OCBC - DBS Research 2022-11-04: Record Net Profit On Strong NIM

• OCBC (SGX:O39) reported two consecutive quarters of highest NIM expansion amongst peers in 3Q22.

3Q22 results ahead of consensus.

• OCBC's 3Q22 revenue of S$3.2bn grew 23% y-o-y/9% q-o-q while net profit of S$1.6bn improved 31% y-o-y/8% q-o-q, ahead of consensus and our expectations. Net interest income of S$2.1bn rose 44% y-o-y/23% q-o-q, driven by stronger-than-expected NIM of 2.06% that increased 35bps q-o-q due to an increase in improved margins across key markets on higher asset yields outpacing the rise in funding costs.
• - Read this at SGinvestors.io -
• - Read this at SGinvestors.io -

Weaker non-interest income.

• OCBC's 3Q22 non-interest income came in at S$1.1bn, a decline of 4% y-o-y/11% q-o-q. Net fee and commission income fell 20% y-o-y/5% q-o-q, mainly due to lower wealth management fees amid the soft market sentiment partly offset by higher credit card and loan and trade-related fees. Trading income also declined 27% q-o-q on lower non-customer flow treasury income.

Higher credit costs and allowances.

• Read more at SGinvestors.io.

Rui Wen LIM DBS Group Research | Tabitha FOO DBS Research | https://www.dbs.com/insightsdirect/ 2022-11-04 SGinvestors.io

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