OCBC Profit Rises on Fee Gains
While net interest income at OCBC fell in the first quarter, wealth-led gains and higher fees lifted total income.
Oversea-Chinese Banking Corporation Limited (OCBC) reported a 5% rise in first-quarter net profit as strong wealth management and insurance performance helped offset pressure from lower interest rates.
The Singapore-based bank posted net profit of S$1.97 billion for the three months ended March 31, up from S$1.88 billion a year earlier and 13% higher than the previous quarter. Total income climbed to a record high, rising 5% year-on-year to S$3.83 billion.
The lender said the results were driven by record non-interest income, which surged 23% to S$1.61 billion and accounted for more than 40% of total income. Growth was broad-based across fees, trading and insurance operations.
Wealth management as key contributor
Wealth management emerged as a key contributor, with related income increasing 11% to S$1.48 billion. Banking wealth management assets under management rose 12% from a year earlier to S$342 billion, supported by net new money inflows across all customer segments.
Net fee income climbed 24% to S$675 million, boosted by a 34% jump in wealth management fees as customer investment activity increased across private banking, premier banking and other wealth channels. Investment banking, trade-related and loan-related fees also improved.
Trading income rose 10% to S$434 million, driven by record customer flow income amid sustained wealth-related activity and stronger hedging demand from corporate clients.
Insurance income increased 34% to S$409 million, supported by improved sales performance and a release of reserves. Total weighted new sales grew 16%, while new business embedded value rose 31%.
Pressure on Lending Margins
Despite the strong revenue growth, OCBC continued to face pressure on its lending margins as interest rates declined. Net interest income fell 5% to S$2.22 billion, while net interest margin narrowed to 1.76% from 2.04% a year earlier.
Operating expenses increased 6% to S$1.50 billion due to higher staff costs and continued investment in technology infrastructure. However, the bank maintained a cost-to-income ratio below 40% at 39.3%.
Asset quality remained stable, with the non-performing loan ratio unchanged at 0.9%. The bank said it took a prudent approach to provisioning amid increased macroeconomic uncertainty, setting aside S$191 million in allowances for non-impaired assets. Total allowance coverage for non-performing assets improved to 163%.
Loans and deposits both expanded during the quarter, reflecting continued momentum in the bank’s strategic growth areas.
On a quarter-on-quarter basis, OCBC’s first-quarter performance was also supported by lower operating expenses, which declined 4% from the previous quarter after elevated technology-related costs in late 2025.
Annualised earnings per share stood at S$1.76, while return on equity was 13.0%.
The bank said its strong capital, funding and liquidity position leaves it well placed to pursue growth opportunities while navigating ongoing economic uncertainties.
