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Oversea-Chinese Banking Corp Ltd O39

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OCBC First-Quarter Results Stronger on Higher Fee and Insurance Income

Michael Wu, CAIA Senior Equity Analyst

Analyst Note

| Michael Wu, CAIA |

Oversea-Chinese Banking Corporation's first-quarter net profit was SGD 1.5 billion, compared with SGD 698 million the same period last year and SGD 1.1 billion last quarter. Similar to peers, this was driven by higher fee and trading income but for OCBC, the increase in net profit was also supported by higher insurance income. Total income was 17% higher against the same period last year at SGD 2.9 billion. Excluding the insurance operation, total income was largely steady at SGD 2.3 billion. As expected, the credit cost was lower with the expected credit loss, or ECL, at SGD 161 million this quarter, compared with SGD 657 million last year. Our fair value estimate is increased slightly to SGD 13 from SGD 12.50 per share. There is no change in the overall strategy with the new CEO Helen Wong reiterating the bank’s focus on banking, wealth management and insurance. However, improvements are expected within each of the above operations and across geographies. Digitalisation remains a focus for the group.

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Company Profile

Business Description

Based in Singapore, Oversea-Chinese Banking Corp. is a banking institution providing consumer and corporate banking and treasury services throughout Asia. OCBC Bank remains the longest-established Singapore bank, founded by the merger of three local banks in 1932. The group's operations include consumer banking; wealth management through the Bank of Singapore and private banking; small to midsize enterprise and business banking; corporate and institutional banking; and insurance through Great Eastern.

63 Chulia Street, No. 10-00 OCBC Centre East
Singapore, 049514, Singapore
T +65 63187222
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 30,538

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