Oversea-Chinese Banking Corporation Limited (OCBC) has reported a net profit of S$1.88 billion for the first quarter of 2025, marking a 12% increase from the previous quarter's S$1.69 billion but a 5% decrease compared to S$1.98 billion in the same period last year. The growth was largely driven by an increase in fee, trading, and insurance income.
The Group’s cost-to-income ratio improved to 38.7%, with sustained momentum in loan and deposit growth while maintaining sound portfolio quality, as indicated by a non-performing loan ratio of 0.9%. A prudent approach was adopted to set aside allowances for non-impaired assets due to uncertainties in the operating environment. Capital, funding, and liquidity positions remained robust.
In terms of quarterly performance, OCBC’s net profit increased by 12%, supported by stronger income and reduced operating expenses. Net interest income fell by 4% to S$2.35 billion due to a narrower net interest margin and shorter quarter effect despite a rise in average assets.
Non-interest income rose significantly by 36% to S$1.31 billion, with notable increases in net fee income (up 6%) driven by customer activities related to wealth management and investment banking fees. Trading income saw an improvement of 31%, while insurance income grew substantially from S$101 million in the previous quarter to S$306 million.
Operating expenses dropped by 9% from the previous quarter primarily because of higher investments made in the fourth quarter of last year for strategic initiatives and business growth.
Year-on-year performance showed that group net profit was down by 5%. Despite this decline, non-interest income rose by 10%. Operating expenses increased slightly due to higher staff costs and technology investments.
Total non-performing assets decreased from a year ago but were slightly up compared to the previous quarter due to new corporate NPA formation offsetting recoveries and upgrades.
Customer loans stood at S$322 billion as of March-end, reflecting an annual increase driven mainly by residential mortgages and corporate loans. Sustainable financing loans also saw significant growth over the past year.
Customer deposits experienced an upward trend both annually (9%) and quarterly (3%), resulting in improved CASA ratios.
OCBC is adhering to MAS' Basel III reforms requirements phased between July 2024 and January 2029 with Group CET1 CAR reported at 17.6%.
Group CEO Helen Wong commented on these results: “Our first-quarter results reflected the strength and diversity of our banking, wealth management, and insurance franchise." She acknowledged challenges posed by geopolitical risks affecting economic growth but expressed confidence in OCBC’s ability "to navigate complexities while supporting our customers throughout our network.”