DB:OCBA

Stock Analysis Report

Oversea-Chinese Banking

Executive Summary

Oversea-Chinese Banking Corporation Limited provides financial services in Singapore, Malaysia, Indonesia, Greater China, other parts of the Asia Pacific, and internationally.

Rewards

Trading at 51.3% below its fair value

Earnings are forecast to grow 3.14% per year

Pays a high and reliable dividend of 4.56%

Risk Analysis

High level of non-cash earnings

Shareholders have been diluted in the past year



Snowflake Analysis

6 star dividend payer with excellent balance sheet.


Similar Companies

Share Price & News

How has Oversea-Chinese Banking's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OCBA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

OCBA

11.0%

DE Banks

0.1%

DE Market


1 Year Return

-4.6%

OCBA

4.4%

DE Banks

14.1%

DE Market

Return vs Industry: OCBA underperformed the German Banks industry which returned 4.4% over the past year.

Return vs Market: OCBA underperformed the German Market which returned 14.1% over the past year.


Shareholder returns

OCBAIndustryMarket
7 Day0%11.0%0.1%
30 Day-2.7%19.0%0.2%
90 Day-0.7%26.1%3.3%
1 Year-0.5%-4.6%7.8%4.4%17.6%14.1%
3 Year28.2%15.0%-2.7%-7.5%14.8%4.8%
5 Year27.1%5.8%-4.8%-28.2%22.2%5.4%

Price Volatility Vs. Market

How volatile is Oversea-Chinese Banking's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Oversea-Chinese Banking undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OCBA (€7.2) is trading below our estimate of fair value (€14.78)

Significantly Below Fair Value: OCBA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: OCBA is good value based on its PE Ratio (10.4x) compared to the Banks industry average (18.2x).

PE vs Market: OCBA is good value based on its PE Ratio (10.4x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: OCBA is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: OCBA is overvalued based on its PB Ratio (1x) compared to the DE Banks industry average (0.9x).


Next Steps

Future Growth

How is Oversea-Chinese Banking forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

3.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OCBA's forecast earnings growth (3.1% per year) is above the savings rate (-0.4%).

Earnings vs Market: OCBA's earnings (3.1% per year) are forecast to grow slower than the German market (13.3% per year).

High Growth Earnings: OCBA's earnings are forecast to grow, but not significantly.

Revenue vs Market: OCBA's revenue (3.5% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: OCBA's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OCBA's Return on Equity is forecast to be low in 3 years time (10.5%).


Next Steps

Past Performance

How has Oversea-Chinese Banking performed over the past 5 years?

4.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OCBA has a high level of non-cash earnings.

Growing Profit Margin: OCBA's current net profit margins (48.2%) are higher than last year (46.6%).


Past Earnings Growth Analysis

Earnings Trend: OCBA's earnings have grown by 4.8% per year over the past 5 years.

Accelerating Growth: OCBA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: OCBA had negative earnings growth (-0.08%) over the past year, making it difficult to compare to the Banks industry average (-7%).


Return on Equity

High ROE: OCBA's Return on Equity (9.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Oversea-Chinese Banking's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: OCBA has a low level of unsold assets or inventory.

Debt Coverage by Assets: OCBA's debt is covered by short term assets (assets are 1.9x debt).


Financial Institutions Analysis

Asset Level: OCBA's level of assets compared to its equity is moderate.

Allowance for Bad Loans: OCBA has a low allowance for bad loans.

Low Risk Liabilities: OCBA's liabilities are made up of primarily low risk sources of funding.

Loan Level: OCBA has an acceptable proportion of non-loan assets held.

Low Risk Deposits: OCBA's loans are broadly funded by customer deposits.

Level of Bad Loans: OCBA has an appropriate level of bad loans (1.58%)


Next Steps

Dividend

What is Oversea-Chinese Banking's current dividend yield, its reliability and sustainability?

4.56%

Current Dividend Yield


Dividend Yield vs Market

company4.6%marketbottom25%1.3%markettop25%3.6%industryaverage2.6%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: OCBA's dividend (4.56%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: OCBA's dividend (4.56%) is in the top 25% of dividend payers in the German market (3.57%)


Stability and Growth of Payments

Stable Dividend: OCBA's dividends per share have been stable in the past 10 years.

Growing Dividend: OCBA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45.6%), OCBA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OCBA's dividends in 3 years are forecast to be covered by earnings (52.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.2yrs

Average management tenure


CEO

Samuel Tsien (64yo)

7.8yrs

Tenure

S$10,700,000

Compensation

Mr. Nag Tsien, also known as Samuel, serves as Commissioner at PT Bank OCBC NISP Tbk since December 12, 2012. He has been the Group Chief Executive Officer of Oversea-Chinese Banking Corporation Limited si ...


