Oversea-Chinese Banking Corporation Limited

OCBC reported Q2 2026 group net profit of SGD 2.2 billion, up 22% year on year, and record total income of SGD 4.17 billion, up 18% year on year. Q2 net interest income was SGD 2.26 billion, down 1% year on year but up 2% quarter on quarter, while noninterest income rose 51% year on year; for 1H, net profit was SGD 4.19 billion, up 13%, total income was SGD 8 billion, up 11%, and noninterest income rose 36% to SGD 3.51 billion. ROE was 14.4% annualized in Q2 and 13.7% for 1H; cost-to-income ratio was 37.8% in Q2 and 38.5% for 1H; NIM was 1.70% in Q2 and exit NIM in June was 1.67%; loans were SGD 364 billion, up 11% year on year and 5% quarter on quarter, deposits were SGD 459 billion, up 13% year on year, and CET1 was 14.0% fully phased-in and 15.7% transitional. Guidance: management raised full-year loan growth guidance to high single-digit to low double-digit, expects full-year income to grow year on year with a slight decline in NII, guided cost-to-income in the low-40% range, and said full-year credit costs are likely to be at the lower end of the earlier 20-25 bps range. The bank also said it will complete the remaining SGD 2.5 billion capital return plan by FY26 and noted about SGD 800 million left, equivalent to roughly SGD 0.18 if returned as a special dividend.

The CEO framed the quarter as a validation of OCBC’s Next Frontier strategy, emphasizing broad-based momentum across banking, wealth and insurance. He highlighted strong loan growth, wealth momentum, and the ability to keep generating ROE despite NIM compression. His tone was confident but measured, repeatedly stressing discipline on capital, risk, and acquisitions, and saying the bank is comfortable operating around a 14% CET1 target while focusing on ROE.

The CFO led with the hard numbers: Q2 profit of SGD 2.2 billion, total income of SGD 4.17 billion, NII of SGD 2.26 billion, noninterest income up 51%, and ROE of 14.4%. She also pointed to cost discipline, with Q2 cost-to-income at 37.8%, 1H expenses at SGD 3.08 billion, and solid balance sheet metrics including NPL ratio at 0.9%, Q2 credit costs at 14 bps, and CET1 at 14.0% fully phased-in. On capital, she confirmed the interim dividend of SGD 0.47, up SGD 0.06, and reiterated the remaining capital return of about SGD 800 million, which would be SGD 0.18 if paid as a special dividend.

Analysts focused on the sustainability of loan growth, wealth flows, Hong Kong/China regulatory changes, Great Eastern volatility, and capital management. Management said Q2 loan growth was exceptional partly due to M&A deals, so it does not expect the same pace in 3Q/4Q, but it raised full-year loan growth guidance and said growth should continue to be anchored by Asia, tech, and sustainable-finance themes. On Hong Kong and China rules, Bank of Singapore said it is an offshore business with strong client controls, has not seen significant asset outflows, and does not market onshore in China; on Great Eastern, management said investment-mark-to-market results could stay volatile, but underlying insurance performance remains solid. On capital, management said it is comfortable around a 14% CET1 operating level and does not expect to need equity raising.