OCBC reports 22% rise in net profit and higher interim dividend: Our Quick Take

OCBC 2Q26 earnings highlights

OCBC announced its earnings for the second quarter of 2026 (2Q26) and the first half of 2026 (1H26). Key highlights include:

• Net profit of S$2.22 billion in 2Q26, up 22% year-on-year and 12% quarter-on-quarter, crossing S$2 billion for the first time on a quarterly basis. 1H26 net profit rose 13% year-on-year to a record S$4.19 billion.
• Total income for 2Q26 hit a record S$4.17 billion, with non-interest income of S$1.91 billion rising 51% year-on-year to a new high, comprising close to 46% of total income.
• Interim ordinary dividend of 47 cents per share declared, up 15% from 41 cents a year ago, representing a payout ratio of 50%.
• Loans grew 11% year-on-year (in constant currency terms) to S$364 billion, with strong 5% quarter-on-quarter growth.
• Asset quality remained sound with NPL ratio steady at 0.9% and total NPA coverage of 163%.
• Annualised ROE of 14.4% in 2Q26 and 13.7% for 1H26.

Source: Company data, 1H26 results presentation

What you need to know about OCBC 2Q26 results

OCBC Group has reported record quarterly net profit of S$2.22 billion for 2Q26, up 22% year-on-year and 12% higher than the previous quarter. 

This brings 1H26 net profit to a record S$4.19 billion, up 13% year-on-year.

#1 - Record quarterly profit driven by broad-based income growth

OCBC's total income for 2Q26 rose to a new high of S$4.17 billion, marking an 18% increase from the same period last year and 9% higher than the previous quarter. 

Total income for 1H26 grew 11% year-on-year to S$8.00 billion.

Net interest income for 2Q26 came in at S$2.26 billion, down 1% year-on-year but up 2% quarter-on-quarter, as a downward repricing of loans and higher wholesale funding costs were more than compensated by a 5% increase in average assets.

OCBC's net interest margin (NIM) was 1.70% in 2Q26, 22 basis points (0.22%) lower than 2Q25 and 6 basis points (0.06%) lower than 1Q26. 

The quarter-on-quarter NIM compression was milder than the 10 basis point (0.10%) decline recorded in 1Q26.

Source: Company data, 1H26 results presentation

#2 - Non-interest income hit a new record in 2Q26

Non-interest income rose 51% year-on-year and 19% quarter-on-quarter to a record S$1.91 billion. 

Non-interest income accounted for close to 46% of total income in 2Q26, up from 36% a year ago.

Net fee income grew 28% year-on-year to S$739 million, underpinned by record wealth management fees of S$470 million (up 45% year-on-year), which alone accounted for 63% of total fee income. 

Investment banking and loan and trade-related fees also grew from the previous year.

Net trading and investment income rose 85% year-on-year to a record S$695 million, up 60% quarter-on-quarter. 

This was driven by both record customer flow income from wealth-related activities and corporate hedging demand, as well as stronger non-customer flow investment income from Great Eastern Holdings (GEH), reflecting the equity market rebound post 1Q26.

Insurance income improved 68% year-on-year to S$382 million, supported by robust underlying insurance and investment performance. 

For 1H26, total weighted new sales (TWNS) and new business embedded value (NBEV) grew by 15% and 28% respectively, with NBEV margin improving to 49.8% from 44.7% a year ago.

Source: Company data, 1H26 results presentation

Group wealth management income reached a record S$3.29 billion in 1H26, up 27% year-on-year, and now contributes 41% of the Group's total income (up from 36% a year ago). 

Banking wealth management AUM rose 13% year-on-year to a new high of S$350 billion.

Source: Company data, 1H26 results presentation

#3 - Cost-to-income ratio improved to 37.8%

OCBC's operating expenses for 2Q26 came in at S$1.58 billion, up 13% year-on-year and 5% quarter-on-quarter, mainly due to higher performance-linked remuneration and continued investments in talent and technology.

Despite the increase in expenses, the strong income growth drove the cost-to-income ratio (CIR) down to 37.8% in 2Q26, an improvement from 39.1% a year ago and 39.3% in 1Q26.

Source: Company data, 1H26 results presentation

Total allowances in 2Q26 declined 28% quarter-on-quarter to S$156 million, mainly from a decline in allowances for non-impaired assets. 

Credit costs were an annualised 14 basis points, significantly lower than the 23 basis points recorded in 1Q26. 

For 1H26, credit costs were 18 basis points on an annualised basis.

NPL ratio held steady at 0.9%. Total NPA coverage remained high at 163%. 

Notably, 2Q26 new NPAs were mainly from the downgrades of two Greater China corporate real estate accounts previously classified under special mention.

