OCBC Bank - DBS Research 2024-05-13: Third Time's A Charm?

• OCBC (SGX:O39) reported 1Q24 revenue of S$3,626mil (+8% y-o-y, +11% q-o-q), with net profit of S$1,982mil (+5% y-o-y, +22% q-o-q) reaching a new quarterly high.

1Q24 revenue and net profit above consensus.

• - Read this at SGinvestors.io -
• OCBC's capital ratios remained strong, with CET1 at 16.2% (4Q23: 15.9%) largely from profit accretion, and total CAR is 18.4% (4Q23: 18.1%).
• 1Q24 net interest income (NII) of S$2,437mil rose 4% y-o-y, declined 1% q-o-q, as loan growth of +2% y-o-y, +1% q-o-q partially offset the impact from shorter days in 1Q24 on top of the 2bps q-o-q decline in the net interest margin (NIM) as funding costs continued to rise q-o-q.

Higher non-interest income supported by growth across fee, trading, and insurance income.

• - Read this at SGinvestors.io -
• Meanwhile, profit from Great Eastern (SGX:G07) was significantly higher at S$289mil (+21% y-o-y, +328% q-o-q) – this was the main driver for non-interest income this quarter, supported by better investment performance and an improved claims experience. Great Eastern’s total weighted new sales improved +34% y-o-y, +2% q-o-q.

1Q24 saw lower credit costs of 16bps (4Q23: 21bps), as writeback in general allowances offset higher specific allowances.

• Read more at SGinvestors.io.

Rui Wen LIM DBS Group Research | Singapore Research Team DBS Research | https://www.dbs.com/insightsdirect/ 2024-05-13 SGinvestors.io

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