Overseas Chinese Banking Corporation (OCBC Bank)

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The Straits Times
Published on Apr 26, 2013
Shareholders grill OCBC over chairman's pay, F&N sale

By Rachel Scully

FEISTY OCBC shareholders put the bank's bosses on the spot yesterday with pointed questions about the chairman's pay and the "cheap" price it received for its Fraser & Neave (F&N) and Asia Pacific Breweries (APB) stakes.

The questions at the annual general meeting appeared to find solid backing among some of the 450 shareholders present, with applause breaking out at some points.

The focus was on the pay structure of chairman Cheong Choong Kong, despite his remuneration being effectively lower now than under the old structure.

Several shareholders criticised what they regard as a lack of transparency over Dr Cheong's new annual fees of $1.8 million.

Dr Cheong was previously on a contract and provided consultancy services in areas such as talent spotting, management development and customer service.

The contract ended last June and was not renewed. OCBC paid $2.576 million to Dr Cheong for the 12 months to Dec 31, 2012.

This included his chairman and board committee fees, meeting attendance fees and remuneration under his consultancy contract.

Of this sum, the pro-rated chairman's fees for the second half of the year were $900,000.

One shareholder, Mr Phillip Smith, asked how Dr Cheong's basic chairman's fees of $1.8 million compared with that for OCBC's next highest-paid non-executive director and the industry average.

He argued that a chairman's basic fees are usually two times that of the next highest-paid non-executive board member and asked what was the basis for Dr Cheong's payout being six times that of the next highest-paid non-executive director.

His question drew applause from the crowd. Mr Smith was likely referring to Mr Bobby Chin, who received a total of $272,000 in fees and benefits.

OCBC director Fang Ai Lian, who chairs the remuneration committee, responded, saying that the board values Dr Cheong's contributions.

She said Dr Cheong was at the bank daily and his salary reflects the responsibility, accountability and time spent at the highly complex organisation, adding: "We feel that if Dr Cheong spends more time at the bank, that will benefit shareholders.

"A fixed fee is more transparent than one with a basic and performance fees or share options."

Other shareholders noted that Dr Cheong's new payout was higher than that of other bank chairmen, such as DBS's Peter Seah, who received just under $1 million last year.

However, a shareholder who wanted to be known as Mr Seah said he backed the chairman and directors' fees.

"The total payment for the chairman and directors last year is about $3 million, which is less than 1 per cent of OCBC's net profit," he said.

"If they have helped the bank to outperform others in the industry, I think their pay is justified."

The other contentious issue raised at the meeting, which lasted for almost two hours at Orchard Hotel, was OCBC's sale of its stakes in F&N and APB.

Shareholder Tan Kok Chin told the gathering that "OCBC sold its stake in F&N and APB too cheaply and too quickly".

The comment sparked a great deal of talk among investors.

OCBC sold its F&N shares at $8.88 each and its APB shares at $45 apiece last July.

The eventual buyout offer from Thai tycoon Charoen Sirivadhanabhakdi gave F&N shareholders $9.55 for each share while the APB stock was bought by Heineken for $53 each.

Dr Cheong replied: "OCBC had received an unsolicited offer for the F&N and APB shares at a good price as a package. The price was offered at a premium over the prevailing share price which had already had a run-up before the offer was made."

He added that although OCBC could have solicited other offers, that could have jeopardised the initial offer made, which was at a considerable premium.

Dr Cheong was then asked why a larger special dividend was not paid out to shareholders, given the windfall from the APB and F&N sales.

He replied that OCBC has a policy of reinvesting its profits from non-core businesses into the core businesses. Dividend payouts should also be done on a sustainable basis.

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Anyone vested in this counter too? I am planning to offload a portion at $11.18.
OCBC income down 16% — still better than forecast

SINGAPORE — Oversea-Chinese Banking Corp’s profit fell less than analysts estimated last quarter as an increase in fees and commissions outweighed narrowing net interest margins at Southeast Asia’s second-largest lender.

Net income declined 16 per cent from a year earlier to S$696 million, OCBC said in a statement to the stock exchange this morning. That exceeded the S$640 million average of four analysts’ estimates compiled by Bloomberg.

“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
The Straits Times
Published on May 01, 2013
OCBC posts 16% drop in Q1 net profit

Loan growth offset by lower interest margins; non-interest income falls

By Magdalen Ng

OCBC Bank yesterday reported a first-quarter net profit of $696 million, a 16 per cent slide from the same quarter a year ago.

