Singapore's OCBC to sell up to S$1.5 bln in securities

HONG KONG, Aug 7 (Reuters) - Oversea-Chinese Banking Corp (OCBC.SI), the smallest of Singapore's three banks, said on Thursday it plans to sell up to S$1.5 billion ($1.1 billion) in preference shares after it posted a fall in quarterly profit.

Southeast Asian lenders, including Singapore's DBS (DBSM.SI) and Malaysia's Maybank (MBBM.KL) have been raising money in recent months to boost their capital, though the amount raised has been far less than bigger U.S. or European financial firms.

OCBC is aiming to sell S$1 billion in non-convertible guaranteed preference shares, or perpetual securities with no fixed date of redemption, with an upsize option of up to S$500 million, according to a statement on Thursday.

The preference shares will pay a fixed dividend rate for the first 10 years, and a floating rate after that period, OCBC said.

The securities will qualify as Tier 1 capital, and is intended mainly to further strengthen OCBC's capital base.

The Singapore bank on Thursday announced that net profit in the three months to end-June dropped 20 percent to S$425 million from a year earlier, below the S$500 million forecast by four analysts polled by Reuters. [ID:nSFC000043]

The fundraising is OCBC's second in two months, after raising S$1 billion in preference shares in early June that were priced at an annual dividend of 5.1 percent each.

Other Southeast Asian lenders have also raised funds recently. Malaysia's top lender Maybank sold S$600 million of perpetual bonds, according to a term sheet in late July.

Meanwhile, DBS, Southeast Asia's biggest bank by assets, raised S$1.5 billion from a preference share sale in May.

OCBC'S latest preference shares were rated A-minus by Standard & Poor's on Thursday. ($1=1.381 Singapore Dollar) (Reporting by Rafael Nam; Editing by Jacqueline Wong)