SINGAPORE: Singapore lenders Oversea-Chinese Banking Corporation and United Overseas Bank beat quarterly profit estimates on Wednesday, driven by recovery in their core markets and lower provisions for loan losses.
Prospects in Singapore’s banking sector have improved as a rebounding economy has boosted demand for mortgages and loans, while booming markets have bolstered the wealth management business, report agencies.
OCBC, Singapore’s second-biggest bank, reported net profit of S$1.16 billion in April-June versus S$730 million a year earlier. That compared with the S$1.12 billion average of four analyst estimates, Refinitiv data showed. But profit slumped 23 per cent from the first quarter.
“While the long-term trajectory of global economic recovery is positive, we remain watchful on the current operating environment in view of the recent virus resurgence and heightened safety measures in our key markets,” Chief Executive Helen Wong, who took charge in April, said in a statement.
The bank’s allowances for loan losses fell 69 per cent in the second quarter from a year earlier.
Quarterly net profit at smaller peer, United Overseas Bank, came in at S$1 billion, beating the S$948 million average of three analyst estimates, according to Refinitiv data. Profit rose 43 per cent from a year earlier as impairment charges more than halved, but profit was flat from the first quarter.
Both banks increased dividend payouts. Last week, Singapore’s central bank removed caps on dividends paid by banks, citing an improving global economic outlook.