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OCBC (SG:O39)
SGX:O39
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OCBC
(SGX:O39)
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Rating:71Outperform
Price Target:
S$19.50
â–¼(-3.32% Downside)
OCBC's strong earnings call performance and valuation metrics are significant positives, indicating robust growth potential and value. However, financial performance concerns, particularly in revenue and cash flow, and technical indicators suggesting overbought conditions, moderate the overall score.
Positive Factors
Strong Noninterest Income Growth
The significant growth in noninterest income indicates a diversified revenue stream, reducing reliance on interest income and enhancing financial stability.
Wealth Management Success
Strong performance in wealth management underscores OCBC's ability to capture high-margin business, supporting long-term profitability and client retention.
Strong Capital Position
A robust capital position ensures financial resilience and supports strategic growth initiatives, enhancing OCBC's competitive edge in the banking sector.
Negative Factors
Decline in Net Interest Income
The decline in net interest income reflects challenges in the core banking business, potentially impacting future earnings if interest rates remain low.
Narrowing Net Interest Margin
A narrowing net interest margin could pressure profitability, especially if low interest rate environments persist, affecting long-term earnings potential.
Revenue Decline
The revenue decline poses a concern for sustainable growth, indicating potential challenges in maintaining market share and competitive positioning.
OCBC (O39) vs. iShares MSCI Singapore ETF (EWS)
Market Cap
$90.69B
Dividend Yield4.71%
Average Volume (3M)4.95M
Price to Earnings (P/E)12.3
Beta (1Y)1.04
Revenue Growth0.69%
EPS Growth-0.06%
CountrySG
Employees33,656
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.43
Shares Outstanding4,514,995,600
10 Day Avg. Volume3,854,820
30 Day Avg. Volume4,954,879
Financial Highlights & Ratios
PEG Ratio1.29
Price to Book (P/B)1.28
Price to Sales (P/S)2.79
P/FCF Ratio22.63
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue3.14
Enterprise Value/Gross Profit4.19
Enterprise Value/Ebitda4.78
Forecast
1Y Price Target
$21.92Price Target Upside8.66% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
OCBC Business Overview & Revenue Model
Company DescriptionOversea-Chinese Banking Corporation Limited provides financial services in Singapore, Malaysia, Indonesia, Greater China, rest of the Asia Pacific, and internationally. The company's Global Consumer/Private Banking segment provides products and services to individual customers, including checking accounts, and savings and fixed deposits; housing and other personal loans; credit cards; wealth management products consisting of unit trusts, banc assurance products, and structured deposits; and brokerage services. This segment also offers investment advice and portfolio management, estate and trust planning, and wealth structuring services for high-net-worth individuals. Its Global Wholesale Banking segment provides project financing, short-term credit, working capital, and trade financing; customized and structured equity-linked financing products; cash management and custodian services; capital market solutions; corporate finance and advisory banking services; and treasury products. This segment serves corporates, public sector, and small and medium enterprises. The company's Global Treasury and Markets segment is involved in the foreign exchange activities, money market operations, and fixed income and derivatives trading, as well as provision of structured treasury products and financial solutions. Its Insurance segment provides fund management services, and life and general insurance products. The company's Others segment is involved in property and investment holding activities. The company operates approximately 430 branches and representative offices in 19 countries and regions. Oversea-Chinese Banking Corporation Limited was founded in 1912 and is headquartered in Singapore.
How the Company Makes MoneyOCBC generates revenue through multiple streams, primarily from net interest income and non-interest income. Net interest income is derived from the interest earned on loans provided to customers, which includes personal loans, mortgages, and corporate financing, minus the interest paid on deposits and borrowings. Non-interest income comes from various sources such as fees and commissions from banking services, wealth management, insurance premiums, and trading income. Additionally, OCBC has established significant partnerships with other financial institutions and companies, enhancing its service offerings and expanding its customer base. The bank's strong focus on digital banking and innovation also plays a crucial role in attracting new clients and retaining existing ones, thus contributing to its overall earnings.
OCBC Earnings Call Summary
Earnings Call Date:Nov 07, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 20, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong performance with significant growth in noninterest income and wealth management. While there are challenges with declining net interest income and narrowing NIM, the overall financial health and strategic growth initiatives indicate a positive outlook.Q3-2025 Updates
Positive Updates
Strong Net Profit Growth
Group net profit for Q3 2025 was SGD 1.98 billion, up 9% from last quarter, marking the second highest quarterly net profit on record.
Record Noninterest Income
Noninterest income rose 24% quarter-on-quarter to SGD 1.57 billion, driven by fee, trading, and insurance income.
Wealth Management Success
Wealth management income grew 25% to SGD 1.62 billion, contributing 43% to group total income, with quarterly wealth management fees reaching record levels.
Stable Asset Quality
NPL ratio remained stable at 0.9% for the past 6 quarters, with total credit costs at 16 basis points annualized.
Strong Capital Position
Common equity Tier 1 ratio was 16.9% on a transitional basis and 15% on a fully phased-in basis.
Growth in Loans and Deposits
Loans grew 7% year-on-year and deposits increased 11% year-on-year, with CASA deposits growing 15% year-on-year.
Insurance Business Growth
Profit contribution from GEH grew 50% quarter-on-quarter to SGD 347 million, with new business embedded value rising 9%.
Negative Updates
Decline in Net Interest Income
Net interest income fell 2% to SGD 2.23 billion quarter-on-quarter due to declining benchmark rates.
