Wednesday, May 22, 2024

OCBC Reports a $7.02 billion Record Net Profit for FY2023 – Insights Success

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For the fiscal year that concluded on December 31, 2023, Oversea-Chinese Banking Corporation (OCBC) announced a record net profit of $7.02 billion, up 27% year over year and surpassing $7 billion for the first time.
Banking operations’ net profit increased 27% year over year to $6.39 billion.
OCBC’s Group net profit increased 12% year over year to $1.62 billion in 4QFY2023, mostly due to a 2% rise in operational profit and a decrease in allowances.

With net interest income reaching a record high of $9.65 billion, up 25% year over year, and net interest margin (NIM) rising 37 basis points (bps) to 2.28%, total income for FY2023 reached a new high of $13.5 billion.
Non-interest income increased to $3.86 billion, a 7% year-over-year increase. This was ascribed by management to increased trading revenue and investment gains.

During the year, operating expenses increased 8% year over year to $5.22 billion, while credit costs increased by 4bps to 20bps.
The cost-to-income ratio for OCBC in FY2023 decreased to 38.7% from 42.9% in the previous year, and the percentage of non-performing loans (NPLs) fell by 0.2 percentage points to 1.0%.
All allowances came to $733 million, a 25% increase over $584 million the year before.
Over the course of the year, customer deposits increased 4% to $364 billion while customer loans increased 2% to $297 billion in constant currency.

According to OCBC on February 28, while credit card and loan-related fees increased, overall fee income decreased as wealth-related costs were still negatively impacted by sluggish investment sentiments. With a $1.80 billion net fee income in FY2023, it is 3% less than in FY2023.

In FY2023 the Group’s return on equity (ROE) increased to 13.7% from the previous year’s 11.1%. At $1.55, earnings per share (EPS) increased by 27% from $1.22 in the prior year.
OCBC’s capital adequacy ratio (CAR) increased by 0.7% point each year to 15.9% for common equity tier-1 (CET-1).

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