OCBC Reports Lower Q2 Net Profit Amidst Lower Net Interest Income

OCBC's Q2 net profit fell 6.6% YoY to SGD 1.82 billion due to lower net interest income. Total income declined 2.3% YoY to SGD 3.55 billion. Net interest income dropped 6.0% YoY to SGD 2.28 billion, while noninterest income increased 5.4% YoY to SGD 1.26 billion. The bank declared an interim dividend of SGD 0.41 per share, lower than SGD 0.44 a year earlier.

Singapore's second-largest bank, Oversea-Chinese Banking Corp (OCBC), reported a 6.6% year-on-year (YoY) decline in its second-quarter (Q2) net profit to SGD 1.82 billion. This drop was primarily attributed to a 6.0% YoY decrease in net interest income, which fell to SGD 2.28 billion. Total income also decreased by 2.3% YoY to SGD 3.55 billion, while noninterest income increased by 5.4% YoY to SGD 1.26 billion. OCBC declared an interim dividend of SGD 0.41 per share, down from SGD 0.44 a year earlier [1].

The bank's net interest margin (NIM) slipped to 1.92% during the quarter, down from 2.20% a year earlier, reflecting the challenging environment in which OCBC operates. Helen Wong, OCBC's Group Chief Executive, noted that evolving trade and monetary policies, as well as persistent geopolitical tensions, are expected to weigh on growth prospects [1].

Despite the challenges, OCBC maintained its other 2025 financial targets. The bank's return on equity (ROE) declined to 12.3% in Q2 from 14.2% in the same period of 2024. Wong, who is set to retire at the end of this year, will be succeeded by Tan Teck Long, OCBC's head of global wholesale banking [1].

This earnings report marks the start of the Singaporean banking season, following mixed results from major global lenders. Standard Chartered reported a higher-than-expected 26% jump in first-half pretax profit, while HSBC Holdings experienced a sharper-than-expected drop in profit due to write-downs from exposures to a Chinese bank and Hong Kong real estate [1].

OCBC's rivals, DBS Group and United Overseas Bank, are scheduled to report their financial results on August 7. The banking sector continues to navigate a complex economic landscape, with varying impacts on profitability and growth prospects [1].

References:
[1] Reuters. (2025, July 31). Singapore's OCBC sees lower 2025 net interest income, Q2 profit matches forecasts. Retrieved from https://www.reuters.com/markets/asia/singapores-ocbc-sees-lower-2025-net-interest-income-q2-profit-matches-forecasts-2025-07-31/