ocbc bank unveiled a S$2.5 billion ($1.9 billion) capital return program, following its Singaporean rivals in distributing surplus funds to investors, though markets were underwhelmed by the plans.

The city-state’s second-largest bank will hand out special dividends and conduct share buybacks over two years, OCBC said Wednesday alongside its earnings announcement, marking its first special payout since 2005. Shares of the lender fell nearly 3% in early trade, underperforming the broader market after the company’s fourth-quarter results missed estimates.

“OCBC may need to further optimize its capital structure,” said Bloomberg Intelligence analyst Rena Kwok. Post the S$2.5 billion capital return, the bank still holds about S$700 million above its operating common equity Tier 1 capital range of 14% as of the fourth quarter, sufficient for potential growth plans, she said.

The bank will defer plans to redevelop a property complex that includes its headquarters in the business district, Wong said in her results presentation, in light of the capital return program. OCBC said last year that it was looking to refresh the buildings.

OCBC Chief Executive Officer Helen Wong, who took the role in 2021, said the total dividend payout ratio will rise to 60% for this year and the next, from at least 50% in recent years. On a full-year basis, the bank delivered its third consecutive record profit.

The bank’s move to return capital comes after United Overseas Bank Ltd. said it will distribute S$3 billion over the next three years via share buybacks and special dividends. DBS Group Holdings Ltd. unveiled a quarterly dividend program earlier this month, on top of a S$3 billion buyback plan announced in November.

OCBC’s net income rose 4% to S$1.69 billion in the three months ended Dec. 31 from a year earlier, driven by fees primarily from wealth management while lending income stayed flattish, the lender said. That compared with the S$1.8 billion average estimate of analysts compiled by Bloomberg.

Wong said net interest margin will be around 2% for the year versus 2.2% in 2024, while loan growth is seen in the mid-single-digit percentage.

Similar to DBS and UOB, OCBC also benefited from higher funds flows into Singapore, a global wealth hub that vies with Switzerland and Hong Kong. Net new money and higher market valuation drove its clients’ wealth management assets to S$299 billion as of December, a 14% expansion from a year earlier.