Oversea-Chinese Banking Corporation (O39) Q3 2024 TU earnings summary

Executive summary

• Net profit for Q3 2024 reached SGD 1.97 billion, up 9% year-on-year and 2% quarter-on-quarter, with nine-month net profit at a record SGD 5.9 billion, up 9% year-on-year, driven by record total income and strong non-interest income growth.

• Wealth management and insurance segments delivered significant contributions, with wealth management income up 15% year-on-year to SGD 1.29 billion and AUM at a record SGD 284 billion; Great Eastern's profit contribution rose 72% year-on-year.

• Asset quality remained strong, with NPL ratio at 0.9% and NPA coverage ratio increasing to 164%.

• Cost-to-income ratio improved to 38.5% for Q3 and 37.8% for the nine months, reflecting positive operating jaws.

• Annualised ROE rose to 14.1% for Q3 2024 and 14.4% for the nine months.

Financial highlights

• Total income for Q3 2024 was SGD 3.8 billion, up 11% year-on-year and 5% quarter-on-quarter; nine-month total income surpassed SGD 11 billion for the first time.

• Net interest income for Q3 was stable at SGD 2.43 billion; non-interest income surged 41% year-on-year to SGD 1.37 billion.

• Fee income for Q3 rose 10% year-on-year to SGD 508 million, driven by a 25% increase in wealth management fees.

• Trading income for Q3 more than doubled year-on-year to SGD 508 million; nine-month trading income exceeded SGD 1 billion for the first time.

• Operating expenses increased 9% year-on-year in Q3 2024, mainly due to higher business activity and digitalisation investments.

Outlook and guidance

• Full-year 2024 NIM expected around 2.2%, at the lower end of the guided range, with low single-digit loan growth and credit costs in the range of 20 basis points.

• ROE projected above 14%, supported by resilient economic fundamentals in key Asian markets.

• Double-digit non-interest income growth expected in 2025 to offset potential NII decline from lower rates.

• Profit expected to remain stable in 2025, with higher loan growth potential and continued focus on building CASA balances.

• Proactive balance sheet management and targeted technology investments to drive growth and efficiencies.