Profit after tax margin reaches ~52.4% as total income exceeds S$14B for the first time; wealth management fees surge 22%.

Record Net Profit and Margin Performance

OCBC delivered a third consecutive record net profit of S$7.59B in FY2024, with a profit margin above 52% and total income crossing S$14B for the first time, underpinned by diversified revenue growth across banking, wealth and insurance. Group net profit after tax attributable to equity holders reached S$7,587 million in FY2024, an 8% increase from S$7,021 million in FY2023 (Annual Report p.104). This marks a sustained upward trajectory from S$3,586 million in FY2020, S$4,858 million in FY2021, S$5,526 million in FY2022, and S$7,021 million in FY2023 (Annual Report p.104).

Total income hit a record S$14,473 million, up 7% from S$13,507 million in FY2023 (Condensed Financials p.16). Based on these figures, OCBC's net profit after tax margin—calculated as net profit divided by total income—reached approximately 52.4% (S$7,587 million / S$14,473 million), reflecting the bank's ability to convert more than half of its revenue into bottom-line profit for shareholders.

Net Profit (S$ million) ($M)Source: Orionmano Industries

Revenue Drivers: Banking, Wealth, and Insurance

OCBC's revenue growth in FY2024 was driven by a diversified franchise spanning banking, wealth management, and insurance. Net interest income reached a record S$9,755 million, up 1% year-on-year, supported by 5% growth in average customer loans (Asian Banking & Finance). However, net interest margin (NIM) declined 8 basis points to 2.2%, reflecting tightening loan yields outpacing lower deposit costs (Asian Banking & Finance; LinkedIn).

Non-interest income surged 22% to S$4,718 million, making up 32.6% of total income compared to 28.6% in FY2023 (Condensed Financials p.16; Asian Banking & Finance). Within this, net fee income rose 9% to S$1,970 million, with wealth management fees jumping 22% across all wealth channels (Asian Banking & Finance). Net trading income increased 53% to S$1,537 million, with customer flow treasury reaching a new high (Asian Banking & Finance).

Insurance profit before income tax rose 34% to S$1,190 million, driven by stronger performance from its life insurance business and higher mark-to-market gains on its investment portfolio (Media Release PDF, p.8). After tax and non-controlling interests, Great Eastern Holdings' contribution to group net profit was S$882 million in FY24, up from S$636 million in FY23 (Media Release PDF, p.22).

Group wealth management income—comprising private banking, premier banking, insurance, asset management, and stockbroking—grew 13% to a record S$4,890 million, accounting for 34% of total income (Asian Banking & Finance). Banking wealth management assets under management rose 14% to a new high of S$299 billion (Asian Banking & Finance).

Profit Before Income Tax (S$ million) ($M)Source: Orionmano Industries

Source: Orionmano Industries

Cost Discipline and Asset Quality

Operating expenses totaled S$5,742 million in FY2024, up 10% from S$5,223 million in FY2023, driven largely by staff costs which rose to S$3,837 million from S$3,501 million (Condensed Financials p.16). Despite this increase, the cost-to-income ratio improved as total income growth outpaced expense growth, reflecting management's continued cost discipline while investing strategically for growth (Media Release PDF, p.8; Condensed Financials p.16).

Allowances for loans and other assets decreased to S$690 million from S$733 million in FY2023, with credit costs falling 1 basis point to 19 basis points (Condensed Financials p.16; Asian Banking & Finance). The non-performing loan (NPL) ratio improved to 0.9% from 1.0% a year earlier, indicating sound asset quality despite the macroeconomic environment (Asian Banking & Finance; LinkedIn).

Customer loans rose 8% year-on-year to S$319 billion, while customer deposits increased 7% to S$391 billion, providing a stable funding base to support net interest income (Asian Banking & Finance). Total assets grew to S$625 billion as of December 2024, up from S$581 billion in December 2023 (Annual Report p.104).

Capital Return Plan and Dividends

OCBC announced a comprehensive capital return plan that rewards shareholders directly. The Board recommended a final tax-exempt dividend of 41 cents per share and a special tax-exempt dividend of 16 cents per share for FY2024, bringing the total full-year dividend to 101 cents per share—a 23% increase from 82 cents in FY2023 (Condensed Financials p.1; LinkedIn).

Total dividend payout is estimated at S$4.54 billion, representing approximately 60% of net profit (Condensed Financials p.1). The special dividend of 16 cents per share adds approximately 10% to the payout ratio on top of the ordinary dividend (Media Release). The Scrip Dividend Scheme will not apply to the final and special dividends (Media Release p.8).

Beyond the dividend, the Board also announced a S$2.5 billion capital return plan over two years, to be executed through special dividends and share buybacks (LinkedIn; Media Release). This reflects management's confidence in OCBC's capital position and its commitment to shareholder value. Earnings per share rose 8% to S$1.67 (Asian Banking & Finance).

With a record profit, strong capital position, and a clear capital return plan, OCBC is well-positioned for FY2025. Watch for further NIM pressure given the Q4 NIM decline to 2.15%, and potential M&A in the insurance segment following the increased stake in Great Eastern Holdings to 93.72%.