OCBC’s profit in the first quarter of 2021 exceeds double expectations of a record $1.5 billion.

  • Ace Global
  • December 30, 2021

OCBC successfully went beyond market forecasts as its earnings for Q1 2021 more than doubled Q1 2020 performances. Constituting to such an achievement is OCBC’s strive towards its insurance and wealth businesses while reducing allowances for low credit-rated loans.

As the second-largest bank from Singapore, OCBC posted a net income of $1.5 billion in the first quarter of 2021. Non-interest revenue rose 70% to $1.47 billion. In contrast, net interest income was $1.44 billion, 11% lower than $1.63 billion last year, which resulted from the 20 basis points compression in interest margin in the sustained low-interest-rate environment.

To be more precise, OCBC’s net interest margin stood at 1.56 per cent, lower than the 1.76 per cent for the first quarter of 2020. Credit costs also fell to 22 basis points from 86 a year ago as the economic outlook improved.

Ms Helen Wong, CEO of OCBC, who provided the OCBC results, said the earnings were exceptional due to conducive market conditions. OCBC will see a sharp recovery in world production and trade in 2021, led by the recovery in economic activity in the US amid monetary stimulus and budget spending. Economic recovery is also expected to be strong in the bank’s core markets of Singapore, Malaysia, Indonesia and Greater China. To assist with recovery, the bank will focus on deepening its network to support its clients and capitalize on signs of sectorial recovery. In addition, OCBC’s competitors, DBS and UOB, reported robust results for the first quarter.

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