In 2017, we continue to expect unfavourable loans volume and rates dynamics to suppress net interest income growth. We observed that OCBC’s Great Eastern Holdings performance had been volatile in 2016 and had failed to offset weaknesses in the loans business. However we expect higher interest rates in 2017 to boost OCBC’s insurance business performance and provide some respite to an otherwise tough operating environment. Downgrade to “REDUCE” with a lower target price of S$8.48 (previously S$8.55). Our revised TP is based on unchanged 0.95x FY17F book value (excluding preference shares).