OCBC share price dropped from a high of $9.00 to $8.35 upon the release of poor 2Q16 results. Second quarter earnings fell a whopping 15% year-on-year due to lower insurance income from subsidiary Great Eastern Holding (GEH).
For OCBC, the insurance segment, driven by GEH, represents one of the most profitable income sources. Operating profits from insurance segment was $120 million, the third highest among OCBC’s business segments. The earning contributions from GEH fell 66% due to the absence of a $105 million gain from the sale of an asset in 2Q15. However, GEH’s underlying insurance business actually performed well in this quarter, with new sales increased by 23%, led by growth across distribution channels in Singapore and Malaysia. Due to the unrealized mark-to-market losses in GEH’s equity and bond investments, profit from GEH’s life insurance recorded a dismal 19% drop.
Apart from insurance segment, OCBC also witnessed poor performance in its “bread and ...
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