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Brokers' Take: 'Buy' calls on OCBC follow its Q1 results

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"Buy" calls have been placed on OCBC shares following the release of the bank's first-quarter FY2015 earnings results.

"BUY" calls have been placed on OCBC shares following the release of the bank's first-quarter FY2015 earnings results.

Maintaining its "buy" call on the stock, RHB Research said it had met expectations but loan growth and net interest margin slippage was disappointing.

"Still, we maintain BUY with a S$11.70 target price (10 per cent upside) as OCBC is making progress with its Greater China strategy, as evident by its improved funding position and growth of its wealth management and treasury businesses. Also, its asset quality remains solid," said RHB Research.

It added that actual integration of OCBC Wing Hang's China operations is expected to start in the second half of 2015, and this would provide a further catalyst for growth.

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KGI Fraser also maintained its "buy" call on the OCBC stock with its target price unchanged at S$11.63.

KGI Fraser said while the fall in the bank's net interest margin was disappointing, there should be an improvement in the next few quarters as the lender reduces its lower-yielding interbank assets.

"We also see further synergies as OCBC continues its integration of OCBC Wing Hang, which should provide momentum for organic growth within the group. Asset quality also remains strong with non-performing loan ratio unchanged at 0.6 per cent."

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