Articles by Yantoultra Ngui

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Singapore's OCBC bank Q3 profit beats estimates, flags weaker margins - Reuters

SummaryCompaniesNet profit steady at S$1.98 bln, beats forecastNIM drops to 1.84% from 2.18% a year ago2025 NII seen down mid-to-high single-digit percentDividend payout ratio maintained at 60%, plus buybacks SINGAPORE, Nov 7 (Reuters) - Singapore's second-largest bank Oversea-Chinese Banking Corp, or OCBC (OCBC.SI), opens new tab, flagged a more cautious outlook for 2025 as margin pressures persisted, even as its third-quarter net profit beat market expectations. "Looking ahead, the external environment remains complex, shaped by shifting policy dynamics and geopolitical tensions," said OCBC's Group CEO Helen Wong in a statement. "Our strong balance sheet and robust capital position provides us with flexibility to manage these risks, and enables us to support our customers and invest for future growth," she added. Advertisement · Scroll to continueReport Ad OCBC now expects net interest income to decline by a mid-to-high single-digit percentage in 2025, compared with a mid-single-digit drop in the second quarter, according to Wong's slides accompanying the results. The bank narrowed its net interest margin, a key profitability gauge, forecast to around 1.90%, from a range of 1.90% to 1.95% earlier. Other targets remain unchanged, including mid-single-digit loan growth, cost-to-income ratio in the low 40s and a 60% total dividend payout ratio for the full-year plus share buybacks, according to the slides. OCBC's results rounded up a mixed third-quarter earnings season for Singapore banks, which have faced headwinds from moderating interest rates and an uncertain macroeconomic environment. Advertisement · Scroll to continue Larger peer DBS Group (DBSM.SI), opens new tab posted on Thursday better-than-expected third-quarter earnings, sending its shares to a record high, while smaller rival United Overseas Bank (UOBH.SI), opens new tab profit dropped after it booked hefty credit allowances. Singaporean bank earnings also come on the heels of mixed results from global peers last week. HSBC's (HSBA.L), opens new tab third-quarter pre-tax profit fell 14% after a $1.4 billion litigation charge tied to the Bernard Madoff fraud, while Standard Chartered (STAN.L), opens new tab beat estimates with a 3% rise in profit, helped by record wealth income and strong markets activity. OCBC, which is also Southeast Asia's second-largest lender by assets, said July-September net profit was S$1.98 billion ($1.53 billion) versus S$1.97 billion a year earlier. This beat the mean estimate of around S$1.81 billion polled by LSEG. Ad Break Coming Up NEXT StayNext OffEnglish 180p288p360p480p540p576p720pHD1080pHDAuto (180p) About ConnatixV2143896119 About ConnatixV2143896119 Continue watchingafter the adVisit Advertiser websiteGO TO PAGE The performance was supported by higher non-interest income and lower allowances, it said. OCBC, which counts Singapore, greater China, Indonesia and Malaysia among its key markets, said return on equity dropped to 13.4% in the third quarter from 14.1% in the same period of 2024. Net interest margin dropped to 1.84% during the quarter from 2.18% a year earlier. ($1 = 1.2942 Singapore dollars) Reporting by Yantoultra Ngui; Editing by Chris Reese and Sam Holmes Purchase Licensing Rights Get the key points from this story with Reuters AI Yantoultra NguiThomson ReutersYantoultra Ngui is the Southeast Asia Deals Correspondent of Reuters in Singapore, covering M&A and capital market activities in a region that is fast emerging as one of the world’s biggest economies. He previously was a reporter at Bloomberg and The Wall Street Journal (WSJ). Notably, he was part of WSJ's team that covered the financial scandal at Malaysian state fund 1MDB, and that won SOPA Excellence in Breaking News award for the coverage of the assassination of Kim Jong Nam, the half-brother of North Korea's leader Kim Jong Un, in Malaysia in 2018. Yantoultra graduated with an MBA in Finance from Universiti Putra Malaysia (UPM) in 2010.EmailXLinkedin