Singapore's second largest lender was unable to repeat its stellar performance of the first quarter last year, when a surge in trading and insurance income propelled the bank to post record quarterly earnings of $832 million.

Net interest income fell 4 per cent to $912 million for the three months ended March 31 from a year ago as loan growth was offset by lower net interest margins (NIMs).

NIMs, a key gauge of loan profitability, fell 22 basis points from 1.86 per cent last year to 1.64 per cent, dampening the 10 per cent loan growth across the consumer, corporate and small- and medium-sized enterprises segments.

Chief executive Samuel Tsien said that while he still expects some volatility and compression in NIMs, it should average out at the current levels for the full year.

He added that the impact of the property cooling measures on the bank's loan book will probably be felt only in the third quarter as there is still a strong pipeline.

Non-interest income fell 14 per cent to $676 million, even though fee and commission income, which includes wealth management, loan-related and fund management income, grew 15 per cent to $316 million.

Trading income declined 65 per cent to $56 million.

Contributions from Great Eastern, OCBC's insurance arm, also fell 19 per cent to $178 million from $221 million a year ago.

Operating expenses were up 8 per cent to $672 million as staff-related costs increased 10 per cent from a year ago to $421 million. There was a 7 per cent increase in staff strength, mainly in the bank's regional franchise of Indonesia and Malaysia, over the year.

This is in line with the bank's strategy to grow its overseas markets, particularly those in which the bank has a "penetrating presence", said Mr Tsien.

While the revenue mix from the different geographies has stayed largely the same as a year ago, Mr Tsien said that in terms of absolute earnings growth, the regional markets have been growing.

The bank's asset quality improved, with the non-performing loan ratio falling from 1 per cent in the first quarter last year to 0.7 per cent last quarter.

Only loans to the manufacturing sector saw a slight uptick in non-performing assets.

Mr Tsien explained: "We operate in an external environment that is not within our control. We are watching the sectors that are more subject to the economic transformation which is currently happening in Singapore. As much as possible, we would like to anticipate those issues and then work with the customers."

He added that the number of customers having problems adjusting to economic restructuring is not significant.

Earnings per share for the quarter was 79.1 cents, down from 89.8 cents a year ago. Net asset value per share was up from $6.32 last quarter to $6.90.

OCBC shares closed seven cents lower at $10.85 yesterday.

My Value Investing Blog: http://sgmusicwhiz.blogspot.com/

17cts dividend
Not a call to Buy or Sell

Mr Bump: All I Can Smell Is My FEAR
News report on the latest result... It seems OCBC has the worst performance this round, comparing with the other two local banks...

OCBC Q2 profit falls 8%, hit by poor insurance unit results

SINGAPORE — Oversea-Chinese Banking Corporation, Singapore’s second-biggest bank, posted an 8 per cent drop in quarterly profit, a below-forecast result after it was hit by lower contributions from its insurance unit, the group reported today (Aug 2).

OCBC earned S$597 million in the three months ending in June, compared with S$648 million a year earlier. The profit was below the S$643 million average forecast of six analysts polled by Reuters.

“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
OCBC is always prudent in its execution...

OCBC tops Asian Banker’s Balance Sheets Ranking for Singapore

OCBC Bank said it has emerged top among Singapore banks in The Asian Banker 500 (AB500) Strongest Bank Balance Sheets Ranking in 2013.

The ranking lists the relative strength of the 500 largest banks in Asia Pacific region by assets and is based on a Strength Scorecard that ranks banks in six areas: scale, balance sheet growth, risk profile, profitability, asset quality and liquidity.

The ranking includes commercial banks -as well as financial holding companies that focus on banking - from Australia, Brunei, Cambodia, China, Hong Kong, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Pakistan, the Philippines, South Korea, Singapore, Taiwan, Thailand and Vietnam.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
OCBC Group Reports Third Quarter Net Profit After Tax of S$759 million


<vested oldpot>
Not a call to Buy or Sell

Mr Bump: All I Can Smell Is My FEAR
The trend tells that it won't be too far that OCBC overtakes DBS.
Ocbc if $10.00 or less worth buying to hold for long term? I kinda like ocbc over the other two however i dont know if the stock is fairly priced or expensive now?

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