To The Moon

🌟🌟🌟As interest rates normalise across Asia, margin compression is pressuring Singapore banks but OCBC $ocbc bank(O39.SI)$  remains resilient.  With Q2 2025 Net Interest Margin (NIM) expected at 1.96% down 24 bps year over year, the key drivers are softening benchmarks like SORA and HIBOR and a strategic shift towards high grade, lower yield assets.  Yet OCBC's 6.2% year over year loan growth will help to offset the decline, reflecting disciplined expansion.

More importantly, non interest income is proving its mettle.  Despite anticipated moderation in insurance income (SGD 270 million) and trading, OCBC's fee income jumped 14% year over year in Q1 25, led by 20% growth in wealth management.  In Q1 25 alone, total non interest income surged 36% quarter over quarter to SGD 1.31 billion, a testament to OCBC's diversified and growing income base.

Q2 25 Earnings Outlook 

OCBC is expected to report SGD 1.77 billion in net profit, down 9% year over year, reflecting continued NIM compression.  Yet fee income is forecast to grow 14% year over year with wealth management contributing SGD 255 million and insurance income holding steady.  Analysts expect an interim dividend of 42 cents, reinforcing OCBC's commitment to shareholder returns.

Leadership Transition : A Moment of Reflection and Renewal

After 3 years of record profits and strategic transformation, Group CEO Helen Wong will retire on December 31 2025, citing family reasons.  Her legacy includes the One Group strategy, a SGD 2.5 billion capital return plan and deepening OCBC's footprint across ASEAN and Greater China 

Stepping into her shoes is Tan Teck Long, a seasoned banker with over 30 years of experience.  As Head of Global Wholesale Banking, he delivered a 20% CAGR in income and 25% in net profit, modernised OCBC's credit platform and captured surging China-ASEAN flows.  His appointment as Group CEO from January 1 2025, marks a bold new chapter in OCBC, one that is rooted in continuity but brimming with ambition.

Tan Teck Long said that while Helen Wong laid a firm foundation, he will be privileged to build on that.  OCBC will double down on sustainable growth, innovation and people development. 

OCBC's Balance Sheet Strength

NPL ratio is 0.9%, the best among the 3 local banks.

CET1 ratio is 15.5%

Strategic Anchor : 94% stake in Great Eastern.

Market Sentiment 

Analysts are bullish on OCBC with a Buy rating, Target price of SGD 19.25, an upside potential of 12%.

Concluding Thoughts 

This isn't just a quarterly update for OCBC.  It is a turning point.  OCBC is not merely navigating headwinds, it is preparing to soar under new leadership with a Balance Sheet built for resilience and a strategy built for growth and relevance.  As a long time investor of OCBC, I am reaping the rewards of nice juicy dividends of 4.95%  while waiting for capital growth.

Go Long Go Strong Go OCBC! 😍😍😍🌈🌈🌈💰💰💰🇸🇬🇸🇬🇸🇬

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