Singapore banks fall ahead of earnings release; OCBC leads bank losses as STI slides 1.4%

SINGAPORE – Shares of Singapore’s three local banks traded lower on the morning of Nov 2, with OCBC recording the steepest decline, ahead of their earnings releases in early November.

As at 11.43 am, OCBC was down $1.07 or 3.7% at $28.22, while DBS fell $1.82 or 2.5% to $71.31. UOB declined $0.89 or 2.2% to $40.48.

OCBC’s sharper decline came after its insurance subsidiary Great Eastern reported a 72% year-on-year fall in third-quarter net profit to $102.9 million on Nov 2, weighed down by weaker investment valuations and a one-off loss from the partial divestment of its Indonesian subsidiary.

By noon, OCBC extended its losses to trade at $28.26. Meanwhile, DBS and UOB pared some of their declines to $71.41 and $40.53, respectively.

The losses among the banking heavyweights weighed on the benchmark Straits Times Index (STI), which was down 1.4% or 72.9 points at 5,303.84 as at noon.

The slide comes ahead of the banks’ upcoming third quarter earnings announcements in early November.

UOB will be the first to report its results on Nov 4, followed by DBS and OCBC on Nov 5 and Nov 6, respectively.

Analysts had earlier told The Business Times that wealth management fees at Singapore banks could ease in the third quarter following a strong showing in the preceding three months, even as pressure on net interest margins persists.

Investors are also expected to scrutinise the banks’ exposure to artificial intelligence-related financing and the impact of rising bond yields on their investment portfolios and capital positions.

However, the analysts expect the banks’ underlying asset quality and capital positions to remain resilient. THE BUSINESS TIMES