SINGAPORE (Nov 6): Singapore's Oversea-Chinese Banking Corp (OCBC) on Friday raised its 2026 outlook after posting a 3% annual rise in third-quarter net profit that beat estimates, even as weakness in its insurance arm weighed on its bottom line.

OCBC, Singapore's second-largest bank, said July-September net profit rose to S$2.04 billion (US$1.60 billion) from S$1.98 billion a year earlier. This was slightly higher than the mean estimate of S$2.01 billion from four analysts, according to LSEG data.

Net interest income rose by 4% from a year earlier, helped by growth in customer loans and high-quality non-commercial assets. However, the performance was dragged down by an 18-basis-point fall in net interest margin, a key profitability gauge.

Trading and insurance income declined 10% and 37% year-on-year, respectively, largely due to the weaker investment performance of its insurance arm Great Eastern Holdings.

OCBC's customer flow trading income jumped by 29% from a year earlier, although non-customer flow trading and investment income swung to a S$15 million loss in the third quarter.

The bank said Great Eastern saw mark-to-market losses in its bond portfolio in the third quarter, while significant gains from equities made in the second quarter were not repeated.

The group's wealth management income, comprising income from private banking, premier private client, premier banking, insurance, asset management and stockbroking, declined 25% from the previous quarter due to weaker investment performance at Great Eastern.

Excluding Great Eastern, banking wealth management income rose 2% to a record high of S$1.12 billion, as the lender continued to benefit from Asia's wealth boom.

The bank said it is monitoring the evolving Middle East conflict and energy market situation, as well as market conditions in Indonesia.

The bank raised its 2026 loan growth forecast to low double digits, from its previous projection of high-single-digit to low-double-digit growth.

OCBC expects total income to grow by at least a mid-single-digit percentage this year, while net interest income is projected to be flat or decline slightly. Credit costs are also expected in the range of 15-20 bps, from 20-25 bps previously.

OCBC's results round out the third-quarter earnings season for Singapore lenders, with peers DBS and UOB reporting weaker-than-expected profits, weighed down by a decline in trading income.

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