OCBC - Maybank Research 2024-08-02: Delivering On Strategy; Dividend Visibility Despite Rising Rate Cut Risks

• OCBC (SGX:O39)’s 1H24 core-earnings were ahead of MIBG/Street expectations on stronger insurance and trading gains. Net interst income (NII), while holding up, is seeing deceleration in light of falling NIMs and tepid loans.
• - Read this at SGinvestors.io -
• Nevertheless, a strong capital base and potential excess capital returns if full ownership of Great Eastern is achieved, provides strong dividend visibility.

Non-interest income mixed signals

• While 2Q24 non-interest income (NoII) made up 33% of OCBC's total income – the highest since 2022 - this was led by insurance and trading gains.
  • - Read this at SGinvestors.io -
  • Trading income is also showing slower momentum falling -4% q-o-q.
• In less volatile fees, loan and trade related fees are improving (+8% q-o-q). However, wealth management which historically account for more than 40% of contribution fell -7% q-o-q. This points to clients pursuing lower fee generating activities.
• We look towards 3Q for turnaround.

Slower net interest income growth, with Fed cut risks

• Read more at SGinvestors.io.

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

Read also Maybank's most recent report:
2025-05-09 OCBC - Cautious Momentum With Limited Visibility, But Strong Balance Sheet..

Previous report by Maybank:
2025-02-26 OCBC Bank - Synergies Strong, Capital Returns Lagging. Downgrade To HOLD..

Price targets by 4 other brokers at OCBC Target Prices.

Listing of research reports at OCBC Analyst Reports.

Relevant links:
OCBC Share Price History,
OCBC Announcements,
OCBC Dividend Payout Dates & Corporate Actions,
OCBC News