Latest Forum Topics / OCBC Bank Last:14.89 -0.03 | Post Reply |
What is the magic in OCBC rising price?
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Rosesyrup
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12-Aug-2013 20:42
Yells: "Get your own opinion, don't follow blindly." |
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Here's what boosted Singapore's impressive GDP in 2Q  'Modest improvements' seen in other segments. According to Bank of America Merrill Lynch, Singapore's GDP growth came in at +3.8% in 2Q, above expectations and earlier flash  estimate of +3.7%. Higher reading came from stronger services (+5.5% vs. +5%  flash estimate), despite softer manufacturing (+0.2% vs. +1.1% flash) and construction (+5.1% vs. +5.6% flash). On a quarter-on-quarter seasonally adjusted annualized basis, GDP expanded a sharp +15.5% from the first quarter. Growth was led by services, in particular financial services (+13.1% in 2Q vs. +10.6% in 1Q), wholesale & retail services (+5.6% vs. +0.2% in 1Q). A sharp turnaround was seen in transport & storage (+2.5% vs. -0.9% in 1Q). Other services components also showed modest improvements, including business services (+3.7%), info-com (+3.5%), hotels & restaurants (+3.2%) and ?other services? (+1.7%). Visitor arrivals remained healthy, supporting the tourismrelated segments.    SOURCE: YAHOO FINANCE LINK: http://sg.finance.yahoo.com/news/heres-boosted-singapores-impressive-gdp-062800701.html  |
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Octavia
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02-Aug-2013 08:46
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Interim dividend of 17c payable for each shares was announced.Record date 14 Aug 13 and make payable on 28 aug 13.   |
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Octavia
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02-Aug-2013 08:36
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OCBC Q2 profit falls 8% Oversea-Chinese Banking Corp (OCBC), Singapore's second-biggest bank, posted an 8 per cent drop in quarterly profit, a below-forecast result after it was hit by lower contributions from its insurance unit. OCBC earned S$597 million in the three months ending in June, compared with S$648 million a year earlier. The profit was below the S$643 million average forecast of six analysts polled by Reuters. The poll was taken before OCBC's insurance unit Great Eastern Holdings posted a 77 per cent drop in quarterly profit after it was hit by the second-quarter market volatility that drove its non-operating business to a loss of S$155.6 million. OCBC underperformed its domestic rivals DBS Group Holdings and United Overseas Bank, which both beat market expectations by posting net profit growth of 10 per cent and 9.9 per cent respectively |
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Rosesyrup
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31-Jul-2013 22:18
Yells: "Get your own opinion, don't follow blindly." |
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Why OCBC is a better choice. Not long ago, analysts claimed that DBS would be a better choice of investment than OCBC and UOB. Reasons given were: A1) Singapore Government's cooling measure housing market would hurt  the local banks. Since DBS is diversified  across Asia, it would be less exposed to the impact of the cooling measure than banks (OCBC & UOB) who are mostly based in Singapore. A2) DBS investment outside Singapore, gives it better growth opportunity. A3) High amount of housing loans hold by Singapore Banks  risk turning into large amount of Non Performing Loan when interest rate hike inevitably- claimed by  Moody. In my opinion, the above points are not the full story and a decision based upon those might be distorted.    Allow me to  share the reason why  pure local banks  are better selections. 1) Cooling Measure VS Economic Crisis    The worry about more property cooling measure to come, is a needless one. After some 7 rounds of cooling measure, property price and transaction volume  are beginning to fall. Since the government policies has taken effect and reach its aim of cooling the market, it makes no sense to continue hammering the market with new measures. In fact we can expect government to start removing those measure as soon as interest rate starts moving up-  most probably after  1 year.  Removing those cooling measure is necessary to  increase the liquidity of housing market and allow those  investors cannot afford the high interest rate  to  sell their properties.  The next question that comes naturally would be: Why would government want to help those investors who can't afford high interest rate? Well, those investors pledged their properties when apply for housing loan. If they can't afford the rising interest rate their properties and can't sell   their properties, their properties  would be seized and sell in the market. When such cases happened to large amount of investors, we can quickly see the market flooded with worthless properties while banks see many loan turn bad and collateral turn worthless-  a repeat of  US 2008 subprime crisis. As a small country, the economic  resulting hardship would be unbearable. Thus government would its best to prevent such crisis and a necessary step would be to increase the liquidity of the property market once interest rate starts hiking. In constrast, the risk of economic disruption as a result of fund exiting Asia would prove to be more worrying. This is especially true for developing countries like Vietnam, Indonesia, and India- check out news about India  struggle to  hike interest rate  in order to  fight  currency devaluation.  