(Adds forecasts, new quotes)
By Anshuman Daga
SINGAPORE, Feb 24 (Reuters) - Singapore's second-largest
lender Oversea-Chinese Banking Corp (OCBC) reported a
34% rise in quarterly profit on Friday, driven by higher
interest rates, but income from wealth management fees and its
insurance business fell sharply.
Net profit at Southeast Asia's second-largest bank by assets
rose to S$1.31 billion ($976 million) in October-December from a
year earlier. However, profit fell 19% from the third quarter.
The city-state's banks, among the most well capitalised in
the world, benefited from an early rebound in the pandemic-hit
economy, but higher funding costs and weak wealth management
fees have emerged as key risks.
OCBC's fourth-quarter results showed non-interest income
declined 42% from a year earlier, mainly due to lower wealth
management fees as a result of subdued customer investment
activities and valuation losses reported by the bank's insurance
business.
Group CEO Helen Wong said in a statement China's
earlier-than-expected reopening could provide support to
regional economies. Interest rates are expected to remain high
as inflationary pressures linger, she added.
OCBC, which counts Singapore, Greater China and Malaysia
among its key markets with a large insurance business, forecast
a net interest margin of 2.1% for this year versus 1.91%
reported in 2022, and it forecast mid single-digit growth in its
loan book.
OCBC's forecast of improving net interest margins comes as
local peers DBS and UOB flag moderation in
margins after their quarterly profit announced recently.
Net interest margin is a key gauge of profitability.
"We continue to maintain sound capital, funding and
liquidity positions to capture growth opportunities while
ensuring sufficient buffers for uncertainties," Wong, who took
the CEO role two years ago, said in the statement.
Wong, a former CEO of HSBC Greater China, has
been persistently quizzed by analysts on the bank's strategy for
its relatively large capital buffers. OCBC's main rivals have
made acquisitions in recent years.
($1 = 1.3422 Singapore dollars)
(Reporting by Anshuman Daga; Additional Reporting by Yantoultra
Ngui; Editing by Muralikumar Anantharaman, Chris Reese, Jamie
Freed and Lincoln Feast.)
