- OCBC's dividends for FY23 rose 21% y-o-y to 82 cents, with the dividend payout ratio stable at 53%. 4Q23 dividend was up 5% y-o-y to 42 cents. It was below our expectations.
- OCBC's 4Q23 earnings of S$1.62bn met our estimates. It came from higher fee income and stable NII. FY23 PATMI was 100% of our FY23e forecast.
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- Maintain BUY on OCBC with an unchanged target price of S$14.96. We like OCBC due to attractive valuations and a dividend yield of 6.7%, buffered by a well-capitalised 15.9% CET 1, and non-interest income growth from recent acquisitions.
The Positives
Net interest income grew 3% y-o-y.
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- OCBC has provided FY24e guidance for NIM to be in the range of 2.20% to 2.25%, with FY23 exit NIM currently at 2.26%.
Fee income continues to grow.
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