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OCBC issued over $7 bil in sustainable financing to region' s SMEs last year, more than double y-o-y
OCBC also extended sustainability-linked loans (SLLs) to 24 enterprises in the region last year, up from just one the year prior. In 2024, OCBC hopes to more than double this figure, says Linus Goh, head of global commercial banking.
Oversea-Chinese Banking Corporation (OCBC) extended over $7 billion in sustainable financing to the region&rsquo s small- and medium-sized enterprises (SMEs) in 2023, more than double the amount issued in 2022.
OCBC issued these loans to over 1,200 companies across Singapore, Malaysia, Indonesia and Hong Kong, up from some 600 SMEs in 2022. The bank notes &ldquo significant traction&rdquo in Singapore, Malaysia and Hong Kong, without providing specific figures by market.
Across sectors, SMEs from the built environment, clean transportation, energy efficiency and renewable energy sectors accounted for more than 80% of the 1,200-plus firms that took up sustainable loans with OCBC last year.
OCBC also extended sustainability-linked loans (SLLs) to 24 enterprises in the region last year, up from just one the year prior. In 2024, OCBC hopes to more than double this figure, says Linus Goh, head of global commercial banking.
Speaking to reporters on Feb 5, Goh says these SLLs were issued to companies from nearly a dozen industries, including engineering, construction and textile manufacturing and many are private companies.
Of the 24 SLLs, two were done in Hong Kong, one each in Malaysia and Indonesia, and the rest were in Singapore.
&ldquo Some are listed companies, and therefore they would have some obligation to show their progress in sustainability. But the others that are not, nonetheless, felt the need to represent how they would lead by showing the target improvements in emissions. That is significant because these are the ones who will then lead that whole momentum,&rdquo says Goh.
Among them is textile and apparel manufacturer Ghim Li, which received a $16 million SLL from OCBC last year with data collected and verified by local fintech company STACS.
SLLs are typically structured with pre-established key performance indicators or sustainability performance targets, such as lower electricity use or reduced emissions. Should the debtor company achieve these targets, they will enjoy lower interest rates on their loans via a step-down mechanism.
According to Goh, &ldquo most, if not all&rdquo of the companies that took out SLLs have opted for a 25% reduction in their greenhouse gas emissions over five years.
While Goh declined to reveal exactly how much companies can save with a step-down loan, he says these interest savings are &ldquo not a big factor&rdquo .
&ldquo Most of the time, the consideration is about how they&rsquo re able to present their firm as being clear about their target&hellip Many of the multinationals are now contemplating their Scope 3 [emissions]. So, they need to come to players in their value chain who is ready to make the move and help them demystify this whole thing?&rdquo
While Scope 1 and 2 measure the emissions of a company&rsquo s operations and its purchased energy, Scope 3 encompasses all the emissions arising from the company&rsquo s supply chain.
OCBC&rsquo s SME framework
These loans were issued in accordance with the OCBC SME Sustainable Finance Framework, which was launched in Singapore in 2020 and extended to Malaysia and Hong Kong from 2022.
Designed as a common point of reference for the bank&rsquo s sustainable loans, it replaces the need for bespoke frameworks for each loan.
OCBC launched the framework with eight categories: clean transportation, energy efficiency, pollution prevention and control, sustainable water and wastewater management, built environment, renewable energy, eco-efficient and circular economy, and environmentally sustainable management of living natural resources and land use.
In 2022, OCBC added a ninth category: climate adaptation. According to OCBC, this covers nature-based solutions and engineering services that &ldquo enhance adaptive capacity and reduce vulnerability to climate change&rdquo .
