OCBC Boosts Credit Allowance for Macro Risks
Singapore-based OCBC allocated a higher credit allowance in the first quarter of the year in anticipation of greater uncertainty in the economic outlook.
OCBC’s net profit fell 5 percent year-on-year to S$1.9 billion ($1.5 billion) in the first quarter of 2025, according to the bank’s financial results.
Total income was flat, increasing 1 percent to S$3.7 billion as lower net interest income was offset by higher non-interest income underpinned by stronger fees, trading and insurance income. Operating expenses rose 5 percent to S$1.4 billion, mainly driven by higher staff costs and continued investments in technology.
Trade Policy Shifts, Geopolitical Risks
In addition, the bank boosted its allowances for loans and other assets by 25 percent to S$212 million. This consists of S$94 million for impaired assets and S$118 million from changes in credit risk profiles and management overlays set aside for heightened uncertainties in the macroeconomic environment.
«We have prudently set aside credit allowances to buffer our portfolio on a forward-looking basis, in view of the challenging economic outlook,» commented OCBC CEO Helen Wong.
«Looking ahead, the heightened uncertainties brought about by the shifts in trade policies and geopolitical risks are expected to have a dampening effect on overall economic growth in the region. As the situation continues to unfold, we remain watchful and vigilant in managing risks. With our strong balance sheet and capital position, we have the ability to navigate complexities while supporting our customers throughout our network.»
