We turn cautious due to potential sequential impact from an escalating trade war environment. Further advancement in capital plans unlikely for now.
Driving growth across Asia to achieve ~13%-14% ROE by 2025.
OCBC (SGX:O39) plans to accelerate its growth trajectory and launched a refreshed strategy. Through its four growth pillars (capture rising Asian wealth, support increasing trade and investment flows, unlock value from new economy through digitisation, and drive sustainability), OCBC aims to achieve an incremental S$3bn in cumulative revenue and positive JAWs in 2023-2025 to achieve ~13%-14% ROE by 2025.
- Read this at SGinvestors.io -
Sequential impact from an escalating trade war environment, further capital management plans likely on hold.
- Read this at SGinvestors.io -
We believe a further advancement in capital plans is unlikely for now. Recall that in 2018, OCBC's management turned to scrip dividends to shore up more capital in an uncertain economic environment.
Downside risks from asset quality cushioned by high non-performing loan (NPL) coverage ratio.
Read more at SGinvestors.io.
Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
