Oversea-Chinese Banking Corporation Limited

OCBC reported Q2 2026 group net profit of SGD 2.2 billion, up 22% year on year, and first-half net profit of SGD 4.19 billion, up 13%. Total income rose 18% year on year in Q2 to SGD 4.17 billion and was up 11% in the first half to SGD 8 billion. Q2 net interest income was SGD 2.26 billion, down 1% year on year and up 2% quarter on quarter; NIM was 1.70%, down 6 basis points quarter on quarter. Q2 noninterest income rose 51% year on year; first-half noninterest income rose 36% to SGD 3.51 billion. Cost-to-income ratio was 37.8% in Q2 and 38.5% for the first half. Loans were up 11% year on year and 5% quarter on quarter to SGD 364 billion, while deposits rose 13% year on year to SGD 459 billion. NPL ratio stayed at 0.9%, Q2 credit cost was 14 basis points annualized, and first-half credit costs were 18 basis points. CET1 was 14.0% fully phased-in and 15.7% transitional. Guidance: management raised full-year loan growth guidance to the high single-digit/low double-digit range, expects full-year income to grow year on year with a slight decline in NII, sees cost-to-income in the low 40% range, and expects full-year credit costs at the lower end of the earlier 20 to 25 basis point range. June exit NIM was 1.67%.

The CEO framed the quarter as evidence that the Next Frontier strategy is gaining traction, with broad-based growth across banking, wealth and insurance. He emphasized that OCBC is focused on specific growth industries such as Asia supply chains, tech infrastructure and sustainable finance, and said these themes should continue to anchor loan growth. His tone was confident but cautious, noting that second-quarter loan growth was exceptional and probably not repeatable at the same pace in the second half.

The CFO highlighted that Q2 profit, income and wealth-related metrics all reached record levels, with the quarter’s SGS 2.2 billion profit driven by broad noninterest income strength and resilient operating discipline. She called out Q2 NII of SGD 2.26 billion, a 1% year-on-year decline but a 2% quarter-on-quarter increase despite a lower-rate environment, and pointed to a 37.8% Q2 cost-to-income ratio, 14 basis points of annualized credit cost, and a 0.9% NPL ratio. On capital, she said CET1 was 14.0% fully phased-in, the interim dividend is SGD 0.47, and the group remains committed to the remaining SGD 2.5 billion capital return plan by FY26.

Analysts pressed management on whether strong loan growth, higher wholesale funding and a 14% CET1 target are sustainable. Management said Q2 loan growth was boosted by some M&A-related financings and preemptive liquidity actions, and expects a slower pace in the second half, while keeping CET1 around 14% and using balance-sheet optimization if needed. Questions also focused on Hong Kong, China cross-border rules and Great Eastern volatility; management said Bank of Singapore only deals offshore, has not seen significant asset outflows, sees Great Eastern’s mark-to-market as volatile but its underlying insurance business as solid, and said the new China rules do not affect them.