RETAIL BANKING | Tony Chua, Singapore

OCBC sees greener pastures as Asian economy improves

But misses second quarter forecast behind 24% surge in operating expenses and 40% in staff costs.

OCBC, Singapore's second-biggest lender, said Asia's strong economies will underpin earnings growth this year, even though second-quarter profit slightly missed forecasts as staff costs surged.

Singapore banks are benefiting from the city-state's best-ever economic expansion and reduced bad debt charges, but historically low interest rates are keeping interest rate margins under pressure.

"While we are alert to the possibility of renewed volatility in financial markets, on balance we have a positive outlook in light of the growth prospects in our key markets," said Oversea-Chinese Banking Corp (OCBC) CEO David Conner in a statement.

Singapore's economy is set to grow as much as 15 percent in 2010, making the city-state one of the fastest-growing economies in the world this year.

OCBC said operating expenses rose 24 percent from a year earlier, led by staff costs due to higher salaries and hiring of bankers as it consolidated the newly acquired ING's private bank in Asia into the business.

View the full story in Reuters.

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