Broker Name: CGS International
Date of Report: April 20, 2026
Excerpt from CGS International report.
Report Summary
Stock: OCBC (OCBC SP)
Action: Downgrade to Hold
Target Price: S\$23.30
Current Price (as of report): S\$22.67
Key Highlights:
- 1Q26F net profit expected at S\$1.80bn (-4.5% yoy, +3.0% qoq) due to declining NIM and higher credit costs.
- Non-interest income (Non-II) growth expected to normalize, with wealth management fees a positive but insurance mark-to-market softer due to weaker equity markets.
- Net interest margin (NIM) expected to decline further to ~1.82% in 1Q26F.
- Share buybacks resumed in Mar 2026, but mainly for replenishing treasury shares; potential for special dividend (c.12 Scts/share) remains intact for FY26F.
- FY26F/FY27F EPS estimates trimmed by 0.9%/1.1% on lower NIM and higher credit cost assumptions.
- Current share price already reflects OCBC’s resilient earnings profile with limited near-term catalysts amid margin compression.
- Dividend yield estimated at 4.2% for FY26F.
Implications:
- Investors are advised to Hold OCBC at current levels; limited upside to target price.
- Upside risks: higher ROE targets, stronger NIM, double-digit non-II growth, larger credit cost write-backs.
- Downside risks: weaker macro conditions, higher provisions, slower non-II growth.
Ticker: OCBC SP
Call to Action: Hold
Price Target: S\$23.30
above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website : https://www.cgsi.com.sg
