OCBC’s Q2 profit misses estimates

Bloomberg

Oversea-Chinese Banking Corp.’s (OCBC) profit fell more than analysts anticipated in the second quarter as it joined its Singapore peers in setting aside higher provisions for loan losses during pandemic.
Net income dropped 40% from a year earlier to $533 million in the three months ended June 30, Southeast Asia’s second-largest bank by assets said. That missed the S$930 million average estimate of eight analysts surveyed by Bloomberg.
Similar to its local rivals, OCBC built hefty buffers before expiry of government relief measures leaves businesses more vulnerable to global economic downturn. The lenders also suffered from a squeeze in lending profitability stemming from falling interest rates.
Still, CEO Samuel Tsien joined his counterparts at DBS Group and United Overseas Bank in maintaining credit-cost estimates for two years via 2021, signalling Singapore’s major banks expect to ride through the nation’s worst recession.
“Much uncertainty persists on both the economic front and human cost arising from the pandemic,” Tsien said in a presentation. “It is important for banks to defensively shore up their balance sheet and prepare for the slow recovery.”