OCBC - Maybank Research 2024-05-10: On Track / Off-track?

OCBC - On Track / Off-track?

OCBC (SGX:O39) | SGinvestors.ioOCBC (SGX:O39)
  • OCBC (SGX:O39)’s 1Q24 earnings were ahead of MIBG/Street expectations on stronger trading, insurance and fees. Net-interest income is also holding up.

ROE on track. Capital use for Great Eastern deal, off-track?

  • - Read this at SGinvestors.io -
  • On the other hand, OCBC’s bid to privatise Great Eastern (SGX:G07) has limited synergistic value, in our view. Plus, there are risks the offer price may have to be raised in order to close the deal.
  • Returning excess capital to OCBC's shareholders is a better option, in our view.

On track for ROE delivery

  • - Read this at SGinvestors.io -
  • Wealth also saw a turnaround (+20% y-o-y, +17% q-o-q). We expect this trend to strengthen as clients increase allocations to higher fee activities.
  • Net-interest margins (NIM) fell -3bps y-o-y and -2bps q-o-q, while loans momentum saw improvement (+2.3% y-o-y). Higher for longer interest rates may give NIMs better support in 2024E, although funding costs need to be watched (CASA fell -13bps q-o-q).
  • We think OCBC’s current momentum should support ROEs in the upper-end of management guidance of 14%.

Great Eastern offer: Limited value creation seen

  • Read more at SGinvestors.io.

Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.

Thilan Wickramasinghe Maybank Research | https://www.maybank-ke.com.sg/ 2024-05-10

Previous report by Maybank:
2024-02-28 OCBC Bank - Integration Is Helping ROEs; Dividend Upside Unclear..

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


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