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Bad debts hit Singapore’s OCBC net profit


November 6, 2008

Bad debts hit Singapore’s OCBC net profit

Oversea-Chinese Banking Corp, Singapore's third-biggest bank, on Wednesday posted a more-than-feared 13 percent decline in quarterly profit, dented by losses from bad debts amid global market turmoil, reported Reuters.

OCBC earned S$402 million ($272 million) in the three months ended September compared with S$463 million a year earlier, worse than the S$417 million average estimate of four analysts polled by Reuters.

The bank took charges of S$156 million mainly on debt securities, up from S$39 million a year earlier. The bank said the losses followed "the unprecedented upheavals in global credit markets".

Last week bigger rival United Overseas Bank said its quarterly profit dropped a larger-than-expected 5 percent as market turmoil hurt non-interest income and as it wrote down bad debt.

Singapore banks, which have largely dodged the global credit crisis so far because of strong loan growth, now face weak capital markets that will hurt fees, slowing loan demand due to an expected Asian economic downturn and rising bad debt.

OCBC shares fell 12.2 percent in the third quarter, more than the 9.8 percent drop in UOB shares and an 11 percent drop in shares of sector leader DBS Group. DBS will report earnings on Friday.

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