SINGAPORE: Oversea-Chinese Banking Corp (OCBC) on Wednesday said its fourth-quarter net profit rose 3%, as the new CEO of Singapore's second-largest bank laid out his growth plans.
Tan Teck Long, who became CEO at the beginning of the year, said the lender would build on its wealth management offerings and increase its ASEAN presence.
"Even though we may be carried away and be confused by uncertainties in the marketplace, ASEAN is actually a good place to be in," he said, adding that Hong Kong remained a key market.
OCBC's key markets include Singapore, Greater China, Indonesia and Malaysia.
"We are seeing a rising Asia with rising intra-Asia trade, rising intra-Asia investments and wealth flows," Tan said.
In the fourth quarter, OCBC's wealth management fees rose 26% from a year earlier, which helped drive its net fee income up 16% to S$602 million ($475.93 million).
Wealth management income grew 14% to a record S$5.60 billion for the full year, contributing 38% of the group's total income.
Tan said the bank will continue to leverage its hubs in Singapore and Hong Kong to capture high-net-worth wealth flows, a strategy that has yielded "high growth," while also deepening its wealth footprint in Malaysia and Indonesia.
RATE AND TRADE HEADWINDS
OCBC's 3% year-on-year rise in fourth-quarter net profit to S$1.74 billion beat a mean estimate of around S$1.69 billion from two analysts polled by LSEG. The increase was driven by a 37% jump in non-interest income to S$1.32 billion.
Net interest margin (NIM), a key profitability gauge, dropped to 1.86% from 2.15% a year earlier.
OCBC shares were down 0.9% on Wednesday, against a 0.14% fall in Singapore's benchmark index.
For 2026, the bank has taken a more cautious outlook due to rate headwinds and uncertainty around global trade.
It expects a slight-to-moderate fall in net interest income this year as rate cuts weigh on margins, though total income is expected to hold steady or grow.
Return on equity is also expected to be stable or show a slight improvement, driven by a stronger focus on higher-returning businesses. The bank did not provide a 2026 NIM target.
"Currently, the bank's still digesting the effect of NIM compression, so that is a big uncertainty," Tan said. "So that's why we are a little bit cautious."
OCBC reiterated a 50% ordinary dividend payout ratio and said it would seek to complete a S$2.5 billion capital return plan by this year.
Separately, it unveiled a special dividend of 16 cents, bringing the total dividend to 99 cents, slightly lower than S$1.01 a year earlier.
OCBC's results closed out a mixed fourth-quarter earnings season for Singapore banks.
On February 9, larger peer DBS Group reported earnings that missed analysts' forecasts, while smaller rival United Overseas Bank on Tuesday also reported softer earnings, though they came in above expectations. - Reuters
