After looking at the results posted by the various REITs listed on the Singapore Exchange over the past 2 weeks or so, attention now turns to the results posted by the Singapore banks.
Starting the ball rolling this time round is Singapore’s longest established bank, Oversea-Chinese Banking Corporation Limited (SGX: O39), or OCBC, where they have released their results for the 2nd quarter and 1st half of FY2025 ended 30 June early this morning (01 August). The other 2 banks (in DBS and UOB) will be releasing their results next Thursday (07 August).
Since announcing its 4th quarter and full-year results in February, one of the notable developments involving OCBC in recent months was its early-June proposal to acquire the remaining 6.28% of Great Eastern shares (currently suspended from trading for over a year) that it does not already own, at S$30.15 per share. OCBC also stated that if the acquisition did not proceed, it would support an alternative bonus-share plan to restore the public float and resume trading. However, at an EGM held by Great Eastern in early-July, shareholders did not approve the proposed delisting, resulting in the lapse of the exit offer.
An even bigger piece of news came a few days after the conclusion of the EGM by Great Eastern, where it was announced that Ms Helen Wong will be retiring as CEO of the bank effective 31 December 2025. However, she will continue to serve as Chairperson of OCBC China and as a director of OCBC Hong Kong. Succeeding her from 01 January 2026 will be Mr Tan Teck Long, who has been Head of Global Wholesale Banking since joining OCBC in March 2022.
In this post, you’ll find my review of OCBC’s latest financial results and ratios, along with its interim dividend payout to shareholders:
Financial Results (2Q FY2024 vs. 2Q FY2025, and 1H FY2024 vs. 1H FY2025)
2Q FY2024 vs. 2Q FY2025:
| 2Q FY2024 | 2Q FY2025 | % Variance | |
| – Net Interest Income (S$’mil) | $2,430m | $2,283m | -6.0% |
| – Net Fee & Commission Income (S$’mil) | $466m | $580m | +24.5% |
| – Other Non-Interest Income (S$’mil) | $733m | $684m | -6.7% |
| Total Income (S$’mil) | $3,629m | $3,547m | -2.3% |
| Total Expenses (S$’mil) | $1,373m | $1,389m | +1.2% |
| Net Profit Attributable to Shareholders (S$’mil) | $1,944m | $1,816m | -6.6% |
In my personal opinion, it is a rather disappointing set of results reported by OCBC – particularly, this is the first quarter after several quarters that its total income and net profit attributable to shareholders saw a year-on-year decline. The only positive was the double-digit percentage improvement in its net fee & commission income (by 24.5% year on year).
Net interest income fell by 6.0% year on year to S$2.28 billion due to its net interest margin declining by 28 basis points (from 2.20% in 2Q FY2024 to 1.92% in 2Q FY2025) in a declining interest rate environment. However, this was partially offset by a 7% growth in average assets.
Other non-interest income was down by 6.7% year on year to S$684 million due to lower insurance income, partially offset by a higher trading income.
This led to OCBC’s total income recording a 2.3% year-on-year dip to S$3.55 billion.
Along with a 1.2% year-on-year rise in total expenses, and a 19% year-on-year jump in amortisation, tax, and non-controlling interests, its net profit attributable to shareholders fell by 6.6% year on year to S$1.82 billion.
1H FY204 vs. 1H FY2025:
| 1H FY2024 | 1H FY2025 | % Variance | |
| – Net Interest Income (S$’mil) | $4,867m | $4,628m | -4.9% |
| – Net Fee & Commission Income (S$’mil) | $945m | $1,126m | +19.2% |
| – Other Non-Interest Income (S$’mil) | $1,443m | $1,448m | +0.3% |
| Total Income (S$’mil) | $7,255m | $7,202m | -0.7% |
| Total Expenses (S$’mil) | $2,719m | $2,804m | +3.1% |
| Net Profit Attributable to Shareholders (S$’mil) | $3,926m | $3,699m | -5.8% |
Similar to its 2nd quarter results, OCBC’s total income and net profit attributable to shareholders for the 1st half of FY2025 also suffered a single-digit percentage decline. The brightest spot in its results this time round was the 19.2% year on year jump in its net fee & commission income to S$1.13 billion, contributed by continued growth momentum in wealth-related fees (where it rose by 25% year on year, supported by growth across all product channels, with customers increasingly deploying funds into investments).
Net interest income was down by 4.9% year on year to S$4.63 billion as a result of its net interest margin declining by 26 basis points (from 2.24% in 1H FY2024 to 1.98% in 1H FY2025). However, this was partially offset by a 8% rise in average asset volume.
Other non-interest income inched up by 0.3% year on year to S$1.45 billion, was a 6% growth in trading income (driven by a 10% rise in customer flow income) was partially offset by a 9% decline in insurance income from Great Eastern Holdings (largely attributable to the mark-to-market impact of decline in interest rates on the valuation of insurance contract liabilities, and lower valuation of private equity holdings from its insurance funds).
