That said, the team expects a double-digit decline on a q-o-q basis mainly due to seasonality where non-interest income tends to be weaker and operating expenses (opex) usually tick up.
From its meeting, the RHB team gathered that OCBC’s liquidity inflows have been positive, which will translate to healthy current accounts savings accounts (CASA) growth in 4QFY2025.
Growth in CASA was also thanks to the lower rates environment. With interest rates declining, the lower rates in fixed deposits have reduced their attractiveness, leading depositors “contented” leaving their savings in CASA deposits instead, says RHB.
“As the CASA mix rises, this should lead to lower funding cost,” it adds. “Although there has been no further repricing of OCBC’s flagship product since August 2025, the repricing of fixed deposits (FDs) after the steep decline in benchmark rates earlier should be felt in 4QFY2025”.
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On loan growth, OCBC looks set to be on track to meet its guidance of mid-single-digit growth. OCBC had previously guided its net interest margin (NIM) to be around 1.90%, given 3QFY2025’s exit NIM of 1.84% and another round of rate cuts by the US Fed in December 2025.
In 4QFY2025, RHB sees wealth fees softening on seasonality and off a high base in 3QFY2025. However, the bank should see “decent” fee growth on a y-o-y basis given the strong inflows earlier coupled with improving investor sentiment.
OCBC added that it remains watchful on the commercial real estate space although management seems to be comfortable with the names on its book and provision coverage, says RHB.
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The team expects OCBC to distribute a final dividend per share (DPS) of 57.5 cents, up from 57 cents last year, bringing the bank’s FY2025 dividend to 98.5 cents, down from FY2024’s $1.01 payout.
“The upcoming dividend announcement should see OCBC complete its capital return dividends. Investors will be keen to see if there is room for further capital optimisation and returns,” notes RHB.
“One such source could be the capital set aside earlier of [around] 40 basis points (bps) if the delisting exercise for Great Eastern Holdings had gone through,” it adds. “We also do not discount the possibility that a portion of the $1 billion capital distribution plan for share buybacks could be returned through dividends instead, given the strong share price performance and valuations.”
OCBC’s 4QFY2025 and FY2025 results will be presented by its new CEO, Tan Teck Long, who stepped into the role on Jan 1.
“We expect investors to focus on, among others, the 2026 outlook and guidance, especially for wealth, capital management, and the new CEO’s plans ahead,” says RHB.
As at 11.31am, shares in OCBC are trading 13 cents lower or 0.61% down at $21.29.
