Reports

Singapore’s OCBC Logged Sharp Rise In Net Profit After Tax In 2012

Chrissy Coleman Asia Correspondent 18 February 2013

Singapore’s OCBC Logged Sharp Rise In Net Profit After Tax In 2012

Overseas-Chinese Banking Corporation, the parent of Bank of Singapore, logged a 73 per rise in net profit, after tax, in 2012 compared with the previous 12 months, with wealth management and loan revenues helping drive the results.

Overseas-Chinese Banking Corporation, the parent of Bank of Singapore, logged a 73 per rise in net profit, after tax, in 2012 compared with the previous 12 months, with wealth management and loan revenues helping drive the results.

OCBC as a group reported a net profit after tax of S$3.99 billion ($3.23 billion) for the financial year ended 31 December 2012, from S$2.31 billion in 2011.

Core net profit after tax, which excludes gains from the divestment of non-core assets, grew 24 per cent over the year to a record S$2.83 billion. The results were driven by a combination of record net interest income, fee income and net trading income, as well as significantly higher contributions from Great Eastern Holdings, OCBC said in a statement late last week. 

Fees and commission income increased by 5 per cent to S$1.20 billion, a new record for the bank, from S$1.14 billion in 2011.These figures were driven by the sustained growth of the group’s wealth management franchise, including Bank of Singapore, and supported by higher loan-related and trade-related fees, OCBC said.

Fees, commissions

Fees and commissions in wealth management rose 28 per cent year-on-year to S$322 million in 2012, the statement said.

The group’s revenue from various wealth management activities (comprising insurance, private banking, asset management, stockbroking and sales of other wealth management products), grew to S$1.84 billion for 2012, a 43 per cent increase from S$1.29 billion a year ago. As a share of total revenue, wealth management contributed 28 per cent, compared with 23 per cent in 2011.

“OCBC’s private banking business maintained its strong growth momentum, with assets under management increasing 35 per cent to $43 billion (S$52 billion) as at 31 December 2012, up from $32 billion (S$41 billion) the previous year,” the bank said.

Operating profit (after allowances) for the firm’s consumer and private banking arms increased 20 per cent to S$589 million from S$489 million in 2011, driven by higher net interest income and fee income, which offset an increase in expenses and allowances. For 4Q12, operating profit rose 37 per cent year-on-year to S$149 million from S$109 million, led by broad-based revenue growth which more than compensated for an increase in expenses, OCBC said.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes