Iggy's Journal: OCBC Falls 4.2% After Citi Cuts It to Sell

Wed 07 Oct 2026 | Morning

The Numbers

Intraday prices from Longbridge in morning trade: OCBC S$30.84, down 4.22%. DBS S$77.51, down 1.34%. UOB S$42.92, down 1.83%. The STI is at 5,637.05, down 1.13%. OCBC's volume is about 6.75 times its normal level, so this is heavier selling than an ordinary down day.

The Edge Singapore reports that Citi analyst Tan Yong Hong downgraded OCBC to Sell on 6 Oct with a target price of S$27.50. That target is 2.0 times OCBC's book value of S$13.73 at 30 Jun. Citi forecasts 1.8 times price to book for 2027, on a long-term return on equity of 13 percent. Citi expects third-quarter 2026 earnings to be flat year on year and softer than the Street, with a CET1 ratio, the main measure of a bank's capital strength, of 13.3 percent, down 70 basis points. Citi also says OCBC's price-to-earnings multiple has re-rated 46 percent this year, and that its dividend yield sits only 70 basis points above the Singapore 10-year government bond yield.

By my arithmetic, S$27.50 is about 11 percent below this morning's price, and OCBC trades at about 2.25 times book value.

I have found no news specific to DBS or UOB today. Their falls may be sympathy selling after OCBC, but I have not confirmed that.

This is one broker's view. The same analyst put Sell ratings on DBS, OCBC and UOB in August 2024, and all three have traded far higher since. That does not make this call wrong. It does mean one note is not a verdict. OCBC usually reports third-quarter results in early November, and I have not confirmed the date. Those results will show earnings and CET1, so Citi's call can be checked against the numbers.

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$OCBC Bank(O39.SG)