If not handled properly, the history of 1997 currency crisis would repeat itself and companies in the those countries would simply go bust. In all these developing Asian countries, DBS has stake in them and thus it run a high risk of suffering a huge loss should anything happened to these countries. Thanks to the smart polices by MAS, Singapore is expected to weather such economic disruption and thus" pure" Singapore banks are expected to be spared from the crisis.  Strong policies that  MAS  have imposed to protect the  economy include appreciation of SGD to its all time high and  agreeing to accept Japanese bonds as collateral. 2) The Real  Opportunity To  Growth    Growth opportunites offered in other Asian countries are truly debatable. In the bid to protect their economy, most countries have imposed strong protectionism policies on  their fianacial industries.  These protectionsim policies limit the growth and competitiveness of foreign banks. A good example can be seen from the recent case where Temasek Holding faced  tons of hurdles when it  tried to sell shares of Indonesia's Danamon Bank to DBS. What is a growth opportunity when you can't even cash out? On the other hand, Singapore as a financial hub for South East Asia and with its strong economic stability offer much more attractive growth opportunity for the local banks. Foregin business  preferred to set up in Singapore and foreign funds flow first into Singapore then to the rest of SEA countries.We can safely assume this will continue  to be the case for at least the next 5-10 years. Thus banks who focus more on local market are expected to grow better than bank who seek growth in other SEA countries. 3)  MAS's ACE Card   As always Moody tends  to exaggerate  " crisis" that is unlikely to happen and  comfort you when there is  real crisis lurking (2008 subprime is a good example).  Crisis as a result of high amount of housing debt  is UNLIKELY to happen in Singapore. As mentioned above, the cooling measure can be removed to improve liquidity in the market, this provides opportunity for those who cannot afford the rising interest rate to exit the market. Secondly, government's plan on increasing the population by 2020 should also provide ample demand to balance the supply in propety market. Most importantly, MAS has an ACE card up its sleeve that will allow it to buy some time before rising the local interest rate- inevitably Singapore interest rate is highly pegged to US interest rate, which is expected to rise when Fed stops it QE by mid 2014.  Remember the " All time high SGD" we are talking about? The high SGD gives MAS more flexibility and room in choosing to devaluate SGD over increasing interest rate. This  delay the need to rise local  interest rate, and should give sufficient time for property investors to be warned of the rising rate and to liquidate their properties. Thus the crisis warned by Moody is high avoidable and should not be of major concern. In a nutshell, with the low economic risk and high growth opportunity, Singapore financial  market is a much better investment than many SEA market. With this I concluded that banks that focus on local markets (OCBC & UOB) will fare much better than bank (DBS) that is diversified across the volatile Asia markets. As for why OCBC is preferred over UOB, it is because size does matter. Just sharing my view here, email me rosesyrup123@yahoo.com if you have something to share with me. Thanks. The above analysis is purely my personal opinion. I urge you to do your own assessment and calculation for any relevant decision making purposes. Author: Rosesyrup |
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marubozu1688
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11-Jul-2013 22:39
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OCBC Breakout! Trend Reversal! http://mystocksinvesting.com/singapore-stocks/ocbc-bank/ocbc-bank-trend-reversal/   |
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marubozu1688
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01-Jul-2013 21:21
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Broke 200D support today. OCBC is technically bearish now. http://mystocksinvesting.com/singapore-stocks/ocbc-bank/ocbc-bank-technically-bearish-and-down-trend/  
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Octavia
Elite |
12-Jun-2013 14:26
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Trading Central notes the stock accelerated on the downside following the break down of a key rising trend line. Prices are below the short term and medium term moving averages, and a " bearish crossover" has appeared. Also RSI is heading downwards. As long as $10.55 holds as resistance, the house tips for a new pullback toward $9.90 and $9.50 in extension. | ||||
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hello123
Senior |
03-Jun-2013 15:53
Yells: " google ' sgx swinger ' - for how stock operators work " |
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I mean today open down with a gap from   last friday close of 10.33   , then move down   fast to 1016-10.20   region for a strong bounce. for more details - see my ocbc chart   ...tq 
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zidane
Member |
03-Jun-2013 13:52
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do you mean gap down to 10.16 ?
