Hot stock: OCBC down 6.3% after Q4 net profit misses analyst estimates
SHARES of OCBC O39 fell in the morning on Wednesday (Feb 23), after the bank said its net profit for the fourth quarter ended Dec 31, 2021 fell 14 per cent on year to S$973 million.
As at 9 am in the morning, the counter reached a low of S$12.33, down 6.3 per cent or S$0.83, with 1.5 million shares changing hands.
No married deals were recorded, according to ShareInvestor data.
As at 9.33 am, its shares eased slightly to S$12.52, down 4.9 per cent or S$0.64. The counter remains one of the top traded by volume, with 7.1 million shares worth S$89.3 million changing hands.
The lender's fourth quarter results had missed the S$1.18 billion average estimate based on 4 analysts polled by Refinitiv.
The earnings were also weaker compared to its peers. Earlier in February, DBS reported a net profit of S$1.4 billion for its fourth quarter ended Dec 31, 2021, up 37 per cent from a year ago. Meanwhile, UOB's net profit for the 3 months ended Dec 31, 2021 stood at S$1.02 billion, compared to S$688 million a year earlier.
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As for the full year, OCBC posted a net profit of S$4.86 billion, which is a 35 per cent increase from a year earlier, amid strong growth in non-interest income and lower allowances, which offset a decline in net interest income amid a low interest rate environment.
In a report on Wednesday, Jefferies analyst Krishna Guha said while OCBC's broad trends, including loan growth, margins, non-interest income and expenses, were largely in line with peers, "the elevated credit cost and no comments on dividend policy were a dampener".
He is positive on the restoration of the full-year dividend to pre-pandemic levels, but noted that it is "underwhelming" given the bank's CET-1 (Common Equity Tier 1) ratio of 15.5 per cent.
Guha added: "All in, results were tad shy of consensus and some colour on asset quality and credit cost guidance for the current fiscal year would be welcome."
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