Oversea-Chinese Banking Corporation (O39) H1 2024 earnings summary

Executive summary

• Record 1H24 net profit of S$3.93 billion, up 9% year-over-year, with annualized ROE at 14.5% and total income surpassing S$7 billion for the first time.

• Broad-based income growth across banking, wealth management, and insurance; cost discipline and benign credit costs supported results.

• Wealth management income rose 14% to S$2.54 billion, now 35% of total income; AUM reached S$279 billion.

• Interim dividend raised 10% to 44 cents per share, payout ratio at 50%.

• Asset quality improved, with NPL ratio at 0.9% and allowance coverage at 155%.

Financial highlights

• Net interest income up 3% to S$4.87 billion, driven by 3% loan growth and 12% growth in other financial assets.

• Non-interest income grew 15% to S$2.39 billion, led by higher fees, trading, and insurance income.

• Cost-to-income ratio improved to 37.5%; operating expenses rose 6% to S$2.72 billion.

• Customer loans at S$304 billion, up S$7 billion year-over-year; sustainable financing loans grew 33% to S$44.6 billion.

• Customer deposits stable at S$370 billion, CASA ratio increased to 47.9%.

Outlook and guidance

• NIM guidance maintained at 2.2%-2.25%, expected at lower end by year-end.

• Loan growth expected to be low single digit; credit costs projected at 20-25 bps.

• Management remains confident in navigating macroeconomic challenges, citing strong capital, funding, and liquidity positions.

• Focus on capturing trade, investment, and wealth flows across ASEAN and Greater China.

• Heightened geopolitical uncertainties and global risks acknowledged.