OCBC shares hit record high after Q3 profit of $1.98 billion beats expectations

SINGAPORE – OCBC Bank on Nov 7 reported stronger-than-expected third-quarter profit on the back of higher non-interest income and lower allowances.

Net profit for the three months to Sept 30 was $1.98 billion, little changed from $1.97 billion a year earlier, but beating a $1.79 billion forecast in a Bloomberg poll.

Its shares rose as much as 4.4 per cent to a high of $17.94 on Nov 7, before paring gains to close 3.4 per cent higher at $17.78.

At her final OCBC results briefing on Nov 7 before retiring at the end of 2025, chief executive officer Helen Wong said: “Global trade and most major economies have shown signs of resilience. This year in particular was supported by some front-loading for trade and also technology upcycling, particularly for Asia.

“Looking ahead, operating conditions continue to be complex, and 2026 may see slower economic growth across various countries and geographies. Trade policies can continue to shift. Geopolitical tensions are still there and could have an implication on the demand and supply chains of our key markets.

“But we do feel that the fundamentals remain resilient and we are positive on the mid- to longer-term growth prospects as well.”

The bank’s net interest income (NII) for the quarter dipped 9 per cent to $2.23 billion, as net interest margin (NIM) contracted by 34 basis points to 1.84 per cent amid a softening interest rate environment.

Non-interest income rose 15 per cent year on year to $1.57 billion from broad-based fee, trading and insurance income growth.

Total allowances of $139 million were 18 per cent lower year on year.

OCBC said asset quality remained resilient, with the non-performing loan ratio unchanged at 0.9 per cent.

Ms Wong said while NII and NIM moderated, the bank is focused on asset growth.

“There are always interest rate cycles. They are always up and down. You cannot rely on high interest rates to generate a wider margin. So the crux of the matter is to always focus on growth and asset growth to defend the NII.”

Ms Wong added that it is equally important to manage funding costs.

“So, growing deposits in the right manner, especially lower-cost deposits, is key as well,” she said.

OCBC will continue to focus on driving regional account openings for companies and commercial banking customers, as well as capturing more cash management business.

The bank is maintaining most of its 2025 financial targets, including mid-single-digit loan growth and cost-to-income ratio in the low 40s.

It is committed to its 60 per cent total dividend payout ratio, and for share buybacks to be completed in 2026.

For NIM, the bank now guides to around 1.9 per cent – the lower end of the previous range of 1.9 per cent to 1.95 per cent.

OCBC was the last of Singapore’s three local banks to report quarterly results.

DBS Bank on Nov 6 posted a 2 per cent drop in third-quarter profit, while UOB on the same day said its earnings slid 72 per cent to $443 million after an additional $1 billion allowance for credit and other losses.

After hitting a record close the previous day, DBS shares closed 1 per cent lower at $54.98 on Nov 7. UOB shares fell 0.1 per cent to $33.86, after closing 2.8 per cent lower on Nov 6.