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30-04-2015, 12:10 PM
An honorable member of the Coffee Shop Has Just Posted the Following:
Media Release
OCBC Group Reports Record First Quarter 2015
Net Profit after Tax of S$993 million
Strong earnings growth across the Group’s key markets
lifted net profit by 11% from a year ago and 26% from the previous quarter
Singapore, 30 April 2015 - Oversea-Chinese Banking Corporation Limited (“OCBC Bank”) reported a
net profit after tax of S$993 million for the first quarter of 2015 (“1Q15”), an increase of 11% from
S$899 million a year ago (“1Q14”) and 26% higher than S$791 million the previous quarter (“4Q14”).
The 1Q15 results were underpinned by strong growth in the Group’s customer-related businesses
across a more diversified earnings base, with all its key markets of Singapore, Malaysia, Indonesia
and Greater China delivering positive profit growth. The first quarter results included the consolidation
of OCBC Wing Hang Bank, which became a subsidiary in the third quarter of 2014.
Net interest income increased 15% to S$1.25 billion from S$1.09 billion a year ago, mainly from robust
asset growth. Customer loans rose 20% from a year ago to S$210 billion, with broad-based growth
across the Group’s key customer segments and markets. The Group continued to strengthen its
funding position and grew customer deposits by 26% to S$250 billion from S$199 billion in 1Q14. As
a result, the Group’s loans-to-deposits ratio (“LDR”) was 83.0% as compared with 87.0% a year ago.
Despite improving consumer loan spreads in Singapore, the lower LDR and weaker income from
money market gapping activities contributed to an eight basis points decline in the Group’s net interest
margin from 1.70% to 1.62%. Excluding the consolidation effect of OCBC Wing Hang, customer loans
and deposits grew 4% and 8% year-on-year, respectively.
Non-interest income rose 7% to S$859 million from S$800 million a year ago. Fee and commission
income increased 12% to S$395 million from strong growth in wealth management, brokerage, fund
management and trade fees. Net trading income, primarily treasury-related income from customer
flows, grew 25% to S$123 million from S$99 million in 1Q14. Profit from life assurance grew 9% yearon-year
to S$199 million, lifted by higher operating profit from Great Eastern Holdings (“GEH”) and
mark-to-market gains in its Non-participating Fund. GEH’s new business embedded value margins
rose to 40.7% from 38.2% a year ago, driven by improved channel and product mix.
The Group’s share of results of associates and joint ventures rose to S$89 million from S$17 million in
the previous year, largely attributable to Bank of Ningbo, which became a 20%-owned associated
company of the Group on 30 September 2014.
The Group’s overall income from wealth management activities (comprising income from insurance,
private banking, asset management, stockbroking and other wealth management products) grew from
S$572 million a year ago to a new quarterly high of S$583 million. As a share of the Group’s total
income, wealth management activities contributed 28% as compared with 30% in 1Q14. OCBC’s
private banking business continued to expand, with assets under management increasing 4% to
US$51 billion (S$70 billion) as at 31 March 2015, up from US$49 billion (S$62 billion) the previous
year.
Operating expenses for the quarter rose 24% to S$873 million from S$706 million a year ago, after
consolidating OCBC Wing Hang. The Group’s cost-to-income ratio was 41.4% for the quarter.
Excluding OCBC Wing Hang, operating expenses increased 9%, largely from higher staff costs and a
3% rise in headcount to support the expansion of the Group’s franchise in its key markets.
Allowances for loans and other assets were S$64 million, compared with S$41 million a year ago,
partly attributable to the consolidation of OCBC Wing Hang. The Group’s asset quality remained
sound, with the non-performing loans (“NPL”) ratio at 0.6%, an improvement from 0.7% a year ago.
Annualised return on equity for 1Q15 of 13.2% was higher than 10.6% of the previous quarter, while
annualised earnings per share was 99.7 cents, a 29% increase over 77.4 cents in 4Q14. Both ratios
were however lower as compared to a year ago as a result of the dilutive impact arising from the rights
issue in the third quarter of 2014.
Against the previous quarter, the Group’s net profit after tax was 26% higher. This was largely
attributable to higher fee income, net trading income and profit from life assurance. On a quarter-onquarter
basis, operating expenses were 5% lower.
Allowances and Asset Quality
Net allowances for loans and other assets were S$64 million as compared with S$41 million a year
ago, and were lower than S$154 million the previous quarter. Specific allowances for loans, net of
recoveries and write-backs were S$45 million for the quarter and represented an annualised 9 basis
points of loans.
