OCBC

[winston]

UPDATE 1-OCBC Q4 profit down 30 pct as bad debt spikes

* Q4 net S$301 mln vs expectations of S$381 mln * Bad debt charges rise to S$243 mln vs S$13 mln yr ago * says to tightly manage expenses, recession to last all year (adds detail, quotes) By Saeed Azhar

SINGAPORE, Feb 18 (Reuters) - Singapore's Oversea-Chinese Banking Corp posted a bigger-than-expected 30 percent drop in quarterly profit as a slumping economy boosted bad debt charges.

The smallest of three Singapore banks warned on Wednesday that 2009 will be challenging as a recession is expected to last throughout the year.

OCBC, like its Asian peers, largely escaped the credit storm that badly damaged Western banks, but is now threatened by rising bad loans due to an economic downturn in Asia and lower fees from crippled capital markets.

"Clearly asset quality is deteriorating and we saw that in the big jump in provisions," said David Lum, a banking analyst at Daiwa Institute of Research in Singapore. "That is something, like all other banks, they will have to tackle." OCBC CEO David Conner said in a statement that the bank plans to manage its expenses more tightly and its risk management will be on high alert given the uncertain outlook.

Net profit for October-December fell to S$301 million ($197 million) from S$428 million a year ago. Analysts had, on average, forecast a net profit of S$381 million, according to five forecasts compiled by Reuters.

For a graphic of the result, please click: https://customers.reuters.com/d/graphic ... CQ0209.gif BAD DEBT Bad debt charges surged to S$243 million in the fourth-quarter from S$13 million a year earlier, led by bad loans.

DBS Group , Singapore's biggest bank, reported last week a bigger-than-expected 40 percent drop in October-December profit, its worst results in three years, also hurt by an increase in bad debt provisions.

OCBC's net interest income rose 28 percent from a year ago to S$783 million in the quarter, helped by 12 percent growth in loans and higher interest rate margins.

But non-interest income, which includes commissions and fees on investment products such as mutual funds, dropped 44 percent to S$259 million, the bank said.

OCBC also saw a drop in contributions from its insurance arm Great Eastern , which reported a 47 percent drop in net profit in the fourth quarter. OCBC owns 87 percent of Great Eastern.

OCBC shares were down 0.4 percent at S$4.88 by midsession.

The shares are down around 2 percent this year after dropping 40 percent in 2008.

United Overseas Bank has fallen about 16 percent this year and DBS is down 4.5 percent. The benchmark Straits Times Index <.FTSTI> has fallen 7 percent so far this year.

Source: Reuters

[millionairemind]

February 18, 2009, 5.51 pm (Singapore time)

OCBC CEO says layoffs will be last resort

SINGAPORE - Singapore's Oversea-Chinese Banking Corp will consider layoffs only as last resort, chief executive officer David Conner said on Wednesday.
CEO David Conner said no jobs cut have been planned currently at OCBC.

No jobs cut have been planned currently, he said at a media briefing.

He had earlier said in a statement that OCBC, which posted a bigger-than-expected 30 per cent drop in quarterly net profit, plans to manage its expenses more tightly.

The smallest of three Singapore banks warned that 2009 will be challenging due to the global economic slowdown and recession in Singapore that is expected to last throughout the year.

Source: REUTERS

[winston]

Singapore's OCBC says Q1 profit slides 12 pct

SINGAPORE, May 6 (Reuters) - Oversea-Chinese Banking Corp , the smallest of Singapore's three listed banks, said its first-quarter profit fell 12 percent due to writedowns on bad debts, but the profit drop was smaller than analysts had expected.

Jan-March net profit fell to S$545 million ($370 million) from S$622 million a year ago, it said on Wednesday.

Analysts had predicted a net profit of S$293 million, according to the average of five forecasts compiled by Reuters, against a comparable figure of S$460 million a year ago that excluded exceptional items.

Bad debts rose to S$197 million from a writeback of S$8 million in the year-ago period.


Source: Reuters

[winston]

OVERSEA-CHINESE BANKING CORP - Nomura Singapore Limited upgraded the rating of Oversea-Chinese Banking Corp to "buy" from "neutral", citing robust first quarter results and strong balance sheet ratios.

Nomura also raised the bank's price target to S$8.10 from S$6.88.


Source: Reuters

[winston]

OCBC to take $151 mln Q3 hit on insurer losses

SINGAPORE, July 31 (Reuters) - Singapore's Oversea-Chinese Banking Corp (OCBC.SI) said it will take a hit of S$218 million ($151 million) in the third quarter after its insurance unit announced it will redeem its policy holders' credit derivatives at a loss.

