UOBKayhian on 17 Feb 2014
FY14F PE (x): 11.1
FY15F PE (x): 10.2
OCBC reported net profit of S$715m (+8% yoy, -6% qoq) for 4Q13, in line with our forecast of S$703m. Growth driven by net interest income. Loans expanded a strong 4.8% qoq and 17.8% yoy. Sequential expansion was driven by Singapore and Greater China. Net interest income grew strongly by 11.9% yoy with NIM edging marginally higher by 1bp to 1.64%. Maintain BUY. Our target price of S$11.50 is based on 1.56x 2014F P/B, derived from Gordon Growth Model (ROE: 11.7%, required return: 7.8% and growth: 0.8%).
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