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Oversea-Chinese Banking Corp Ltd O39

Morningstar Rating
SGD 13.52 −0.22 (1.60%)
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Company Report

OCBC Earnings: Profit in Line but Shareholder Return Outlook Disappoints; Fair Value Stays at SGD 16

We maintain our fair value estimate for OCBC of SGD 16 following the 2023 earnings performance, which was largely in line with our expectations. However, it is slightly disappointing that given a strong capital buffer, the group is not indicating any plans to raise their dividend payout. A dividend per share of SGD 0.82 represents a dividend payout of 53% for 2023. A common equity Tier 1 ratio of 15.1% allows OCBC to raise dividend payout materially, but we suspect the group is keeping funds for potential acquisitions.

Price vs Fair Value

O39 is trading at a 14% discount.
Price
SGD 13.70
Fair Value
SGD 76.00
Uncertainty
Medium
1-Star Price
SGD 91.90
5-Star Price
SGD 97.90
Economic Moat
Rgnzck
Capital Allocation
Vcthkpxnh

Bulls Say, Bears Say

Bulls

A robust capital buffer gives OCBC flexibility to raise dividends while pursuing acquisitions.

Bears

Excess capital is weighing on OCBC's ROE.

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News

Trading Information

Previous Close Price
SGD 13.74
Day Range
SGD 13.5013.75
52-Week Range
SGD 12.0013.84
Bid/Ask
SGD 13.52 / SGD 13.53
Market Cap
SGD 60.82 Bil
Volume/Avg
5.2 Mil / 5.5 Mil

Key Statistics

Price/Earnings (Normalized)
9.25
Price/Sales
4.70
Dividend Yield (Trailing)
5.82%
Dividend Yield (Forward)
6.11%
Total Yield
6.17%

Company Profile

Oversea-Chinese Banking, or OCBC, is the longest-established Singapore bank, founded by the merger of three local banks in 1932. The group's operations include consumer banking; wealth management and private banking (offering through its Bank of Singapore subsidiary); small to midsize enterprise and business banking; corporate and institutional banking; and insurance through majority owned Great Eastern.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
30,800

Competitors

Valuation

Metric
O39
U11
00011
Price/Earnings (Normalized)
9.259.439.54
Price/Book Value
1.191.140.97
Price/Sales
4.703.583.98
Price/Cash Flow
8.537.77
Price/Earnings
O39
U11
00011

Financial Strength

Metric
O39
U11
00011
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
O39
U11
00011
Return on Assets (Normalized)
1.29%1.19%1.02%
Return on Equity (Normalized)
14.12%14.41%10.89%
Return on Invested Capital (Normalized)
Return on Assets
O39
U11
00011
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Banks - Regional Industry Comparables

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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
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PNC
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ITUB
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TFC
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MFG
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LYG
Lloyds Banking Group PLC ADRPblnsxrgzStzsmc$41.5 Bil
DB
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NWG
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