SINGAPORE, Might 10 (Reuters) – Singapore's second-biggest lender Oversea-Chinese language Banking Corp (OCBC.SI) (OCBC) joined greater rival DBS Group in flagging a peak in rates of interest after reporting document quarterly revenue on Wednesday because of larger web curiosity margins.
OCBC Group Chief Government Officer Helen Wong mentioned the financial institution believed rates of interest had peaked and “will go secure”.
“We're assumption that we don't see rate of interest discount the remainder of the 12 months,” she informed reporters.
OCBC's January-March web revenue rose 39% to S$1.88 billion ($1.4 billion), beating the imply estimate of S$1.74 billion from 5 analysts polled by Refinitiv.
Its complete web curiosity margin, a key gauge of profitability, rose to 2.30% within the first quarter from 1.55% in the identical interval a 12 months earlier, however was down from 2.31% within the fourth quarter.
OCBC, Southeast Asia's second-biggest financial institution by property, forecast full-year web curiosity margin would edge as much as 2.2% from a earlier steerage of two.1%.
Singapore's banks have been benefiting from sturdy inflows from rich prospects amid world financial uncertainty due to the city-state's standing as monetary protected haven.
OCBC's earnings efficiency follows these of its friends, with DBS (DBSM.SI) reporting final week a 43% soar in first-quarter web revenue that was additionally a document. Smaller United Abroad Financial institution (UOBH.SI) posted final month a 74% surge in core web revenue.
OCBC's shares rose 0.7% on Wednesday in a flat broader market (.STI).
Jefferies Analysis mentioned OCBC's revised web curiosity margin steerage was broadly in keeping with expectations and the dealer anticipated “comparatively muted share worth response”.
WEALTH MANAGEMENT
“Our mortgage portfolio was resilient and our wealth administration enterprise continued to draw web new cash inflows,” OCBC Group Chief Government Officer Helen Wong mentioned in an announcement.
The lender mentioned it was beginning to see progress in cross border flows after China's reopening, however it was additionally intently monitoring volatility in developed markets and geopolitical tensions.
“Wanting forward, we're watchful of tighter monetary circumstances which can gradual world financial progress and elevate total dangers,” Wong mentioned.
OCBC, which counts Singapore, better China and Malaysia amongst its key markets, mentioned web curiosity revenue rose 56% to S$2.34 billion within the first quarter from a 12 months earlier.
Return on fairness rose to 14.7% within the first quarter from 10.6% in the identical interval of 2022.
In the meantime, Wong mentioned OCBC's purchasers' publicity to Further Tier 1 (AT1) bonds of Credit score Suisse was “very insignificant”.
Buyers have been rocked by a Swiss authorities' resolution to wipe out $17 billion of Credit score Suisse's AT1 debt underneath its takeover by UBS Group, in a transfer that hit AT1 holders more durable than shareholders.
($1 = 1.3245 Singapore {dollars})
Reporting by Yantoultra Ngui; Modifying by Tom Hogue
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