Oversea-Chinese Banking Corp ( OCBC ), the second-largest bank in Singapore, maintained 2025 guidance and set aside credit allowances, citing a challenging economic outlook after posting a 5 % decline in first-quarter net profit that exceeded expectations on Friday ( May 9 ).
According to OCBC’s Group Chief Executive Helen Wong,” Looking back, the heightened difficulties brought about by the shifts in business policies and political risks are anticipated to have a softening effect on overall financial growth in the region.”
In light of the challenging economic outlook, she continued,” We have wisely set aside funds accommodations to buffer our investment on a forward-looking foundation.”
According to Wong’s presentation slides that came with the income results, OCBC maintained all of its 2025 fiscal targets, including net interest margins in the selection of 2 percent and funds costs in the 20 to 25 basis points.
OCBC’s benefits rounded up Singapore businesses ‘ strong first-quarter earnings season, with United Overseas Bank posting secure but less than expected results and OCBC and DBS Group beating projections.
Following major international lenders like HSBC and Standard Chartered, which have highlighted the risk to economic growth, are all three identified risks that have been raised by the influence of US President Donald Trump’s taxes.
OCBC, which is also Southeast Asia’s second-largest provider, reported a decline in January-March net profit from a history S$ 1.98 billion ( US$ 1.45 billion ), primarily due to lower net interest earnings. OCBC experienced its first quarterly net income decline since the first quarter of 2022.
However, the outcome far exceeded the indicate S$ 1.87 billion that two analysts polled by LSEG had predicted.
OCBC reported a 25 % increase in overall accommodations in the first quarter, reaching S$ 212 million, making up the top three areas for the company.
The provider attributed it primarily to allowances for S$ 118 million in non-impaired assets created by changes to funds risk profiles and management overlays set off for heightened uncertainties in the economic environment.
Return on equity decreased from 14.7 % to 13 % in the first quarter of the same period in 2024.
Important success indicator, net interest ratio, decreased to 2.04 % in the fourth from 2.27 percent in the previous quarter.