Oversea-Chinese Banking Corp Ltd

O39: XSES (SGP)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	SGD 55.00	Syrvjft	Bdnncypwx

OCBC Earnings: Strong Noninterest Income Supports Growth; Expect Successful Privatization of GEH

Lorraine Tan , Kathy Chan

May 10, 2024

Narrow-moat Oversea-Chinese Banking Corp. started 2024 with a strong set of first-quarter results. Year-on-year net profit growth of 5% was above our expectation and consensus, led by strong growth in insurance and trading income. OCBC also announced a SGD 1.4 billion unconditional offer for the 11.56% stake in its insurance subsidiary, Great Eastern Holdings, that it does not currently own. We assume a successful privatization as the offer price of SGD 25.60 per share implies a meaningful premium of 36.9% to the May 9 closing price, but the impact will mainly be seen in reduced minority interest.

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