Oversea-Chinese Banking Corporation (O39) investor relations material

Executive summary

• Net profit for 1H25 was S$3.70 billion, down 6% year-over-year from a record high, with total income stable at S$7.20 billion.

• Net interest income declined 5% due to lower rates and NIM contraction, while non-interest income rose 8% on strong fee and trading income.

• Wealth management income hit a new high, up 4% and now 37% of total income; AUM grew 11% year-over-year.

• Insurance profit contribution increased 10% to $553 million, driven by improved investment performance and a higher stake in GEH.

• Cost-to-income ratio remained below 40%, reflecting disciplined cost management despite a 3% rise in operating expenses.

Financial highlights

• Net interest income for 1H25 was S$4.63 billion, down 5% YoY; non-interest income was S$2.57 billion, up 8% YoY.

• Loans and deposits grew 7–10% year-over-year; NPL ratio steady at 0.9%.

• Allowances for loans and other assets increased 4% YoY to S$326 million due to macro overlays.

• CET1 ratio at 17% (transitional), 15.3% (fully phased-in); leverage ratio at 7.3%.

• Group ROE annualized at 12.6% for Q2; EPS (annualized) was S$1.64, down 6% YoY.

Outlook and guidance

• FY25 NIM guided at 1.9–1.95%, reflecting lower SORA and HIBOR rates; NII expected to decline mid-single digits from 2024 record.

• Loan growth expected to remain mid-single digit; cost-to-income ratio to stay in low 40s.

• Credit cost guidance at 20–25 bps; dividend payout ratio to remain at 60% (including special dividend and buybacks).

• Management remains cautious on macro risks, especially tariffs, global trade fragmentation, and sectoral weakness.

• SFRS(I) 18 will impact future presentation and disclosure, effective 2027.