MENU

5 Positive Things That Investors Should Know About Oversea-Chinese Banking Corp Limited’s Latest Earnings Update

Oversea-Chinese Banking Corp Limited (SGX: O39), or OCBC, is one of the three main banks in Singapore. In early May, the bank announced its 2018 first quarter earnings update. Here are five positive things that I think investors should know about OCBC’s latest results:

1. The bank’s net interest income grew 11% year-on-year to S$1.42 billion in 2018’s first quarter, driven by improvement in its net interest margin, and loans growth. Moreover, the growth was broad-based across industries as well as geographical segments.

2. In general, a lower cost-to-income ratio is preferred.Non-interest income increased by 8% to S$918 million, due to a 19% rise in wealth management fee income, and higher brokerage, fund management, and loan-related activities.

3. The cost-to-income ratio fell from 45.9% to 44.2% as a result of OCBC’s scale and effective cost management. In general, a lower cost-to-income ratio is preferred.

4. The annualised return on equity (ROE) for the bank improved from 9.6% a year ago to 11.8% 2018’s first quarter.

5. OCBC maintained an extremely sound capital position and strong balance sheet as of 31 March 2018. Its Common Equity Tier 1 capital adequacy ratio (CAR), Tier 1 CAR, and Total CAR were at 13.1%, 14.2% and 15.8% respectively. They were well above their respective regulatory requirements of 6.5%, 8%, and 10%.

There are 28 surprising and important things we think every Singaporean investor should know—and we’ve laid them all out in The Motley Fool Singapore’s new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge—simply click here now to claim your copy.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has recommendations for DBS Group Ltd and United Overseas Bank Ltd.