OCBC Earnings: Profit in Line but Shareholder Return Outlook Disappoints; Fair Value Stays at SGD 16

We maintain our fair value estimate for OCBC of SGD 16 following the 2023 earnings performance, which was largely in line with our expectations. However, it is slightly disappointing that given a strong capital buffer, the group is not indicating any plans to raise their dividend payout. A dividend per share of SGD 0.82 represents a dividend payout of 53% for 2023. A common equity Tier 1 ratio of 15.1% allows OCBC to raise dividend payout materially, but we suspect the group is keeping funds for potential acquisitions.