Singapore Bank OCBC Posts Big Profit Miss, Hit by Loan-loss Provisions
SINGAPORE (Reuters) - Singapore's second-largest lender Oversea-Chinese Banking Corp <OCBC> reported a larger-than-expected 40% tumble in quarterly net profit on Friday, hurt by loan-loss provisions in a pandemic-hit market and a slowdown in customer activity.
Singapore's banking regulator asked the lenders last week to cap their dividends, pummelling their shares.
"It is important for banks to defensively shore up their balance sheet and prepare for the slow recovery," OCBC Group CEO Samuel Tsien said in a statement.
He said there were some early signs of an improvement in business activities, but were neither "strong nor systemic".
The bank's net profit declined to S$730 million ($533.31 million) in the June quarter from S$1.2 billion a year earlier and versus the average estimate of S$980 million of five analysts, according to data from Refinitiv.
Profit rose 5% from the first quarter.
The results came a day after larger peer DBS Group's <DBSM.SI> quarterly profit slumped by a fifth but was above market estimates and rose on the quarter.
OCBC's provisions for credit losses swelled to S$750 million in the second quarter from S$111 million a year earlier.
($1 = 1.3688 Singapore dollars)