Net profit at Singapore’s Oversea-Chinese Banking Corporation fell by close to a fifth in the final quarter of 2016 as non-performing loans rose markedly from the previous year.

Non-performing loans totalled S$2.89bn as of December 31, up S$300m from the previous quarter and marking a nearly 42 per cent rise of S$850m from the end of 2015.

That increase, mainly from corporate accounts in the oil and gas support services sector, drove the bank’s non-performing loan ratio to 1.3 per cent at the end of December, up from 0.9 per cent at the end of 2015. Net allowances for loans and other assets jumped almost 49 per cent to S$726m during the 2016 financial year.

Adjusted net profit after tax fell to S$789m for the quarter ended December, down 18 per cent from the same period a year earlier and falling short of a S$864m median estimate from analysts surveyed by Bloomberg.

Lower customer loan yields resulted in net a fall for interest income, which fell 7 per cent year on year to S$1.25 billion, while non-interest income fell 4 per cent to S$926m due to lower net trading income and life assurance profit, which offset growth in fee income.

Operating expenses also rose 1 per cent for the period due mostly to costs associated with consolidation of the wealth and investment management unit OCBC purchased from Barclays last year.

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