According to Goh, this category has been &ldquo applied&rdquo in Singapore and Malaysia. &ldquo To make things work at the company level, you really have to have good visibility of the interdependencies. The work that we try to do is to facilitate that conversation, to help overcome some of the issues.&rdquo
This may sometimes involve government bodies, he adds. &ldquo I think we [have] found, particularly here, [that] the government agencies are all quite willing to come to the table to solve the problems and help us move forward. We&rsquo re also trying to do the same in some of the other markets.&rdquo
Loan demand set to be &lsquo soft&rsquo
Demand for commercial loans was soft last year, says Goh, and it may &ldquo continue to be somewhat soft&rdquo this year. &ldquo If you look at the overall condition of the global economy and the regional economy, it still weighs on businesses. The outlook is still muted, at least for the first half of the year.&rdquo
Goh blames a &ldquo weak China outlook&rdquo . &ldquo China has quite a big influence and impact on the Asean economies and so, without China firing strongly, you kind of see a bit of a muted demand.&rdquo
Sustainable financing issued by OCBC to SMEs contributes towards the bank&rsquo s overall sustainable finance loan book.
OCBC group chief executive officer Helen Wong revealed at COP28 in December 2023 that the bank&rsquo s sustainable finance portfolio hit $52 billion at the end of September, surpassing its $50 billion target more than two years ahead of schedule.
OCBC had set the $50 billion target in 2021 after exceeding its original targets of $10 billion by 2022 and $25 billion by 2025 ahead of time.
Southeast Asia&rsquo s second-largest financial services group by assets reported that its sustainable finance portfolio amounted to $44 billion at the end of 2022, which was up 29.4% y-o-y from $34 billion reported at end-2021.
That said, Wong is unlikely to raise OCBC&rsquo s sustainable finance target again. In May 2023, Wong said it is &ldquo not crucial&rdquo for the bank to keep increasing this target. &ldquo This will become very business-as-usual to us we will continue to grow our sustainable financing. If we continue to grow double-digits every year, whatever target you set becomes just a number to be beaten.&rdquo
OCBC is set to release its results for FY2023 ended December on Feb 28 before the market opens.
hmmm 13.4 ? 0.78 dividend, 0.582 yield.
Also, p/b 1.188, nav 11.28 at 13.4
I better wait at 12.61, around 200ma level if it ever comes down lol
Anyway, I think it should do better than 13.4 as ocbc so far keeps to 50%+ payout ratio.
At least, in short term surge. Of course, barring any disaster.
Also, p/b 1.188, nav 11.28 at 13.4
I better wait at 12.61, around 200ma level if it ever comes down lol
Anyway, I think it should do better than 13.4 as ocbc so far keeps to 50%+ payout ratio.
At least, in short term surge. Of course, barring any disaster.
Joelton ( Date: 30-Jan-2024 13:28) Posted:
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RHB' s final dividen projection only 38 cents ??
Interim dividen is already 40 cts and for as long as I can remember , OCBC has never paid a final dividen that is lower than its interim dividen .
I would expect the final dividen to be 40 cts min 42 cts very likely , and 45 cts maximum .
And even though they commit to a 50% payout ratio , they can pay more than that . Last year , they paid out 53% .
Interim dividen is already 40 cts and for as long as I can remember , OCBC has never paid a final dividen that is lower than its interim dividen .
I would expect the final dividen to be 40 cts min 42 cts very likely , and 45 cts maximum .
And even though they commit to a 50% payout ratio , they can pay more than that . Last year , they paid out 53% .