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hello123
Senior |
03-Jun-2013 03:41
Yells: " google ' sgx swinger ' - for how stock operators work " |
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ocbc ,now   10.33   may gap down to   11.16-18   for a bounce. for more details ,  see my ocbc chart   .tq   |
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stockmarketmind
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23-May-2013 14:48
Yells: "stockmarketmindgames" |
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continuous selling in ocbc | ||||
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stockmarketmind
Master |
23-May-2013 12:09
Yells: "stockmarketmindgames" |
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It gap down in the morning. http://stockmarketmindgames.blogspot.sg/2013/05/ocbc-gap-down-during-opening.html  |
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cheerstan2002
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23-May-2013 11:40
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Agree. I guess we can wait  patiently for 11.5 and then see how the mkt is doing then decide what to do next. For those who can go for long, i guess can see it break thru 11.2when investors are back after holiday .. Cheers!
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octsky
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23-May-2013 10:22
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ocbc all time high cant break 1120 but also didnt drop below 1100. i got a feeling it is going to break 1120 and go higher. just a feeling, maybe wrong also. lol |
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stockmarketmind
Master |
23-May-2013 08:51
Yells: "stockmarketmindgames" |
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I am turning bearish on OCBC. http://stockmarketmindgames.blogspot.sg/2013/05/ocbc-orchestrated-selling.html  |
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Octavia
Elite |
02-May-2013 12:37
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Singapore is no longer home to the world's strongest bank, according to Bloomberg Markets Magazine's third annual ranking of the World's Strongest Banks announced on Thursday. The rankings showed Qatar National Bank (QNB) supplanting Singapore's OCBC from the number one spot in 2012. OCBC, which had taken the top spot in the past two years, dropped to No. 2, followed by Canadian Imperial Bank of Commerce in third place. The three local banks stayed within the top ten rankings, however. DBS Group moved up to No. 5 in 2012, from No.8 previously, while UOB moved up one spot to No. 6. The last Asian bank to make it to the top ten was Hong Kong's Hang Seng Bank at No. 10. For the rankings, Bloomberg Markets Magazine evaluated 78 banks with total assets of at least US$100 billion at mid-March, and took into consideration five ratios: the banks' Tier-1 capital to risk-weighted assets non-performing assets to total assets reserves for loan losses to non-performing assets deposits to funding and efficiency (costs to revenue). |
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krisluke
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02-May-2013 11:47
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What is the news?
OCBC reported 1Q13 net profit of S$696 million. This was within our estimates. NIMs were a disappointment at 1.64%, lower 6bps q-q, and 22bps y-y. Wealth management fees however grew strongly. Contributions from non-participating funds, and net trading income were lower q-q from a high base. Loans allowance was low at S$21 million while credit quality remains strong. How do we view this?Net profit was within our estimates due to lower than expected net trading income, but lower loans allowance made. Management guide NIMs to be stable at 1.64% for FY2013, and Wealth management growth to be strong. Geographically, growth in Greater China, Indonesia and Malaysia are expected to increase, as management allocates more resources to these key markets. Management is of the view that Fed rates may increase before FY15 end. We expect a significant increase in interest rates to be a positive catalyst for the bank, although credit cost may rise. We continue to expect negative y-y growth of core net profit, due to FY2012’s high net trading income and our forecast for flat net interest income growth. Investment Actions?We factor in 1Q13 earnings, including the lower NIMs and lower loans allowance. Base on these adjustments, we revise our FY2013 EPS to S$0.75, and BVPS to S$6.96. Based on an unchanged P/B multiple of 1.25X, we obtained a new target price of S$8.70. Base on current share price, we maintain our “Reduce” call. Source: PhillipCapital Research - 2 May 2013 |
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krisluke
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02-May-2013 11:18
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March banking statistics largely mirrored that of Feb 2013. DBU and ACU loans rose 15% y-o-y with DBU loans expanding by 20% y-o-y, thanks to the business segment, while ACU loans rose 10% y-o-y. Housing loan growth remained healthy (+16% y-o-y), although growth would likely begin to moderate in 2H13 once the recent cooling measures start to filter through. Neutral call on the sector maintained.
