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Bloomberg
Oversea-Chinese Banking Corp (OCBC) shares fell the most in a month after the Singaporean bank posted first-quarter profit growth that relied largely on a drop in loan provisions as lending margins stagnated.
Southeast Asia’s second-largest bank slid as much as 3.2 percent in Singapore on Monday morning after Chief Executive Officer Samuel Tsien signaled that last quarter’s decline in loan allowances may be as good as it gets this year.
Analysts expressed concern that OCBC’s loan margins failed to widen from the previous quarter — unlike those at DBS Group Holdings Ltd. and United Overseas Bank Ltd. — even as benchmark
interest rates rose.
“Investors probably expected a stronger performance†in net interest margins, Bloomberg Intelligence analyst Diksha Gera said.
OCBC was the last of Singapore’s three major banks to report results. The lenders are benefiting from rising interest income and an improved credit environment, and their growing wealth management operations have provided a new revenue stream.
Net income increased 29 percent from a year earlier to S$1.11 billion ($832 million) in the three months ended March, OCBC reported.