- OCBC (SGX:O39) recorded 4Q23 net profit of S$1.62bn missed our/Bloomberg consensus estimates by 6%/8%. The miss came mainly from weaker-than-expected insurance (-60% q-o-q, -12% y-o-y) income – this was mainly attributable to higher insurance claims. Credit costs were also slightly higher than expected at 25bp in 4Q23 (calculated, vs our expected 20bp).
- - Read this at SGinvestors.io -
NIM was a bright spot
- Key positives – still some NIM expansion in 4Q23 of +2bp q-o-q to 2.29%. This comes against the NIM contraction recorded at peers. Nonetheless, NII rose only +0.2% q-o-q.
- - Read this at SGinvestors.io -
- As with peers, OCBC will be extending one-off support to 14,000 junior colleagues to cope with rising living costs. This amounted to S$9m in staff cost which was included in FY23 opex.
OCBC's FY24 targets
- ROE of 13-14% (vs. FY23’s ~14% target),
- NIM in the range of 2.2-2.25% (vs. FY23’s 2.28%),
- low single-digit loan growth (vs. FY23’s +1%),
- credit costs of 20-25bp (vs. FY23’s 20bp), and
- 50% dividend payout ratio target (vs. FY23’s 53%).
Focusing on working capital accounts to moderate funding costs
- Read more at SGinvestors.io.
Above is the excerpt from research report by CGSI Research.
Clients of CGS International may access the full report in PDF @ https://itrade.cgsi.com.sg/.
Andrea CHOONG CGS International Research | LIM Siew Khee CGSI Research | https://itrade.cgsi.com.sg 2024-02-28
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
