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2023-08-07

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OCBC Chalks Up a Record Net Profit and Boosts Interim Dividend by 43%: 5 Highlights from the Bank’s Latest Results

Singapore’s second-largest bank posted an outstanding set of earnings while raising its interim dividend.

OCBC Chalks Up a Record Net Profit and Boosts Interim Dividend by 43%: 5 Highlights from the Bank’s Latest Results

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{"i18n":{"language":"en_US"},"data":{"magic":2,"id":206290271801504,"tweetId":"206290271801504","gmtCreate":1691373199056,"gmtModify":1691373203099,"author":{"id":3582969710070724,"authorId":3582969710070724,"authorIdStr":"3582969710070724","name":"OO_898","avatar":"https://static.tigerbbs.com/9fb3c360d5d7711641a868a144192fc7","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":4,"crmLevelSwitch":1,"currentWearingBadge":{"badgeId":"7a9f168ff73447fe856ed6c938b61789-1","templateUuid":"7a9f168ff73447fe856ed6c938b61789","name":"Knowledgeable Investor","description":"Traded more than 10 stocks","bigImgUrl":"https://static.tigerbbs.com/e74cc24115c4fbae6154ec1b1041bf47","smallImgUrl":"https://static.tigerbbs.com/d48265cbfd97c57f9048db29f22227b0","grayImgUrl":"https://static.tigerbbs.com/76c6d6898b073c77e1c537ebe9ac1c57","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2022.03.05","individualDisplayEnabled":0},"individualDisplayBadges":[],"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"html":"<html><head></head><body><p>Good</p></body></html>","htmlText":"<html><head></head><body><p>Good</p></body></html>","text":"Good","highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/206290271801504","repostId":2356948671,"repostType":2,"repost":{"id":"2356948671","pubTimestamp":1691372202,"share":"https://www.laohu8.com/m/news/2356948671?lang=&edition=full","pubTime":"2023-08-07 09:36","market":"sg","language":"en","title":"OCBC Chalks Up a Record Net Profit and Boosts Interim Dividend by 43%: 5 Highlights from the Bank’s Latest Results","url":"https://stock-news.laohu8.com/highlight/detail?id=2356948671","media":"The Smart Investor","summary":"Singapore’s second-largest bank posted an outstanding set of earnings while raising its interim dividend.","content":"<html><head></head><body><p>Singapore’s second-largest bank posted an outstanding set of earnings while raising its interim dividend.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1fcd9aefd4d912966ccf8e9b0257c2eb\" alt=\"OCBC Bank\" title=\"OCBC Bank\" tg-width=\"1024\" tg-height=\"768\"/><span>OCBC Bank</span></p><p><strong>OCBC Ltd</strong> (SGX: O39) is the final bank of the local trio to report its 2023 second quarter (2Q 2023) and first half (1H 2023) earnings.</p><p>Last week, its peer <strong>United Overseas Bank</strong> (SGX: U11) released a sparkling set of results that saw it up its interim dividend by 42%.</p><p>Earlier this week, <strong>DBS Group</strong> (SGX: D05) also announced a strong set of results and hiked its 1H 2023 dividend by 25%.</p><p>OCBC also did not disappoint as the bank delivered a record net profit and boosted its interim dividend by 43% year on year, the highest percentage increase among the three local banks.</p><p>Here are five things that investors need to know about the lender’s latest earnings.</p><h2 id=\"id_1364997397\">1. A commendable set of financial numbers</h2><p>For 2Q 2023, OCBC saw its net interest income (NII) jump 40% year on year to S$2.4 billion as global interest rates continued to rise.</p><p>Non-interest income for the quarter climbed 11% year on year to S$1.1 billion, principally contributed by its insurance arm <strong>Great Eastern Holdings Ltd</strong> (SGX: G07).</p><p>As a result, total income leapt 30% year on year to S$3.5 billion.</p><p>Operating expenses inched up just 2% year on year, thus allowing operating profit before allowances to shoot up 48% year on year to S$2.4 billion.</p><p>Allowances more than tripled year on year to S$252 million for 2Q 2023 because of increased coverage for non-impaired loans.</p><p>Net profit improved by 34% year on year to S$1.7 billion.</p><p>For 1H 2023, NII increased by 48% year on year to S$4.7 billion while group net profit rose 38% year on year to S$3.6 billion.</p><p>Return on equity (ROE) for the half year also increased by 3.9 percentage points from 10.4% to 14.3%.</p><h2 id=\"id_1404767248\">2. Lower fee income offset by higher wealth management AUM</h2><p>Fee income was subdued for 2Q 2023, clocking in at S$430 million, down around 10% year on year.</p><p>The decline was attributed to weaker wealth management, brokerage and fund management fees.