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Singapore-listed banks

OCBC: Singapore’s second-largest bank this morning posted a 14% increase in second-quarter net profit, led by higher interest income and contributions from Greater China and Indonesia. This even as net interest margins declined due to reduced market gapping activities and a lower loan-to-deposit ratio. As a comparison, DBS earlier this week reported an increase in NIM to a three-year high. That said, OCBC’s numbers this morning beat market expectations as the positives from the continuing integration of recent China acquisitions are starting to prove to be positive drivers for the bank going forward. OCBC reported Q2 net profit of SGD1.05 billion versus expectations of SGD969 million. UOB: Also out this morning, UOB posted a 5.7% drop in its Q2 net versus the same period from one year ago. Net profit of SGD762million came in shy of the market’s expectations of close to SGD830 million. While client franchise income continued to show healthy growth, lower treasury and investment income led to the earnings miss.

Neptune Orient Lines

NOL posted net profits of SGD1.22 billion or USD890 million in Q2 numbers out after trading in the markets closed yesterday. Included in the numbers was the sale of their logistics business to Kintetsu Japan earlier in the year, for USD887 million. Excluding this, NOL made USD3 million in net profit for the quarter, up from a loss of USD54 million in Q2 2014. The company acknowledges that, while the group’s container shipping business continues to face a challenging environment- characterised by over capacity and weak market demand - they remain focused on improving their cost competitiveness and yield optimism to return their linear business to sustained profitability. Also according to ST, which cited NOL’s CEO Ng Yat Chung, “NOL could be sold if the price is right”.

US GDP

The US released Q2 GDP of 2.3% versus an expected 2.6%. Although this headline growth came in a bit short of expectations, it was more than offset by a big upward revision to Q1 GDP, well into positive territory. In addition, consumer spending remained strong and core PCE inflation, a measure the Fed uses, rose to 1.8%, above street expectations and close to the Fed’s 2.0% medium-term target. Overall stocks in the US ended the day flat with the biggest reaction to the growth number seen in the DXY.
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