Broker: DBS Group Research
Date of Report: 20 April 2026
Excerpt from DBS Group Research report.
Report Summary
- Stock: Oversea-Chinese Banking Corporation Ltd (OCBC)
- Ticker: OCBC SP
- Action: BUY
- Target Price: SGD 25.50 (12-month target)
- Key Idea: OCBC is refocusing on growth engines with a new strategy targeting expanded market share in Singapore, Hong Kong, and other ASEAN markets. Management guides for stable to improving ROE and cost discipline, with CIR targeted at low to mid-40%.
- Dividend Policy: Management reaffirmed a 50% dividend payout ratio, with potential for special dividends and a total payout ratio of 60% for FY24 and FY25 (including special dividends and share buybacks).
- Growth Drivers: Double-digit growth in non-interest income (mainly from wealth management and trading), and mid-single digit loan growth expected in FY26.
- Valuation: Target price based on Gordon Growth Model (13% ROE, 3% growth, 9% cost of equity), representing ~1.7x FY27F P/BV, +2 standard deviations above the 15-year historical average.
- Main Risk: Deteriorating asset quality (especially from commercial real estate exposures), higher-than-expected NPLs, and macroeconomic uncertainties, but high NPL coverage ratio (151%) provides a buffer.
above is an excerpt from a report by DBS Group Research. Clients of DBS Group Research can be the first to access the full report from the DBS Group Research website : https://www.dbs.com/
