OCBC

SINGAPORE (XFN-ASIA) - Oversea-Chinese Banking Corp (OCBC) will
probably
report Tuesday that net profit last year rose up to 11 pct compared to
2004, aided by strong lending in Malaysia, analysts said.

Analysts polled by XFN-Asia expect the bank's 2005 net profit to
range between 1.28 bln and 1.29 bln sgd, up from 1.16 bln in the
previous
year.

Three of the five analysts surveyed projected full-year net
profit of
1. 28 bln sgd for OCBC.

"We are looking for a full-year net profit of 1.28 bln sgd, or a
fourth quarter net income of 323 mln," Macquarie Securities regional
banking analyst Ismael Pili said in a research note.

The bank's non-interest income is likely to have grown, partly
due to
the brisk insurance business of unit Great Eastern Holdings.

On the loans side, OCBC's performance was supported by robust
lending
in Malaysia, although operations in Indonesia may be weaker in step
with
the sluggish economy there during the fourth quarter, he said.

"Margins should improve from the third quarter's 1.83 pct. Loan
yields were particularly weak in the third quarter which we attribute
to
increased competition in its Singapore business," Pili said.

CMIB-GK Research analyst Kenneth Ng also pegs OCBC's net profit
at
1.28 bln sgd.

A European brokerage analyst who declined to be identified
estimates
fourth quarter profit of 325 mln sgd and with full-year earnings also
seen
at 1.28 bln.

Daiwa Institute of Research analyst David Lum sees profit coming
in
at a better 1.29 bln sgd.

Credit Suisse analyst Sanjay Jain said his own earnings forecast
for
OCBC will be in the same range, expecting small gains in the bank's
non-interest and net interest income.

"Both should grow a little especially (since) they were very weak
in
Singapore for the past nine months. So Singapore should give them some
relief. There was some positive loan growth in the fourth quarter in
my
assumption."

OCBC is particularly strong in the small and medium enterprise
segment and in bancassurance/wealth management business.

But what draws investor interest in the bank is not its
operational
performance but its capital management potential, according to
analysts.

In a recent note, Credit Suisse picked OCBC as the winner among
the
local banks in capital management terms with a host of initiatives
such as
share buy-backs, stock-split and dividend-cum-rights issue that it has
done.

"OCBC should continue leadership on this front," it said.

Macquarie's Pili said: "As we are less concerned about the
operational performance or the bottomline of OCBC, we are looking for
capital management pronouncement given that we see as the primary
attraction of the bank."

Pili said the market will closely watch OCBC's announcement on a
timetable for the completion of its sale of non-core assets, on the
progress of its share buyback and dividends.