OCBC’s net profit for the fourth quarter ended Dec 31, 2023 gained 12 per cent to S$1.62 billion from S$1.44 billion a year prior, driven by a 2 per cent increase in operating profit as well as lower allowances.
The latest profit figure fell short of the S$1.72 billion estimate based on one analyst polled by Bloomberg.
On Thursday (Feb 28), the lender reported a net interest income of S$2.46 billion, up 3 per cent from a year ago as average assets grew 4 per cent.
Net interest margin (NIM) moderated 2 basis points to 2.29 per cent, which OCBC attributed to higher funding costs that more than offset its increase in asset yields.
Non-interest income rose 25 per cent to S$811 million, as net fee income increased 16 per cent year on year due to higher fees from wealth management, credit card and loan-related activities. Net trading income also improved 22 per cent on the back of higher customer flow treasury income, offset in part by a decline in insurance income.
The bank’s non-performing loan ratio as at Dec 31, 2023 was 1 per cent – down 0.2 percentage point from the prior year.
Total allowances for the quarter stood at S$187 million, down 41 per cent from S$314 million in the prior year due to a decline in allowances for both impaired and non-impaired assets.
The bank declared a final dividend of S$0.42 per share, bringing its total dividend for the full year to S$0.82 per share, up 21 per cent from S$0.68 the prior year.
It represents a dividend payout ratio of 53 per cent of the group’s FY2023 net profit, which was up 27 per cent at S$7.02 billion.
Shares of OCBC closed Tuesday S$0.02 or 0.2 per cent lower at S$13.31.
