SINGAPORE — Singapore’s Oversea-Chinese Banking Corp. (OCBC) on Wednesday guided for stable-to-growing total income in 2026, even as interest income declines and global conditions remain uncertain, after reporting a 3 percent rise in fourth-quarter profit.
The country’s second-largest bank said it expects a slight-to-moderate fall in net interest income as rate cuts weigh on margins but sees return on equity holding steady or improving, driven by a stronger focus on higher-returning businesses.
“Looking ahead, we remain cautious yet positive. Global conditions are likely to remain uncertain, shaped by geopolitical tensions, evolving trade dynamics and interest rate uncertainty,” OCBC group CEO Tan Teck Long said in a statement.
OCBC reiterated a 50 percent ordinary dividend payout ratio and said it aimed to complete its SG$2.5 billion ($1.97 billion) capital return plan by this year.
The bank reported a 3 percent rise in fourth-quarter net profit to SG$1.74 billion, beating the mean estimate of around SG$1.69 billion from two analysts polled by LSEG, helped by a 37 percent jump in non-interest income to SG$1.32 billion on growth in fee, trading and insurance income.
OCBC did not include a target for net interest margin for 2026 after guiding for NIM of about 1.90 percent in 2025.
Wealth management fees recorded a 26 percent increase year on year, net trading income was up 30 percent over the same period and insurance income more than doubled, OCBC said in a statement.
Meanwhile, net interest margin, a key profitability gauge, dropped to 1.86 percent for the quarter from 2.15 percent a year earlier.
Return on equity fell to 12.6 percent for full-year 2025 from 13.7 percent a year earlier.
OCBC, which counts Singapore, greater China, Indonesia and Malaysia among its key markets, proposed a final dividend of 42 Singapore cents a share for 2025, bringing the total ordinary dividend for last year to 83 cents.
Separately, the bank announced a special dividend of 16 cents as part of the capital return plan, bringing the total dividend to 99 cents, slightly lower than 101 cents a year ago.
OCBC’s results rounded up a mixed fourth-quarter earnings season by Singapore banks.
Larger peer DBS Group posted on Feb. 9 earnings that missed analysts’ forecasts, while smaller rival United Overseas Bank on Tuesday also reported softer earnings, though it came in above expectations.
Global peer Standard Chartered reported on Tuesday a 16 percent rise in annual pre-tax profit on robust performances from its banking and wealth businesses.