OCBC (SGX:O39) reported 4Q23 revenue of S$3.3bn (+9% y-o-y/-5% q-o-q) with net profit of S$1.6bn (+12% y-o-y/-10% q-o-q), which are below consensus expectations.
Operating costs grew 1% y-o-y/declined 2% q-o-q as a result, and cost-to-income ratio (CIR) rose to 40.0% for 4Q23 (3Q23: 39.1%). Capital ratios remained strong, with CET1 and total CAR at 15.9% (3Q23: 15.3%) and 18.1% (3Q23: 16.9%), respectively.
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Higher non-interest income supported by increased trading and investment income.
Non-interest income of S$811m improved 32% y-o-y/declined 17% q-o-q, driven by lower insurance income and net gains from the sale of investment securities.
Net fees and commissions of S$460m (+16% y-o-y/flat q-o-q) were resilient despite the typical seasonality effect in 4Q23, driven by stronger wealth fees, loans, trade, guarantees, remittances, and other fees.
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4Q23 saw higher credit costs of 20bps (3Q23: 17bps) due to higher general allowances.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