OCBC&rsquo s results for 4QFY2023 should not surprise, but dividends may: RHBThe Singapore research team at RHB Bank Singapore has kept its &ldquo neutral&rdquo call on Oversea-Chinese Banking Corporation (OCBC) ahead of the bank&rsquo s results for the 4QFY2023 and FY2023 ended Dec 31, 2023, on Feb 28.To the team, the bank&rsquo s results for the final quarter should come as expected although its dividends may be a surprise.For the FY2023, the team expects the bank&rsquo s results to meet their estimates as well as that of the consensus.&ldquo A peaking rates cycle will likely lead to income pressures and dampen share price performance of Singapore banks under coverage. However, decent dividend yield should provide downside support,&rdquo it writes.On a q-o-q basis, the team is expecting a slight easing in the bank&rsquo s 4QFY2023 bottomline on the back of lower non-interest income and catch-up on operating expenditures (opex). However, OCBC&rsquo s earnings should still register y-o-y growth from a stronger net interest income (NII) and lower loan impairments.For the quarter, the RHB team expects to see sustained loan growth with weakness in trade-related loans cushioned by stable mortgage and non-trade corporate lending.&ldquo OCBC noted pockets of aggressive mortgage pricing in 4Q, but refrained from competing aggressively despite its ample liquidity. 3QFY2023 loan book contracted by 2% YoY (+1% y-o-y, constant currency terms) and for FY2023, growth should look broadly similar (FY2023 guidance: low-single digit growth),&rdquo says the team.Meanwhile, the bank has ample liquidity (with a loan-to-deposit ratio of 79.9% for the 3QFY2023), which has allowed it to run off some of the costlier fixed deposits to keep funding cost pressures manageable.&ldquo Recall that 3QFY2023/9MFY2023 net interest margin (NIM) of 2.27% and 2.28% were trending ahead of the [estimated] 2.25% guidance. OCBC had guided for a weaker 4Q NIM q-o-q on muted loans growth, deposit competition and lower exit NIM (of 2.23%) &ndash all of which appear to have shaped up as expected,&rdquo says the team.The final quarter of the year is a seasonally soft one for wealth management activities and the RHB team expects OCBC&rsquo s 4QFY2023 results to be no exception. The team also expects the bank&rsquo s trade- and loan-related fees to reflect the continued softness in loans growth.However, card fees are expected to be a &ldquo bright&rdquo spark for the bank, similar to one of its peers, whose card fees remained healthy in the 4QFY2023 thanks to the holiday season.Overall, non-interest income in the 4QFY2023 is unlikely to excite, unless insurance and non-customer flow trading income surprises positively.Other positives identified by the team: the bank&rsquo s asset quality, in which the team expects to see relatively stable credit cost q-o-q in the 4QFY2023 and the acquisition of PT Bank CommonwealthThe latter is a &ldquo smallish, bolt-on acquisition&rdquo that will help OCBC Indonesia&rsquo s operations broaden its product offerings such as auto financing, as well as help it build scale. There is also little overlap in the customer base between both parties.&ldquo Near-term, the deal is not likely to have any major impact on capital or earnings but should be positive over the longer term,&rdquo says the RHB team.While the team has no changes to its earnings forecasts, it expects a final dividend per share (DPS) of 38 cents, which would bring OCBC&rsquo s DPS for the FY2023 to 78 cents, above the 68 cent-dividend in FY2022. FY2023&rsquo s estimated dividend represents a yield of 6% and a payout of 49.5%.The team has lowered its target price to $13.40 from $13.70 to reflect its new 0% environmental, social and governance (ESG) premium and, or discount after a change in the country&rsquo s median ESG score.
OCBC so powderful today ?
rate cut to benefit property developers?
OCBC Bank clinches Bank of the Year 2023 in Malaysia by The Banker
KUALA LUMPUR: OCBC Bank (M) Bhd has been named Malaysia Bank of the Year 2023 by The Banker.OCBC Bank, among the foremost foreign banks in Malaysia and in existence for over 90 years, is part of the Singapore-based OCBC Group, the region second largest banking group by assets.
citing the reason for the selection, The Banker singled out OCBC Bank wide-ranging approach to improve its banking operations, taking measures to increase its green credentials, support retail customers and develop new opportunities for its staff.
We are delighted with this recognition, which affirms the direction we have been taking all these years, revolving round sustainability, digitalisation, customer-centricity and staff. The Award will spur us on to not just do more of what works for the communities we serve, but to keep challenging ourselves to excel and do even better.
By enabling our people and communities to realise their aspirations every step of the way, we believe we will be entrenching ourselves as the best bank for the communities we serve not just in Malaysia but in the region as well. For now, and beyond, OCBC Bank chief executive officer Tan Chor Sen said in a statement.
Nice .....
https://www.theedgesingapore.com/news/environmental-social-and-governance/ocbc-sustainable-finance-loan-book-hits-52-bil-breaking-50
https://www.theedgesingapore.com/news/environmental-social-and-governance/ocbc-sustainable-finance-loan-book-hits-52-bil-breaking-50
OCBC sues suspect in Singapore&rsquo s biggest money laundering case for $19.7 million
OCBC Bank has filed a claim against Su Baolin and a court order to seize a mortgaged bungalow under construction in Sentosa Cove.