Total expenses was up by 3.1% year on year to S$2.80 billion due to a 4% increase in staff costs (attributable to annual salary increments and increased variable compensation linked to higher business activities), along with an increase in technology-related expenses (as the bank continued to invest in common platforms and upgrade its capabilities across markets).
Together with its total allowances rising by 4% year on year to S$326 million (due to an increase in allowances for non-impaired assets), this led to OCBC’s net profit attributable to shareholders recording a 5.8% year-on-year decline to S$3.70 billion.
Key Financial Ratios (1Q FY2025 vs. 2Q FY2025)
When it comes to looking at a bank’s financial ratios, my focus is on 3 of them – (i) net interest margin – which is the difference between what the bank makes from lending money compared to what it pays for deposits; (ii) return on equity – which is the profit the bank makes for every dollar of shareholders’ money it has invested; and (iii) non-performing loans ratio – which is the percentage of bank’s loans that borrowers are struggling to pay, meaning they are overdue or unlikely to be paid back.
In the table below, you will find a comparison of these 3 key financial ratios recorded in the current quarter under review (i.e., 2Q FY2025 ended 30 June 2025) against the recorded in the previous quarter 3 months ago (i.e., 1Q FY2025 ended 31 March 2025) to find out if they have continued to remain at healthy levels:
| 1Q FY2025 | 2Q FY2025 | Difference (in Percentage Points – pp) | |
| Net Interest Margin (%) | 2.04% | 1.92% | -0.12pp |
| Return on Equity (%) | 13.0% | 12.3% | -0.7pp |
| Non-Performing Loans Ratio (%) | 0.9% | 0.9% | – |
While OCBC’s non-performing loans ratio remains unchanged at 0.9%, with asset quality remaining sound, its net interest margin fell by 0.12pp to 1.92% as a result of a declining interest rate environment, and return on equity dipping by 0.7pp to 12.3%.
Dividend Payout to Shareholders
The management of OCBC pays out a dividend to the shareholders on a semi-annual basis.
For the 1st half of FY2025, a dividend payout of 41 cents/share has been declared, representing a payout ratio of 50% (which is in-line with the management’s guidance). Compared to its dividend payout of 44 cents/share a year ago, this was a 6.8% decline.
If you are a shareholder of OCBC, do take note of the following dates on its upcoming dividend payout:
Ex-Date: 08 August 2025
Record Date: 11 August 2025
Payout Date: 21 August 2025
CEO Ms Helen Wong’s Comments & Outlook (from the Bank’s Press Release)
“Our first half 2025 results reflected resilient performance across our diversified business franchise. We expanded our loan book and maintained sound asset quality, and delivered broad-based fee income growth. Underpinned by our strong balance sheet and capital position, we are firmly committed to our comprehensive capital return plan.
Over the past year, we have met our objectives of increasing our economic interests in Great Eastern Holdings (GEH) and have also assisted GEH in managing the trading suspension of its shares. As we move forward, we will continue to derive more synergies within the Group, and are confident that this will further our drive to be a leading wealth management player in the region.
The outlook ahead remains challenging. Evolving trade and monetary policies, and persistent geopolitical tensions are expected to weigh on growth prospects. Despite the uncertainties, OCBC has a strong and resilient franchise. As I prepare to hand over the reins of Group CEO to Teck Long’s capable hands on 1 January 2026, I do so with full confidence. OCBC is well placed for the future with a clear ambition, and we are focused on supporting our customers and capturing growth opportunities across the region to drive long-term value for our stakeholders.”
Closing Thoughts
Overall, OCBC’s financial results for the 2nd quarter as well as for the 1st half of FY2025 was a disappointment for me – where the year-on-year decline in total income and net profit attributable to unitholders for both periods was the first in several quarters (for the 2nd quarter, total income and net profit attributable to shareholders fell by 2.3% and 6.6% respectively; for the 1st half of FY2025, it was at 0.7% and 5.8% respectively).
The same can also be said for its dividend payout to shareholders, where it saw a 6.8% year-on-year dip to 41 cents/share.
On the key financial ratios, its net interest margin and return on equity also fell, but non-performing loans ratio remained stable at 0.9%, and asset quality continue to remain sound.
That said, I’m always of the opinion that one quarter of weaker performance does not break a company. I will continue to monitor the same set of statistics in the coming quarters.
This brings me to the end of today’s post, where I shared my thoughts on OCBC’s latest 2Q and 1H FY2025 financial results. Do take note that all the opinions are purely my own, which I’m sharing for educational purposes only. They are not meant as any buy or sell calls for the bank’s shares. You should always do your own due diligence before making any investment decisions.
Related Documents
Disclaimer: At the time of writing, I am a shareholder of Oversea-Chinese Banking Corporation Limited.
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