OCBC (Oversea-Chinese Banking Corporation) Bank has released their latest financial results this morning (24th Oct 2023). For FY2022, Oversea-Chinese Banking Corporation (OCBC) has achieved record earnings of $5.75 billion, marking an impressive 18% increase from the previous year; and are generally in-line with market expectations. OCBC dividend history as follows:
Dividend | Ex Date | Record Date | Payment Date | Details |
DIVIDEND | 2023-05-08 | 2023-05-09 | 2023-05-19 | SGD 0.40 |
DIVIDEND | 2022-08-12 | 2022-08-15 | 2022-08-25 | SGD 0.28 |
DIVIDEND | 2022-05-06 | 2022-05-09 | 2022-05-20 | SGD 0.28 |
DIVIDEND | 2021-08-13 | 2021-08-16 | 2021-08-26 | SGD 0.25 |
DIVIDEND | 2021-05-12 | 2021-05-14 | 2021-06-29 | SGD 0.159 |
One of the significant takeaways from the announcement is the increase in the final dividend to 40 cents per share (making it a total of 80 cents for the full year), which is a 40% increase from the previous year's dividend. With the increase in the final dividend, the bank's dividend policy has also been made public. that OCBC intends to pay out 50% of its earnings as dividends, which is in line with DBS and UOB. This is a positive development for investors who are looking for attractive investment opportunities within the sphere of blue chip companies.
The increase in the final dividend and the new dividend policy are important developments for investors looking for stable dividends. OCBC's management has also stated that they do not expect to cut the dividend for the full year of 2022, which provides investors with added assurance that the bank is committed to maintaining a stable dividend payout.
With a 6.4% yield based on the last traded price, OCBC appears to be the cheapest among the three banks in terms of dividend yield and PB ratio. Investors can expect a dividend of approximately 80 cents in 2023 (vs 28 + 28 totaling 56 cents in 2022), assuming that there are no externalities that could lead to the regulators to limit their dividends.
OCBC has a return on equity (ROE) of approximately 11%, making it one of the more leveraged banks to the Hong Kong and China market. The reopening of Hong Kong and China's economies could benefit OCBC as the bank has Wing Hang Bank and a few acquisitions in China. While UOB is more focused on the ASEAN markets, OCBC is better positioned in the North Asian markets, specifically China and Hong Kong. To know more about Singapore Banks geographical focus, go here.
Chart 1: OCBC Price-to-Book ratio from 2013 to current (2023) - chart created using TradingView
In conclusion, OCBC's latest financial results and dividend policy are a positive development for investors who are looking for stable dividends (barring unforeseen circumstances). With a dividend yield of 6.4% on the last traded price (in contrast to both DBS and UOB dividend of about 4.5%) and PE ratio of 8x, Price to Book ratio of 1.1, OCBC appears to be the cheapest among the three banks at this
OCBC's management has stated that they do not expect to reduce the dividend unless such externalities occur. As such, OCBC could be an attractive investment opportunity for investors who are looking for stable dividends and exposure to North Asian markets.
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