</p><p>Wealth management fees fell by 15.8% year on year to S$181 million as investors remained on the sidelines.</p><p>However, OCBC reported net new money inflows into its wealth management franchise, with assets under management rising by 10% year on year to S$274 billion as of 30 June 2023.</p><p>For 1H 2023, fee income dipped by 11.6% year on year from S$999 million to S$883 million.</p><h2 id=\"id_177163280\">3. A steady NIM coupled with marginal loan growth</h2><p>OCBC reported a net interest margin (NIM) of 2.26% for 2Q 2023, up sharply from 1.71% back in 2Q 2022.</p><p>However, it was also the bank’s second consecutive quarter-on-quarter decline in NIM.</p><p>OCBC’s NIM was at its highest in 4Q 2022 with 2.31% but this ratio dipped to 2.3% in 1Q 2023 and then to 2.26% in 2Q 2023.</p><p>For 1H 2023, NIM clocked in at 2.28%, up from 1.63% a year ago.</p><p>The lender’s loan book enjoyed a 2% year on year rise to S$297 billion in constant currency terms.</p><p>Building and construction loans made up 32% of OCBC’s loan book as of 30 June 2023 while mortgage loans made up slightly more than one-fifth.</p><p>In line with its sustainability push, sustainable financing loans climbed 29% year on year to S$34 billion and comprised 11% of its loan book.</p><h2 id=\"id_3482806060\">4. An improved cost-to-income ratio with lower non-performing loans</h2><p>For 1H 2023, operating expenses rose just 5% year on year, significantly lower than the 30% year on year jump in total income.</p><p>Because of this, OCBC’s cost-to-income ratio (CIR) fell to 37.8% for 1H 2023, down from 47.1% in the prior year.</p><p>For 2Q 2023, the CIR came in at 38.5%, down sharply from 49% back in 2Q 2022.</p><p>OCBC’s non-performing loans (NPL) ratio came down from 1.3% last year to 1.1% as of 30 June 2023.</p><p>There were loan recoveries and upgrades in Singapore, Malaysia, and Indonesia but these were offset by higher NPLs in the US mainly from a downgrade of a corporate account in the commercial real estate sector.</p><h2 id=\"id_3749968436\">5. Interim dividend raised by 43%</h2><p>In light of the strong results, OCBC has raised its interim dividend from S$0.28 last year to S$0.40 for a 43% year on year increase.</p><p>The dividend payout ratio remains at 50%, in line with its guidance.</p><p>The bank’s trailing 12-month dividend totals up to S$0.80, giving its shares a trailing 12-month dividend yield of 6.1%.</p><h2 id=\"id_2612370198\">Get Smart: A refreshed strategy to spur growth</h2><p>CEO Helen Wong intends to leverage OCBC’s strong network and enhance its capabilities based on the recently-launched unified brand and logo to drive further growth.</p><p>The group projects an ROE of 14% for 2023 along with a NIM above 2.2%.</p><p>It also expects low to mid-single-digit loan growth and will maintain its dividend payout ratio at 50%.</p></body></html>","source":"thesmartinvestor_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>OCBC Chalks Up a Record Net Profit and Boosts Interim Dividend by 43%: 5 Highlights from the Bank’s Latest Results</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOCBC Chalks Up a Record Net Profit and Boosts Interim Dividend by 43%: 5 Highlights from the Bank’s Latest Results\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-08-07 09:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/ocbc-chalks-up-a-record-net-profit-and-boosts-interim-dividend-by-43-5-highlights-from-the-banks-latest-results/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Singapore’s second-largest bank posted an outstanding set of earnings while raising its interim dividend.OCBC BankOCBC Ltd (SGX: O39) is the final bank of the local trio to report its 2023 second ...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/ocbc-chalks-up-a-record-net-profit-and-boosts-interim-dividend-by-43-5-highlights-from-the-banks-latest-results/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SG9999000343.SGD":"Schroder Singapore Trust A Dis SGD","SG9999008742.SGD":"Eastspring Investments Unit Trusts - 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Asian Equity Income AS SGD-H","SG9999002406.SGD":"利安新加坡信托基金","LU0577902371.SGD":"FULLERTON LUX FUNDS - ASIA GROWTH & INCOME EQUITIE \"I\" (SGD) ACC","LU0557290698.USD":"施罗德环球可持续增长基金","LU0072462343.USD":"贝莱德亚洲巨龙基金","SG9999003800.SGD":"Nikko AM Global Dividend Equity Acc SGD-H","SG9999000327.SGD":"Schroder Asian Growth A Dis SGD","LU0588545490.SGD":"Eastspring Investments - Asian Equity Income AS SGD"},"source_url":"https://thesmartinvestor.com.sg/ocbc-chalks-up-a-record-net-profit-and-boosts-interim-dividend-by-43-5-highlights-from-the-banks-latest-results/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2356948671","content_text":"Singapore’s