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

Executive summary

• FY2025 profit before tax 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 disciplined expense management.

• Group net profit was SGD 7.42 billion, down 2% from last year due to higher tax expense, mainly from increased profit in higher tax jurisdictions and the new 15% global minimum tax.

• Asset quality remained resilient with NPL ratio stable at 0.9% for seven consecutive quarters and credit costs at 17 bps.

• Record total income, strong non-interest income, and wealth management and insurance results offset lower banking profit.

• Board proposed a final ordinary dividend of 42 cents and a special dividend of 16 cents, bringing total FY25 dividends to 99 cents per share (60% payout ratio).

Financial highlights

• Net interest income fell 6% to SGD 9.15 billion due to declining rates, while non-interest income grew 16% to SGD 5.46 billion, reaching a new high.

• Fee income up 22% to SGD 2.41 billion; trading income up 10% to SGD 1.68 billion; insurance profit contribution up 28% to SGD 1.13 billion.

• Operating expenses rose 2% to SGD 5.88 billion, with cost-to-income ratio stable at 40.2%.

• Customer loans grew 9% year-over-year to SGD 341 billion; customer deposits up 10% to SGD 428 billion, with CASA ratio at 50.7%.

• CET1 CAR: 16.9% transitional, 15.1% fully phased-in Basel III.

Outlook and guidance

• Expect market uncertainty and continued interest rate pressure in 2026, with a slight to moderate decline in NII but stable to growing total income.

• Loan growth expected in mid-single digits; credit costs guided at 20-25 bps.

• Maintain 50% ordinary dividend payout policy; SGD 2.5 billion capital return plan to complete by FY2026.

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

• Double-digit growth targeted for non-interest income, especially in wealth.