CEO Compensation Analysis

Compensation vs Market: Samuel's total compensation ($USD7.70M) is above average for companies of similar size in the German market ($USD4.36M).

Compensation vs Earnings: Samuel's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Nag Tsien
Group CEO and Executive & Non-Independent Director7.8yrsS$10.70m0.040% SGD12.8m
Siew Peng Tan
Executive VP & CFO8.2yrsno datano data
David Cheng
Head of Corporate Finance4.3yrsno datano data
Khiang Tong Lim
Head of Group Operations & Technology9.8yrsno datano data
Collins Chin
Head of Investor Relations0yrsno datano data
Yuen Ling
Head of Group Legal & Regulatory Compliance9.4yrsno datano data
Ching Ching Koh
Head of Group Brand & Communications15.3yrsno datano data
Poh Ho
Head of Group Human Resources4.6yrsno datano data
Wei Hong Ching
Deputy President0.08yrsno data0.0086% SGD2.8m
Vincent Soh
Head of Group Property Management15.7yrsno datano data

8.2yrs

Average Tenure

57.5yo

Average Age

Experienced Management: OCBA's management team is seasoned and experienced (8.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nag Tsien
Group CEO and Executive & Non-Independent Director7.8yrsS$10.70m0.040% SGD12.8m
Parwati Surjaudaja
President Director & CEO of Bank OCBC NISP11.2yrsS$202.00kno data
Joo Yeow Wee
Non-Executive & Independent Director6.1yrsS$325.00k0.0017% SGD538.8k
Beng Seng Koh
Non-Executive Non-Independent Director0.3yrsno datano data
Tih Lee
Non-Executive & Non-Independent Director16.8yrsS$221.00k0.26% SGD82.1m
Ngiap Tan
Independent Non-Executive Director6.4yrsS$325.00k0.031% SGD10.0m
Sang Ooi
Independent Chairman of the Board5.4yrsS$1.66m0.0011% SGD346.4k
Pramukti Surjaudaja
Non-Executive & Non-Independent Director14.7yrsS$188.00k0.0017% SGD532.4k
Wee Ghee Quah
Independent Director8.1yrsS$215.00k0.0011% SGD356.0k
Kim Chiu Chua
Non-Executive Independent Director2.4yrsS$280.00k0.00018% SGD57.7k

6.3yrs

Average Tenure

64.5yo

Average Age

Experienced Board: OCBA's board of directors are considered experienced (6.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.4%.


Top Shareholders

Company Information

Oversea-Chinese Banking Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Oversea-Chinese Banking Corporation Limited
  • Ticker: OCBA
  • Exchange: DB
  • Founded: 1912
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: S$48.275b
  • Listing Market Cap: S$32.070b
  • Shares outstanding: 4.40b
  • Website: https://www.ocbc.com

Number of Employees


Location

  • Oversea-Chinese Banking Corporation Limited
  • No. 10-00 OCBC Centre East
  • 63 Chulia Street
  • Singapore
  • 49514
  • Singapore

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OVCH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
O39SGX (Singapore Exchange)YesOrdinary SharesSGSGDJan 1992
OCBADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
OVCH.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDFeb 2009

Biography

Oversea-Chinese Banking Corporation Limited provides financial services in Singapore, Malaysia, Indonesia, Greater China, other parts of the Asia Pacific, and internationally. The company's Global Consumer/Private Banking segment provides products and services to individual customers, including checking accounts, and savings and fixed deposits; housing and other personal loans; credit cards; wealth management products consisting of unit trusts, banc assurance products, and structured deposits; and brokerage services. This segment also offers investment advice and portfolio management, estate and trust planning, and wealth structuring services for high net worth individuals. Its Global Corporate/Investment Banking segment provides project financing, overdrafts, trade financing, and deposit accounts; fee-based services, such as cash management and custodian services; investment banking services, including financing solutions, syndicated loans and advisory services, corporate finance services for initial public offerings, secondary fund-raising, and takeovers and mergers; and customized and structured equity-linked financing services. This segment serves corporates, public sector, and small and medium enterprises. The company's Global Treasury and Markets segment is involved in the foreign exchange activities, money market operations, and fixed income and derivatives trading, as well as provision of structured treasury products and financial solutions. Its OCBC Wing Hang segment offers commercial banking, consumer financing, share brokerage, and insurance services. The company’s Insurance segment provides fund management services, and life and general insurance products. Its Others segment is involved in property and investment holding activities. As of May 7, 2018, the company operated a network of 570 branches and representative offices in 19 countries and regions. Oversea-Chinese Banking Corporation Limited was founded in 1912 and is headquartered in Singapore. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 22:20
End of Day Share Price2020/02/18 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.