OCBC Bank (OCBC.SI): First Take: PPoP misses, costs and AQ lead to profit beat, RoE/PB skews negative

OCBC announced 3Q26 profits of S$2,042mn, up 3% y/y, down 8% q/q and 5% above JPMe. PPoP was down 15% q/q, 4% below JPMe. The bulk of the drivers of the PPoP miss were known post GEH and UOB/DBS. NIM compression of 4bps q/q (despite 110bps q/q LDR pick-up, led by CoF as CASA reduced 87bps q/q) and fee income decline of 1% q/q are small incremental negatives. AQ was a standout positive, with NPAs down 3% q/q (NPL ratio -6bps q/q to 0.8%, with coverage at 157% despite cyclically low credit costs of just 6bps ann. in 3Q). Cost control was good, leading to CIR almost in-line with JPMe at 40.8%. CET1 steady at 14% was a positive surprise, but BVPS declined 1.3% q/q on 1H dividend payment (S$2.1bn, almost similar to 3Q profits) but likely also due to small OCI losses on treasury. Bank level performance held up well, but weaker 3Q NIM suggests higher risk of negative revisions for the bank and the sector. WM was in-line with our estimate but likely weaker than Street. Given the events and bro