OCBC Bank - RHB Invest 2023-01-20: 4Q22 To Be A Stable Quarter; Stay BUY

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We expect the OCBC to report a net profit of S$1.55bn for 4Q22, down an estimated 3.5% q-o-q due mainly to weaker non-II. Key positives would be the continued NIM expansion and benign credit cost on solid asset quality.

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NII and NIM to still show improvement.

• OCBC's net-Interest-Income (NII), which increased a sharp 23% q-o-q in 3Q22, is expected rise further in 4Q22. Underpinning the NII improvement would be net-interest-margin (NIM) expansion. Although unlikely to match the 35bps q-o-q expansion to 2.06% in 3Q22, we believe OCBC's NIM would still edge up 9bps q-o-q to 2.15% in 4Q22 even as loans are being repriced to reflect the uptrend in interest rates. In 4Q22, Singapore’s short term rates are up 100-120bps q-o-q.

Within striking distance of loan growth guidance.

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Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2023-01-20 SGinvestors.io

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