¨            DBU + ACU loans up 15% y-o-y.  March 2013 banking statistics largely mirrored that of the previous month. Domestic banking unit (DBU) and Asian currency units (ACU) loans expanded by 15% y-o-y (+2% m-o-m) vs. Feb 2013: +15% y-o-y +1% m-o-m. DBU loans expanded by 20% y-o-y (+1.5% m-o-m) while ACU loans rose 10% y-o-y (+2% m-o-m). Overall growth was balanced between loans to businesses and consumers, each up 15% y-o-y.
¨            DBU loans to businesses still strong.  March 2013 DBU loans growth was still driven by business loans (+23% y-o-y +2% m-o-m), particularly loans to businesses in the manufacturing (+66% y-o-y) and general commerce (+28% y-o-y) sectors. Meanwhile, consumer loans growth was stable at 15% y-o-y, with housing loans expanding by 16% y-o-y. We understand that the latest round of property market cooling measures have yet to be felt, with growth thus far reflecting drawdowns of loans that were approved earlier. That said, OCBC expects the impact from the cooling measures to start filtering through from 2H2013.
¨            Deposit growth eased slightly.  March 2013's deposit growth stood at +8.9% y-o-y (+1% m-o-m), down from +9.7% y-o-y in Feb 2013 (+0.6% m-o-m). With the slower deposit growth (vs. loan growth), loan-to-deposit ratio (LDR) inched up to 96.5% from 96% at end-Feb 2013.
¨            Investment case.  Pending the results of  DBS (Buy FV: SGD17.20)  and  UOB (Buy FV: SGD22.60)later today, we are maintaining our Neutral call on the sector. DBS and UOB are our top picks while we are Neutral on OCBC (FV: GD10.60).
  Source: OSK
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krisluke
Supreme |
02-May-2013 11:17
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OCBC reported 1QFY13 net profit of SGD696m (-12% y-o-y +5% q-o-q) with weaker income level cushioned by lower loan allowances. We are maintaining our Neutral call on OCBC, with an upgraded fair value of SGD10.60 (from SGD9.60). Despite the upgrade, the limited upside potential means that our Neutral call remains unchanged.
¨            1QFY13 results in line.  OCBC reported 1QFY13 net profit of SGD696m (-12% y-o-y, based on core 1QFY12 net profit +5% q-o-q). While this was 4% and 3.5% ahead of our and consensus full-year estimates respectively, when annualised, we consider the results to be within expectations. Annualised pre-provision operating profit was 5% below our estimates, but this was more than offset by low loan allowances, which we do not think is sustainable despite OCBC's sound asset quality.
¨            Weaker income cushioned by low loan allowances.  Operating income was down 12% y-o-y and 5% q-o-q, impacted mainly by: i) net interest margin (NIM) pressure (-22bps y-o-y -6bps q-o-q), although Management thinks NIM could have bottomed out for the year ii) weaker trading income (-65% y-o-y -59% q-o-q) and iii) lower profit from life assurance (-19% y-o-y -15% q-o-q). On the flip side, loan growth was decent (+10% y-o-y +3% q-o-q) while loan allowances were low (-79% y-o-y -70% q-o-q), which helped support overall profitability.
