SINGAPORE: Singapore lenders OCBC and UOB reported higher second-quarter profits on Friday, as income from wealth management and other fee-based businesses helped offset pressure from lower interest rates on their core lending operations.

OCBC, the city-state's second-largest bank, raised its loan-growth forecast after posting record quarterly profit that exceeded expectations.

Smaller peer UOB cut its 2026 forecast for fee-income growth to the low single digits from high single digits, even as its quarterly profit beat estimates. It did not provide an explanation for the guidance change.

The quarterly results added to a run of strong wealth-related earnings for the region's lenders.

Singapore's biggest bank, DBS, and Asia-focused lenders HSBC and Standard Chartered have reported rising income from serving wealthy clients, underscoring the country's appeal as a regional wealth hub amid volatile markets and geopolitical uncertainty.

OCBC posted a record quarterly net profit of S$2.22 billion, up 22% from a year earlier and above a S$1.93 billion average analyst estimate from LSEG.

Its non-interest income rose 51% to S$1.91 billion in the quarter, driven by a 28% rise in fees, an 85% jump in trading income and a 68% increase in insurance income.

OCBC's first-half wealth-management income rose 27% to a record S$3.29 billion, while banking assets under management increased 13% to S$350 billion.

"With our strong capital, funding and liquidity position, diversified income streams and disciplined risk management, we are well positioned to navigate uncertainties and tap the growth sectors to deliver sustainable long-term value," OCBC CEO Tan Teck Long said in a statement.

UOB, Singapore's third-largest bank, said second-quarter net profit rose 10% to S$1.48 billion ($1.17 billion), above a S$1.40 billion average analyst estimate from LSEG.

Its net fee income rose 5% to S$665 million, led by record wealth-management fees. Wealth-management income for the first half rose 16%, including 30% growth across Malaysia, Indonesia, Thailand and Vietnam.

"Our results reflect the resilience of our diversified franchise, and the momentum building across our key ASEAN markets," UOB Deputy Chairman and Chief Executive Wee Ee Cheong said in a statement.

Both lenders joined bigger peer DBS in reporting lower second-quarter net interest margins, a key measure of lending profitability that reflects the difference between what banks earn on loans and pay for deposits and other funding.

OCBC's margin fell to 1.70% in the second quarter from 1.92% a year earlier, while UOB's dropped to 1.74% from 1.91%. DBS on Thursday reported a decline to 1.87% from 2.05%.

OCBC now expects high-single-digit to low-double-digit loan growth, up from a previous mid-single-digit forecast.

UOB maintained its forecast for low-single-digit loan growth this year and expects its full-year net interest margin to be between 1.75% and 1.80%.

OCBC increased its interim dividend to 47 cents from 41 cents. UOB raised its interim dividend to 88 Singapore cents per share from 85 cents. - Reuters