Singapore Banks Announce Multi-Billion Dollar Capital Returns with OCBC Q4 Profit Misses

Singapore's second-largest bank, Oversea-Chinese Banking Corp (OCBC), announced multi-billion capital returns and a record profit for 2024, aligning with other banks. Despite citing uncertainties related to trade tensions and tariffs, OCBC's Group CEO Helen Wong expressed confidence in the resilience of Southeast Asia's economies. The bank fell short of profit forecasts in the fourth quarter, leading to a 2.8% drop in its shares. Looking ahead, OCBC projected mid-single-digit loan growth for 2025 and expects a decline in net interest margin to around 2% due to anticipated rate cuts by the U.S. Federal Reserve. OCBC deferred plans to redevelop its Chulia Street property in Singapore's central business district. The bank's announced capital return includes special dividends and share buybacks over two years. In the fourth quarter, OCBC reported a 4% increase in net profit, attributed to higher non-interest income. Comparatively, its profit performance slightly missed analysts' estimates. Larger rival DBS Group and smaller rival United Overseas Bank both saw profit growth and announced capital return plans. Geopolitical factors, including Trump's trade policies, could potentially impact global growth, although Singapore's economy may withstand direct U.S. tariffs.