OCBC (SGX:O39)'s 1Q26 earnings of S$1.97bn were in line with our estimates, at 25% of our FY26e forecast, with record total income of S$3.83bn and ROE of 13.0%. The standout was non-II at a record S$1.61bn (+23% y-o-y), led by WM fees of S$422mil (+34% y-o-y) and insurance income of S$409mil (+34% y-o-y).
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Trading income grew 10% y-o-y on record customer flow. CIR improved to 39.3%; NPL stable at 0.9% for the 8th consecutive quarter; NPA coverage rose to 163%.
Management maintained FY26 guidance and reaffirmed completion of the S$2.5bn capital return plan by FY26e (S$1bn buyback remaining). The pending HSBC Indonesia wealth acquisition (~S$6.6bn AUM) reinforces OCBC’s Next Frontier strategy.
The Positives
Wealth management drives record non-II.
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growth is activity-driven not market-driven, banking AUM was flat q-o-q at S$342bn on softer valuations, but wealth customer flow income grew ~50% y-o-y on transaction volume and hedging demand, and
insurance NBEV margin expansion to 48.6% (1Q25: 43.1%) reflects a deliberate product mix shift, structural rather than transitional.
OCBC noted that April momentum has carried over, with the IUL pivot and HSBC Indonesia providing structural support against market volatility risk.
Asset quality stable; conservative GP build for macro risks.
Read more at SGinvestors.io.
Above is an excerpt from a report by Phillip Securities Research. Clients of Phillip Capital may be the first to access the full PDF report @ https://www.stocksbnb.com/.
