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5 Things To Like About Oversea-Chinese Banking Corp Limited Today

Oversea-Chinese Banking Corp Limited (SGX: O39) or OCBC is one of the 3 main local banks listed in Singapore, along with United Overseas Bank Ltd (SGX: U11) and DBS Group Holdings Ltd (SGX: D05).

Recently, OCBC announced its 2018 third-quarter earnings update. Here are five positive things that I think investors should know about its earnings release. But first, let’s run through the company’s numbers.

A quick overview

Here’s a quick summary of the key financial metrics from the earnings update.

Source: OCBC’s Result Presentation

Overall, we can see that most of the key figures have increased on a year-on-year basis. Here are the five points worth mentioning.

  1. Net interest income grew 9% year-on-year driven by improvement in net interest margin and loan growth. Moreover, the growth was broad-based across industries and geographical segments. Similarly, net profit jumped 12% year-on-year to reach a record high of S$ 1.25 billion, driven mainly by an improvement in its banking operations.
  2. Non-interest income was marginally higher year-on-year driven mainly by a rise in wealth management fee income and trading income.
  3. Both customer loans and deposits grew by 10% and 7%, respectively, as compared to the same period last year.
  4. Next, return on equity (ROE) improved from an annualized 11.9% last year to 12.6% this quarter.
  5. Last but not least, OCBC maintained a sound capital position. The bank’s common Equity Tier 1 capital adequacy ratio (CAR), Tier 1 CAR and Total CAR as at 30 September 2018, were 13.6%, 14.4% and 16.1% respectively. These ratios were well above the respective regulatory requirement of 6.5%, 8% and 10%.

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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, Oversea-Chinese Banking Corp Limited and United Overseas Bank Ltd.