Singapore-based lender Oversea-Chinese Banking Corporation (OCBC) net profit for the second quarter of 2021 surged 59% year-on-year to S$1.16bn ($858m) as the lender reduced allowances for bad loans as well as the performance of its banking and insurance business.
The increase in net profit came despite a 2% on-year drop in total income to S$2.57bn as compared to S$2.62bn in the same quarter last year.
“Net profit growth was driven by robust banking and insurance performance, while wealth management income grew strongly and private banking assets under management continued to expand,” said Helen Wong, group chief executive of OCBC, in a statement.
Watchful about recovery
“While the long-term trajectory of global economic recovery is positive, we remain watchful on the current operating environment in view of the recent virus resurgence and heightened safety measures in our key markets,” Wong added.
OCBC also announced an interim dividend of 25 Singaporean cents per share. This translates to a dividend payout ratio of 42% of its net profit.
In the same quarter last year, OCBC had paid an interim dividend of 15.9 Singapore cents, as its dividend payout was capped by the Monetary Authority of Singapore. The regulator lifted its dividend cap introduced during the COVID pandemic in July this year.
For the first half of 2021, OCBC reported an 86% year-on-year growth in net profit to S$2.66bn as compared to S$1.42bn in the same quarter last year. Total income grew 7% year-on-year to S$5.48bn as compared to S$5.11bn in the same quarter last year.
OCBC’s shares were 0.65% higher than the previous close at S$12.32, during early trade on the Singapore Exchange.