- OCBC's 2Q25 earnings of S$1.82bn were below our estimates as continued NIM compression led to lower NII. 1H25 PATMI was 47% of our FY25e forecast.
- OCBC's interim dividends fell 7% y-o-y to 41 cents, with dividend payout ratio stable at 50%. OCBC has reiterated its S$2.5bn capital return (special dividend equivalent to 10% dividend payout ratio and ~S$1bn share buyback) previously announced.
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- OCBC has lowered its FY25e guidance for NIM of 1.90-1.95% (previously around 2%) with NII to decline by mid-single digit but maintained guidance of mid-single digit loan growth and credit costs of around 20 to 25bps.
The Positives
Wealth management (WM) fees and trading income support earnings.
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- Trading income growth (+6% y-o-y) was led by a rise in customer flow income from both wealth and corporate segments, with increased treasury sales across key markets.
Provisions finally improve.
- Read more at SGinvestors.io.
