With the release of OCBC Bank results yesterday, a comparison is made between DBS Bank and OCBC Bank.
Net Profit $1.63 billion
EPS 70 cents
Total dividend per share 56 cents (80% of EPS)
Dividend yield 3.83% (based on 18 Feb share price of $14.60)
PE ratio 20.8 times
Net Profit $2.25 billion
EPS 66.1 cents
Total dividend per share 30 cents (45% of EPS)
Dividend yield 3.18% (based on 18 Feb share price of $9.41)
PE ratio 14.2 times
OCBC had a higher net profit of $2.25 billion compared to $1.63 billion for DBS. The return on equity (ROE) was also higher for OCBC at 12.1 per cent against DBS’ 10.2 per cent. However, total dividend per share for OCBC is 30 cents whereas DBS proposed 56 cents. DBS decided to declare 80 per cent of its earnings per share (EPS) as dividend, contrasting OCBC, which only offers 45 per cent of EPS as dividend. The rest of earnings will be retained for business use. As a consequence, the dividend yield for OCBC is lower at 3.18 per cent against 3.83 per cent for DBS.
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