When one considers CAO, one needs to understand the peculiar nature that this company major shareholder is China sovereign and the CEO is from the major shareholder. Being a party member, the pay scale differs from normal CEO and thus not comparable.
Agreed that Singapore banks may continue to perform well. However, does not endorsed that interest rate in Singapore will follow that of US as Singapore monetary policy relies on exchange rate stability and not on interest rate. As Singapore dollars continue to be strong (continuous strong inflow of foreign capital) and local inflation numbers coming off, Singapore deposit rate will come off further and faster than US interest rates.
My retirement goal is to live comfortably while I will max out my CPF life which will give me more than 3K monthly when I reached 65 and my endowment plan will give me another 2k. Investing my spares in income generating equities such as banks and REITs will provide the buffer needed to go for holidays and other purposes expense.
OCBC is likely to release a slight decline year on year result of -5% due to compression of NIM arising from lower SORA, which will be offset partially by rise in fee incomes. This should be in line with most analysts expectation. As for guidance wise, I expect them to await for more clarity of the tariffs situation before providing any further guidance. This is in line with the conservative approach that OCBC took in previous years.
NIM to narrowed is common sense as interest rates decline in Singapore. The crux of the issue is by how much and how fast? Which in this case may be a slow process as the world uncertainties may keep the rate stubborn to decline. Another factor to consider is how much is NIM contribution to profitability and that all the 3 local banks are moving towards fees income such as international wealth management that can be seen in their exponential growth recently. Not sure if Citi has taken these into their considerations.
Traditionally, DBS is the biggest beneficiary of higher interbank rates due to the historical acquisition of POSB, making her the biggest deposit base with the lowest loan deposit ratio. However we have seen in recent years that the wealth management areas has become the most important part of profit and will continue to be. This is also true of the other 2 local banks. Thus, with the integration of GE into OCBC, I would pitted OC ahead of UOB.
In risk management we are concerned about keyman risk and now we have a key system risk that even in BCP, we have not considered fully. This risk needs to be addressed in all sectors of our economy and it is time that regulators should also step in to relook the degree of concentration (thus, control) such key system has on our economy.