Oversea-Chinese Banking Corporation (OCBC) O39 has reported record earnings of $5.75 billion for FY2022, up 18% over the preceding year.
Total income in the same period was up 10% to $11.7 billion.
For 4QFY2022, earnings was up 34% y-o-y to $1.3 billion.
The bank's fee income businesses were weighed down by unfavourable market conditions throughout the year, which curbed customers' investment activity. Its insurance unit, Great Eastern Holdings suffered from unrealised valuation losses too.
However, its net interest income grew strongly thanks to higher rates. Lower allowances helped as well.
The bank plans to pay a final dividend of 40 cents per share. Including 28 cents already paid as an interim dividend, that means a total FY2022 payout of 68 cents, equivalent to a payout ratio of 53%.
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For FY2021, the bank paid a total of 53 cents, equivalent to 49% of its earnings.
“OCBC has emerged stronger from the pandemic and achieved another consecutive year of robust performance despite challenging conditions,” says group CEO Helen Wong.
“I am delighted that the steady execution of our strategic priorities has yielded positive results and we have delivered record earnings,” she says.
“We are constantly redefining our business through accelerating digitalisation. We continue to enhance our digital platforms and introduce market-first initiatives to enrich the customer experience,” adds Wong.
She expects the bank’s key markets in Asia to remain resilient, and to grow at a faster clip versus the global average.
“We are optimistic that the reopening of China and Hong Kong SAR could further spur regional economic growth. We enter the new year with confidence as we drive for sustainable growth and deliver long-term value to our shareholders,” says Wong.
For the current FY2023, the bank is guiding for a net interest margin of 2.1%, versus 2.31% achieved for 4QFY2022. For whole of FY2022, NIM was 1.91%
It expects loan growth to grow at "mid single-digit" and credit costs to be at between 15 to 20 basis points.
OCBC shares closed on Feb 23 at $12.64, down 2.02%.
