OCBC Profit Misses, DBS Layoffs: What’s the Outlook for 3 Major Banks?

employee
Tiger_SG
02-26
Reward Tiger-CoinsReward 500 Tiger-coins

$ocbc bank(O39.SI)$ dropped 2% today following the release of its earnings report. While OCBC remains a top performer, its rivals performed better.

For the full year 2024, the bank's net profit reached S$7.59 billion, an 8% yoy increase. However, Q4 net profit was S$1.69 billion, a 4% yoy increase, which missed analysts’ expectations of S$1.81 billion (a 6.6% miss), making OCBC the only one of Singapore’s three major banks to fall short of expectations.

This stands in stark contrast to $DBS Group Holdings(D05.SI)$ (+10% met expectations) and $UOB(U11.SI)$ (+9% exceeded expectations).

For the full year, net interest income hit a record high of S$9.76 billion (+5% YoY), but Q4 net interest margin (NIM) dropped from 2.29% to 2.15% (-14bps YoY), primarily due to rising deposit costs and competitive loan pricing.

Guidance Is Less Optimistic

Management has guided that NIM will further decline to 2% in 2025, significantly lower than 2024's 2.2%. In contrast, DBS's NIM rose to 2.15% in Q4.

OCBC also projected mid-single-digit loan growth in 2025, compared to 8% loan growth in 2024.

Despite announcing a S$2.5 billion capital return, the details were less attractive compared to its competitors.

  • OCBC: Through special dividends (10% of 2024-2025 net profit) and share buybacks, the total payout ratio is 60% (including ordinary dividend of 85 cents per share and special dividend of 16 cents per share).

  • DBS: In addition to the S$3 billion share buyback in Q3, the bank also introduced a special bonus of S$1,000 for all employees (except executives) and a new dividend policy.

  • UOB: The bank announced a S$3 billion capital return plan, including S$2 billion in share buybacks.

Among the major banks, DBS had a relatively strong performance this earnings season.

However, in an interview yesterday, DBS CEO Piyush Gupta, who is set to step down, mentioned that DBS will cut around 4,000 contract and temporary workers over the next three years, with AI taking over their roles.

Does this indicate that DBS is also focusing on cost-cutting and efficiency?

Questions for tigers:

  • How do you view the earnings of the three major banks?

  • Which bank is worth buying now?

  • Will AI replacing human workers become a major trend in the coming years?

  • Leave your comments or post directly in the topic to win tiger coins~

OCBC Earnings Misses: Will DBS or UOB Continue to Outperform?
Singapore's second-largest bank, Oversea-Chinese Banking Corp, said it expects loan growth to moderate in 2025 after posting a smaller-than-expected rise in fourth quarter profit and unveiling a S$2.5 billion capital return. OCBC was the only bank to miss forecasts in an otherwise strong fourth quarter earnings season for Singapore banks, which declared multi-billion capital return packages alongside their financial results, sending their shares to record-highs. ------------ Does DBS or UOB Offer More Upside? What's your target price for OCBC? Which bank is worth buying right now?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Reward expired
Due to insufficient number of valid participants, 500Tiger coins have been refunded to the initiator
Deadline to 03/02 12:29
Reward-post

Comments

  • koolgal
    02-27
    koolgal

    🌟🌟🌟Even though $ocbc bank(O39.SI)$  missed Analysts' expectations , it is fundamentally a profitable bank with its FY 24 Group Net Profit up 8%.  OCBC has been consistent in rewarding its shareholders with great dividends.  The current dividend yield is 5%.    

    OCBC is still the 2nd largest bank in Singapore and the No. 2 stock in the STI ETF $STI ETF(ES3.SI)$  by market capitalisation.

    I believe that OCBC's share price will recover and continue its upward growth trajectory in the long term.  It is time in the market that counts, not timing the market.

    @Tiger_SG  @TigerStars  @TigerClub  @CaptainTiger  

  • icycrystal
    02-27
    icycrystal
    SG Banks worth buying [Doubt] [Doubt] [Doubt]

    $ocbc bank(O39.SI)$ dropped 2% today following the release of its earnings report. While OCBC remains a top performer, its rivals performed better.

