We’re coming to the tail-end of the earnings season – with most of the companies having already reported their business updates or financial results for the period ended 31 December 2024.
Among the 3 Singapore-listed banks, both DBS and OCBC have reported their 4Q and full year results for the period ended 31 December on 10 February and 19 February respectively, and you can find my reviews for them via the following links:
- DBS Group Holdings Limited’s 4Q & FY2024 Results Review
- United Overseas Bank Limited’s 4Q & FY2024 Results Review
This morning (26 February), Oversea-Chinese Banking Corporation Limited (SGX: O39), or OCBC as its commonly known, is the last to do so.
While many may also be familiar with the Singapore-headquartered bank, but do you know that among the 3, OCBC is the longest established bank? It was formed in 1932 from the merger of 3 local banks, with the oldest of which founded in 1912.
With a network of close to 420 branches and representative offices in 19 countries and territories, OCBC is the second largest financial services group in Southeast Asia by assets. However, its key markets are Singapore, Malaysia, Indonesia, and Greater China.
In this post, you will find my review of OCBC’s latest financial figures and ratios, as well as its dividend payout to shareholders:
Financial Figures (4Q FY2023 vs. 4Q FY2024, and FY2023 vs. FY2024)
In this section, you will find a review of OCBC’s financial figures for the 4th quarter, as well as for the full year ended 31 December 2024 (i.e., FY2024), compared against that reported in the corresponding time periods last year:
4Q FY2023 vs. 4Q FY2024:
| 4Q FY2023 | 4Q FY2024 | % Variance | |
| – Net Interest Income (S$’mil) | $2,462m | $2,455m | -0.3% |
| – Net Fee & Commission Income (S$’mil) | $460m | $517m | +12.4% |
| – Other Non-Interest Income (S$’mil) | $351m | $444m | +26.5% |
| Total Income (S$’mil) | $3,273m | $3,416m | +4.4% |
| Total Expenses (S$’mil) | $1,310m | $1,560m | +19.1% |
| Net Profit (S$’mil) | $1,622m | $1,687m | +4.0% |
My Observations: On the whole, OCBC’s financial performance for the 4th quarter was a robust one – apart from a slight 0.3% year-on-year dip in its net interest income to S$4,918 million, as a 6% increase in average assets was mitigated by a 14 basis point contraction in its net interest margin (from 2.29% in 4Q FY2023 to 2.15% in 4Q FY2024) from a series of interest rate cuts announced by the US Federal Reserve in the 2nd half of 2024.
Net fee and commission income was up by 12.4% year on year to S$517 million, from higher wealth management fees (up from S$195 million in 4Q FY2023 to S$246 million in 4Q FY2024), brokerage and fund management (up from S$34 million in 3Q FY2024 to S$43 million in 4Q FY2024), and investment banking fees (up from S$19 million in 3Q FY2024 to S$27 million in 4Q FY2024).
Other non-interest income jumped by 26.5% year on year to S$444 million, from an increase in trading income (up from S$222 million in 4Q FY2023 to S$303 million in 4Q FY2024), as well as from life and general insurance (up from S$88 million in 4Q FY2023 to S$101 million in 4Q FY2024).
Total expenses saw a 19.1% year-on-year increase to S$1,560 million, due to higher staff costs associated with a rise in headcount, variable compensation, and annual salary increments.
FY2023 vs. FY2024:
| FY2023 | FY2024 | % Variance | |
| – Net Interest Income (S$’mil) | $9,645m | $9,755m | +1.1% |
| – Net Fee & Commission Income (S$’mil) | $1,804m | $1,970m | +9.2% |
| – Other Non-Interest Income (S$’mil) | $2,058m | $2,748m | +33.5% |
| Total Income (S$’mil) | $13,507m | $14,473m | +7.2% |
| Total Expenses (S$’mil) | $5,223m | $5,742m | +9.9% |
| Net Profit (S$’mil) | $7,165m | $7,587m | +8.1% |
My Observations: For the full year, OCBC’s financial results was also an improved one – particularly, its net interest income, trading income, customer flow treasury income, total income and net profit reached new highs.
Net interest income was up by 1.1% year on year to S$9,755 million, driven by a 5% growth in average assets from customer loans, and high-quality assets which were income accretive but lower yielding.
Net fee and commission income saw a 9.2% year-on-year improvement to S$1,970 million, bolstered by a 22% year-on-year rise in wealth management fees across all wealth channels (driven by a rise in customer activities from improved investment sentiment and from a higher assets under management base), along with higher investment banking and loan-related fees.
Other non-interest income spiked by 33.5% year on year to S$2,748 million, driven by a record trading income (which surged by 53% year on year from S$1,004 million in FY2023 to S$1,537 million in FY2024, driven by increased activities from both consumer [which reached a new high of S$1,112 million] and corporate segments), as well as a higher insurance income (up 14% year on year from S$808 million in FY2023 to S$917 million in FY2024).
All these contributed to OCBC’s total income reaching a new high of S$14,473 million.
Total expenses went up by 9.9% year on year to S$5,742 million, from higher staff costs (mainly attributed to headcount increase, higher variable compensation in-line with income growth, along with annual salary increments), as well as from the consolidation of PT Bank Commonwealth from May 2024, which was fully integrated into OCBC Indonesia in September 2024.
Finally, OCBC’s net profit for FY2024, at S$7,587 million, was also a new high for the bank – in fact, it is the 3rd straight year which its net profit broke new highs.
Key Financial Ratios (3Q FY2024 vs. 4Q FY2024)
Personally, when it comes to reviewing a bank’s financial ratios, my focus is on 3 of them (net interest margin, return on equity, and non-performing loans ratio), and I will compare the statistics reported for the current quarter under review against that reported in the previous quarter 3 months ago.
