DBS misses profit expectations on bad debt charges, OCBC beats fourth quarter forecast

(Reuters) - DBS Group Holdings, Southeast Asia's biggest bank. posted a 6 percent increase in core quarterly profit, missing expectations as it took higher provisions for bad debt charges.

Oversea-Chinese Banking Corp (OCBC.SI), Singapore's second-biggest bank, beat analysts forecasts by posting an 8 percent rise in quarterly profit helped by strong loan growth.

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.

Singapore banks are facing a slowdown in mortgages in the wake of central bank's crackdown on the housing market, which has fueled strong loan growth for domestic banks since 2010.

OCBC Q2 profit falls 8%, hit by poor result of insurance unit

Oversea-Chinese Banking Corp (OCBC), Singapore's second-biggest bank, posted an 8 per cent drop in quarterly profit, a below-forecast result after it was hit by lower contributions from its insurance unit.

OCBC earned S$597 million in the three months ending in June, compared with S$648 million a year earlier. The profit was below the S$643 million average forecast of six analysts polled by Reuters.

The poll was taken before OCBC's insurance unit Great Eastern Holdings posted a 77 per cent drop in quarterly profit after it was hit by the second-quarter market volatility that drove its non-operating business to a loss of S$155.6 million.

OCBC underperformed its domestic rivals DBS Group Holdings and United Overseas Bank, which both beat market expectations by posting net profit growth of 10 per cent and 9.9 per cent respectively.

"Despite the partial erosion to our earnings in the second quarter from the unrealised mark-to-market losses at our subsidiary Great Eastern, the momentum in our customer flow business remains strong," chief executive Samuel Tsien said in a statement. - Reuters

US rate futures traders see first Fed rate hike in early 2015

TRADERS of short-term US interest rate futures do not expect the Federal Reserve to lift its target for short-term borrowing costs until early 2015 after the central bank said on Wednesday it would keep up its bond-buying programme to help the economy.

Fed funds futures contracts added to losses after the Fed issued its statement at the close of its regular two-day policy-setting meeting.

The Fed said it will continue buying assets until there is substantial improvement in the labor market outlook, and said it would keep rates low until unemployment falls to at least 6.5 per cent as long as inflation does not threaten to rise above 2.5 per cent.

Futures prices before the statement suggested traders saw about a 51 per cent chance of a rate hike in January 2015.

After the statement the figure stood at 52 per cent, according to CME Group's Fed Watch, which generates probabilities based on the price of fed fund futures traded at the Chicago Board of Trade. Traders gave a 42 per cent chance of a hike in December 2014.

The Fed has held its target rate for overnight lending between banks near zero since December 2008. -Reuters

NewSat flags interest in Singtel's sale of Optus unit

Australian satellite communications company NewSat has flagged its interest in Singapore Telecommunications Ltd's A$2 billion (US$1.88 billion) sale of its Australian unit, Optus Satellite.

NewSat chief executive Adrian Ballintine said a number of private equity firms and investment banks have approached the satellite operator about potential partnerships.

"There is an opportunity for us to be a participant," Mr Ballintine was quoted as saying in The Australian newspaper on Wednesday.

"It's fair to say that we have been approached by numerous PE firms and banks to partner up," Mr Ballintine said. "We could also manage the process too, which would be interesting."

Private equity firms KKR and Carlyle Group are among the suitors lining up bids for Optus, people familiar with the matter have previously told Reuters.

SingTel, Southeast Asia's largest telecom operator, is battling tepid growth in its key markets of Singapore and Australia, and the funds raised from the sale would help it plough cash into faster-growing businesses.

France's Eutelsat Communications SA, Blackstone Group BX.N and Providence Equity Partners are also expected to bid, sources have said. SingTel is inviting first round offers by June 14, one of the people said. -Reuters

SPH up 3.9% after REIT plan

Singapore Press Holdings Ltd shares rose as much as 3.9 per cent to a seven-week high of S$4.56 on Tuesday after it announced plans to establish and list a real estate investment trust.

SPH, which dominates newspaper publishing in Singapore, aims to make S$1.048 billion (US$829 million) by selling part of the REIT whose assets are two shopping malls, in what could be the city-state's third-biggest initial public offering this year.

SPH had said it would explore the possibility of setting up a REIT earlier this year but had not given any details until Monday's announcement.

SingTel’s Q4 profit falls 33% to $868mil on stake sale, taxes

Singapore Telecommunications, Southeast Asia’s biggest phone company, reported fourth-quarter profit fell 33% after taking a loss on a stake sale and paying higher taxes.

Net income declined to $868 million in the three months ended March from $1.29 billion a year earlier, Singapore-based SingTel said in a statement today. Sales fell 6.3% to $4.5 billion.

Higher earnings from SingTel’s affiliates in Indonesia and Thailand limited the impact of a falling contribution from Bharti Airtel in India, which posted a 49% drop in profit on higher interest and network costs. The Singapore phone company expanded fourth-generation services in the city-state in April and its Optus unit bought airwaves in Australia last week as they expand mobile networks to compete better.

The company said revenue this year will be little changed while earnings before interest, tax, depreciation and amortisation will rise by a “low single digit level”.

SingTel shares gained 1.8% to close at $3.99 in Singapore yesterday. The stock has climbed 21% this year, compared with a 8.4% advance in the benchmark Straits Times Index.

SingTel in March completed the sale of its 30% stake in Warid Telecom (Private) for US$150 million ($186 million) and will receive a 7.5% share of the net proceeds from any future sale, public offering or merger. It took a loss of $225 million from the deal.

The company had a one-time tax credit of $270 million last year from recognising an increase in the value of an asset transferred to an associate.

Del Monte buys 125,000 own shares

Del Monte Pacific Limited said on Wednesday that it has bought 125,000 of the company shares at 81.5 cents each yesterday.

The open market purchase, which cost about S$102,145, boosted the total number of shares purchased since the share buyback mandate was obtained, to 379,000 shares. This is about 0.029 per cent.

In April, the company announced plans to seek a dual listing in the Philippines.

The shares ended at 83.5 cents, up 3 cents on Tuesday.