SINGAPORE &ndash OCBC Bank has sued a suspect involved in Singapore&rsquo s biggest money laundering case, marking the first known attempt of a lender here taking action to recover losses related to the case.
South-east Asia&rsquo s second-largest bank in November filed a claim against Su Baolin, a Cambodian passport holder, seeking about $19.7 million, mostly from a residential mortgage, according to legal documents seen by Bloomberg. The hearing date is fixed for Dec 1.
Su is among the 10 Chinese-born individuals arrested in Singapore in August for offenses including money laundering and forgery. He is facing two charges so far, both on forgery.
OCBC applied for a court order to seize a mortgaged bungalow under construction in Sentosa Cove. Su has also been ordered to repay $19.5 million in a housing loan, plus interest, and some $220,570 in credit card debt, according to the suit.
The lender declined to comment on the lawsuit. An affidavit showed two failed attempts to deliver the suit to Su as no one had answered the intercom at his mailing address.
The Business Times reported earlier in November that Su had submitted plans to build a two-storey detached house with a swimming pool in Sentosa Cove, before his arrest in August.
He had purchased the property in March 2021 for slightly more than $39.33 million from tycoon Lim Chin Huat. Located on a 1,816.3 sq m plot of land along Ocean Drive, the site offers unblocked sea views and faces Marina Bay Sands.
Su has been held in remand since his arrest on Aug 15. The Singapore police have seized some $99 million of assets in properties, cash, bank accounts and cryptocurrencies in the names of Su and his wife.
More than $2.8 billion of assets have been frozen or seized by the police since the islandwide raid in August, including more than 150 properties linked to the 10 individuals arrested. The ongoing scandal sent shockwaves across Singapore, a global financial hub dubbed &ldquo Switzerland of the East&rdquo , given its attraction among the wealthy. BLOOMBERG
engine start liao
1268 ... nice# ... pick up a bit ...
price is " less bulky" than DBS & UOB ..... hope it will be more agile & recover to 13 much faster .....
uphill momentum like picking up .....
OCBC to buy Indonesia&rsquo s Bank Commonwealth for $191 million as it eyes growing Asean-Greater China flows
SINGAPORE &ndash OCBC Bank&rsquo s subsidiary in Indonesia is buying Commonwealth Bank of Australia&rsquo s (CBA) unit in the South-east Asian country.
Bank OCBC NISP (OCBC Indonesia) will pay CBA 2.2 trillion rupiah (S$191 million) for a 99 per cent shareholding in the unit, Bank Commonwealth, and acquire the remaining 1 per cent from other shareholders.
Bank Commonwealth &ndash set up in 1997 as a CBA venture with Bank International Indonesia &ndash serves around 1.2 million clients, including retail customers and small and medium-sized enterprises.
CBA became its controlling shareholder in 2002.
The bank&rsquo s net asset value stood at 4.1 trillion rupiah while its net tangible assets were valued at 3.5 trillion rupiah as at Sept 30.
The deal, which will involve Bank Commonwealth becoming a unit of OCBC Indonesia, needs approval from the Indonesia Financial Services Authority and the Monetary Authority of Singapore
It is expected to be completed in the second or third quarter of 2024, noted a statement by CBA on Thursday, adding that the sale meets its strategy of focusing on its banking business in Australia and New Zealand.
OCBC said its Indonesian subsidiary has sufficient financial resources to fund the proposed acquisition, which is not expected to have a material impact on its net tangible assets, earnings per share or capital position for the financial year ending Dec 31.
&ldquo Bank Commonwealth will be merged into OCBC Indonesia after the proposed acquisition. OCBC Indonesia will be working closely with (the bank) on the migration of customers and employees to ensure a smooth transition,&rdquo it added.
The deal marks OCBC group chief executive Helen Wong&rsquo s first takeover since she took the helm of Singapore&rsquo s second-largest bank in 2021.
