OCBC - DBS Research 2023-11-10: NIM Peaked During 3Q23; Asset Quality Continues To Hold Up

OCBC - NIM Peaked During 3Q23; Asset Quality Continues To Hold Up

OCBC (SGX:O39) | SGinvestors.ioOCBC (SGX:O39)
  • OCBC (SGX:O39) reported 3Q23 revenue of S$3.4bn (+9% y-o-y/-1% q-o-q) with net profit of S$1.8bn (+21% y-o-y/+6% q-o-q), largely in line with the consensus. Higher net profit q-o-q was driven by lower allowances q-o-q, although non-fee income weighed on non-interest income during 3Q23.
  • - Read this at SGinvestors.io -
  • Capital ratios remained strong, with CET1 and total CAR at 15.3% (2Q23: 15.4%) and 16.9% (2Q23: 17.8%), respectively.

Net interest income improved on higher NIM.

  • 3Q23 net interest income of S$2.5bn rose 17% y-o-y/3% q-o-q, as 3Q23 saw a 1bps improvement q-o-q in NIM to 2.27%.
  • Meanwhile, loan growth was -2% y-o-y/flat q-o-q.

Higher non-interest income supported by fee income.

  • - Read this at SGinvestors.io -
  • Net fees and commissions rose 2% y-o-y/7% q-o-q to S$461m, driven by stronger wealth fee, loans, trade, guarantees, remittances, and other fees, although net new money declined this quarter.
  • The trading income of S$216m (flat y-o-y/-31% q-o-q) declined due to a decline in non-customer trading income on the back of lower MTM valuation on FVTPL securities and derivatives, while profit from GEH, at S$220m (-12% y-o-y/-16% q-o-q), declined, as higher medical claims offset investment gains.

Lower credit costs in 3Q23

  • Read more at SGinvestors.io.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.

Rui Wen LIM DBS Group Research | https://www.dbs.com/insightsdirect/ 2023-11-10

Read also DBS's most recent report:
2024-02-29 OCBC - 4Q23 Revenue & Net Profit Below Consensus; Higher FY23 Dividend In Line.

Price targets by 5 other brokers at OCBC Target Prices.

Listing of research reports at OCBC Analyst Reports.

Relevant links:
OCBC Share Price History,
OCBC Announcements,
OCBC Dividends & Corporate Actions,
OCBC News Articles


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