What you need to know about OVERSEA-CHINESE BANKING CORP Ltd. 's business update for the third quarter of fiscal year 2021
Except for$UNITED OVERSEAS BANK LIMITED(U11.SI)$,$OVERSEA-CHINESE BANKING CORP(O39.SI)$You also released the business update for the third quarter of this fiscal year ending September 30 on the morning of November 3, 2021.
Overseas Chinese banking has also changed from last year to a semi-annual reporting period like UNITED OVERSEAS BANK LIMITED; In view of this, it only released the main financial performance data and ratio of the current quarter. Similarly, OVERSEA-CHINESE BANKING CORP did not declare a dividend this time (management only declared a dividend when it released its second and fourth quarter results).
This article will reveal important information about the bank's financial performance and ratio.
The details are as follows:
OVERSEA-CHINESE BANKING CORP's total revenue increased by 0.8% quarter-on-quarter, The driving factors are net interest income (average loan value increased by 4%, net interest margin decreased by 2 basis points, from 1.54% in the third quarter of fiscal year 2020 to 1.52% in the third quarter of fiscal year 2021) and net fee and commission income increased by 2.8% (general fee increase brought about by the increase of customer transactions and business activities). The offsetting factor was a 14.1% decline in other non-interest income (net trading income decreased due to the unrealized market-marking loss of the Great Eastern Holdings portfolio).
With the reserve for loans and other assets falling by 33.7% (from S $350 million in the third quarter of fiscal year 2020 to S $163 million in the third quarter of fiscal year 2021), OVERSEA-CHINESE BANKING CORP's net profit increased to S $1.224 billion, an increase of 19.1% (S $1.028 billion in the third quarter of fiscal year 2020).
The first nine months of fiscal year 2020 Vs. The first nine months of fiscal year 2021:
Total revenue increased by 5.1% year-on-year: The main driving factor is the increase of net fee and commission income by 15.5%, coupled with the increase of other non-interest income by 20.0% (due to the improvement of transaction income and life insurance profit), and the offsetting factor is the decrease of net interest income by 3.7% (due to the decrease of net interest margin from 1.63% in the first nine months of fiscal year 2020 to 1.55% in the first nine months of fiscal year 2021, which is 8 basis points and offset by asset growth)
The increase in total revenue, the slight increase in total expenses in the same period, and the sharp decline in reserves for loans and other assets (from S $1.758 billion in the first nine months of fiscal year 2020 to S $555 million in the first nine months of fiscal year 2021) combined to make the net profit increase by 58.2% to S $3.885 billion.
Major Financial Ratio (FY2020 Q2 Vs. FY2021 Q3)
Next, let's look at some of the major financial ratios of the bank for the current quarter (i.e., the third quarter of fiscal year 2021 ending September 30, 2021) (which I will pay attention to whenever I study bank performance) and compare the same ratios of the previous quarter (i.e., the second quarter of fiscal year 2021 ending June 30, 2021):
My observation: Except for a 0.06 percentage point decrease in net interest margin from the previous quarter (due to the decrease in return on assets and differential income and interest reversal), all other data are basically stable.
The only problem with OVERSEA-CHINESE BANKING CORP's latest business figures is that net interest margins fell 0.06 percentage points from the previous quarter. Besides, the latest data reported by OVERSEA-CHINESE BANKING CORP is basically within my expectation.
This is my comment on OVERSEA-CHINESE BANKING CORP's latest business update. Please note that all the information you have just read is for reference only and does not imply any buying or selling suggestions for the Bank's shares. You should always conduct due diligence before making an investment decision.
Modify on 2021-11-15 14:52
Disclaimer: The above content represents only the personal views of the poster and does not constitute investment advice on this platform.