(Adds detail from earnings, analyst quotes)
* DBS Q4 core net profit S$802 mln vs consensus S$843 mln
* OCBC Q4 net profit S$715 mln vs consensus S$676 mln
* OCBC says outlook optimistic, DBS boosts final dividend by
By Saeed Azhar
SINGAPORE, Feb 14 Singapore's DBS Group Holdings
Ltd and Oversea-Chinese Banking Corp Ltd
posted increases in quarterly profit fuelled by mortgage and
trade loans, and were upbeat about growth prospects.
DBS missed expectations but boosted its full-year dividend
to 58 cents from 56 cents a year earlier. It said in
presentation notes that its outlook is positive and it also sees
a strong performance from capital markets.
OCBC's quarterly profit came in ahead of the market
"Looking ahead, our overall outlook remains optimistic,
given the positive macroeconomic environment and the underlying
growth prospects in our key markets," OCBC CEO Samuel Tsien said
in a statement.
The positive outlook comes despite concerns that government
and central bank curbs on property transactions and lending are
set to slow growth in mortgages as well as lending to property
firms, which account for about a third of bank loans in
Analysts have cautioned the real test will come in 2015 when
an expected rise in interest rates and a higher supply of homes
could dent the property market.
"We're looking at a 10 percent price correction (for
property) this year, which shouldn't put much pressure on credit
costs, whereas the draw-downs of previously committed mortgages
are likely to continue to push loan growth in mortgage," said
Macquarie analyst Matthew Smith.
"That might be a very different story in 2015 though. Demand
and supply looks tough, rates rising and inability to refinance
could push the (housing) market down further."
DBS, Southeast Asia's biggest bank, earned S$802 million
($633.3 million) excluding exceptionals in the three months
ended December, compared to the S$843 million average forecast
of six analysts polled by Reuters.
It earned S$760 million a year earlier. Including one-off
items such as the sale of its stake in a lender in the
Philippines, DBS posted a net profit of S$973 million.
OCBC reported a net profit of S$715 million in the three
months ended December, compared to an average forecast of S$676
million by six analysts. OCBC earned S$663 million in the fourth
quarter of 2012.
Quarterly net interest income -- the gap between what a
bank makes from loans and pays on deposits -- rose 12 percent
for both banks. Customer loans also grew at the same pace of 18
percent year-on-year for the two banks.
The banks are looking at growth opportunities through
DBS is in advanced talks to buy Societe Generale's
Asian private bank, a deal that would help boost its private
banking assets by almost a third, sources have told Reuters.
OCBC said on Friday substantial shareholders of Wing Hang
Bank Ltd will have until March 3 "to seek to finalise
the terms of the possible general offer by OCBC Bank."
Hong Kong banks are also seeing a slow down in mortgage
growth and loans for property investment, but credit quality
remains strong, analysts said.
Rating agencies like Moody's have applauded the move by Hong
Kong's regulator to temper growth in personal loans as credit
positive for banks because they are likely to exercise more
prudence in loan underwriting.
(Editing by Matt Driskill and Edwina Gibbs)