Great Eastern (GELA.SI) is making a one-time redemption offer to its policy holders on products with underlying investments in collateralised debt obligations (CDOs), badly hit by the credit crisis. That will result in a loss of S$250 million to the insurer in the third quarter, the statement said late on Friday.

OCBC, the smallest of Singapore's three listed banks, said it does not expect the S$218 million charge to affect its continuing profitability, business fundamentals or capital position.

OCBC will announce its second quarter results on Aug 3.


Source: Reuters

[millionairemind]

August 3, 2009, 1.02 pm (Singapore time)

Trading gains again?? hmm.... to repeat this kind of gains, perhaps need to engineer a crash in Q3??

OCBC Q2 net up 10%, signals banking recovery

SINGAPORE - OCBC Bank, Singapore's smallest listed bank, signalled the worst may be over for the banking sector as it posted an unexpected 10 per cent rise in quarterly profit fuelled by strong trading gains and loan margins.

Shares of Oversea-Chinese Banking Corp fell ahead of the result after it shocked investors with a late Friday announcement that it will take a one-time charge in the third quarter linked to its insurance arm that is redeeming policy holders burnt by risky debt products.

But OCBC CEO David Conner said on Monday there is growing consensus the worst is over for the global economy and financial markets, although the pace of recovery remains uncertain.

For the last quarter, OCBC's result was broadly in line with several Asian banks, which have escaped a sharp deterioration in credit quality and are seeing improving prospects for loan growth as the region crawls out of an economic slump.

'It signals that the revenue is coming back from the non-interest side and things are stable as far as non-performing loans are concerned,' said Brian Hunsaker, banking analyst at Fox-Pitt Kelton in Hong Kong. 'Certainly you can expect the same trend for the other banks.'

April-June net profit rose to $466 million (US$325 million) from $425 million a year ago, OCBC said.

Analysts had predicted a net profit of $356 million, according to the average of six forecasts compiled by Reuters.

OCBC kicked off the earnings season for Singapore banks.

Second-ranked United Overseas Bank will announce earnings on Wednesday and DBS, Southeast Asia's biggest bank, on Friday.

'We are more bullish compared to a month ago as more signs have emerged in the past month to fuel the market's confidence on the outlook ahead,' Alistair Scarff, research analyst at Bank of America-Merrill Lynch, said in a note ahead of the earnings.

'Recent second quarter GDP and property data reaffirm that the economy is already past the trough. Meanwhile, our own channel checks suggest that asset quality is holding up better than we thought.'

Bad debt
Bad debt charges rose to $104 million in the second-quarter from $55 million a year earlier, but below $197 million recorded in the first quarter.

OCBC's net interest income rose 5 per cent from a year ago to $710 million in the last quarter, as interest rate margins widened by 5 basis points to 2.29 per cent.

But non-interest income, which includes commissions and fees on investment products such as mutual funds, surged 37 per cent.

OCBC saw an almost four times higher contribution from its insurance arm Great Eastern of $125 million from $33 million a year earlier, while trading income almost tripled.

OCBC shares were down 1.4 per cent at the midday break, after slumping by as much as 2.7 per cent on news that it will take a $218 million hit in its third quarter linked to Great Eastern.

Shares of OCBC are up 54 per cent so far this year, underperforming DBS's 65 per cent surge, but outperforming UOB's 35 per cent rise.

Singapore's benchmark Straits Times Index is up by half so far this year.

Source; REUTERS

[millionairemind]

Been watching market's reaction to OCBC's earnings... namely the banking groups, DBS/UOB/OCBC price vol action.

Nothing!!!

Seems to have all priced in the good news...

[kennynah]

bcos, u bot them all up earlier than this OCBC's earnings...

[winston]

OVERSEA-CHINESE BANKING CORP - RBS also downgraded Oversea-Chinese Banking Corp to "sell" from "hold" and lowered its target price for the stock to S$6.80 from S$8.00, citing a cut in earnings, the stock's unappealing valuation and its belief that the bank's asset quality may deteriorate.

Source: Reuters

[winston]

Downgrade OCBC from Outperform to Neutral

We downgrade OCBC from Outperform to Neutral, even as we roll forward our target price from S$8.11 (1.65x CY09 P/BV) to S$8.97 (1.67x CY10 P/BV). We think that OCBC’s margins faces the most pressure as its loan mix shift from building & construction loans to mortgage.

OCBC had made good-margin loans to construction corporates/SME earlier but these stands to be repaid as residential projects receive temporary occupation permits. A greater mix of lower-margin mortgage loans will then weigh in, akin to industry trends.

Source: CIMB