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Business Times
01-08-2025
- Business
- Business Times
OCBC trims full-year NIM guidance; Q2 profit slips 7% to S$1.82 billion
[SINGAPORE] OCBC has lowered its target net interest margin (NIM) for FY2025 to a range of 1.9 to 1.95 per cent, down five to 10 basis points (bps) from an earlier range of around 2 per cent. During the second quarter, 'reduction in loan yields outpaced the drop in deposit costs', said OCBC group chief financial officer Goh Chin Yee on Friday (Aug 1). She was speaking at the bank's Q2 results briefing for the three months ended Jun 30, for which OCBC – the first of Singapore's three local lenders to report earnings – posted a 7 per cent year-on-year decline in net profit to S$1.82 billion. The drop was largely due to a 6 per cent fall in net interest income to S$2.28 billion, as NIM fell 28 bps to 1.92 per cent from 2.2 per cent a year ago. On a quarter-on-quarter basis, NIM fell 12 bps. Most of this decline was attributed to a 'sharp drop' in the Singapore Overnight Rate Average (Sora) and the Hong Kong Interbank Offered Rate (Hibor) over the quarter. The one-month and three-month compounded Sora declined by 63 bps and 49 bps, respectively, while one-month and three-month Hibor fell more steeply by 289 bps and 215 bps. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up About half of OCBC's loan book is denominated in Singapore and Hong Kong dollars. Around 80 per cent of its Singapore dollar loans and nearly all Hong Kong dollar loans are on floating rates. As a result, the reduction in loan yields more than offset the drop in deposit costs, Goh noted. In March, the lender announced a cut in the maximum interest rate for its flagship 360 Account to 6.3 per cent per annum on the first S$100,000, from 7.65 per cent. A further cut to 5.45 per cent took effect from Friday. Looking ahead, Goh expects both Sora and Hibor to 'stay steady' at current levels, with OCBC maintaining its assumption that the US Federal Reserve will cut rates three times for the rest of the year. If those assumptions hold, the bank's NIM is likely to come in 'closer to the higher end' of its revised guidance range, she added. OCBC posted an exit NIM of 1.88 per cent in June, and expects an 'upward inflection' in the coming months as the deposit rate cuts flow through. Dividend and capital return The bank's Q2 net profit of S$1.82 billion beat the S$1.79 billion consensus forecast in a Bloomberg poll of six analysts. OCBC declared an interim dividend of S$0.41 per share, down from S$0.44 a year ago. This was in line with its 50 per cent interim payout policy, said group chief executive officer Helen Wong. The bank 'remains committed' to its 60 per cent total dividend payout target for FY2025, along with its S$2.5 billion two-year share buyback plan, she added. Other full-year guidance also remained unchanged, including mid-single-digit loan growth and a cost-to-income ratio in the mid-40s. Other business drivers Non-interest income rose 5 per cent to S$1.26 billion, supported by a 24 per cent increase in fee income and a 6 per cent rise in trading income. These gains offset lower insurance income. OCBC's non-performing loan ratio held steady at 0.9 per cent. Total allowances fell to S$114 million in the quarter, down from S$144 million a year ago. For the first half of the year, the bank posted a 6 per cent decline in net profit to S$3.7 billion. Total income slipped 1 per cent to S$7.2 billion, from S$7.26 billion a year ago. Shares of OCBC were down 0.4 per cent or S$0.07 at S$16.80 as at 2 pm on Friday, following the results announcement.
Yahoo
13-03-2025
- Business
- Yahoo
OCBC Unifies Global Finance with Oracle Fusion Cloud ERP
Southeast Asia's second largest financial services group moves finance to the cloud to streamline financial processes, improve insights, and enhance compliance SINGAPORE, March 13, 2025 /PRNewswire/ -- Oracle CloudWorld Tour -- OCBC, Southeast Asia's second largest financial services group by assets, is using Oracle Fusion Cloud Enterprise Resource Planning (ERP) to support its purpose to enable people and communities to realize their aspirations. With Oracle Cloud ERP, OCBC has unified its global finance platform to increase efficiency and enhance decision-making, as it continues to strengthen its ASEAN-Greater China network. Formed in 1932 and headquartered in Singapore, OCBC has close to 420 branches and representative offices across 19 countries and regions. To enhance its operational efficiency and align its financial processes globally, OCBC turned to digitalization to transform its capabilities, moving away from manual processes. OCBC chose to implement Oracle Cloud ERP to streamline and automate its finance operations and reporting for improved organizational effectiveness. "We have a comprehensive banking, wealth management, insurance and asset management franchise that sets the OCBC Group apart from our peers. It is imperative that we work together as 'One Group' to drive synergies that will foster growth. To achieve this, our finance teams across various entities and geographies will need a unified and agile global finance platform," said Goh Chin Yee, group chief financial officer, OCBC. "Oracle Cloud ERP provided this solution, with capabilities to automate our finance operations and reporting, enabling us to harness the power of data analytics and artificial intelligence (AI). With regular refresh and updates to these capabilities, we will be able to respond swiftly to changes in our operating environment, remain competitive while ensuring compliance with regulatory and accounting changes." With Oracle Cloud ERP, OCBC has increased productivity and improved controls. Oracle Fusion Cloud Enterprise Performance Management (EPM), part of Oracle Cloud ERP, has also enabled OCBC to align its financial consolidation and reporting processes. "It is becoming increasingly essential for financial institutions to embrace new technologies to drive innovation and transformation, unlock new business opportunities and stay ahead of the always-evolving regulatory landscape," said Adrian Johnston, senior vice president, Applications, Oracle Asia Pacific. "With Oracle Cloud ERP, OCBC has embraced automation and embedded AI to increase efficiency, expand insights and accelerate decision-making as it expands into new markets worldwide." More than 10,000 organizations, across public and private sectors, turn to Oracle Cloud ERP to run their businesses. Oracle Cloud ERP offers a comprehensive set of enterprise finance and operations capabilities and embedded AI that powers touchless processes, predictive insights, and collaborative actions. With financials, accounting hub, procurement, project management, enterprise performance management, risk management, subscription management, and supply chain management & manufacturing capabilities on a single platform, and Oracle B2B - which revolutionizes the way organizations transact, pay, finance, and ship sustainably across the globe – organizations can standardize processes, embrace automation, and increase efficiency. OCBC recently received the Finance Innovation Award in the Finance and Supply Chain Award category at the 2025 Oracle Customer Excellence Awards. About Oracle Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at About Oracle CloudWorld Tour Oracle CloudWorld Tour is Oracle's global celebration of customers and partners. Join us to discover how to get the most business value from AI, explore ways to increase productivity and efficiency through automation, and learn more about our cloud infrastructure, database, and applications from the people that build and use them. For keynotes, session details, news and more visit or Trademarks Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company--ushering in the new era of cloud computing. View original content: SOURCE Oracle Sign in to access your portfolio
