Singapore's OCBC Bank and the United Overseas Bank (UOB) have reported an increase in net profit, while DBS's net profit went down by 23%, year-on-year, according to quarterly financial results.

OCBC Bank reported a net profit after tax of SG$1.06bn (US$800m) for the third quarter of 2017, an increase of 12% from SG$43m a year ago, and 2% below SG$1.08bn in the second quarter of 2017. The strong performance was driven by sustained momentum across the group's banking, wealth management and insurance businesses in its key markets of Singapore, Malaysia, Indonesia and Greater China, the bank said in a statement.

The group's total income reached SG$2.4bn, indicating an annual increase of 7% and a quarterly decrease of 2%. Net interest income grew 12% to SG$1.38bn in 3Q17 from SG$1.23bn a year ago, underpinned by asset growth and higher net interest margin. Non-interest income saw a slight increase of 1% on an annual basis, from SG$970m in 3Q16 to SG$978m in 3Q17.

Fees and commissions increased 14% annually to SG$488m, mainly from wealth management, fund management and trade-related income. Wealth management fee income grew 32% year-on-year, partly contributed by the former wealth and investment management business of Barclays PLC in Singapore and Hong Kong which was acquired in November 2016.

Overall wealth management income, comprising income from insurance, private banking, asset management, stockbroking and other wealth management products, of SG$2.25bn grew 38% from SG$1.63bn a year ago. As a proportion of the group's total income, wealth management contributed 32%, higher than 26% in 9M16. Assets under management at OCBC's private banking business rose to SG$129bn billion) as of September 30, 2017, a 53% increase from SG$85bn a year ago, partially contributed by the acquisition of Barclays WIM.

'Our strong third quarter earnings demonstrated the quality and continued momentum in each of our banking, wealth management and insurance franchises. Our key markets of Singapore, Malaysia, Indonesia and Greater China have all contributed to our broad-based income growth,' said Samuel Tsien, OCBC Bank's CEO, in a statement. 'Asset quality was stable and healthy coverage ratios were maintained.' According to Tsien, business activities and investments are generally picking up in tandem with regional economic trends and we are well-placed to serve our customers and capture opportunities as they arise. 'However, we will remain watchful of ongoing geo-political event risks and the continuing stress observed in the oil and gas industry,' he said.

In the third quarter of 2017, OCBC issued three structured products worth SG$97m (3Q16: 1 product; SG$33m), according to SRP data. Earlier, in May, the bank launched its private banking business in Indonesia through its 85%-owned subsidiary, OCBC NISP, to respond to growing demand for more sophisticated structured products by Indonesian high net worth (HNW) investors. The bank also launched in Q1 a pilot roboadvisory service within wealth management to allow investors to build and rebalance portfolios using automated, algorithm-based portfolio management advice without having to deal with relationship managers.

UOB reported net profit before tax of SG$1.07bn in 3Q17, 12% higher compared with the same period last year and 4% higher compared to the previous quarter. Net interest income went up 15% on an annual basis, from SG$1.2bn to SG$1.41bn, driven by higher net interest margin and loan growth. Fee and commission income also increased from SG$492m in 3Q16 to SG$551m in 3Q17, up 12%. Other non-interest income decreased by 12% year-on-year and by 10% quarter-on-quarter.

The group's global market segment's profit before tax declined by 28% on an annual basis to SG$160m. As compared to the same quarter last year, profit before tax declined due to lower trading income. However, against the previous quarter, profit before tax declined from $66 million to $28 million due to lower net interest income and trading income.

The profit before tax of UOB's retail segment was $1,343 million in 9M17, 9% higher than a year ago. Total income increased 10%, supported by double digit growth in wealth management and credit card products. Net interest income grew 6% from higher loan and deposit volumes, partly offset by lower loan margin. Expenses were higher by 9% from headcount growth to support regional expansion and higher business volume.

By geographical segment, Singapore accounts for 62% of UOB's operating income (SG$1.07bn), followed by Malaysia and Thailand with 13% and 5%, respectively.

According to SRP data, UOB issued no structured products in 3Q117 (3Q16: 5; SG$99m), however, Gidon Kessel, head of structured products at the bank, said in an interview last month that structured products have seen a resurgence in Singapore in 2017 with customer demand and sales increasing exponentially year-on-year across the market. Kessel said the bank is gearing up to launch KI Reset, a follow up structure to the KO Glider marketed earlier in March, which will add an additional reset feature to the knock-in level of between 5% and 15% depending on the customer preference in terms of trade.

Between July 1 and September 30, 2017, the net profit of DBS went down by 23% on an annual basis, from SG$1.07bn to SG$822m. Compared to the second quarter of 2017, net profit decreased by 28%.

On the other hand, net income reached SG$3.5bn, indicating an annual increase of 4% and a quarterly increase of 5%.  Net interest income rose by 9% year-on-year and by 5% quarter-on-quarter. Compared to the same period last year, net fee and commission income increased by 12% to SG$685m. Similarly, compared to the previous quarter, net fee and commission income went up by 8%, following the increase in wealth management fees to SG$272m in 3Q17 to SG$245m in 2Q17.

Other non-interest income fell 20% from a year ago to SG$399m due to lower trading income as well as the impact of a SG$41m property disposal gain a year ago, the bank said in a statement. Non-performing assets amounted to SG$3.0bn, for which cumulative specific allowances of SG$1.5bn have been made.

According to SRP data, DBS issued a total of 154 structured products worth SG$770m during the third quarter of 2017 (3Q17: 169 products; SG$403m).

SRP data shows that DBS increased its net sales by 112% year-on-year and by 91% quarter-on-quarter.  Similarly, the net sales of OCBC went up by 195.8% as compared to the same period last year.

Click on the respective links for the full 3Q17 results of DBS, UOB and OCBC.

Related stories:
Singapore based i-banks report increase in net profits, structured product sales falter

UOB adds rates and commodities to multi-asset offering (Part 2)

Demand for capital protection has increased, UOB