other fee segments including credit card, and loan and trade-related fees.
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The bank made total allowances of $154 million, lower by 6%.
Its CET1 capital adequacy ratio for 3QFY2022 was 14.4%, versus 15.5% the year earlier.
Helen Wong, the bank's group CEO is pleased to have delivered a strong set of quarterly results.
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"While subdued customer investment activity impacted wealth fees, we continued to attract net new money inflows into our wealth management franchise," she says.
"Our portfolio quality remained resilient; and our investments to drive franchise growth, raise productivity and deliver operational efficiencies continue to yield positive results.
"Looking ahead, the global economic outlook is expected to be increasingly challenging. Backed by our strong balance sheet, we are well-positioned to support our customers and capture opportunities as they arise," says Wong.
OCBC shares closed Nov 3 at $11.95, down 0.91% for the day.
