By Ambar Warrick
Investing.com-- Shares of Oversea-Chinese Banking Corp (SGX:OCBC) hit a three-month high on Wednesday after Singapore’s second-largest bank logged strong growth in its second-quarter profit.
As of 0154 ET (0554 GMT), OCBC’s shares jumped 1.6% to 12.01 Singapore dollars (S$)- their highest level since early May.
The bank’s second-quarter net profit came in at S$1.48 billion, a 28% jump from last year, it said in a statement. A bulk of this jump came from a strong quarter for OCBC’s traditional banking, wealth management, and insurance businesses.
The bank posted a record quarterly net interest income of S$1.70 billion, up 16% from last year. It declared an interim dividend of 28 cents per share.
OCBC’s life insurance business saw the largest jump in profit, up 82% from last year to S$372 million.
The bank is likely to benefit from increasing lending margins later in the year, as Singapore’s Monetary Authority hikes interest rates to combat a spike in inflation.
CEO Helen Wong, who took the role in 2021, said that overall economic growth in the bank’s key markets would continue to remain positive in 2022.
But external headwinds are likely to slow down growth in the remainder of the year, Wong warned. OCBC's shares are trading down about 12% below their peak this year, as economic and geopolitical ructions battered Singaporean markets.
Shares of OCBC’s peer DBS Group) Holdings Ltd (SGX:DBSM), which is Southeast Asia’s largest bank, rose 1.6% after the results. DBS will report its quarterly earnings on Thursday, and is also expected to log strong growth.
Smaller rival United Overseas Bank Ltd (SGX:UOBH), which had also clocked an 11% rise in quarterly earnings last week, rose about 0.3%. The broader Singapore stock market was largely flat, amid mixed global economic cues.