Record Net Profit of .02 billion reported by OCBC for FY2023

Oversea-Chinese Banking Corporation (OCBC) has reported a record-breaking net profit of .02 billion for the fiscal year that ended on December 31, 2023. This marks a 27% increase compared to the previous year and is the first time the bank has exceeded billion in net profit.

The banking operations’ net profit also saw a significant increase of 27% year over year, reaching .39 billion. OCBC’s Group net profit for the fourth quarter of FY2023 rose by 12% year over year to .62 billion. This growth was mainly attributed to a 2% increase in operational profit and a decrease in allowances.

Net interest income for OCBC reached a new high of .65 billion, a 25% year-over-year increase. The net interest margin (NIM) also saw an improvement, rising 37 basis points to 2.28%. Total income for FY2023 reached .5 billion, driven by the record-high net interest income. Non-interest income also saw a 7% year-over-year increase to .86 billion, with management attributing this growth to increased trading revenue and investment gains.

Operating expenses for the year increased by 8% year over year to .22 billion, while credit costs also increased slightly. However, the cost-to-income ratio for OCBC decreased to 38.7% from 42.9% in the previous year. The percentage of non-performing loans (NPLs) decreased to 1.0%, down 0.2 percentage points from the previous year. All allowances totaled 3 million, a 25% increase from the year before. Customer deposits grew by 4% to 4 billion, while customer loans increased by 2% to 7 billion in constant currency.

In terms of fee income, OCBC noted that credit card and loan-related fees increased, but overall fee income decreased due to sluggish investment sentiments affecting wealth-related costs. The net fee income for FY2023 was .80 billion, a 3% decrease from the previous year.

The Group’s return on equity (ROE) increased to 13.7% in FY2023, up from 11.1% the previous year. Earnings per share (EPS) also saw a significant increase of 27% to .55 from .22 in the prior year. OCBC’s capital adequacy ratio (CAR) for common equity tier-1 (CET-1) increased by 0.7% points each year to 15.9%.

Overall, OCBC’s impressive financial performance in FY2023 reflects its strong operational capabilities and strategic decision-making in a challenging economic environment.

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