OCBC profit up 11% to $4.49b in FY18

Net interest income rose 9% to $5.81b.

OCBC capped the volatile year on strong footing as net profit rose 11% YoY to $4.49b in FY18 from $4.05b. In Q4, however, earnings fell 11% to $926m as profits from Great Eastern Holdings (GEH) fell.

Net interest income rose 9% YoY to $5.89b amidst higher loan growth and net interest margin (NIM). NIMs edged up 5bps to 1.80% amidst wider margins in Singapore, Malaysia and Greater China. Return on equity also rose to 11.5% from 11%. Loan growth also hit 9% YoY to $258b across all key markets with loans to Singapore rising 8%.

However, non-interest income fell 7% YoY to $3.81b amidst a $406m decline in net gains from investment securities and other income. Wealth management income also fell amidst lower insurance contributions.

Also read: Banks in Singapore fall from grace as lending and non-interest income take blow

Expenses rose 4% YoY to $4.21b in FY18. This pushed up the cost-income ratio as trading income fell amidst unrealised MTM losses from the investment portfolio of GEH. The bank also maintained sound asset quality as non-performing loan (NPL) ratio held steady at 1.5% in FY18 and total credit costs at 11bps. CET1 CAR also improved to 14% YoY from 13.1%.

The bank proposed a final tax-exempt dividend of 23 cents per share, bringing the total dividend to 43 cents from 37 cents in the previous year.