Singapore bank OCBC's Q1 profit at 3-1/2 year high, tad below estimates

SINGAPORE (Reuters) - Singapore's Oversea-Chinese Banking Corp Ltd (OCBC) reported a 29 percent rise in quarterly profit, underpinned by strong growth in net interest income and wealth management, but missed market estimates, sending its shares down 3.2 percent.

The results from Singapore's second-largest listed lender followed forecast-beating numbers from DBS Group Holdings Ltd and United Overseas Bank. Singapore banks are benefiting from an improving economy and higher local interest rates.

"The group's income growth was broad-based, loan growth was sustained, assets under management growth continued and allowances were much lower," OCBC Chief Executive Officer Samuel Tsien said in a statement on Monday.

OCBC's net profit came in at S$1.11 billion ($832 million) in the three months ended March 31 versus S$861 million reported a year ago, and was the highest since the quarter ending September 2014.

This was short of the average estimate of S$1.18 billion from five analysts compiled by Thomson Reuters. The year-ago number was restated from a reported profit of S$973 million.

OCBC said the changes were a result of Singapore-incorporated companies listed on the Singapore Exchange being required to adopt a new financial reporting framework.

The bank's net interest margin rose five basis points to 1.67 percent. Fee and commission income increased 11 percent, led by a 19 percent jump in wealth management fee income.

OCBC's allowances for loans and other assets declined to S$12 million from S$168 million a year ago.

($1 = 1.3335 Singapore dollars)

(Reporting by Anshuman Daga; Editing by Edwina Gibbs and Darren Schuettler)