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OCBC has enough capital for M& A, business growth: CEO Helen Wong
OCBC has enough capital for business growth even as chief executive officer Helen Wong signals her appetite for deals while keeping the bank&rsquo s dividend policy.
&ldquo We are well-capitalised,&rdquo Wong said on Wednesday (Nov 13) in an interview on Bloomberg Television. &ldquo We have prepared for both organic growth and certain inorganic growth opportunity.&rdquo
OCBC has funds available for M& A opportunities as well as investing in its businesses from its wealth platform to artificial intelligence, said Wong, who has led the bank since 2021. The lender is also on track to maintain its 50 per cent dividend payout ratio, she added.
She said the bank will consider potentially paying more to its shareholders if the bank&rsquo s capital remains high after funding growth plans.
Wong&rsquo s acquisition strategy underscores how much the business serving the rich supports the bank&rsquo s profitability. OCBC&rsquo s wealth revenue includes income from its private bank &ndash Bank of Singapore &ndash as well as lower-rung consumer, insurance and brokerage units.
OCBC continues to be on the lookout for deals, with Wong highlighting the interest in Indonesia, as well as in wealth-management assets. Other potential targets would be in Malaysia and Greater China, while Singapore presents less propositions for dealmaking.
&ldquo Indonesia has better opportunity and we like the growth and how Indonesia is evolving as a big economy,&rdquo she said.
For wealth assets, OCBC would prefer buying a portfolio of clients which doesn&rsquo t duplicate too much with what the bank already has, rather than buying an entire bank, she said.
The bank has been striking deals. It is now in the middle of bidding for full control of Great Eastern Holdings and had offered S$1.4 billion to buy the remaining stake in the Singapore insurer that it does not currently own. It also completed its acquisition of Bank Commonwealth in Indonesia this year.
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Wong declined to disclose the amount of OCBC&rsquo s excess capital and analysts&rsquo estimates vary, though it&rsquo s seen to be higher than its rivals. CreditSights&rsquo Karen Wu said the number stands around S$3.6 billion and Bloomberg Intelligence&rsquo s Rena Kwok sees it at around S$4 billion to S$7 billion.
&ldquo We think that OCBC&rsquo s capital management plans are vague versus major local peers such as UOB and DBS who have mentioned clearer pathways for capital returns via possibly increased dividends and share buyback plans,&rdquo Kwok said.
Singapore&rsquo s top banks are having a bonanza year, with profits spurred by their wealth-management business that prospered as the city-state attracted funds from global investors.
OCBC is enjoying the wealth-driven income boost along with rivals DBS Group Holdings and United Overseas Bank with share prices of the trio all rising to record levels last week.
DBS chief Piyush Gupta unveiled a S$3 billion share buyback plan, the first time the lender will cancel the shares after repurchase as a way to manage excess capital. UOB will consider a similar move among other options.
On the other hand, OCBC prefers to use dividends to manage its capital, given its price-to-book ratio of just above 1, chief financial officer Goh Chin Yee said last week during an earnings briefing.
OCBC reported its third-quarter profit rose 9 per cent to S$1.97 billion, roughly in line with analysts&rsquo estimates of S$1.91 billion. Wealth income, which includes banking and insurance, rose 15 per cent from a year ago.
Asked about the economy in China, where the government has rolled out a variety of stimulus packages including partial relief on local government debt, Wong said: &ldquo I see improved sentiment. More measures are likely.&rdquo
Let' s hope this news is a precursory to something even more interesting than share buybacks.
Delvyss ( Date: 14-Nov-2024 10:23) Posted:
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" OCBC has enough capital for M& A, business growth: CEO Helen Wong "
https://www.businesstimes.com.sg/companies-markets/banking-finance/ocbc-has-enough-capital-m-business-growth-ceo-helen-wong
You have the bigger picture, bro. 
4x payout = more work and admin.
DBS is still the most efficient & effective of them all. Hope Ms Tan will continue the legacy of PG.
4x payout = more work and admin.
DBS is still the most efficient & effective of them all. Hope Ms Tan will continue the legacy of PG.
FATABA ( Date: 13-Nov-2024 13:56) Posted:
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Bro , I guess you are asking if they wld follow DBS and pay out 4X a year ( quarterly ) as against current half yearly.
Looking at the current situation .....I guess it is unlikely as 4X certainly demand more work and admin duties ( filing etc)
They have NOT follow DBS since the last few years.
So I think OCBC n UOB wld stick to their twice payout a year. Might be wrong ...but only know from next year.
Dyodd
Looking at the current situation .....I guess it is unlikely as 4X certainly demand more work and admin duties ( filing etc)
They have NOT follow DBS since the last few years.
So I think OCBC n UOB wld stick to their twice payout a year. Might be wrong ...but only know from next year.
Dyodd
Delvyss ( Date: 13-Nov-2024 12:49) Posted:
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Does anyone think that UOB & OCBC can improve on their dividend payout frequency?
MrBear12 ( Date: 12-Nov-2024 11:26) Posted:
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Analyst bear says too.
Delvyss ( Date: 12-Nov-2024 11:20) Posted:
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Analyst bear says too.
Delvyss ( Date: 12-Nov-2024 11:20) Posted:
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" Rallying bank stocks have further room to run, analyst says "
https://www.marketwatch.com/story/rallying-bank-stocks-have-further-room-to-run-analyst-says-310f1136
If Dbs declares special div, OCBC and UOB will feel the pressure and also likely to follow suit. If not their SP will lag further from DBS,rasing SH dissatisfaction, etc
Delvyss ( Date: 11-Nov-2024 10:03) Posted:
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This will be a sweet surprise if it does !
MrBear12 ( Date: 11-Nov-2024 07:33) Posted:
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Hello experts, which trading platform is good and brokerage competitive to recommend, my uobkayhian not working at opening hours till now, thanks for helping
Who knows, a special dividend may be in pipeline
prophetjul ( Date: 11-Nov-2024 07:28) Posted:
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They have enough cash in hand to do all that without organic growth. Otherwise, their CET keeps going up, cash keeps rising unless they can buy over another GE.
And their ROE will go down.
All these traits of non shareholder friendly management.
They need to show better managment of their existing cash now.
And their ROE will go down.
All these traits of non shareholder friendly management.
They need to show better managment of their existing cash now.
MrBear12 ( Date: 10-Nov-2024 18:46) Posted:
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Helen did a bad job of damage control, after the DBS and UOB share buyback news. She should have been more assertive and speak with conviction on capital management. Came across as wishy washy. But they have a lot of spare capital to return, so she needs to come out stronger.
MrBear12 ( Date: 10-Nov-2024 18:46) Posted:
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Just grow the business sustainably and all the below mentioned will occur.
prophetjul ( Date: 10-Nov-2024 08:37) Posted:
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How?
a) increase the dividends
b) share buybacks
c) bonus issues
a) increase the dividends
b) share buybacks
c) bonus issues
Fiat500 ( Date: 09-Nov-2024 16:30) Posted:
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Giving dividends alone is not good enough. Ocbc themselves should do the shareholders a favour by pushing up the share price. Now the gap has gone so much wider compared to Uob n Ocbc..