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 from a record high, with total income stable at S$7.20 billion.

• Net interest income declined 5% to S$4.63 billion due to lower rates and NIM contraction, while non-interest income rose 8% year-over-year, 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.

• Asset quality remained resilient with NPL ratio at 0.9% and NPA coverage at 156%.

• Interim dividend of 41 cents per share declared, maintaining a 50% payout ratio and supporting a targeted 60% full-year payout.

Financial highlights

• Loans grew 7% year-over-year to S$325 billion and deposits rose 10% to S$407 billion; CASA deposits up 14% with CASA ratio at 49.8%.

• Cost-to-income ratio held at 38.9%, with operating expenses up 3% year-over-year.

• Wealth management fees rose 25% to S$548 million; trading income up 6% to S$771 million.

• Insurance profit contribution from GEH grew 10% to S$553 million; NBEV up 16% with margin at 44.7%.

• EPS (annualised) was S$1.64, down 6% year-over-year; ROE (annualised) at 12.6%.

Outlook and guidance

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

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

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

• Dividend payout ratio to remain at 60%, including special dividends and share buybacks.

• Capital and liquidity positions are strong, supporting long-term growth and resilience.