- OCBC (SGX:O39)’s 2023 earnings were in-line with Street and MIBG. Their strategy of regional integration as ‘One Group’ is delivering results with better loan growth and margins than peers.
- - Read this at SGinvestors.io -
- While OCBC’s dividend policy is clearer now, excess capital continues to be an overhang.
Coming together; Good execution in a slowing market
- We think ‘One Group’ synergies are starting to show for OCBC, with 4Q23 loans rising +0.6% y-o-y. This is unlike peers where lending was flat. Management claims some of this is driven by North Asian supply chains relocating to SE Asia as well as SE Asian investments going in to developed markets.
- - Read this at SGinvestors.io -
- We believe OCBC’s positioning in SE Asia – especially Indonesia and Malaysia where macro growth is set to accelerate – should provide upside.
- Management thinks activity in Greater China is bottoming out, which could potentially drive upgrade risks through 2024E.
- Our FY24-25E net-interest income assumptions have been raised 12-14%.
Asset quality well supported, but risks remain
- Read more at SGinvestors.io.
