OCBC / Great Eastern

OCBC / Great Eastern: GEH 3Q12 core net profit at $198m was within DBSV’s expectations, with the rebound thanks to improved non-par fund profits arising from improved mkt conditions, and compares with the mark-to-market losses last year and weak invmt performance in 2Q12. Separately GEH recorded $421.6m after tax gain from the sale of its shares in FNN and APB. GEH’s underlying business was generally stable. OCBC results to be out 9 Nov pre market. DBSV expects OCBC’s 3Q12 net profit to contract 7% qoq stemming mainly from topline pressure with modest growth from its wealth mgt platform, Bank of Singapore. Nevertheless the house expects provisions to remain benign and NPL ratio to still remain the lowest vs peers. OCBC will record a one-off gain of $1.15b from its divestment in FNN and APB. DBSV tips OCBC as its preferred pick, keeps at Buy with TP $10.70.