A Quick Look At Overseas-Chinese Banking Corporation’s Results

OCBCOverseas-Chinese Banking Corporation (SGX: O39) posted a 73% jump in full-year profits to S$3.99b. Singapore’s second-largest bank said core net profit, which excludes gains from the divestment of non-core assets, grew 24%. But the shares lost 0.4% to S$9.99.

Shares in Singapore’s two other quoted banks lost ground too. United Overseas Bank (SGX: U11), which will report results on the 27 February, fell 0.3% to S$19.32.  DBS Group Holdings (SGX: D05), which posted a 11% rise in core profits last week, slipped 0.1% to S$15.00.

OCBC said its results were driven by a combination of record net income, fee income and net trading income as well as significantly higher contributions from Great Eastern Holdings (SGX: G07). Last week, the insurer, which is a subsidiary of OCBC, reported record annual profits of S$1.9b.

OCBC said net interest income grew to a record of S$3.75b, which is 10% more than last year. However, it revealed that net interest margin has narrowed again. In 2010, the margin was 1.98%; in 2011 it was 1.86% and last year it stood at 1.77%. The bank said this was due to the continued low-interest environment.

Commenting on the results, chief executive office Samuel Tsien said: “Although the market outlook remains uncertain, we expect the global economy to post low-to-moderate growth in the year ahead. We are well-positioned to continue to drive sustainable growth   in   our   key   geographies   and   businesses,   and   are   well-placed   to   pursue   new   opportunities.”

The bank has proposed a final dividend of 17 cents per share, which would bring the full-year payout to 33 cents per share compared to 30 cents last time.

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