Ms Koh Ching Ching, OCBC&rsquo s head of group brand and communications, told The Straits Times that the proposed acquisition will allow the group to better support increasing trade and investment flows between Asean and Greater China.
There is little overlap in client relationships between Bank Commonwealth and OCBC Indonesia, she said.
&ldquo Bank Commonwealth also has demonstrated capabilities in wealth management and auto joint financing that can be leveraged to broaden OCBC Indonesia&rsquo s product offerings and diversify its customer acquisition channels.&rdquo
Mr Thilan Wickramasinghe, Singapore research head for Maybank Investment Banking Group, said Indonesia is a prime growth market in Asean and a chief beneficiary of north-south supply chain reconfigurations.
&ldquo This is one of the main growth themes for Singapore banks... so we expect them to look to Indonesia as a critical contributor for driving higher returns,&rdquo he added.
OCBC rival UOB is also growing its presence in South-east Asia with its acquisition of Citigroup&rsquo s consumer banking businesses in Malaysia, Thailand, Vietnam and Indonesia.
Singapore&rsquo s banks &ndash DBS, OCBC and UOB &ndash are already among the largest foreign lenders in Indonesia, noted Mr Willie Tanoto, a director in Fitch Ratings&rsquo financial institutions team.
OCBC is the second-largest foreign bank in Indonesia, although its market share in system loans and deposits is just above 2 per cent, while UOB and DBS each have a share of slightly more than 1 per cent, said Mr Tanoto.
The Bank Commonwealth deal is expected to add around 30 branches to OCBC Indonesia&rsquo s distribution network, he added, noting: &ldquo (Bank Commonwealth&rsquo s) financial performance has also been falling short of its expectations, so it is not likely to be immediately accretive to OCBC&rsquo s earnings or other key financial metrics.&rdquo
&ldquo Nevertheless, the consideration for the acquisition is reasonably small from OCBC&rsquo s perspective, and the acquisition signals OCBC&rsquo s commitment to the market,&rdquo he said.
saw an article by a Michael Makdad in morningstar.com ... fair value estimate $16 ?
Joelton ( Date: 11-Nov-2023 10:10) Posted:
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OCBC&rsquo s Helen Wong sees growth driver in wealth flows as Q3 fee income rebounds
OCBC&rsquo S chief executive Helen Wong expressed optimism that wealth flows will continue to drive the bank&rsquo s business growth, as the lender on Friday (Nov 10) held its third-quarter earnings briefing.
It also reported that its fee income for the quarter was S$461 million &ndash the highest in the last four quarters, although it was still lower than in 2021. The bank attributed this to higher wealth management, credit card and trade-related fees.
&ldquo But I wouldn&rsquo t paint too rosy a picture,&rdquo said Wong, noting that investors were still on the fence about taking on more wealth-management activities.
Like most banks, OCBC&rsquo s net interest margin (NIM) also benefited from rising interest rates. Its NIM rose 21 basis points from a year ago to 2.27 per cent in Q3 ended September.
It also raised its NIM targets for the year, but only marginally, to 2.25 per cent, seeing that its nine-month NIM average had already reached 2.28 per cent.
Wong said that NIM will likely remain at current levels for the first half of next year, and that it would be hard to predict further into the future, given the uncertainties in interest rates, macro and geopolitical environment.
The growth in the bank&rsquo s NIM led to higher net interest income (NII), which rose 17 per cent to S$2.5 billion from S$2.1 billion. This was also partly helped by asset growth.
Meanwhile, non-interest income grew 4.4 per cent to S$973 million from S$932 million, as higher fee income and better investment performance offset lower insurance income.
Total income thus rose 13.1 per cent year on year to S$3.4 billion from S$3 billion in Q3 2022, while net profit was 21.4 per cent higher year on year, reaching S$1.8 billion in Q3 2023.
At its earnings briefing, OCBC maintained most of its earlier forecasted metrics. It is targeting a return on equity of above 14 per cent and a loan growth of &ldquo low single-digit range&rdquo , as loans registered a 1 per cent growth yearly and quarterly to S$298 billion, based on constant currency terms.