Interest Rate Impact
NIM narrowed by 8 basis points to 1.84%, primarily due to lower loan yields amid falling benchmark rates.
Reduced NIM Guidance
The guidance for NIM was adjusted downwards to around 1.9%, reflecting pressure from declining interest rates.
Company Guidance
In the third quarter of 2025, OCBC reported a group net profit of SGD 1.98 billion, marking a 9% increase from the previous quarter. This performance was driven by a 24% rise in noninterest income to SGD 1.57 billion, which more than compensated for a 2% decline in net interest income to SGD 2.23 billion due to falling benchmark rates. The return on equity (ROE) was annualized at 13.4%, while total income grew by 7% quarter-on-quarter. The bank's strong performance in wealth management, with a record high income of SGD 1.62 billion, contributed significantly to the results. The net new money inflows were SGD 12 billion, surpassing the previous quarters' run rate. Asset quality remained robust with a non-performing loan (NPL) ratio of 0.9% and total credit costs at an annualized 16 basis points. The Common Equity Tier 1 (CET1) ratio was 16.9% on a transitional basis. OCBC's capital position was sound, supporting their strategy to drive asset growth and manage funding costs efficiently.OCBC Financial Statement Overview
Summary
OCBC shows strong profitability and a solid balance sheet with effective cost management and a healthy return on equity. However, revenue declines and cash flow challenges are areas for improvement.Income Statement
OCBC has demonstrated strong profitability with a consistent net profit margin of around 28% in 2024, despite a revenue decline of 9.3%. The EBIT and EBITDA margins remain robust, indicating efficient operational management. However, the recent revenue contraction poses a concern for future growth.Balance Sheet
The debt-to-equity ratio of 0.54 in 2024 suggests moderate leverage, which is manageable given the bank's strong equity base. Return on equity is healthy at 12.8%, reflecting effective use of shareholder funds. However, the slight increase in leverage over the years warrants monitoring.Cash Flow
OCBC's cash flow performance has been mixed, with a significant decline in free cash flow growth in 2024. The operating cash flow to net income ratio is low, indicating potential challenges in converting income into cash. The free cash flow to net income ratio remains strong, suggesting good cash generation relative to profits.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.85B | 27.16B | 24.73B | 15.58B | 12.17B | 8.10B |
| Gross Profit | 20.83B | 13.78B | 12.77B | 11.09B | 9.72B | 8.10B |
| EBITDA | 18.27B | 22.19B | 19.84B | 11.37B | 7.77B | 5.87B |
| Net Income | 11.32B | 7.59B | 7.02B | 5.75B | 4.86B | 3.59B |
Balance Sheet | ||||||
| Total Assets | 644.79B | 625.05B | 581.42B | 559.96B | 542.19B | 521.39B |
| Cash, Cash Equivalents and Short-Term Investments | 33.75B | 57.28B | 51.74B | 61.65B | -7.65B | -7.44B |
| Total Debt | 45.54B | 31.79B | 26.77B | 22.63B | 29.78B | 35.42B |
| Total Liabilities | 583.27B | 566.37B | 525.87B | 505.29B | 489.05B | 471.42B |
| Stockholders Equity | 60.45B | 59.32B | 52.92B | 53.09B | 51.47B | 48.42B |
Cash Flow | ||||||
| Free Cash Flow | 16.35B | 3.35B | 8.59B | 8.45B | 13.84B | 15.25B |
| Operating Cash Flow | 17.02B | 3.96B | 9.13B | 8.93B | 10.80B | 6.48B |
| Investing Cash Flow | -6.80B | -4.33B | -10.45B | -1.51B | -29.71B | -9.33B |
| Financing Cash Flow | 15.01B | 70.00M | 355.00M | 628.00M | 20.02B | 5.91B |
OCBC Technical Analysis
Positive
20.17
Price Trends
18.74
Positive
17.74
Positive
16.85
Positive
Market Momentum
0.40
Positive
74.53
Negative
83.51
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 20.17 is above the 20-day moving average (MA) of 19.66, above the 50-day MA of 18.74, and above the 200-day MA of 16.85, indicating a bullish trend. The MACD of 0.40 indicates Positive momentum. The RSI at 74.53 is Negative, neither overbought nor oversold. The STOCH value of 83.51 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | S$18.78B | 28.96 | 30.82% | 2.27% | 11.28% | 8.34% | |
78 Outperform | S$164.28B | 14.59 | 17.10% | 5.06% | 2.67% | 6.32% | |
74 Outperform | S$7.80B | 14.64 | 11.35% | 3.10% | -0.39% | 8.38% | |
71 Outperform | $90.69B | 12.33 | 12.87% | 4.71% | 0.69% | -0.06% | |
71 Outperform | S$1.19B | 14.15 | 4.02% | 4.87% | -10.51% | -15.79% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | S$59.37B | 10.05 | 12.80% | 6.49% | -0.76% | 4.96% |
* Financial Sector Average
SG:O39
OCBC
20.17
4.06
25.17%
SG:D05
DBS Group Holdings
57.34
15.74
37.85%
SG:S68
Singapore Exchange
17.31
5.46
46.11%
SG:U11
UOB
36.01
1.47
4.27%
SG:G07
Great Eastern Holdings Limited
15.47
3.03
24.36%
SG:S41
Hong Leong Finance Limited
2.64
0.29
12.34%
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.