¨            Mixed outlook ahead.  While Management expects the re-pricing of the mortgage book to continue for another 12-18 months, putting pressure on NIMs, this would be compensated by the continued focus on growing contribution from overseas, where margins are higher. OCBC also thinks the likelihood of rates rising has been pushed back, following Japan's aggressive monetary easing. Meanwhile, loans growth is expected to be tempered in 2H13 when the recent cooling measures for the residential property sector start to kick in. Asset quality, however, remains benign and this could help keep loan allowances low.
¨            Forecasts.  No change to our earnings forecasts.
¨            Investment case.  We have raised our fair value to SGD10.60 from SGD9.60, after revising up our target P/BV multiple to 1.45x (1.35x previously) and a roll forward in valuations. Despite the upgrade, the limited upside potential means that our Neutral call remains unchanged.
1QFY13 Results Review.
OCBC reported 1QFY13 net profit of SGD696m (-12% y-o-y, based on core 1QFY12 net profit +5% q-o-q). While this was 4% and 3.5% ahead of our and consensus full-year estimates respectively, when annualised, we consider the results to be within expectations. Annualised pre-provision operating profit was 5% below our estimates, but this was more than offset by low loan allowances, which we do not think is sustainable despite OCBC's sound asset quality.
Operating income was down 12% y-o-y and 5% q-o-q due to weaker net interest and non-interest income. 1QFY13 net interest income (-4% y-o-y, -1% q-o-q) was impacted by NIM pressure (-22bps y-o-y -6bps q-o-q) due to lower asset yields resulting from the low interest rate environment, reduced gapping opportunities and re-pricing of existing housing loans in Singapore. These, however, were cushioned by decent loan growth (+10% y-o-y +3% q-o-q).
Management expects the re-pricing of the mortgage book to continue for another 12-18 months, but this would be cushioned by the continued focus on growing contribution from overseas. NIMs in Malaysia and Indonesia are currently around 2.2% and 4% respectively, which would help compensate for the margin pressure faced domestically. On the whole, OCBC thinks NIM has likely bottomed out for the year. Finally, OCBC thinks any rate increase is now likely to be pushed back following Japan's aggressive monetary easing,
1QFY13 non-interest income was also softer (-15% y-o-y, ex-divestment gains -11% q-o-q) mainly due to weaker trading income (-65% y-o-y -59% q-o-q) and lower profit from life assurance (-19% y-o-y -15% q-o-q) due to lower mark-to-market (mtm) investment gains in GEH's non-participating funds. Fee income (+15% y-o-y +4 q-o-q), however, was a bright spot, thanks mainly to wealth management. The three main markets where OCBC is seeing good traction in wealth management are Singapore, Malaysia and Indonesia. Overall, non-interest income contribution slipped to 42.6% in 1QFY13 vs. 1QFY12: 45.4% 4QFY12: 45.1%.
Overheads were generally under control, down 7% q-o-q with lower costs across the board but up 8% y-o-y due to higher personnel cost (mainly in Malaysia and Indonesia). Management guided for expenses to pick up ahead as IT investments will be ramped up, but overall, the rise should be capped at around high single digits. 1QFY13 cost-to-income ratio (CIR) stood at 42.3% as compared to 35.9% in 1QFY12 (4QFY12: 43.1%).
Loan allowances were a bright spot in 1QFY13, at just SGD21m (-79% y-o-y -70% q-o-q). Specific allowances stood at a mere 1bp (1QFY12: 13bps 4QFY12: 10bps) due to lower allowances and higher recoveries while portfolio allowances was down around 60% y-o-y and q-o-q. According to management, asset quality remains benign with no systemic issues noted thus far. Thus, despite the weaker pre-provision operating profit (-18% y-o-y, ex-divestment gains -4% q-o-q), the low loan allowances helped support 1QFY13 profitability.
Annualised gross loan growth was 12% (+10% y-o-y), ahead of the high single-digit guidance and our 7% assumption. The latest round of cooling measures for the residential property market is only expected to impact mortgage originations from 2H13, leading to slower loan growth. Hence, OCBC maintained their loan growth guidance.