The Group’s asset quality and coverage ratios remained sound. The NPL ratio of 0.6% in 1Q15 was
lower than 0.7% from a year ago. Total cumulative allowances represented 166% of total nonperforming
assets (“NPAs”) and 559% of unsecured NPAs, a higher coverage ratio as compared with
145% and 396%, respectively a year ago. The higher coverage was also partly from the consolidation of OCBC Wing Hang.
Funding and Capital Position
The Group maintained a strong funding and capital position. Customer deposits increased 26% (8%,
excluding the OCBC Wing Hang) to S$250 billion, while the ratio of current and savings accounts to
total customer deposits rose quarter-on-quarter to 45.5%. As at 31 March 2015, the Singapore dollar
and all-currency liquidity coverage ratios for the Group (excluding OCBC Wing Hang) were 273% and
117% respectively, higher as compared to the respective regulatory ratios of 100% and 60%. OCBC
Wing Hang’s liquidity coverage ratios will be incorporated into the overall Group position in due
course.
As at 31 March 2015, the Common Equity Tier 1 capital adequacy ratio (“CAR”) was 13.5% and Tier 1
CAR and Total CAR were 13.5% and 15.5% respectively. Based on Basel III transitional
arrangements, these ratios were in excess of the respective regulatory minima of 6.5%, 8% and 10%.
The Group’s leverage ratio of 7.2% was well above the 3% minimum requirement as guided by the
Basel Committee.
CEO’s Comments
Commenting on the Group’s performance and outlook, CEO Samuel Tsien said:
“We are pleased with our strong start to 2015. The solid set of results demonstrates the increased
diversity of our earnings base, and the progress that we are making in deepening our presence in our
key markets. We will further invest in our businesses and leverage synergies across the expanded
OCBC franchise to better serve our customers. Supported by our strong capital and funding position,
we will continue to pursue a disciplined and prudent strategy of sustainable growth in our key markets.”
http://infopub.sgx.com/FileOpen/OCBC...&FileID=347258 (http://infopub.sgx.com/FileOpen/OCBC-1Q15_Financial.Results.ashx?App=Announcement&FileID=347258)
Click here to view the whole thread at www.sammyboy.com (http://singsupplies.com/showthread.php?205736-OCBC-Group-Reports-Record-First-Quarter-2015-Net-Profit-after-Tax-of-S-993-million&goto=newpost).
Media Release
OCBC Group Reports Record First Quarter 2015
Net Profit after Tax of S$993 million
Strong earnings growth across the Group’s key markets
lifted net profit by 11% from a year ago and 26% from the previous quarter
Singapore, 30 April 2015 - Oversea-Chinese Banking Corporation Limited (“OCBC Bank”) reported a
net profit after tax of S$993 million for the first quarter of 2015 (“1Q15”), an increase of 11% from
S$899 million a year ago (“1Q14”) and 26% higher than S$791 million the previous quarter (“4Q14”).
The 1Q15 results were underpinned by strong growth in the Group’s customer-related businesses
across a more diversified earnings base, with all its key markets of Singapore, Malaysia, Indonesia
and Greater China delivering positive profit growth. The first quarter results included the consolidation
of OCBC Wing Hang Bank, which became a subsidiary in the third quarter of 2014.
Net interest income increased 15% to S$1.25 billion from S$1.09 billion a year ago, mainly from robust
asset growth. Customer loans rose 20% from a year ago to S$210 billion, with broad-based growth
across the Group’s key customer segments and markets. The Group continued to strengthen its
funding position and grew customer deposits by 26% to S$250 billion from S$199 billion in 1Q14. As
a result, the Group’s loans-to-deposits ratio (“LDR”) was 83.0% as compared with 87.0% a year ago.
Despite improving consumer loan spreads in Singapore, the lower LDR and weaker income from
money market gapping activities contributed to an eight basis points decline in the Group’s net interest
margin from 1.70% to 1.62%. Excluding the consolidation effect of OCBC Wing Hang, customer loans
and deposits grew 4% and 8% year-on-year, respectively.
Non-interest income rose 7% to S$859 million from S$800 million a year ago. Fee and commission
income increased 12% to S$395 million from strong growth in wealth management, brokerage, fund
management and trade fees. Net trading income, primarily treasury-related income from customer
flows, grew 25% to S$123 million from S$99 million in 1Q14. Profit from life assurance grew 9% yearon-year
to S$199 million, lifted by higher operating profit from Great Eastern Holdings (“GEH”) and
mark-to-market gains in its Non-participating Fund. GEH’s new business embedded value margins
rose to 40.7% from 38.2% a year ago, driven by improved channel and product mix.
