DBS, OCBC slated for Q4 net profit growth

Wealth management contribution will be higher than 2023 but lower from Q3.

DBS and OCBC are slated for net profit growth for Q4 2024, but performance will be weaker than in Q3, according to UOB Kay Hian.

DBS Group Holdings is expected to have grown its net profit by 12% year-on-year (YoY) in the last three months of 2024. However, it will be 16% quarter-on-quarter (QoQ) lower than in Q3.

Quarterly dividend is expected to increase by 6 Singapore cents to 60 cents for Q4, according to UOBKH analyst Jonathan Koh.

Loan growth is muted at 2% YoY, supported by the strength of the US dollar and Hong Kong dollar.

Fees should rise 16% YoY, with contribution from wealth management increasing 54% YoY but 6% QoQ lower to around S$570m, said Koh.

Net interest margin (NIM) compression has been ‘delayed’ to Q1 2025, due to the US Federal Reserve cutting interest rates by 100 basis points (bp) between September-December 2024.

Oversea-Chinese Banking Corporation, meanwhile, is forecasted to report a net profit growth of 8% YoY, although it should be 11% QoQ lower, according to Koh.

The bank may increase its final dividend by 9.5% YoY to 46 Singaporean cents for the second half of 2024. Koh and UOBKH estimate the payout ratio at 53.7% for 2024.

Its wealth management contribution should be seasonally softer as well, growing 18% YoY but declining 6% QoQ.

NIM may ease 13bp YoY and 2bp QoQ to 2.16%.

Net interest income could decline 1.1% YoY during the quarter, UOBKH said.