OSK-DMG raises OCBC net profit forecast after strong 3QFY13 rebound

Net profit up 5% to S$759m.

Research firm OSK-DMG has raised its FY14 net profit forecast for OCBC by 6% on a lower credit cost assumption after the bank released a robust set of 3QFY13 results.

OCBC’s 3QFY13 net profit of S$759m met market expectations, rising 5% yoy, on the back of stronger contribution from Great Eastern (GE) as well as the unrealised mark-to-market gains in GE's non-participating fund, said OSK-DMG.

But relative to 2013, next year will see slower growth as the bank grapples with the impact of various property cooling measures rolled out by the Monetary Authority of Singapore.

Already, OCBC management has guided for 2014 loan growth of a high single digit, which is notably slower than that in 2013.

"Already, OCBC is seeing a 30% yoy drop in residential mortgage applications and thinks that the impact
on loan growth would start to be felt in 2H2014. The group remains open for potential M&A activities, especially if these involve any of OCBC’s four key markets of Singapore, Malaysia, Indonesia and Greater China," added OSK-DMG.