OCBC lifts loan-growth target after Q2 profit hits record S$2.22bn

OCBC has raised its 2026 lending-growth forecast after second-quarter net profit reached a record S$2.22bn, signalling stronger credit demand despite pressure on lending margins from lower interest rates.

Singapore’s second-largest bank now expects loan growth in the high-single-digit to low-double-digit range, upgrading its previous guidance for mid-single-digit expansion. Second-quarter profit increased 22% year on year and exceeded market expectations.

The upgrade is particularly notable because lower benchmark rates are continuing to compress the margin banks earn between loans and funding.

OCBC has offset part of that pressure through faster balance-sheet growth and sharply higher non-interest income. Second-quarter non-interest income rose 51% to S$1.91bn, supported by stronger fees, trading and insurance activities. Fee income increased 28%, trading income 85% and insurance income 68%, according to Reuters reporting on the results.

The bank’s wealth business was also a major contributor. First-half wealth-management income increased 27% to a record S$3.29bn, while banking assets under management reached S$350bn, 13% higher year on year.

For BCR readers, however, the revised lending guidance is the more important signal. OCBC entered the second quarter with customer loans of S$347bn, already 9% higher than a year earlier on a constant-currency basis. Growth had been broad across industries and was led geographically by Singapore, Malaysia and the bank’s international markets.

Its first-quarter results also showed that trade-related and loan-related fees were rising year on year, while corporate customers generated stronger hedging demand. Sustainable-financing loans stood at S$59.7bn, up 17%.

That provides useful context for the upgraded full-year loan target. Lower interest rates may reduce the income generated from each unit of lending, but stronger corporate borrowing volumes can partly compensate if credit quality remains controlled.

For companies across Southeast Asia, the expansion also points to continued bank appetite for corporate credit at a time when trade patterns, supply chains and funding requirements are being reshaped by geopolitical disruption and tariff changes.

OCBC’s results therefore show two pressures running simultaneously through transaction banking: margins are becoming harder to defend, while the underlying demand for lending and financial services remains strong enough for one of the region’s largest banks to raise its growth expectations.