Oversea-Chinese Banking Corporation (O39) Q4 2025 earnings summary

Executive summary

• Profit before tax for FY 2025 rose 2% year-over-year to a record SGD 9.12 billion, surpassing SGD 9 billion for the first time, driven by broad-based growth in non-interest income and well-managed expenses.

• Group net profit for FY 2025 was SGD 7.42 billion, down 2% from the previous year due to higher tax expenses and the new 15% global minimum tax, with EPS at SGD 1.63, down 3%.

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

• Record total income, disciplined expense management, and lower allowances drove pre-tax profit growth.

• Wealth management and insurance delivered strong results, offsetting lower banking profit.

Financial highlights

• Net interest income (NII) fell 6% to SGD 9.15 billion due to declining interest rates, while non-interest income grew 16% to a record SGD 5.46 billion.

• Fee income rose 22%, trading income increased 10%, and insurance profit contribution rose 28% to SGD 1.13 billion; wealth management fees surged 33%.

• Operating expenses increased 2%, maintaining a cost-to-income ratio of 40%.

• Customer deposits grew 10% year-over-year to SGD 428 billion; CASA ratio improved to 50.7%.

• Credit costs declined to 17 basis points, and NPA coverage ratio stood at 151%.

Outlook and guidance

• Expectation of continued market uncertainty and softening interest rates in 2026.

• Anticipate slight to moderate decline in NII but aim for stable to growing total income, with double-digit growth targeted for non-interest income, especially in wealth and wholesale banking.

• Loan growth targeted at mid-single digits; credit costs guided at 20-25 basis points.

• Maintain 50% ordinary dividend payout policy and complete SGD 2.5 billion capital return plan by FY 2026.

• Targeting a 14% Group CET1 CAR on a fully phased-in basis.