With that, in the table below, you will find a comparison of OCBC’s key financial ratios reported for 4Q FY2024 ended 31 December 2024 against that reported in 3Q FY2024 ended 30 September 2024:
| 3Q FY2024 | 4Q FY2024 | Difference (in Percentage Points – pp) | |
| Net Interest Margin (%) | 2.18% | 2.15% | -0.3pp |
| Return on Equity (%) | 14.1% | 11.8% | -2.3pp |
| Non-Performing Loans Ratio (%) | 0.9% | 0.9% | – |
My Observations: Slight declines recorded in its net interest margin and return on equity, while non-performing loans ratio remained stable at 0.9% (it is the lowest among the 3 Singapore-listed banks).
Dividend Payout to Shareholders
Similar to UOB, the management of OCBC also pays out a dividend to the shareholders on a half-yearly basis.
In the 2 tables below, you will find the dividend payout declared for the 2nd half of FY2024, as well as the total amount declared for FY2024, compared against the amounts declared in the respective periods last year:
2H FY2023 vs. 2H FY2024:
| 2H FY2023 | 2H FY2024 | % Variance | |
| Dividend Per Share (S$’cents) | 42.0 cents | 57.0 cents | +35.7% |
The dividends for 2H FY2024 comprised of a final dividend payout of 41.0 cent/share, together with a special dividend payout of 16.0 cents/share (the first of a 2-year plan to return S$2.5 billion of capital to shareholders) – and this represented a payout ratio of 60%.
Looking ahead, in FY2025, the bank will also declare a special dividend amounting to 10% of its net profit for the year.
I noted a slight negative here – if its special dividend is excluded, OCBC’s final dividend payout of 41.0 cents/share was a slight 2.4% dip compared to its final dividend payout of 42.0 cents/share last year.
FY2023 vs. FY2024:
| FY2023 | FY2024 | % Variance | |
| Dividend Per Share (S$’cents) | 82.0 cents | 101.0 cents | +23.2% |
OCBC’s total dividend payout for FY2024 comprised of a special dividend payout of 16.0 cents/share – stripping that out, its total dividend payout is 85 cents/share, a 3.7% year-on-year improvement compared to its payout of 82.0 cents/share last year.
Finally, if you are a shareholder of OCBC, do take note of the following dates regarding its 2H FY2024 dividend payout:
Ex-Date: 25 April 2025
Record Date: 28 April 2025
Payout Date: 09 May 2025
CEO Ms Helen Wong’s Comments & Outlook (from the Bank’s Press Release)
“I am pleased to report that OCBC has delivered a record profit for the third year in a row. Our well-diversified Banking, Wealth Management and Insurance franchise all contributed to total income reaching an all-time high this year. We effectively managed expenses with continued cost discipline, while strategically investing to drive growth. Our proactive and prudent risk management has kept our portfolio quality healthy and credit costs low.
We deployed capital to increase our stake in Great Eastern Holdings (“GEH”) to 93.72%. GEH has significantly contributed to OCBC’s performance and is a strategic pillar of OCBC’s wealth management business, while OCBC has provided GEH access to our extensive retail and commercial customer base. We also successfully integrated PT Bank Commonwealth, which strengthened our customer and talent base in Indonesia.
The Bank has set out a comprehensive plan to deliver capital returns through a combination of ordinary and special dividends, as well as share buybacks. This signifies our confidence in driving OCBC’s long-term growth, while affirming our commitment to rewarding our shareholders for their continued support of OCBC.
As we enter the new year, we remain cautiously optimistic on the regional growth outlook and are poised to seize growth opportunities as they arise. We will remain agile in navigating the increasingly complex geopolitical landscape, and volatile macroeconomic environment. We firmly believe our collective strength as One Group is key to steering OCBC to greater heights. With OCBC’s well-established franchise, prudent risk management and robust capital, we are confident in our ability to continue delivering strong results and long-term value to all stakeholders.”
Closing Thoughts
OCBC ended FY2024 on a high note, where it set new records on multiple fronts – its net interest income, trading income and customer flow treasury income (which contributed to a 33.5% year-on-year jump in its other non-interest income for the year), total income, as well as in its net profit (which is the 3rd consecutive year which the bank broke its previous year high).
Personally, I was a little disappointed by the slight 2.4% year-on-year dip in its final dividend payout (even though at 41.0 cents/share, it represented a 50% payout of its net profit, as guided by the management) – I had expected it to record a 10% year-on-year improvement, in-line with the increase in its interim dividend payout.
Looking ahead, with the US Federal Reserve intending to keep benchmark interest rates stable as inflation remained at considerably high levels, this will continue to be a tailwind for the bank as far as its net interest income is concerned. On the other hand, should there be a slowdown in economy as a result of ‘tit for tat’ tariffs, then a negative business sentiment could impact the bank’s financial performances ahead.
Another thing shareholders can lookout for is the bank declaring a special dividend payout (with the amount at 10% of its net profit) in FY2025, as part of the capital return to shareholders – no details provided on whether the amount will be declared in one lump sum when it announces its full year results, or will it be broken up into 2 tranches (one when it declares its interim dividend payout and another when it declares its final dividend payout).
With that, I have come to the end of my review of OCBC’s latest results for the 4th quarter, as well as for the full year ended 31 December 2024. Do note that all the opinions found within are purely mine which I’m sharing for educational purposes only. They do not constitute any buy or sell calls for the bank’s shares. You are strongly advised to do your own due diligence prior to making any investment decisions.
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Disclaimer: At the time of writing, I am a shareholder of Oversea-Chinese Banking Corporation Limited.
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