Oversea-Chinese Banking Corp.'s plan to return S$2.5 billion of capital to shareholders over two years via special dividends and share buybacks is a much-welcomed investment thesis for the stock, RHB Research analysts says in a note.

It is a good defensive option given the Singapore-listed bank's solid asset quality and capital levels, as well as its connectivity play, where it is well poised to gain from supply-chain shifts, they write.

Together with the ordinary DPS, investors can expect total payouts of 60% in 2024 and 2025, they say.

RHB upgrades the stock to buy from neutral and raises the target price to S$19.10 from S$16.80. Shares are up 0.8% at S$17.34.