OCBC raises loan growth outlook to low double digits after quarterly profit of S$2.04 billion
Key Facts
OCBC said on November 6 that group net profit reached S$2.04 billion in the third quarter of 2026, up 3% from the same period a year earlier but down 8% from the record level posted in the second quarter. The result was slightly above Bloomberg estimates of S$2.0 billion, according to Reuters coverage published via Investing.com. The bank attributed the quarterly decline to weaker performance from Great Eastern Holdings investments, which partly offset record earnings in banking operations. OCBC, meanwhile, raised its 2026 loan growth outlook to the low double-digit range, from a previous forecast between the high single digits and low double digits. The decision reflects continued credit demand, while contributions from other income sources to group performance vary.
Customer loans stood at S$372 billion as of September 30, up 14% year on year, with broad-based growth across regions and sectors. The bank said average assets grew 15%, driven by an increase in customer loans and high-quality non-trading assets, partly supporting net interest income. Net interest income rose 4% year on year to S$2.31 billion in the third quarter, according to Reuters coverage. The results therefore show a divergence between growth in banking business volumes and pressure on returns from that business.
Group income totaled S$3.733 billion, down 2% from the third quarter of the previous year, while non-interest income fell 10% to S$1.420 billion. The decline came as trading income fell 10% and insurance revenue dropped 37% year on year, with OCBC saying weaker performance from Great Eastern Holdings investments was the main reason. The bank said mark-to-market losses on the subsidiary’s bond portfolio as interest rates rose weighed on results. Significant gains from an equity portfolio that had supported the previous quarter’s performance also did not recur. Losses on Great Eastern-related bonds and equities contributed to weaker overall trading income during the period.
In banking, operating income rose 7% and net profit increased 16% year on year to record levels, Chief Executive Tan Teck Long said. Tan attributed the performance to wealth management and wholesale banking, as wealth management assets reached a record S$358 billion, up 2% from the second quarter. The bank said all customer segments recorded net new money inflows. The performance highlights the strength of core banking activities in the face of weaker insurance and trading revenue. First-half results had shown record profit of S$4.19 billion, up 13% year on year, and total income that rose 11% to S$8.00 billion.
On distributions, the board declared an ordinary interim dividend of 47 cents per share in the first half, up 15% or 6 cents from a year earlier, equivalent to 50% of the group’s net profit for the period. In the same period, the non-performing loan ratio remained at 0.9%, and allowance coverage for non-performing assets was 163%. These indicators provide context on asset quality ahead of year-end, while the bank’s current outlook is for credit costs of between 15 and 20 basis points in 2026, compared with a previous forecast of between 20 and 25 basis points. OCBC also expects full-year total income to grow by at least a mid-single-digit rate, with net interest income stable or slightly lower. The outlook comes as the bank monitors developments in the Middle East conflict and energy markets, alongside market conditions in Indonesia.