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OCBC (SG:O39)
SGX:O39

OCBC (O39) AI Stock Analysis

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OCBC

(SGX:O39)

Rating:75Outperform
Price Target:
S$18.00
â–²(7.72%Upside)
OCBC's stock score benefits significantly from its strong financial performance and attractive valuation. The robust revenue growth, zero debt, and high dividend yield are major positives. However, the technical indicators suggest uncertainty with no clear trend and potential oversold conditions, which slightly moderates the overall score.
Positive Factors
Capital Return
OCBC has reiterated its commitment to the two-year S$2.5bn capital return, including a special dividend equivalent to a 10% dividend payout ratio and ~S$1bn share buyback.
Growth Strategy
Driving growth across Asia to achieve ~13%-14% ROE by 2025 through a refreshed strategy and four growth pillars.
Wealth Management Fees
Wealth management fees rose 18% YoY from higher customer activities and from a higher AUM base.
Negative Factors
Asset Quality
Deteriorating asset quality and higher-than-expected NPLs pose risks to earnings.
Economic Outlook
The earnings growth forecast for FY25 is on shaky ground due to a dampened economic outlook.
Trade War Impact
Potential sequential impact from an escalating trade war suggests caution.

OCBC (O39) vs. iShares MSCI Singapore ETF (EWS)

OCBC Business Overview & Revenue Model

Company DescriptionOversea-Chinese Banking Corporation Limited (OCBC Bank), headquartered in Singapore, is one of the largest financial services groups in Southeast Asia. Established in 1932, the bank operates across various sectors including consumer banking, corporate banking, investment banking, private banking, insurance, asset management, and treasury services. OCBC Bank offers a comprehensive range of financial products and services to individuals, businesses, and institutions, with a significant presence in key markets such as Singapore, Malaysia, Indonesia, and Greater China.
How the Company Makes MoneyOCBC Bank generates revenue through multiple streams primarily associated with its banking and financial services operations. The bank earns interest income from its loan portfolio, which includes mortgages, personal loans, and corporate loans. Additionally, OCBC derives fee-based income from services such as wealth management, brokerage, and investment advisory. The bank also earns from trading and investment activities, including foreign exchange and securities trading. OCBC's insurance subsidiary, Great Eastern Holdings, contributes to revenue through the sale of life and general insurance products. Furthermore, the bank benefits from strategic partnerships and collaborations that enhance its product offerings and market reach, contributing to its overall earnings.

OCBC Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q3-2024)
|
% Change Since: 3.40%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted OCBC's strong financial performance, with record net profit and income driven by wealth management and noninterest income growth. However, challenges such as flat net interest income and increased operating expenses were noted. Overall, the positive aspects outweigh the negatives, indicating robust business health and strategic growth initiatives.
Q3-2024 Updates
Positive Updates
Record Net Profit and Income
OCBC reported a net profit of SGD 1.97 billion for Q3 2024, up 9% year-on-year, with total income reaching a record SGD 3.8 billion.
Strong Wealth Management Performance
Group wealth management income grew 15% year-on-year to SGD 1.29 billion, contributing to a third of the group's total income. Assets under management reached a record SGD 284 million.
Improved Cost-to-Income Ratio
The cost-to-income ratio improved to 38.5% year-on-year, driven by positive operating jaws.
Record Noninterest Income Growth
Noninterest income surged 41% year-on-year, driven by higher fee, trading, and insurance income.
Healthy Loan Growth and Portfolio Quality
Loan portfolio expanded by 12% year-on-year, with a stable NPL ratio at 0.9%.
Sustainable Financing Growth
Sustainable financing loan volume expanded 31% year-on-year to SGD 47 billion, making up 15% of group loans.
Strong Capital Position
CET1 ratio increased to 17.2% on a transitional basis, with a fully phased-in CET1 ratio of 15.6%.
Negative Updates
Flat Net Interest Income
Net interest income was generally flat at SGD 2.43 billion due to declining interest rates and increased funding costs.
Declining Net Interest Margin
Net interest margin for the quarter was 2.18%, down from 2.22% for the nine-month period, indicating pressure from rising funding costs.
New Nonperforming Asset in Hong Kong
A new corporate NPA in Hong Kong related to real estate was reported, although it is largely secured.
Increased Operating Expenses
Operating expenses for the quarter rose 9% year-on-year, driven by higher business volume costs and technology expenses.
Company Guidance
In the third quarter of 2024, OCBC reported a net profit of SGD 1.97 billion, marking a 9% increase year-on-year and a 2% rise quarter-on-quarter, driven by a record total income of SGD 3.8 billion. The bank's net interest income remained stable at SGD 2.43 billion, while noninterest income surged 41% year-on-year to SGD 1.37 billion. The cost-to-income ratio improved to 38.5%, reflecting positive operating jaws. Loan growth was robust, with an expansion of 12% year-on-year on a constant currency basis, and the NPL ratio remained low at 0.9%. The bank's CET1 ratio was 17.2% on a transitional basis and 15.6% on a fully phased-in basis. Wealth management income grew 15% year-on-year to SGD 1.29 billion, with assets under management reaching a record SGD 284 million. The bank highlighted its strategic focus on maintaining a strong capital position, pursuing growth opportunities, and increasing shareholder returns. Looking forward, OCBC expects the full-year NIM to be around 2.2%, with noninterest income projected to grow in double digits, counterbalancing potential declines in NII. The bank remains confident in its ability to navigate uncertainties and capitalize on growth prospects in the ASEAN region.

