Oversea Chinese Banking Corp. – Affirming Positive Trends

Oversea Chinese Banking Corp. – Re-Accelerating Credit Risk

Oversea Chinese Banking Corp.- Negative Jaws & Weaker Credit

Oversea Chinese Banking Corp. – Mixed Bag, But AQ Improving

Oversea Chinese Banking Corp. – Great Eastern HOH Operating Results Flop

Gravity Works As WeWork Doesn't; Now Plan B

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*Good Number:  Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] reported 1Q21 net profit of SGD 1.5 bn, a SGD 271 mn (24.0%) increase on a linked quarter basis. OCBC’s bottom-line improvement was primarily attributable to two factors: SGD 125 mn (43.7%) reduction in the loss provision, which may actually be justified given the deceleration in net new NPL growth; and a SGD 274 mn (139.8%) increase in attributable Great Eastern (GE.SP) earnings, much of which came from unrepeatable non-operating gains;*Credit Improving In Reality: We remain optimistic. By our calculation, we find that net new NPL growth while reversing course from being a negative SGD 78 mn or 8.0% on an annualized basis in 4Q20 only increased SGD 40 mn or 3.6% on an annualized basis for 1Q21 – which remains incredibly low. We continue to find that reserves are now where they need to be, which is a far cry from where currently DBS Group Holdings (DBS.SP) is; and*Insurance One-Off: Great Eastern reported bottom-line results of SGD 438 mn, an increase over the SGD 341m reported at 4Q20 due to SGD 241 mn of non-recurring gains. The NBEV margin was stronger at 47.5% versus 45.3% in 4Q20.

*Good Number:  Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] reported 1Q21 net profit of SGD 1.5 bn, a SGD 271 mn (24.0%) increase on a linked quarter basis. OCBC’s bottom-line improvement was primarily attributable to two factors: SGD 125 mn (43.7%) reduction in the loss provision, which may actually be justified given the deceleration in net new NPL growth; and a SGD 274 mn (139.8%) increase in attributable Great Eastern (GE.SP) earnings, much of which came from unrepeatable non-operating gains;*Credit Improving In Reality: We remain optimistic. By our calculation, we find that net new NPL growth while reversing course from being a negative SGD 78 mn or 8.0% on an annualized basis in 4Q20 only increased SGD 40 mn or 3.6% on an annualized basis for 1Q21 – which remains incredibly low. We continue to find that reserves are now where they need to be, which is a far cry from where currently DBS Group Holdings (DBS.SP) is; and*Insurance One-Off: Great Eastern reported bottom-line results of SGD 438 mn, an increase over the SGD 341m reported at 4Q20 due to SGD 241 mn of non-recurring gains. The NBEV margin was stronger at 47.5% versus 45.3% in 4Q20. 

Oversea Chinese Banking Corp. – The Credit Turn Is Official