Non-performing loans ratio improved slightly to 1 per cent, from 1.2 per cent last year, while non-performing assets fell across Singapore, Malaysia, Indonesia and Greater China, mainly due to higher recoveries and upgrades.
The bank&rsquo s CET-1 ratio fell to 14.8 per cent, down 0.6 basis points quarter on quarter, but was higher than the 14.4 per cent in Q3 last year.
Asked whether the bank would consider paying out a higher dividend ratio, Wong said that the lender remained committed to its 50 per cent dividend payout ratio. &ldquo Whether there&rsquo s any upside... it all depends on how we look at our capital positioning for the next year,&rdquo she added.
Commenting on the recent money laundering case, she noted that the bank has had an &ldquo insignificant exposure&rdquo , but would be making allowances for it.
Its total allowances for the quarter was S$184 million, an increase from S$154 million on higher allowances for impaired assets.
Operating expenses grew 4.9 per cent year on year to S$1.34 billion from S$1.28 billion, as the bank continued to invest in its franchise across people and technology.
OCBC said that it would continue to invest in upgrading its system to improve on its software, as well add to its headcount, amid rising number of tech disruptions of late, seen across all three local lenders.
OCBC Q3 profit rises 21.4% to S$1.8 billion
OCBC : O39 -0.69% on Friday (Nov 10) reported a 21.4 per cent rise in net profit for the third quarter, supported by record growth in net interest income and higher non-interest income.
The bank posted a net profit of S$1.8 billion for the third quarter ended Sep 30, up from S$1.5 billion last year. The earnings were in line with a consensus forecast in a Bloomberg survey of four analysts.
Total income rose 13.1 per cent year on year to S$3.4 billion from S$3 billion.
Net interest income for the quarter rose 17 per cent to S$2.5 billion from S$2.1 billion. The bank said this was supported by asset growth and an expansion in net interest margin.
Non-interest income grew 4.4 per cent to S$973 million from S$932 million, as a rise in fee income and better investment performance offset lower insurance income.
Net fee income was up 2 per cent to S$461 million from the same period last year &ndash the highest level in the past four quarters, OCBC said. The group recorded higher wealth management fees as customer activity rose, along with an increase in credit card fees.
Net trading income held steady at S$216 million, while insurance profit fell 12 per cent year on year to S$220 million from a rise in medical claims, but this was partly offset by better investment performance.
The bank&rsquo s non-performing loans ratio stood at 1 per cent, down from 1.2 per cent the same period last year.
Annualised earnings per share stood at S$1.58 for the quarter, up from S$1.30 in the year-ago period.
Total allowances stood at S$184 million, an increase from S$154 million on higher allowances for impaired assets. Credit costs for the quarter were 17 basis points on an annualised basis.
Operating expenses grew 4.9 per cent year on year to S$1.34 billion from S$1.28 billion as the bank continued to invest in its franchise across people and technology. Its cost-to-income ratio fell to 39.1 per cent, from 42.2 per cent
9 months profit a record 5.4b if we extrapolate it works out to be 7.2b for FY 2023 .
At a 50% payout ratio with 4.5b shares outstanding , the total dividen for FY 2023 will be 80 cents less 40 cents interim the final div will also be 40 cents .
BUT if they are more generous and adopts last year' s payout ratio of 53% , then total div works out to be 85 cents , or 45 cents final div .
I think a 40 cents final div is more or less a given with a potential dividen upside of up to 45 cents .
At a 50% payout ratio with 4.5b shares outstanding , the total dividen for FY 2023 will be 80 cents less 40 cents interim the final div will also be 40 cents .
BUT if they are more generous and adopts last year' s payout ratio of 53% , then total div works out to be 85 cents , or 45 cents final div .
I think a 40 cents final div is more or less a given with a potential dividen upside of up to 45 cents .
Long weekend holidays.. anything can happen ..
Better relaxand enjoy yr holidays.
Happy 🪔 ?
Better relaxand enjoy yr holidays.
Happy 🪔 ?