OCBC Group First Half 2025 Net Profit at S$3.70 billion
Interim dividend of 41 cents declared
https://sporeshare.blogspot.com/2025/07/ocbc-bank-1st-half-results-is-out.html
Singapore, 1 August 2025 – Oversea-Chinese Banking Corporation Limited (“OCBC”) reported net profit
of S$3.70 billion for the first half of 2025 (“1H25”), 6% below the record S$3.93 billion in the previous year
(“1H24”).
OCBC’s total income was little changed, as a decline in net interest income from the peak level a year ago
was mostly compensated by robust fee and trading income growth. Cost-to-income ratio was maintained
below 40%, and higher credit allowances were set aside in view of the current uncertain operating
environment. Asset quality remained benign with non-performing loan ratio at 0.9%, while allowance
coverage for total non-performing assets stood at 156%. The Group maintained its solid financial position,
and an interim ordinary dividend of 41 cents was declared, representing a payout ratio of 50% of 1H25
Group net profit. The Group remains committed to the previously announced S$2.5 billion capital return
which includes a special dividend amounting to 10% of our FY25 Group net profit and share buybacks over
two years, to be completed in 2026. Together with OCBC’s target 50% ordinary dividend payout ratio, this
represents a total dividend payout ratio of 60% for FY25.
H25 Year-on-Year Performance
Group net profit was S$3.70 billion, 6% lower than S$3.93 billion a year ago.
➢ Amid a softening interest rate environment, net interest income fell 5% to S$4.63 billion, as a
compression in net interest margin (“NIM”) more than offset an 8% rise in average asset volume.
Average asset growth was driven by an increase in loans and other interest-earning high-quality assets
which were lower yielding. NIM declined by 25 basis points to 1.98%, as the drop in asset yields
outpaced the decrease in funding costs.
➢ Non-interest income grew 8% to S$2.57 billion, buoyed by a rise in fee and trading income.
• Net fee income of S$1.13 billion was 19% higher from broad-based growth, underpinned by
increased customer activities. In particular, wealth management fees which made up nearly half
of net fee income, surged by 25%, with growth across all wealth product channels.
• Net trading income was S$771 million, 6% above the previous year. Customer flow treasury
income was up 10%, driven by both wealth and corporate segments, with higher treasury sales
across the Group’s key markets.
• Insurance income from Great Eastern Holdings (“GEH”) declined by 9% to S$532 million, largely
attributable to the mark-to-market impact of decline in interest rates on the valuation of insurance
contract liabilities, as well as lower valuation of private equity holdings, from its insurance funds.
New business embedded value (“NBEV”) increased by 16% to S$317 million and NBEV margin
rose to 44.7% from 28.0% a year ago, driven by improved insurance product mix.
➢ The Group’s wealth management income, comprising income from private banking, premier private
client, premier banking, insurance, asset management and stockbroking, increased 4% to S$2.66
billion. Group wealth management income accounted for 37% of total income, higher than 35% in 1H24.
Our Banking wealth management AUM expanded by 11% to an all-time high of S$310 billion, driven
by both net new money inflows and positive market valuation.
➢ Operating expenses were S$2.80 billion, up 3% from the previous year. Staff costs were 4% higher,
attributable to annual salary increments and increased variable compensation linked to higher business
activities. Technology-related expenses were up as the Group continued to invest in common platforms
and upgrade its capabilities across markets. Cost-to-income ratio was 38.9% for 1H25, compared to
37.5% for 1H24.
➢ Total allowances rose by 4% to S$326 million, mainly due to an increase in allowances for non-
impaired assets.
➢ Share of results of associates was S$537 million, up 8% from S$498 million a year ago.
➢ The Group’s annualised return on equity was 12.6%, lower than 14.5% in the preceding year, while
annualised earnings per share was S$1.64, 6% below 1H24.
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