Key Takeaways for Investors from OCBC’s 3Q and 9M FY2025 Business Update – The Singaporean Investor

Core Viewpoint - OCBC reported stable financial results for 3Q and 9M FY2025, with notable performance in net fee and commission income, despite a decline in net interest income due to a softening interest rate environment [4][14]. Financial Performance Summary 3Q FY2024 vs. 3Q FY2025 - Net Interest Income decreased by 8.5% to S$2,226 million, attributed to a 34 basis point contraction in net interest margin from 2.18% to 1.84% [5]. - Net Fee & Commission Income increased by 34.4% to S$683 million, driven by a record wealth management income, which rose by 38.0% to S$376 million [6]. - Total Income remained stable at S$3,796 million, a slight decrease of 0.2% year-on-year [4]. - Total Expenses rose by 3.8% to S$1,519 million [4]. - Net Profit Attributable to Shareholders was S$1,978 million, reflecting a marginal increase of 0.2% [4]. 9M FY2024 vs. 9M FY2025 - Net Interest Income fell by 6.1% to S$6,854 million, with a 29 basis point decline in net interest margin from 2.22% to 1.93% [8]. - Net Fee & Commission Income surged by 24.5% to S$1,809 million, with wealth management fees reaching a new high of S$923 million [9]. - Total Income decreased by 0.5% to S$10,998 million [8]. - Total Expenses increased by 3.4% to S$4,322 million, primarily due to higher staff costs and IT-related expenses [10]. - Net Profit Attributable to Shareholders decreased by 3.8% to S$5,677 million [8]. Key Financial Ratios - Net Interest Margin decreased from 1.92% in 2Q FY2025 to 1.84% in 3Q FY2025 [11]. - Return on Equity improved from 12.3% to 13.4% [11]. - Non-Performing Loans Ratio remained stable at 0.9% [11][12]. Management Commentary and Outlook - The CEO highlighted the resilience of OCBC's diversified banking, wealth management, and insurance franchise, noting strong customer activity and growth in assets under management [13]. - The company anticipates challenges from a complex external environment but is confident in its strong balance sheet and capital position to manage risks and support future growth [14].