OCBC - DBS Research 2025-02-27: Joining The Share Buybacks Trend

• Operating expenses rose 19% y-o-y and 7% q-o-q to S$1,560mil, driven by higher IT-related, year-end business promotion costs, expenses incurred to invest in the group’s strategic initiatives, as well as a one-off payment totaling S$7.5mil to junior employees, to assist with ongoing cost-of-living pressures.

4Q24 revenue & net profit below consensus expectations.

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• As expense growth outpaced income growth, the cost-to-income ratio (CIR) rose to 45.7% (3Q24: 38.5%).
• Capital ratios remained strong, with transitional final Basel III reforms CET1 at 17.1% (3Q24: 17.2%) while total capital adequacy ratio (CAR) was 19.7% (3Q24: 19.8%).
• 4Q24 net-interest income was S$2,455mil (flat y-o-y, +1% q-o-q), primarily attributable to a 2% increase in average assets which more than offset a 3bps q-o-q decline in NIM.

Non-interest income declined q-o-q, mainly due to lower trading and insurance income.

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• Net fees and commissions came in at S$517mil (+12% y-o-y, +2% q-o-q), driven by higher wealth management fees as well as brokerage and fund management fees, partially offset by lower investment banking fees.
• Trading income of S$303mil (+37% y-o-y, -40% q-o-q) declined q-o-q, partly due to seasonality.
• Profit from Great Eastern (SGX:G07) stood at S$101mil (+15% y-o-y, -57% q-o-q) due to a negative impact from changes in the medical insurance environment in Great Eastern’s key markets. Net gains from investment securities decline to S$40mil (-2% y-o-y, -67% q-o-q).

Lower credit costs of 21bps; NPL stable at 0.9%.

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Rui Wen LIM DBS Group Research | Singapore Research Team DBS Group Research | https://www.dbs.com/insightsdirect/ 2025-02-27 SGinvestors.io

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