Singapore banks report strong profit growth, loan losses decline By Reuters

© Reuters. Folks cross by an OCBC financial institution department in Singapore November 4, 2020. REUTERS/Edgar Su/Recordsdata

By Anshuman Daga

SINGAPORE (Reuters) – Singapore lenders Oversea-Chinese language Banking Corp and United Abroad Financial institution (OTC:) beat quarterly revenue estimates on Wednesday, pushed by restoration of their core markets and decrease provisions for mortgage losses.

Prospects in Singapore’s banking sector have improved as a rebounding economic system has boosted demand for mortgages and loans, whereas booming markets have bolstered the wealth administration enterprise.

On the identical time, benign credit score prices point out that banks have been in a position to handle asset high quality within the face of the pandemic affecting companies.

OCBC, Singapore’s second-biggest financial institution, reported internet revenue of S$1.16 billion ($858.75 million) in April-June versus S$730 million a yr earlier. That in contrast with the S$1.12 billion common of 4 analyst estimates, Refinitiv information confirmed. However revenue slumped 23% from the primary quarter.

“Whereas the long-term trajectory of world financial restoration is optimistic, we stay watchful on the present working setting in view of the latest virus resurgence and heightened security measures in our key markets,” Chief Govt Helen Wong, who took cost in April, mentioned in an announcement.

The financial institution’s allowances for mortgage losses fell 69% within the second quarter from a yr earlier.

Quarterly internet revenue at smaller peer, United Abroad Financial institution, got here in at S$1 billion, beating the S$948 million common of three analyst estimates, in keeping with Refinitiv information. Revenue rose 43% from a yr earlier as impairment costs greater than halved, however revenue was flat from the primary quarter.

Each banks elevated dividend payouts. Final week, Singapore’s central financial institution eliminated caps on dividends paid by banks, citing an enhancing international financial outlook.

Southeast Asia’s largest financial institution DBS Group (OTC:) Holdings studies outcomes on Thursday.

Low rates of interest have crimped banks’ internet curiosity margins – a key gauge of profitability – however this has been cushioned by an increase in price earnings, together with wealth administration charges.

($1 = 1.3508 Singapore {dollars})

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