O39SGX

Oversea-Chinese Banking Corporation (OCBC)

What it does

OCBC reports 5 businesses. In FY2025, consumer and private banking brought in 37%, wholesale banking brought in 41%, global markets brought in 10%, insurance brought in 12% and others brought in 1% of total income.

By region, Singapore made up 59%, then Greater China at 14%.

From Oversea-Chinese Banking Corporation, OCBC FY25 condensed financial statements.

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How it makes money

Where OCBC's FY2025 total income came from, what it cost to earn, and what was left for shareholders.

Total incomeS$14.6B

ExpensesS$5.9B

Net profitS$7.4B

Net profit as % of income50.8%

▸ Oversea-Chinese Banking Corporation, FY2025: from total income to profitO39

Income by

Income
Costs, allowances and tax
Profit
% = share of total income

Source: Oversea-Chinese Banking Corporation, OCBC FY25 condensed financial statements (25 Feb 2026), pp. 2, 16 and 19. FY2025 is the year to 31 Dec 2025. Figures as reported, in S$ millions in the tooltips and table.

Technical: expenses were 40.2% of total income and net profit 50.8%. Allowances for bad loans took 4.6%.

Plain: of every dollar OCBC earned, about 40 cents went on running the bank and about 51 cents ended up as profit for shareholders.

Total income by business

Consumer and private bankingS$5.4B · 37%Profit before tax S$2.2B
Wholesale bankingS$5.9B · 41%Profit before tax S$3.6B
Global marketsS$1.4B · 10%Profit before tax S$948M
InsuranceS$1.7B · 12%Profit before tax S$1.5B
OthersS$144M · 1.0%Profit before tax S$887M

Total income by region

SingaporeS$8.6B · 59%Profit before tax S$5.1B
Greater ChinaS$2.0B · 14%Profit before tax S$1.7B
MalaysiaS$1.9B · 13%Profit before tax S$1.4B
IndonesiaS$1.1B · 7%Profit before tax S$493M
Rest of the worldS$725M · 5%Profit before tax S$346M
Other Asia PacificS$323M · 2%Profit before tax S$179M

See the numbers

FY2025	S$M	% of income
Net interest income	9,150	62.6%
Net fee and commission income	2,411	16.5%
Other non-interest income	3,053	20.9%
Total income	14,614	100.0%
Expenses	−5,882	40.2%
Amortisation of intangible assets	−21	0.1%
Allowances for credit and other losses	−665	4.6%
Share of profits of associates and JVs	1,077	7.4%
Profit before tax	9,123	62.4%
Income tax	−1,563	10.7%
Minority interests	−138	0.9%
Net profit to shareholders	7,422	50.8%

Other income combines net trading income (S$1,684M), insurance income from Great Eastern (S$1,069M) and other income (S$300M).
Insurance is OCBC's subsidiary Great Eastern Holdings. Others includes OCBC's S$1,077M share of associates' profits, which is why its profit is larger than its income.
OCBC assigns income to where the assets or transactions are booked.

Moat rating

Narrow moat

6.7 / 10

Return on equity averaged 12.1% over FY2021 to FY2025, 4.8 percentage points above a 7.34% cost of equity, and beat it in every year.

OCBC has earned more than its shareholders could reasonably expect every year for five years, but by a thinner margin than DBS.

The numbers

7.0 / 10

Return on equity against cost of equity, money-centre banks

Average ROE: 12.1%
Average excess return: +4.8 pp
Years above the hurdle: 5 of 5

Spread 5 × 60% + durability 10 × 40% = 7.0

The sources

6.4 / 10

Where OCBC's advantage comes from

1. Brand and pricing power6 / 10
S$428.3B of customer deposits fund S$336.7B of loans, a loan-to-deposit ratio of 78.6% at end-2025. Net interest margin fell to 1.91% from 2.20% as benchmark rates dropped.
Savers keep plenty of money with OCBC, but when interest rates fall, its lending profit falls with them.
2. Barriers to entry8 / 10
Banking needs a MAS licence and regulatory capital. OCBC's CET1 ratio was 16.9% at end-2025, against a 6.5% minimum.
You can't just open a bank. The regulator decides who gets a licence and how much capital they must hold.
3. Switching costs7 / 10
Wealth management income reached S$5.60B in 2025, 38% of total income, across private banking, premier banking, insurance and asset management. Banking wealth AUM was S$343B.
Wealthy clients keep savings, investments and insurance policies under one roof. Moving all of that is a big job.
4. Network effects4 / 10
Everyday payments run on shared rails like PayNow, which every participating bank can use.
PayNow works across banks, so OCBC gains little extra just because more people use it.
5. Economies of scale7 / 10
Cost-to-income ratio of 40.2% in 2025, on total assets of S$675.7B.
OCBC spends about 40 cents of every dollar it earns on running the bank, close to DBS.

Return on equity: Oversea-Chinese Banking Corporation, Annual Report 2025, Group five-year summary, p. 2. Hurdle: Aswath Damodaran, NYU Stern, Cost of capital by sector (US), data as of January 2026. Damodaran's US money-centre bank figure, used as a proxy. A Singapore-specific cost of equity could differ.

Lens scores are rasinbunlover's judgment, reviewed 19 Oct 2026. A wide moat is a reason to dig deeper, not a verdict on the price. For education only. Not financial advice.

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