Oversea-Chinese Banking Corporation (O39) Q1 2026 earnings summary

Executive summary

• Net profit for Q1 2026 rose 13% quarter-on-quarter and 5% year-on-year to S$1.97 billion, driven by record total and non-interest income, and robust wealth management growth.

• Return on equity was 13% annualized; cost-to-income ratio improved to 39.3% with disciplined cost management.

• Asset quality remained resilient with NPL ratio stable at 0.9% for eight consecutive quarters.

• Wealth management and insurance income saw robust growth, with record customer flow treasury income.

• Announced acquisition of HSBC Indonesia International Wealth and Premier Banking portfolio, expected to be earnings accretive and enhance the franchise.

Financial highlights

• Total income grew 5% year-on-year and 6% quarter-on-quarter to S$3.83 billion; non-interest income surged 23% year-on-year and 22% quarter-on-quarter to S$1.61 billion.

• Net interest income for Q1 2026 was S$2.22 billion, down 5% year-on-year and 3% sequentially due to lower interest rates.

• Fee income rose 12% quarter-on-quarter and 24% year-on-year to S$675 million, led by a 34% increase in wealth management fees.

• Operating expenses were S$1.5 billion, up 6% year-on-year but down 4% sequentially; cost-to-income ratio at 39.3%.

• Customer loans grew 9% year-on-year and 2% quarter-on-quarter to S$347 billion; deposits up 10% year-on-year and 4% quarter-on-quarter to S$444 billion.

Outlook and guidance

• 2026 financial targets maintained despite near-term uncertainties from geopolitical tensions, Middle East conflict, and energy prices.

• CET1 capital adequacy target remains at 14% medium-term; fully phased-in CET1 ratio at 15.2%.

• Expect to complete S$2.5 billion capital return plan by FY2026, with dividends paid in FY2027.

• Double-digit growth targeted for wealth management AUM and income.

• Credit costs guided at 20-25bps; CIR expected in low-to-mid 40% range.