OCBC's non-performing loans ratio to rise to 1.5%

Troubles from the oil & gas segment are not yet over.

Banking giant OCBC may still feel the lingering impact from the oil & gas segment as its non-performing loans ratio is expected to rise to 1.5% at the end of the year.

According to RHB analyst Leng Seng Choon, NPL ratio for the group is expected to rise marginally over the future quarters.

"2Q17 total credit cost of 29bps was close to that of 1Q17’s 27bps. The NPL ratio of 1.3% was unchanged sequentially," the analyst said.

He furthered, "Management expects a stabilisation to happen for the oil & gas loan portfolio, but does not see recovery for this segment as yet, as crude oil price remains at a low of <USD50.00 per bbl."