When it comes to Singapore’s longest established bank, Oversea-Chinese Banking Corporation Limited (SGX: O39), or OCBC, many are familiar with the bank’s physical branches and ATM machines scattered across the island.

But do you know that OCBC group comprises 6 commercial banks (OCBC Singapore, OCBC Malaysia, OCBC Indonesia, OCBC Hong Kong, OCBC Macau, and OCBC China – and together, there are more than 300 branches located across Greater China and ASEAN), 1 Islamic bank (OCBC Al-Amin, where there are 7 branches in Malaysia, which complements OCBC Malaysia’s already comprehensive suite of products, including consumer, corporate, investment, premier and transaction banking, as well as global treasury services), 1 private bank (Bank of Singapore, which serves high and ultra high net worth individuals in its key markets of Asia, Greater China, the Indian subcontinent and other international markets), 1 asset management company (Lion Global Investors, one of the largest asset managers in Southeast Asia with presence in Singapore and Brunei), 1 leasing unit (Pac Lease, which primarily offers hire purchase facilities for capital equipment and machinery, in addition to loans for project development, asset acquisition, and working capital as well as trade financing facilities services to SMEs in Malaysia), 3 securities houses (OCBC Securities in Singapore, OCBC Securities Brokerage (Hong Kong) Limited, and PT OCBC Sekuritas Indonesia), and 1 issuer?

On top of that, OCBC also holds a 20% stake in Bank of Ningbo (where they are one of the best city commercial banks and ranked 19th largest bank by total assets in China), along with Great Eastern Holdings (where OCBC has a 93.72% stake – and it has been contributing an average of about 15% towards OCBC’s profit over the last decade).

Following the conclusion of the financial year ended 31 December 2024 (i.e., FY2024), OCBC released its annual report 2024 on Wednesday (26 March), to which you’ll find a summary of the key pointers to take note, along with details of its upcoming annual general meeting (AGM):

Key Highlights from OCBC’s Annual Report 2024

FY2024 Result Highlights:

  • Total income rose 7% year on year to a record-breaking S$14.5 billion, fuelled by net interest income hitting an all-time high (which increased by 1% year on year to S$9.76 billion) and solid non-interest income growth (which surged by 22% year on year to S$4.72 billion, propelled by customer-driven growth).
  • Net profit increased 8% year on year to S$7.59 billion, which is not only a new record, but it’s also the 3rd consecutive year which OCBC reported a record net profit. This was driven by robust income growth across the bank’s comprehensive banking, wealth management, and insurance franchises.
  • Full year dividend increased by 23% year on year to S$1.01/share, representing a total dividend payout ratio of 60%.
  • Additionally, the bank also set out a comprehensive approach to return S$2.5 billion of capital over 2 years through special dividends (set at 10% of the bank’s annual net profits for 2024 and 2025; together with its target ordinary dividend payout ratio of 50%, OCBC’s total dividend payout ratio will be 60% per annum – the highest in over 15 years), and share buybacks (over 2 years, subject to market conditions and regulatory approvals).
  • Non-performing ratio improved from 1.0% a year ago to 0.9%, with total allowances at 6% lower, and non-performing assets coverage ratio improved to 159%, demonstrating the bank’s sound asset quality, and prudent risk management approach.
  • Common Equity Tier 1 Capital Adequacy Ratio (CET1 CAR) increased from 15.9% a year ago to 17.1% (which surpassed the bank’s target of 14%), led by a reduction in risk-weighted assets largely attributable to the adoption of MAS’ final Basel III reform rules, effective 01 July 2024.

Capturing Opportunities in ASEAN and Greater China:

  • The onset of Trade War 2.0 under the Trump Administration and ongoing supply chain diversification saw ASEAN benefitting from outbound foreign direct investments from China.
  • This is in addition to China and China-based companies diversifying supply chains across multiple markets, including Vietnam (for general manufacturing), Malaysia (for advanced manufacturing), Indonesia (for its large population and natural resources), Hong Kong (where many Chinese companies make the special administrative region their first stop for fundraising), as well as Singapore (where they turn to the city state as a hub for financing and managing investment in the region).
  • On this front, OCBC has been successful in supporting Chinese businesses into Hong Kong and Singapore, and then to other parts of ASEAN. Particularly, it saw a near-30% year-on-year increase in new-to-bank customers which are Chinese companies entering ASEAN.
  • Wealth flows within Asia are also rising, which presented opportunities for OCBC to grow its Premier Banking segment under the consumer banking to serve these customers. In 2024, OCBC’s Premier Banking customer base in Hong Kong and Indonesia grew by more than 35% and close to 20% compared to a year ago respectively. Bank of Singapore also saw a strong momentum in alternative investments, with 80% growth in inflows compared to a year ago.

Key Strategic Progresses:

  • In May 2024, OCBC made an offer to acquire additional shares in Great Eastern Holdings, and successfully raised its ownership from 88.44% to 93.72% – this allowed the group to tap into the significant and growing wealth management and insurance potential in the region.
  • In May 2024, OCBC stepped up its presence in Indonesia through the acquisition of PT Bank Commonwealth (which was fully integrated into OCBC Indonesia in September 2024). This helped to raise OCBC’s market ranking by a notch to be the 8th largest bank by total assets in the country (which is also the largest economy in Southeast Asia).