The Group’s share of results of associates and joint ventures rose to S$89 million from S$17 million in
the previous year, largely attributable to Bank of Ningbo, which became a 20%-owned associated
company of the Group on 30 September 2014.
The Group’s overall income from wealth management activities (comprising income from insurance,
private banking, asset management, stockbroking and other wealth management products) grew from
S$572 million a year ago to a new quarterly high of S$583 million. As a share of the Group’s total
income, wealth management activities contributed 28% as compared with 30% in 1Q14. OCBC’s
private banking business continued to expand, with assets under management increasing 4% to
US$51 billion (S$70 billion) as at 31 March 2015, up from US$49 billion (S$62 billion) the previous
year.
Operating expenses for the quarter rose 24% to S$873 million from S$706 million a year ago, after
consolidating OCBC Wing Hang. The Group’s cost-to-income ratio was 41.4% for the quarter.
Excluding OCBC Wing Hang, operating expenses increased 9%, largely from higher staff costs and a
3% rise in headcount to support the expansion of the Group’s franchise in its key markets.
Allowances for loans and other assets were S$64 million, compared with S$41 million a year ago,
partly attributable to the consolidation of OCBC Wing Hang. The Group’s asset quality remained
sound, with the non-performing loans (“NPL”) ratio at 0.6%, an improvement from 0.7% a year ago.
Annualised return on equity for 1Q15 of 13.2% was higher than 10.6% of the previous quarter, while
annualised earnings per share was 99.7 cents, a 29% increase over 77.4 cents in 4Q14. Both ratios
were however lower as compared to a year ago as a result of the dilutive impact arising from the rights
issue in the third quarter of 2014.
Against the previous quarter, the Group’s net profit after tax was 26% higher. This was largely
attributable to higher fee income, net trading income and profit from life assurance. On a quarter-onquarter
basis, operating expenses were 5% lower.
Allowances and Asset Quality
Net allowances for loans and other assets were S$64 million as compared with S$41 million a year
ago, and were lower than S$154 million the previous quarter. Specific allowances for loans, net of
recoveries and write-backs were S$45 million for the quarter and represented an annualised 9 basis
points of loans.
The Group’s asset quality and coverage ratios remained sound. The NPL ratio of 0.6% in 1Q15 was
lower than 0.7% from a year ago. Total cumulative allowances represented 166% of total nonperforming
assets (“NPAs”) and 559% of unsecured NPAs, a higher coverage ratio as compared with
145% and 396%, respectively a year ago. The higher coverage was also partly from the consolidation of OCBC Wing Hang.
Funding and Capital Position
The Group maintained a strong funding and capital position. Customer deposits increased 26% (8%,
excluding the OCBC Wing Hang) to S$250 billion, while the ratio of current and savings accounts to
total customer deposits rose quarter-on-quarter to 45.5%. As at 31 March 2015, the Singapore dollar
and all-currency liquidity coverage ratios for the Group (excluding OCBC Wing Hang) were 273% and
117% respectively, higher as compared to the respective regulatory ratios of 100% and 60%. OCBC
Wing Hang’s liquidity coverage ratios will be incorporated into the overall Group position in due
course.
As at 31 March 2015, the Common Equity Tier 1 capital adequacy ratio (“CAR”) was 13.5% and Tier 1
CAR and Total CAR were 13.5% and 15.5% respectively. Based on Basel III transitional
arrangements, these ratios were in excess of the respective regulatory minima of 6.5%, 8% and 10%.
The Group’s leverage ratio of 7.2% was well above the 3% minimum requirement as guided by the
Basel Committee.
CEO’s Comments
Commenting on the Group’s performance and outlook, CEO Samuel Tsien said:
“We are pleased with our strong start to 2015. The solid set of results demonstrates the increased
diversity of our earnings base, and the progress that we are making in deepening our presence in our
key markets. We will further invest in our businesses and leverage synergies across the expanded
OCBC franchise to better serve our customers. Supported by our strong capital and funding position,
we will continue to pursue a disciplined and prudent strategy of sustainable growth in our key markets.”
http://infopub.sgx.com/FileOpen/OCBC...&FileID=347258 (http://infopub.sgx.com/FileOpen/OCBC-1Q15_Financial.Results.ashx?App=Announcement&FileID=347258)
Click here to view the whole thread at www.sammyboy.com (http://singsupplies.com/showthread.php?205736-OCBC-Group-Reports-Record-First-Quarter-2015-Net-Profit-after-Tax-of-S-993-million&goto=newpost).