OCBC (SGX:O39)'s management intends to maintain dividend payout ratio at 50% starting 2023, which provides more certainty of a recurrent and stable payout. Management is comfortable with a lower CET-1 CAR of 14.0% and will consider all options for capital management, including special dividends.
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OCBC's guidance for 2023.
Management guided for low-to mid-single-digit loan growth for 2023. OCBC sees strong momentum from sustainable finance and is close to reaching its target of S$50b by 2025.
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OCBC's management targets to achieve return on equity (ROE) of above 12%.
Conservative guidance for NIM.
Management currently guides for full-year net-interest margin (NIM) to be 2.2% for 2023. Exit NIM was 2.31% in Mar 23. We expect OCBC's NIM to be maintained at 2.2% in 2024 despite repricing of fixed deposits higher as Fed Funds Rate is expected to peak at 5.50% (previous: 5.00%) after another two rate hikes of 25bp each.
Stable contributions from insurance business.
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Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
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