SINGAPORE: Singapore’s Oversea-Chinese Banking Corp (OCBC) on Wednesday (Feb 25) guided for stable-to-growing total income in 2026, even as interest income declines and global conditions remain uncertain, after reporting a 3 per cent rise in fourth-quarter profit.
The country’s second-largest bank said it expects a slight-to-moderate fall in net interest income as rate cuts weigh on margins but sees return on equity holding steady or improving, driven by a stronger focus on higher-returning businesses.
“Looking ahead, we remain cautious yet positive. Global conditions are likely to remain uncertain, shaped by geopolitical tensions, evolving trade dynamics and interest rate uncertainty,” OCBC group CEO Tan Teck Long said in a statement.
OCBC reiterated a 50 per cent ordinary dividend payout ratio and said it aimed to complete its S$2.5 billion (US$1.97 billion) capital return plan by this year.
The bank reported a 3 per cent rise in fourth-quarter net profit to S$1.74 billion, beating the mean estimate of around S$1.69 billion from two analysts polled by LSEG, helped by a 37 per cent jump in non-interest income to S$1.32 billion on growth in fee, trading and insurance income.
OCBC did not include a target for net interest margin for 2026 after guiding for NIM of about 1.90 per cent in 2025.
Wealth management fees recorded a 26 per cent increase year-on-year, net trading income was up 30 per cent over the same period and insurance income more than doubled, OCBC said in a statement.
Meanwhile, net interest margin, a key profitability gauge, dropped to 1.86 per cent for the quarter from 2.15 per cent a year earlier.
Return on equity fell to 12.6 per cent for full-year 2025 from 13.7 per cent a year earlier.
OCBC, which counts Singapore, greater China, Indonesia and Malaysia among its key markets, proposed a final dividend of S$0.42 a share for 2025, bringing the total ordinary dividend for last year to 83 cents.
Separately, the bank announced a special dividend of 16 cents as part of the capital return plan, bringing the total dividend to 99 cents, slightly lower than 101 cents a year ago.
OCBC’s results rounded up a mixed fourth-quarter earnings season by Singapore banks.
Larger peer DBS Group posted on Feb 9 earnings that missed analysts’ forecasts, while smaller rival United Overseas Bank (UOB) on Tuesday also reported softer earnings, though it came in above expectations.
Global peer Standard Chartered reported on Tuesday a 16 per cent rise in annual pre-tax profit on robust performances from its banking and wealth businesses, while HSBC is scheduled to release its earnings later on Wednesday.