OCBC’s fourth quarter missed expectations, largely due to higher expenses.
The Singapore bank reported Wednesday its fourth quarter net profit came in at S$973 million ($723.21 million), falling 14 percent from the fourth quarter of 2020.
The average forecast from a Refinitiv poll of four analysts was for a net profit of S$1.18 billion.
Higher Expenses
Increased operating expenses were a key culprit in the decline, as the bank’s staff costs rose on its strategic expansion and business activity growth, and on the absence of government job support grants, which were related to Covid-19 support packages.
In addition, allowances increased 11 percent.
Helen Wong, CEO of OCBC, noted in the press conference that the bank also has put in some provisioning around project financing due to construction delays faced by some of its clients.
Provisions for Construction Delays
«Over Covid, there has been difficulty in certain projects around the world. And that, there is shortage of manpower or the some of the logistic arrangement that has been causing delays. And we're taking on conservative view on these delays,» she said.
«In the last quarter, we're talking about three more chunky deals. This is not systemic,» she added. «But with the world moving on with living with Covid, living with endemic, and the economy continues to open up, I think these issues that were caused during the last few years should be gradually being recovered. And so we expect the sponsors to continue to provide support to the projects.»
OCBC was more upbeat about its full-year results, with net profit coming in at S$4.86 billion, rising 35 percent from 2020. In particular, the bank noted it has returned to pre-Covid levels of profitability.
