OCBC won't focus on Singapore anymore

All eyes on Malaysia and Indonesia now.

According to Nomura, 9M12 core net profit rose 28% y-y to SGD2.16bn, accounting for 85% of our FY12F estimate of SGD2.45bn and 82% of the Street’s full-year estimate of SGD2.58bn. The outperformance was mainly due to lowerthan-expected credit costs and stronger trading & insurance income.

Here's more from Nomura:

What do the results mean?
Like its peers DBS and UOB, OCBC recorded a slowdown in annual loan growth to ~8% (+1%q-q), lower-than-expected credit costs and higher markets-related income.

Any change to guidance?
Management is guiding for FY12-13 loan growth to be in the mid-to-high single-digit range given the limited visibility on the global economic recovery. Loan growth has been encouraging in Malaysia (mortgages, corporate) and Indonesia (SMEs, corporate) and management will continue to devote resources to those markets.

NIM downside is limited from current level of ~1.75%. Management believes that the NIM pressure in Singapore will be offset by the faster growth in higher NIM markets like Malaysia and Indonesia.

On capital, management indicated that the capital generated by the divestment of its shares in F&N and APB will be kept for organic growth prospects.

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