Singapore, 7 November 2025 – Singapore’s second-largest lender, Oversea‑Chinese Banking Corporation (OCBC), reported a third-quarter net profit of S$1.98 billion, marginally ahead of the same period last year (S$1.97 billion) and beating market expectations of around S$1.81 billion.
The outperformance was driven mainly by higher non-interest income and lower allowances. However, the bank flagged pressure ahead: its net interest margin fell to 1.84% in Q3, down from 2.18% a year earlier, and it expects full-year 2025 net interest income (NII) to decline by a mid-to-high single-digit percentage.
“Looking ahead, the external environment remains complex, shaped by shifting policy dynamics and geopolitical tensions,” said Group CEO Helen Wong. “Our strong balance sheet and robust capital position provides us with flexibility to manage these risks, and enables us to support our customers and invest for future growth.”
The bank narrowed its net interest margin guidance to around 1.90% from an earlier range of 1.90%-1.95%. Other targets, including low single-digit loan growth, a cost-to-income ratio in the low 40s, and a 60 % total dividend payout ratio plus share buy-backs, remain unchanged.
Key Takeaways for Investors in Asia
- Resilient fee income helps: OCBC’s beat highlights how non-interest income (e.g., wealth management, trading) can buffer margin pressure in a challenging rate environment.
- Margin squeeze remains a headwind: The decline in NIM underlines the challenge Asian banks face as benchmark rates moderate and competition for deposits intensifies.
- Guidance cautious: Although profit held steady, the bank’s outlook for NII and NIM signals continued caution, a key risk factor for investors assessing banking valuations in the region.
- Capital strength matters: OCBC emphasised its strong capital and balance-sheet position, a necessary advantage in a volatile macro environment filled with geopolitical and economic uncertainties.
