DBS, OCBC, UOB: Breaking Down Their 2024 Financial Wins and Challenges

Singapore's banking sector in 2024 continued to thrive, driven by a stable economic environment and robust demand for financial services.

DBS, OCBC, and UOB, as the three major banks, play a pivotal role in shaping the sector's trajectory.

This financial breakdown matters because it helps investors identify high-return opportunities, assists businesses in planning borrowing strategies, and informs the public about the banking sector's role in supporting economic resilience.

Key themes include profitability, which indicates operational efficiency; dividends, crucial for income-focused investors; capital return plans, reflecting shareholder value; and loan growth trends, which signal economic activity levels.

Financial Performance Snapshot

To provide a clear overview, the following table summarizes the key financial metrics for each bank in 2024, based on their annual reports and press releases:

Sources: DBS, OCBC and UOB

Notes:

DBS:

• Net Profit: Achieved a net profit of S$11.289 billion in 2024, marking a 12.2% year-on-year increase. The Singaporean Investor
• Dividend per Share: Declared a total dividend of S$2.37 per share for 2024, including a special dividend of 15 cents per share.
• Capital Return Plans: Announced a S$3 billion share buyback program to return surplus capital to shareholders.

OCBC:

• Net Profit: Reported a net profit of S$7.587 billion for 2024, an 8.1% increase from the previous year.
• Dividend per Share: Declared a total dividend of S$1.01 per share for 2024, including a special dividend of 16 cents per share.
• Capital Return Plans: Unveiled a S$2.5 billion capital return plan, comprising special dividends amounting to 10% of its 2024 and 2025 net profit, with the balance via share buybacks over two years.

UOB:

• Net Profit: Achieved a net profit of S$6.045 billion in 2024, a 5.8% increase from the previous year.
• Dividend per Share: Declared a total dividend of S$2.05 per share for 2024, including a special dividend of 50 cents per share. The Singaporean Investor
• Capital Return Plans: Announced a S$3 billion capital return package, which includes a special dividend of 50 cents per share and a S$2 billion share buyback plan.

Overall, all three banks reported strong financial performances in 2024, with significant net profit growth and substantial capital return plans, including increased dividends and share buybacks.

Note: These figures were sourced from the banks' official financial statements and press releases, such as DBS full-year net profit up 11% to new high of SGD 11.4 billion, OCBC Group Full Year 2024 Net Profit grew 8% to a Record S$7.59 billion, and UOB announces $3 billion package of special dividends and share buybacks.

Key Findings and Insights:

Overall, all three banks reported strong financial performances in 2024, with significant net profit growth and substantial capital return plans, including increased dividends and share buybacks.

Loan Growth Trends and Economic Support

Loan Growth in 2024:

While DBS and UOB maintain steady loan growth, OCBC's anticipated moderation in lending reflects a prudent response to economic uncertainties, underscoring the importance of adaptive risk management strategies in the banking sector.

What This Means for Singaporeans

For investors, the attractive dividend payouts and capital return plans from DBS, OCBC, and UOB make these banks appealing for long-term holdings:

Summary of Key Points

• Investor Appeal:

  • Attractive dividend payouts and capital return plans from DBS, OCBC, and UOB.
  • DBS: 27% dividend growth and S$3 billion share buyback.
  • OCBC: Total dividend of S$1.01 per share, including a special dividend.
  • S$1.80 per share ordinary dividend with a S$3 billion capital return plan.

  Relevant for Singaporean professionals and investors seeking stable income.

• Impact on Businesses and Borrowers:

  • Stable 5% loan growth from DBS and UOB ensures consistent financing access.
  • OCBC: Expected slower loan growth in 2025 may lead to tighter lending conditions.

  Businesses should prepare by exploring alternative financing or negotiating terms early, especially SMEs relying on bank loans.

• Economic Outlook:

  • Stability in lending from DBS and UOB supports Singapore's financial resilience in 2025.
  • This resilience is crucial for fostering economic growth, maintaining employment levels, and boosting consumer confidence amid global uncertainties.

Conclusion: Which Bank Stands Out?

DBS stands out as the leader in profitability and dividends, with its S$11.4 billion net profit and 27% dividend growth, making it a top choice for investors seeking high returns.

Whereas, OCBC adopts a prudent approach, balancing growth with caution, as seen in its S$7.59 billion net profit and special dividend, preparing for potential market risks.

Meanwhile, UOB balances profitability and shareholder returns effectively, with its S$6.1 billion net profit and S$3 billion capital return plan, ensuring consistency and financial strength.

As we look to 2025, key areas to watch include the impact of global economic conditions on loan growth, the progression of digital transformation in banking services, regulatory changes affecting operations, and the banks' strategies for managing risks.