OCBC Bank - RHB Invest 2023-11-14: Steady As It Goes

• OCBC Bank (SGX:O39)’s 9M23 earnings are in line. Despite the improvement in NPL, it raised loan coverage levels further, and this should keep the group in good stead. Management also fine-tuned its 2023 guidance (overall ROE expectation unchanged), while more details on the 2024 outlook will be shared later.
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3Q23 results met expectations

• OCBC's 3Q23 results met expectations, with net profit of S$1.8bn (+6% q-o-q; +21% y-o-y) bringing 9M23 net profit to S$5.4bn (+32% y-o-y), at 76% of our and Street FY23F earnings.
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• Q-o-q, the rise in net profit was due to lower loan provisions (-24% q-o-q, +17% y-o-y), on writebacks in general allowances (GP) of S$36m (2Q23: S$200m charge). PIOP, though, dropped by 2% q-o-q on weaker insurance and other non-II, cushioned by a 3% q-o-q rise in NII on a 1bp NIM uptick and higher fees (+7% q-o-q from wealth, cards and trade).
• Opex was stable, but CIR rose 60bps q-o-q to 39.1%, due to Non-II softness.

Loan book was flat q-o-q

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Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2023-11-14 SGinvestors.io

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