OCBC is focused on leveraging its cross-border platform to drive growth. Its ‘One OCBC’ strategy is delivering synergies and should support interest and non-interest income upside as supply chains shift South.
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We prefer UOB for regional growth and larger capital returns.
Cross-border growth engine
OCBC’s FY24 earnings were in-line. FY24 loans saw significant expansion (+7.6% y-o-y) ahead of peers. Importantly, Greater China credit growth turned positive (+4.5%) after 2 years of declines. Malaysia also saw punchy expansion.
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Management is guiding for NIMs to go lower in FY25E. Partly this is from OCBC’s in-house view of 3 Fed rate cuts. However, we believe it also partly implies a focus on competitive market share gains going forward. We have lowered FY25-26E NII by 3-4%.
Non-interest income shows good execution
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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/.
