Oversea-Chinese Banking Corporation Limited (OCBC) has reported a record net profit of S$7.59 billion for the financial year ending December 31, 2024, an 8% increase over the previous year. This growth is attributed to robust income from the bank's diverse business segments, including Banking, Wealth Management, and Insurance. Total income for the year exceeded S$14 billion for the first time, driven by record net interest income and substantial growth in non-interest income, particularly in wealth fees and trading income.
The board has declared a plan to return S$2.5 billion of capital to shareholders over two years through special dividends and share buybacks. A 60% total dividend payout is anticipated for both FY24 and FY25, with a final ordinary dividend of 41 cents per share and a special dividend of 16 cents per share for FY24.
"Net interest income rose to a new high of S$9.76 billion," supported by increased average assets and net fee income rose 9% to S$1.97 billion, attributed to a 22% rise in wealth management fees. Trading income also increased by 53% to S$1.54 billion. "Insurance income grew 14% to S$917 million," driven by higher underlying insurance business income and improved claim experiences.
Total operating expenses rose by 10% to S$5.74 billion, mainly due to investment in strategic initiatives and higher staff costs. The consolidation of PT Bank Commonwealth into OCBC Indonesia contributed to expense growth. The bank's cost-to-income ratio was 39.7% for FY24. Total allowances decreased by 6% to S$690 million, with minimal credit costs.
In the fourth quarter, OCBC's net profit climbed by 4% year-on-year to S$1.69 billion. Net interest income remained flat at S$2.46 billion despite narrower net interest margins. Non-interest income grew 18% to S$961 million compared to the previous year.
The Board has recommended a final ordinary dividend of 41 cents for FY24, leading to a total payout of S$3.82 billion, consistent with OCBC's 50% payout ratio target. The proposed special dividend will bring total dividends to S$1.01 per share.
CEO Helen Wong stated, "I am pleased to report that OCBC has delivered a record profit for the third year in a row. Our well-diversified Banking, Wealth Management, and Insurance franchise all contributed to total income reaching an all-time high this year." Wong added that the bank has effectively managed expenses while investing strategically for growth and highlighted a plan for capital returns that affirms a commitment to rewarding shareholders. She also expressed cautious optimism about regional growth prospects for the upcoming year, emphasizing OCBC's readiness to adjust to geopolitical and economic challenges for future growth.