OCBC - DBS Research 2023-08-07: Funding Costs Weighs On

• OCBC (SGX:O39)'s 2Q23 net profit in line with expectations as higher revenues also saw higher operating expenses and provisions -
  • OCBC reported 2Q23 revenue of S$3.5bn (+30% y-o-y/+12% q-o-q), ahead of estimates, while the net profit of S$1.7bn (+33% y-o-y/-9% q-o-q) was in line with estimates.
  • - Read this at SGinvestors.io -
  • Capital ratios remained strong, with CET1 and total CAR at 15.4% (1Q23: 15.9%) and 17.8% (1Q23: 18.4%), respectively, the highest among peers.
  • The payment of the 1H23 interim dividend of 40 cents on 25 August 2023 will reduce the CET1 CAR to 14.6%, which is still above the medium-term target of 14.0%. See OCBC's dividend dates.

Net interest income growth partially mitigated by NIM decline.

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• Meanwhile, loan growth was at 1% q-o-q, largely driven by housing and corporate loans in Singapore.

Mixed non-interest income performance.

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Rui Wen LIM DBS Group Research | Tabitha FOO DBS Research | https://www.dbs.com/insightsdirect/ 2023-08-07 SGinvestors.io

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