Oversea-Chinese Banking Corporation (O39) Q2 2025 earnings summary

Executive summary

• Net profit for 1H25 was S$3.70 billion, down 6% year-over-year, with total income stable at S$7.20 billion and cost-to-income ratio at 38.9%.

• Net interest income declined 5% to S$4.63 billion due to lower rates, while non-interest income rose 8% to S$2.57 billion, driven by fee and trading income.

• Wealth management income reached a record S$2.66 billion, up 4% year-over-year, with AUM rising 11% to S$310 billion.

• Insurance profit contribution from GEH grew 10% to S$553 million, supported by improved investment performance and increased stake.

• Interim dividend of 41 cents per share declared, maintaining a 50% payout ratio.

Financial highlights

• Customer loans grew 7% year-over-year to S$325 billion, and deposits rose 10% to S$407 billion; CASA ratio improved to 49.8%.

• NPL ratio stable at 0.9% for five consecutive quarters; NPA coverage ratio at 156%.

• Operating profit before allowances was S$4.40 billion, down from S$4.54 billion year-over-year.

• Allowances for loans and other assets increased to S$326 million from S$313 million.

• Sustainable financing loans rose 19% year-over-year to S$53 billion, now 16% of total group loans.

Outlook and guidance

• FY 2025 NIM expected at 1.9%-1.95% due to lower SORA and HIBOR; net interest income to decline mid-single digit percentage.

• Loan growth guidance maintained at mid-single digit; cost-to-income ratio to stay in low 40s.

• Credit cost guided at 20-25 basis points; proactive risk management and tight underwriting to continue.

• Dividend payout ratio targeted at 60% for FY 2025, including special dividends and share buybacks.

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