Recognitions in 2024:

  • The Strongest Bank in Singapore, 5th Strongest Bank in Asia Pacific and 10th Strongest Bank in the World by The Asian Banker’s 1000 World’s Strongest Banks
  • Bank of the Year – Asia Pacific, Indonesia and Malaysia by The Banker Magazine Bank of the Year Awards
  • Best Private Bank for Digital Wealth Planning – Bank of Singapore by Global Private Banker Wealthtech Awards
  • Best Retail Bank – South East Asia and Singapore by The Digital Banker’s Group Retail Banking and Innovation Awards
  • China International Trade Finance Bank of the Year by Asian Banking and Finance
  • Best Risk Management (Big Cap – Gold) by Singapore Corporate Awards
  • Education Insurance Initiative of the Year by Insurance Asia Awards
  • Best Insurance Asset Manager by AsianInvestor Asset Management Awards

Investments and Transformation for the Future:

  • A HK$1.5 billion (S$260 million) investment over 3 years to shore up OCBC’s technology platforms and facilities across Greater China has been announced, on top of an expansion in its regional engineering hub in China to attract top engineering talents, all of which complementing the bank’s other investments which aim to boost its capabilities in the region.
  • In tandem with the development of the Johor-Singapore Special Economic Zone (JS-SEZ), OCBC have set up cross-border dedicated teams in Singapore and Malaysia (comprising 25 experienced bankers and 4 dedicated branches within the JS-SEZ) to support their SME customers that want to start and grow their businesses in this zone.
  • A new division in Group Strategy and Transformation Office (Group STO), led by the group’s Chief Strategy and Transformation Officer, has been formed in 2024 to drive the its strategy, innovation, and transformation, underpinned by data, customer-centricity, and operational excellence (one of which is in artificial intelligence (AI), where the bank have so far developed over 30 Generative AI applications to boost productivity, creating up to 50% productivity gains for some tasks).
  • In 2024, OCBC also made a S$500 million investment in Singapore’s Punggol Digital District (PDD) to fund its innovation hub, OCBC Punggol, which is set to be completed in 1Q 2027. This complements the group’s 7-year digital core roadmap to modernise its technology architecture, with over S$250 million invested in the first phase from 2019 to 2022, and an additional S$300 million planned for the second phase from 2023 to 2025.
  • Sustainable finance loan achievements have reached S$71 billion, with the group supporting close to 4,000 SMEs across the region with sustainable financing, at the end of 2024. The bank also reported good progress on its net zero financed emissions targets for 6 key sectors, and on track to meet its 2030 interim targets.

Details of OCBC’s 88th AGM

When? Thursday, 17 April 2025
Where? Sands Expo & Convention Centre, Level 4, Roselle & Simpor Ballrooms, 10 Bayfront Avenue, Singapore 018956
Time? 2.00pm

Prior to the AGM, the management will have a presentation on the group’s financial performance, along with a short question and answer session from 1.00pm to 1.45pm – shareholders of the bank will be able to attend the presentation (you just need to arrive around 12.30pm to register).

From past experiences from attending the bank’s AGMs, at 1pm, the CEO will provide an update and outlook, before the CFO presents on the bank’s financial results. At 2pm, the management will dive straight into answering questions from AGM attendees and then putting the resolutions to a vote.

Finally, the meeting will be held in a wholly physical format, with no options for shareholders to join virtually.

For those whose shares are in your CDP account, no pre-registration is required, as verification of your shareholdings is done at the event venue. For those whose shares are in a custodian account, you will need to get in touch with your brokerage to appoint you to attend the meeting as a proxy.

Closing Thoughts

I’m sure you’ll agree with me that OCBC’s results for 2024 is a very strong one, where the bank has set new records on a number of fronts, including its total revenue and net profit. Its net interest income also hit a new high.

On top of that, OCBC’s non-performing loans ratio, at 0.9%, is also the lowest among the 3 Singapore-listed banks, and in my opinion, it’s commendable.

If there’s one slight negative, it will be the bank’s final dividend payout, where it saw a slight dip from S$0.42/share in 2023 to S$0.41/share in 2024. As I did not read about any reasons on why its dividend payout have declined despite an improvement in its total revenue and net profit for the 2nd half of 2024, I’ve submitted the following question to the bank’s management to seek their explanation (if you have any questions to ask in relation to OCBC’s latest annual report for 2024, you may submit them to OCBCAGM2025@ocbc.com before 5pm on 07 April 2025):

May I know the reasons for the year-on-year decline in OCBC’s final dividend (from 42 cents in 2023 to 41 cents in 2024), considering the bank’s total revenue and net profit for the 2nd half of the financial year climbed by 7.7% and 6.7% year on year to S$7.2 billion and S$3.7 billion respectively in the time period?

As a shareholder of the bank since August 2019, I remain confident of Ms Helen Wong and her team’s ability to bring the bank to greater heights, and improving on its returns to shareholders.

With that, I have come to the end of my summary of OCBC’s latest annual report for 2024. Please take note that all the opinions you find in this post are mine which I’m sharing for educational purposes only. They do not constitute any buy or sell calls for the bank’s shares. You should always do your own due diligence before 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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