second-largest bank posted an outstanding set of earnings while raising its interim dividend.OCBC BankOCBC Ltd (SGX: O39) is the final bank of the local trio to report its 2023 second quarter (2Q 2023) and first half (1H 2023) earnings.Last week, its peer United Overseas Bank (SGX: U11) released a sparkling set of results that saw it up its interim dividend by 42%.Earlier this week, DBS Group (SGX: D05) also announced a strong set of results and hiked its 1H 2023 dividend by 25%.OCBC also did not disappoint as the bank delivered a record net profit and boosted its interim dividend by 43% year on year, the highest percentage increase among the three local banks.Here are five things that investors need to know about the lender’s latest earnings.1. A commendable set of financial numbersFor 2Q 2023, OCBC saw its net interest income (NII) jump 40% year on year to S$2.4 billion as global interest rates continued to rise.Non-interest income for the quarter climbed 11% year on year to S$1.1 billion, principally contributed by its insurance arm Great Eastern Holdings Ltd (SGX: G07).As a result, total income leapt 30% year on year to S$3.5 billion.Operating expenses inched up just 2% year on year, thus allowing operating profit before allowances to shoot up 48% year on year to S$2.4 billion.Allowances more than tripled year on year to S$252 million for 2Q 2023 because of increased coverage for non-impaired loans.Net profit improved by 34% year on year to S$1.7 billion.For 1H 2023, NII increased by 48% year on year to S$4.7 billion while group net profit rose 38% year on year to S$3.6 billion.Return on equity (ROE) for the half year also increased by 3.9 percentage points from 10.4% to 14.3%.2. Lower fee income offset by higher wealth management AUMFee income was subdued for 2Q 2023, clocking in at S$430 million, down around 10% year on year.The decline was attributed to weaker wealth management, brokerage and fund management fees.Wealth management fees fell by 15.8% year on year to S$181 million as investors remained on the sidelines.However, OCBC reported net new money inflows into its wealth management franchise, with assets under management rising by 10% year on year to S$274 billion as of 30 June 2023.For 1H 2023, fee income dipped by 11.6% year on year from S$999 million to S$883 million.3. A steady NIM coupled with marginal loan growthOCBC reported a net interest margin (NIM) of 2.26% for 2Q 2023, up sharply from 1.71% back in 2Q 2022.However, it was also the bank’s second consecutive quarter-on-quarter decline in NIM.OCBC’s NIM was at its highest in 4Q 2022 with 2.31% but this ratio dipped to 2.3% in 1Q 2023 and then to 2.26% in 2Q 2023.For 1H 2023, NIM clocked in at 2.28%, up from 1.63% a year ago.The lender’s loan book enjoyed a 2% year on year rise to S$297 billion in constant currency terms.Building and construction loans made up 32% of OCBC’s loan book as of 30 June 2023 while mortgage loans made up slightly more than one-fifth.In line with its sustainability push, sustainable financing loans climbed 29% year on year to S$34 billion and comprised 11% of its loan book.4. An improved cost-to-income ratio with lower non-performing loansFor 1H 2023, operating expenses rose just 5% year on year, significantly lower than the 30% year on year jump in total income.Because of this, OCBC’s cost-to-income ratio (CIR) fell to 37.8% for 1H 2023, down from 47.1% in the prior year.For 2Q 2023, the CIR came in at 38.5%, down sharply from 49% back in 2Q 2022.OCBC’s non-performing loans (NPL) ratio came down from 1.3% last year to 1.1% as of 30 June 2023.There were loan recoveries and upgrades in Singapore, Malaysia, and Indonesia but these were offset by higher NPLs in the US mainly from a downgrade of a corporate account in the commercial real estate sector.5. Interim dividend raised by 43%In light of the strong results, OCBC has raised its interim dividend from S$0.28 last year to S$0.40 for a 43% year on year increase.The dividend payout ratio remains at 50%, in line with its guidance.The bank’s trailing 12-month dividend totals up to S$0.80, giving its shares a trailing 12-month dividend yield of 6.1%.Get Smart: A refreshed strategy to spur growthCEO Helen Wong intends to leverage OCBC’s strong network and enhance its capabilities based on the recently-launched unified brand and logo to drive further growth.The group projects an ROE of 14% for 2023 along with a NIM above 2.2%.It also expects low to mid-single-digit loan growth and will maintain its dividend payout ratio at 50%.","news_type":1},"isVote":1,"tweetType":1,"viewCount":313,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}