DBS, OCBC Slated for Q4 Net Profit Growth

As we approach the end of the year, two of Singapore's largest banks, DBS and OCBC, are expected to report strong net profit growth for the fourth quarter. This is great news for investors, as it indicates that these banks are performing well and are likely to continue to do so in the coming quarters.



According to analysts, DBS is expected to report a net profit growth of 12% year-on-year (YoY) in the fourth quarter, while OCBC is expected to report a net profit growth of 8% YoY. This is a significant improvement from the third quarter, when DBS reported a net profit growth of 16% QoQ and OCBC reported a net profit growth of 11% QoQ.



The strong performance of DBS and OCBC can be attributed to several factors. Firstly, both banks have benefited from higher net interest margins due to the US Federal Reserve's interest rate hikes. This has led to a significant increase in net interest income for both banks. For instance, DBS' net interest income is projected to grow by 12% YoY in Q4 2024, while OCBC's is expected to grow by 8% YoY.

Secondly, both banks are expected to see an increase in fees income, driven by wealth management contributions. DBS' fees income is projected to increase by 16% YoY, while OCBC's is expected to rise by 10% YoY.

Lastly, both banks are expected to see an increase in other non-interest income. DBS' other non-interest income is projected to grow by 54% YoY, while OCBC's is expected to increase by 18% YoY.



However, it is important to note that the wealth management contribution for OCBC is expected to be seasonally softer, growing 18% YoY but declining 6% QoQ. Additionally, OCBC's net interest margin may ease 13bp YoY and 2bp QoQ to 2.16% in the fourth quarter.



In conclusion, DBS and OCBC are expected to report strong net profit growth in the fourth quarter, driven by higher net interest margins, increased fees income, and other non-interest income. While OCBC's wealth management contribution may be seasonally softer and its net interest margin may ease, the overall performance of both banks is expected to be positive. As an investor, it is important to stay informed about the latest developments in the banking sector and to consider the potential impact on your portfolio. By doing so, you can make informed decisions and maximize your returns.