OCBC - CGS-CIMB Research 2023-07-05: 2Q23F Preview & Greater China Connectivity

• We expect OCBC (SGX:O39)'s 2Q23F net profit to soften to ~S$1.74bn (-8% q-o-q, +17% y-o-y). OCBC will report 2Q23F earnings on 4 Aug. (see earnings calendar)
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  • Wealth management income could also be lacklustre amid continued risk-off sentiment following the banking system fallouts in 1Q23, in our view.
  • Credit costs should stay benign, within its guidance (~15-20bp) in 2Q23F, though we do not rule out management overlay top-ups.
  • The stability of insurance income given its adoption of SFRS(I) 17 will take time and could be a swing factor in the upcoming earnings, in our view.
• OCBC hosted an update session on 3 Jul 2023 to unveil its One Group approach to capitalise on sizeable ASEAN-Greater China opportunities. As part of the process of unifying its brand, legal name changes were made for its various banking entities in the region. OCBC also launched a unified refreshed logo to align the branding of these entities.
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• Thematically, the key drivers of OCBC’s revenue projections are its wholesale banking and wealth management segments (from both consumer financial services and Bank of Singapore).
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Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

Read also CGS-CIMB's most recent report:
2023-11-16 OCBC - Deepening Its Indonesian Presence.

Previous report by CGS-CIMB:
2023-11-10 OCBC - CET1 Upside Gives Hope Of Higher Dividends.

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