OCBC Financial Statement Overview

Summary
OCBC demonstrates strong financial performance with significant revenue and net income growth, a robust balance sheet with zero debt, and stable shareholder returns. However, the noticeable decline in cash flow from operations highlights potential challenges in cash generation, necessitating a focus on improving cash flow sustainability.
Income Statement
85
Very Positive
OCBC has demonstrated strong revenue growth, with a significant increase from $13.4B in 2023 to $14.4B in 2024, marking a growth rate of 7.45%. The net profit margin for 2024 is impressive at 52.57%, up from 52.26% in 2023. Despite the lack of reported EBIT and EBITDA margins for 2024, the company has maintained high profitability, indicating efficient cost management and strong operational performance.
Balance Sheet
78
Positive
OCBC exhibits a robust equity position, with a stockholders' equity of $59.3B against total assets of $625B, resulting in an equity ratio of 9.49%. The bank's debt-to-equity ratio has improved significantly, with total debt reduced to zero in 2024, reflecting prudent financial management. Return on equity remains strong at 12.79%, although slightly below the previous year's 13.27%, indicating stable shareholder returns.
Cash Flow
72
Positive
The cash flow statement shows a substantial decrease in operating cash flow from $9.1B in 2023 to $3.96B in 2024, impacting the operating cash flow to net income ratio. Free cash flow decreased to $3.35B in 2024 from $8.59B in 2023, resulting in a negative free cash flow growth rate of -61.01%. The free cash flow to net income ratio remains positive, suggesting ongoing capability to generate cash despite challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue29.95B14.44B13.44B11.19B10.49B8.10B
Gross Profit16.75B14.44B13.44B11.19B10.49B8.10B
EBITDA23.73B9.50B8.95B7.20B6.20B5.87B
Net Income9.23B7.59B7.02B5.53B4.86B3.59B
Balance Sheet
Total Assets602.01B625.05B581.42B559.96B542.19B521.39B
Cash, Cash Equivalents and Short-Term Investments0.0057.28B51.74B61.65B-7.65B-7.44B
Total Debt0.0031.79B26.77B22.63B29.78B35.42B
Total Liabilities602.01B566.37B525.87B505.29B489.05B471.42B
Stockholders Equity57.63B57.62B52.92B53.09B51.47B48.42B
Cash Flow
Free Cash Flow-16.36B3.35B8.59B8.45B13.84B15.25B
Operating Cash Flow8.42B3.96B9.13B8.93B10.80B6.48B
Investing Cash Flow-14.05B-4.33B-10.45B-1.51B-29.71B-9.33B
Financing Cash Flow8.08B70.00M355.00M628.00M20.02B5.91B

OCBC Technical Analysis

Technical Analysis Sentiment
Positive
Last Price16.71
Price Trends
50DMA
16.22
Positive
100DMA
16.21
Positive
200DMA
15.92
Positive
Market Momentum
MACD
0.11
Negative
RSI
71.22
Negative
STOCH
92.24
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:O39, the sentiment is Positive. The current price of 16.71 is above the 20-day moving average (MA) of 16.23, above the 50-day MA of 16.22, and above the 200-day MA of 15.92, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 71.22 is Negative, neither overbought nor oversold. The STOCH value of 92.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:O39.

OCBC Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
SGS68
78
Outperform
$16.24B24.7335.32%3.03%8.76%15.45%
SGS68
78
Outperform
$16.24B24.7335.32%3.03%8.76%15.45%
SGD05
78
Outperform
S$129.51B11.5917.99%6.63%13.03%12.01%
SGO39
75
Outperform
$74.47B9.9013.78%10.62%10.17%8.01%
SGS41
72
Outperform
S$1.16B11.164.99%5.79%3.85%11.43%
SGU11
69
Neutral
$60.74B10.2413.43%6.42%5.68%5.92%
67
Neutral
$16.89B11.799.73%3.75%11.97%-8.33%
SGG07
62
Neutral
S$12.21B12.2712.01%6.98%23.83%28.49%
SGG07
62
Neutral
S$12.21B12.2712.01%6.98%23.83%28.49%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SG:O39
OCBC
16.71
2.54
17.88%
SG:G07
Great Eastern Holdings Limited
25.80
0.64
2.54%
SG:G07
Great Eastern Holdings Limited
25.80
0.64
2.54%
SG:S41
Hong Leong Finance Limited
2.60
0.30
13.04%
SG:S68
Singapore Exchange
15.59
6.24
66.76%
SG:S68
Singapore Exchange
15.59
6.24
66.76%
SG:U11
UOB
36.50
5.64
18.27%
SG:D05
DBS Group Holdings
45.73
10.48
29.73%

OCBC Corporate Events

OCBC Announces Changes to Audit Committee Composition
Jul 1, 2025

OCBC has announced a change in the composition of its Audit Committee with the appointment of Mr. Lian Wee Cheow as a member, effective from July 1, 2025. This decision, approved by the Board and recommended by the Nominating Committee, underscores OCBC’s commitment to maintaining a robust governance structure with independent directors who can exercise unbiased judgment, potentially enhancing the company’s oversight and strategic direction.

The most recent analyst rating on (SG:O39) stock is a Hold with a S$15.90 price target. To see the full list of analyst forecasts on OCBC stock, see the SG:O39 Stock Forecast page.

OCBC Clarifies Position on Great Eastern Holdings Shares
Jun 23, 2025

OCBC has clarified its stance regarding the potential privatization and delisting of Great Eastern Holdings (GEH) shares, emphasizing that it has no intention to convert its Class C Non-Voting shares to ordinary shares after the five-year period, as this would affect GEH’s free float status. Despite the confusion caused by recent media reports, OCBC remains committed to its strategic goal of delisting GEH, having increased its economic interest to 93.72% since October 2024, and has stated that its current exit offer is final with no plans for another offer in the near future.

The most recent analyst rating on (SG:O39) stock is a Hold with a S$15.90 price target. To see the full list of analyst forecasts on OCBC stock, see the SG:O39 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 25, 2025