#4 - Strong loan and deposit growth

Customer loans grew to S$364 billion as at 30 June 2026, up 11% year-on-year and 5% quarter-on-quarter on a constant currency basis. 

Loan growth was broad-based across corporate and consumer segments. The year-on-year corporate loan expansion was driven by TMT & Digital Infrastructure, Energy, Power & Utilities, and Transport sectors.

Source: Company data, 1H26 results presentation

OCBC's sustainable financing loans grew 12% year-on-year to S$59.7 billion, comprising 16% of Group loans, with total commitments at S$84.2 billion.

Customer deposits rose 13% year-on-year to S$459 billion, primarily supported by CASA deposit growth of 12% and higher fixed deposits. The CASA ratio was 49.3%, slightly lower than 50.2% in the previous quarter.

 Source: Company data, 1H26 results presentation

#5 - Interim dividend raised 15% year-on-year to 47 cents

OCBC's board declared an interim ordinary dividend of 47 cents per share for 1H26, up 6 cents or 15% from 41 cents a year ago. 

This represents a payout ratio of 50% of 1H26 Group net profit, with the interim dividend payout amounting to S$2.11 billion. The Scrip Dividend Scheme will not be applicable to the interim dividend.

The Group also reaffirmed its commitment to completing its previously announced S$2.5 billion capital return plan by FY26.

 Source: Company data, 1H26 results presentation

#6 - Updated 2026 outlook

OCBC also updated its 2026 financial targets alongside its 2Q2026 results.

The macro backdrop is now framed around the evolving Middle East conflict, energy market developments and K-shaped economic growth across major economies.

This replaces the earlier emphasis on lower interest rates and specific benchmark rate assumptions.

The main upgrade was in loan growth.

OCBC now expects loan growth to be in the high-single-digit to low-double-digit range, up from its earlier mid-single-digit guidance.

This reflects the strong 11% year-on-year loan growth achieved in 1H2026.

Total income guidance was also lifted slightly.

Management now expects total income “to grow”, compared with the earlier guidance of “stable to growing”.

However, net interest income is still expected to decline slightly, suggesting that fee income, wealth management and other non-interest income remain important offsets.

Cost discipline also looks better than expected.

OCBC tightened its cost-to-income ratio guidance to the low-40% range, from the earlier low-to-mid-40% range, after delivering a strong 38.5% cost-to-income ratio in 1H2026.

Credit cost guidance was unchanged at 20 to 25 basis points.

Dividend guidance was also unchanged, with OCBC maintaining its 50% ordinary dividend payout ratio and its S$2.5 billion capital return plan targeted for completion by FY2026.

Source: Company data, 1H26 CEO presentation

Beansprout's Quick Take on OCBC 2Q26 earnings

OCBC's share price has performed strongly in recent months, with the stock currently trading around S$29.33, close to record highs.

Source: Beansprout

On the positive side, OCBC's 2Q26 results reflect a decisive step-up in earnings momentum. Quarterly net profit crossed S$2 billion for the first time, driven by a record S$1.91 billion in non-interest income (up 51% year-on-year). The strength was broad-based across wealth management fees (up 45%), trading and investment income (up 85%) and insurance income (up 68%).

The 15% year-on-year increase in the interim dividend to 47 cents per share is a positive signal, as it comes on top of the special dividends that form part of the S$2.5 billion capital return plan. This is consistent with the 50% ordinary payout ratio the bank had guided to.

Loan growth also accelerated meaningfully, with customer loans up 5% quarter-on-quarter on a constant currency basis. 

Wealth management continues to be a clear growth engine, with Banking wealth management AUM reaching a new high of S$350 billion.

Credit costs came in much lower at 14 basis points, well below the 20 to 25 basis point range the bank had earlier guided to, reflecting the release of some of the pre-emptive management overlays taken in 1Q26.

On the flip side, the NIM decline continues, with 2Q26 NIM of 1.70% down 22 basis points year-on-year with the pace of quarter-on-quarter decline moderating.

The formation of new corporate NPAs from two Greater China corporate real estate accounts is worth watching, especially given ongoing concerns around the sector.

Valuation is also an important consideration. OCBC is now trading at 2.19x price to book, above historical average price-to-book multiples of 1.16x.

OCBC increased 1H26 interim dividend to 47 cents per share from 41 cents one year ago. If we annualise the 1H26 interim dividend, this would imply a dividend yield of 3.2% based on its closing price of S$29.33 on 6 August. 

OCBC is one of the stocks in Beansprout’s Opportunity Pot Portfolio, where our analyst team highlights the opportunities we believe stand out in the market today. See the stocks in the portfolio, how much we allocate to each, and what we are watching next.

Related links:

• OCBC share price and share price target
• OCBC dividend forecast and dividend history

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