Y-o-Y growth was led by housing loans and loans to building and construction while by geography, growth was led by the local and Malaysian operations. Meanwhile, total customer deposits expanded by an annualised pace of 9% (+7% y-o-y), resulting in the group LDR inching up q-o-q to 87% from 86.2% at end-2012. This, however, was still within the 85-90% comfort zone. More importantly, CASA growth was a robust 13% (+20% y-o-y), annualised, which helped push group CASA ratio to 51% at end-Mar 2013 (end-2012: 50.6%). The improvement came mainly from Singapore and management thinks the CASA ratio can be sustained ahead.
Asset quality improved further with absolute gross NPLs down 5% q-o-q to SGD1.1bn while the gross NPL ratio improved to 0.7% from 0.8% as at end-2012 (end-Mar 2012: 1%). Cumulative allowances were 149% of total NPAs, up from 142% as at 31 Dec 2012. Generally, management is still comfortable with asset quality and has not noted any systemic issues. Finally, OCBC disclosed Basel III CET-1/Tier 1/Total capital ratios of 16.2%/16.2%/18.1% respectively. Tier-1 and Total capital ratios were 16.6% and 18.5% respectively as at end-2012, based on Basel II. The q-o-q drop was mainly due to higher risk weights for exposures to financial institutions, equities and OTC derivatives, cushioned by the full recognition of revaluation surplus on all AFS securities as CET-1.
Risks
The risks include: i) slower-than-expected loan growth ii) weaker-than-expected NIMs and iii) deterioration in asset quality.
Forecasts
No change to our earnings forecasts.
Valuation and Recommendation
We have raised our fair value to SGD10.60 from SGD9.60, which takes into account the following: i) upgraded target 1-year forward P/BV multiple of 1.45x (1.35x previously). This is in lieu of the ample liquidity following easy monetary policies globally, which is positive for riskier assets and ii) a roll-forward in our book value to June 2014, from Dec 2013. Despite the upgrade, the limited upside potential means that our  Neutral  remains unchanged.
 
Source: OSK
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krisluke
Supreme |
02-May-2013 11:06
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Forecasts maintained. OCBC’s 1Q13 core net profit of SGD696m (+5% QoQ, -12% YoY) was slightly below our expectations on lowerthan- expected NIMs, but in line with consensus. Given expectations of stable NIMs over the next few quarters though, our forecasts are maintained and our TP is raised to SGD11.30 (HOLD) from SGD10.50, pegging on a higher P/BV multiple of 1.5x (1.4x previously), taking valuations up to the long-term mean for the group and supported by ROEs of about 11.9% for 2013. HOLD – prefer DBS for its more attractive valuations 2013: PER 11.5x, P/BV 1.2x, ROAE: 10.6%, yield: 3.4%) and the strong growth in its non-traditional income channels.
1Q13 core net profit declined 12% YoY in light of lower trading gains and weaker investment performance from GE. Core net profit rose 5% QoQ, but was supported mainly by lower impairment losses and lower tax - operating profit declined 4% QoQ. Positives include fairly healthy loan growth of 10% YoY, with growth rates of 12%, 14% and 18% for Singapore, Malaysia and Indonesia respectively. Fee income growth was up a robust 15% YoY with wealth management income surging 42% YoY. Asset quality improved further, with its NPL ratio slipping to 0.7% from 0.8% end-Dec 2012. Credit costs, as such, were very benign. On the flip side, NIM contracted further to 1.64% in 1Q13 from 1.7% in 4Q12 due to a) ongoing mortgage repricing, b) limited gapping opportunities and c) increased interbank placements. Guidance maintained. Management maintains its high single-digit loan growth target for the year, on expectations that regional loan growth will supplement an expected decline in domestic mortgage demand caused by recent property restrictions (new originations are still expected to come off 20-30%). NIMs, meanwhile, are expected to be stable at current levels over the next few quarters, as management continues to drive growth in key markets such as Malaysia and Indonesia, where NIMs are higher, to supplement any further compression domestically. Source: Maybank Kim Eng Research - 02 May 2013 |
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