OCBC - CGSI Research 2024-02-28: 4Q23 Missed On Insurance; Capital Management Remains In Focus

OCBC - 4Q23 Missed On Insurance; Capital Management Remains In Focus

OCBC (SGX:O39) | SGinvestors.ioOCBC (SGX:O39)
  • 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.
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  • 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,
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OCBC Dividends & Corporate Actions,
OCBC News Articles


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