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Singapore banks report strong profit growth, loan losses decline

Singapore lenders Oversea-Chinese language Banking Corp (OCBC.SI) and United Abroad Financial institution (UOBH.SI) 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 financial 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 web revenue of S$1.16 billion ($858.75 million) in April-June versus S$730 million a 12 months earlier. That in contrast with the S$1.12 billion common of 4 analyst estimates, Refinitiv knowledge confirmed. However revenue slumped 23% from the primary quarter.

“Whereas the long-term trajectory of worldwide financial restoration is constructive, we stay watchful on the present working setting in view of the current virus resurgence and heightened security measures in our key markets,” Chief Govt Helen Wong, who took cost in April, stated in a press release.

The financial institution’s allowances for mortgage losses fell 69% within the second quarter from a 12 months earlier.

Quarterly web 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 response to Refinitiv knowledge. Revenue rose 43% from a 12 months earlier as impairment prices 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 bettering world financial outlook. read more

Southeast Asia’s greatest financial institution DBS Group Holdings (DBSM.SI) experiences outcomes on Thursday.

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

($1 = 1.3508 Singapore {dollars})

Reporting by Anshuman Daga; Modifying by Christopher Cushing and Sonali Paul

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