$OCBC Bank (O39.SG)$ has announced a 9% rise in its third-quarter net profit, reaching S$1.97 billion (US$1.49 billion), surpassing market expectations. The figure is an increase from S$1.81 billion in the same period last year, exceeding the mean estimate of S$1.91 billion from analysts polled by LSEG.

The strong performance has positioned Southeast Asia's second-largest lender to meet its 2024 targets. For the full year, OCBC expects its net interest margin to be around 2.20%, with low single-digit loan growth, credit costs in the range of 20 basis points, and a return on equity above 14%.

Group CEO Helen Wong commented, "Looking ahead, we will continue to proactively manage our balance sheet to prepare for a lower interest rate environment." She also added, "We are closely monitoring potential volatilities arising from uncertain geopolitical conditions."

OCBC's results follow a strong earnings season for Singapore's banking sector, with both DBS and United Overseas Bank also posting record quarterly earnings, driven by higher fee income and increased markets trading income. The robust performance across these banks has been aided by higher global interest rates and strong inflows of wealth attracted to Singapore's political stability.

The growth in OCBC's profits was also supported by increased wealth management activity, which lifted fee and trading income, alongside higher insurance income and lower allowances. However, the bank's net interest margin slightly declined to 2.18% for the quarter, down from 2.27% a year earlier, a trend also seen by its local peers, DBS and UOB.

OCBC's return on equity increased marginally to 14.1% in the third quarter, compared to 14.0% in the same period last year.

Reuters