    Despite announcing a S$2.5 billion capital return, the details were less attractive compared to its competitors.

    @Shyon @Aqa @SPACE ROCKET @TigerGPT @GoodLife99 @Universe宇宙 @LMSunshine @koolgal @rL @HelenJanet

    How do you view the earnings of the three major banks?


    Which bank is worth buying now?


    Will AI replacing human workers become a major trend in the coming years?


    Leave your comments or post directly in the topic to win tiger coins~

  • MHh
    02-26
    MHh
    With the high interest rates and high loans, I thought all 3 banks would do well. OCBC is really unexpected. I think DBS has been the all time favourite and has been a safe option. However, the CEO is stepping down. I think it would be good to see the new direction first. AI will create a shift in job trends. Repetitive job will be easily replaced by technology and AI. However, there will be more people employed in areas that require technology related skills such as redesigning related work processes, cybersecurity, AI-assisted processes that enhance the bank-customer relationship and service.
    @Success88 @Fenger1188 @Universe宇宙 @rL @Wayneqq @HelenJanet @DiAngel @SPOT_ON @Kaixiang come join
  • 北极篂
    02-28
    北极篂
    新加坡三大银行的盈利表现可以说是相对强劲的，特别是星展银行、大华银行和华侨银行都在近年来持续受益于亚洲市场的增长，尤其是在科技创新和数字银行方面的投资，使得它们在全球竞争中占据了有利位置。尽管近期市场波动和全球经济放缓对它们的盈利有所影响，但银行们普遍表现出了较强的抗风险能力，尤其是在贷款和财富管理业务上的稳步增长。


    从目前的情况来看，星展银行依然是值得关注的选择。它在数字化转型和亚洲市场拓展方面具有独特优势，其盈利模式更为多元化，且财务状况稳健。此外，星展银行在金融科技领域的布局也增强了它对未来增长的驱动力。相比之下，大华银行和华侨银行虽然也有不错的表现，但从市场的创新性和长期增长潜力来看，星展的优势稍微更大一些。


    至于人工智能的趋势，我确实认为AI将成为未来几年的重要趋势，尤其是在重复性和数据处理密集型的行业中，AI能有效替代人类完成大部分工作。这不仅能够提高效率，还能降低成本。然而，AI也无法完全替代那些需要创造性思维和人际互动的职业，比如艺术创作、心理咨询等。因此，AI替代工作将主要集中在一些低技能的岗位，而高技能、需要人类情感参与的岗位仍然有其独特的价值。
  • Aqa
    02-27
    Aqa
    Share prices of the three Singapore banks $DBS Group Holdings(D05.SI)$ $ocbc bank(O39.SI)$ and $UOB(U11.SI)$ are at their all time high for years and investors are still confident with them. Such confidence is fueled by a number of reasons. The interest rate is likely to be “higher for longer”. The U.S. harsh tariffs policies will prove inflationary and the Fed will be forced to hold rates higher for longer. The 3 banks will benefit from higher net interest income. These 3 banks have also projected double digit growth of their non-interest income to boost their total income. The trio of banks also have excess capital in multi-billions to give out higher dividends, share buy-back and business growth. The 3 banks will definitely grow stronger in 2025. Thanks @Tiger_SG @icycrystal
  • Kunzi
    02-26
    Kunzi
    single digit growth only is a bummer for OCBC, adding to it the relatively weak guidance for the upcoming quarters isn't helping it's cause.
    DBS on the other hand appears to be the much stronger performing asset. Furthermore, them looking ahead to the future and recognizing the AI trend throughout the world and reacting to it, is a good look for DBS.
    I think DBS is the best play here, probably followed by UOB and OCBC being a distant third.
    $ocbc bank(O39.SI)$ $DBS Group Holdings(D05.SI)$ $UOB(U11.SI)$
Leave a comment
29
6