Oversea Chinese Banking Stock

All right. Good morning, everyone. Welcome to OCBC's Second Quarter First Half 2026 Results Briefing. On our panel this morning, we have our Group CEO, Mr. Tan Teck Long; and our Group CFO, Ms. Goh Chin Yee. To their left and right, I shall start from Jason, Jason Moo, our CEO of Bank of Singapore; Mr. Sunny Quek, the Head of Global Consumer Financial Services. And then right to the other end, we have Mr. Greg Hingston joining us from Great Eastern, the CEO of Great Eastern. And last but not least, we have Mr. Kenneth Lai, our Head of Global Markets.

Chin Yee will start with the presentation, and thereafter, we will have Teck Long sharing with us some of his thoughts before we take Q&A. Chin Yee, please.

Good morning to all. Welcome, and thank you for joining OCBC's First Half 2026 Results Briefing. OCBC delivered a record group net profit of SGD 2.2 billion for the second quarter of 2026, up 22% year-on-year. This is the first time that our quarterly profit crossed SGD 2 billion. ROE was 14.4% on an annualized basis. Total income grew 18% year-on-year to a new high of SGD 4.17 billion. Net interest income was 1% lower year-on-year amid lower interest rate environment, but this was largely cushioned by our strong growth in average assets.

Robust growth in noninterest income more than compensated for the lower NII. Noninterest income grew 51% year-on-year, driven by broad-based growth across fees, trading and investment income and insurance income, up 28% for fees, trading and investment income up 85% and insurance income up 68%. In particular, strong momentum in wealth management drove the increase in fees, while customer flow treasury income was contributed by both wealth and corporate segments. Noncustomer flow income was also higher for the quarter, largely from SGD 191 million of investment income from Great Eastern, led by strong equity markets. We continue to maintain cost discipline with cost-to-income ratio lower at 37.8%.

Loans and deposits grew strongly, up 11% and 13% year-on-year, respectively. Asset quality remains sound. NPL ratio was stable at 0.9%. Credit cost at annualized 14 basis points. We maintained healthy liquidity, funding and capital positions. Common equity Tier 1 ratio at 14% on fully phased-in basis or 15.7% on a transitional basis.

For the first half, group net profit rose 13% year-on-year to a record SGD 4.19 billion. Total income grew 11% to SGD 8 billion, underpinned by record noninterest income, which more than compensated for the decline in net interest income. Annualized ROE increased 1.1 percentage points to 13.7%.

Moving on to our performance by key business pillars in Slide 5. We delivered broad-based growth across our banking, wealth management and insurance franchise in the first half of 2026, as can be seen from the positive variances in all 3 charts on this slide. Higher fees, trading and investment income drove stronger banking net profit, which grew 8% year-on-year. Wealth management income reached a new high of SGD 3.29 billion, up 27% year-on-year and now comprising 41% of the group's total income. All wealth segments and channels delivered growth.

Net new money inflows were SGD 6 billion for the second quarter, bringing the first half inflows to SGD 11 billion. Banking AUM grew 13% year-on-year and 2% Q-on-Q to SGD 350 billion. Profit contribution from GE rose 44% to SGD 794 million, underpinned by strong insurance and investment performance. Total weighted new sales and new business embedded value grew 15% and 28% year-on-year, respectively, led by strong sales from Singapore across agency as well as banca channels. NBEV margin improved to 49.8% from 44.7% a year ago as GE continued to progress well in shifting to higher-margin products.

Moving on to our group performance trends. I will start with net interest income on Slide 8. Second Q '26 NII was SGD 2.26 billion, down 1% year-on-year and up 2% Q-on-Q despite a lower SORA environment. As shown in the chart on the bottom left, the Q-on-Q increase in net interest income was driven by asset growth across both commercial and noncommercial books, which more than compensated for lower loan yields and higher wholesale funding costs. Average assets grew 5% Q-on-Q, driven by loan growth and a 5% or SGD 10 billion increase in average balances of high-quality treasury assets.

Moving to the chart on the bottom right. 2Q NIM declined 6 basis points Q-on-Q to 1.70%, reflecting compression in loan yields and higher wholesale funding costs. During the quarter, we increased wholesale funding to support our strong 5% Q-on-Q loan growth and our continued investments in high-quality treasury assets, which are NII accretive. These assets remain an important lever in helping us to sustain net interest income in a declining interest rate environment. Excluding the growth of noncommercial book, the overall decline in NIM would have been 3 basis points Q-on-Q instead of 6 basis points Q-on-Q.

Looking ahead, we expect NCA for treasury markets asset growth in second half to be significantly lower compared to first half as we continue to balance our NCA growth against commercial lending opportunities and capital deployment. We expect NIM to stabilize in second half on expectations of gradual strengthening of SORA towards year-end. NII sensitivity based on 1 basis point increase in rates across the whole book was around SGD 6 million on an annualized basis.

Moving on to noninterest income. Our noninterest income reached new highs for both the second quarter and the first half. For the first half, noninterest income rose 36% year-on-year to SGD 3.51 billion, lifted by strong double-digit growth across fees, trading and investment and insurance income. Noninterest income now accounts for 44% of our total income. For the second quarter, noninterest income rose 51% year-on-year and 19% Q-on-Q, driven by higher wealth management fees, trading and investment income. I will cover more details of our fees, trading and investment income in the next 2 slides.

Our second Q fees crossed SGD 700 million for the first time, lifting our first half fee income to a record SGD 1.41 billion. Growth was broad-based, led by wealth management alongside loans and trade-related, as well as investment banking fees. In the first half, Wealth Management fees grew 39% year-on-year, supported by a larger AUM base and increased customer activity. Wealth management fees accounted for more than 60% of our total fee income. Invested AUM improved Q-on-Q to 62%. Growth was broad-based across all wealth product channels, including bancassurance, private banking, treasury products, unit trust, structured deposits as well as brokerage.

Our first half trading and investment income rose 46% year-on-year to SGD 1.13 billion, driven by record customer flow income. First half customer flow income increased 47% year-on-year, supported by both wealth-related activity and corporate hedging, including continued demand for precious metals, foreign exchange and structured products. Second Q customer flow income was up 60% year-on-year across all wealth and corporate segments. Noncustomer flow income also increased significantly, mainly from GE's investment income following the recovery in equity markets post our first Q '26 results.

Moving on to operating expenses. We continue to maintain cost discipline while investing strategically to support business growth and our Next Frontier strategy. First half operating expenses were SGD 3.08 billion, up 10% year-on-year, mainly due to higher performance-related remuneration and incentives and continued investment in technology to support business growth. First half cost-to-income ratio improved year-on-year to 38.5%. Second Q cost-income ratio also improved year-on-year and Q-on-Q to 37.8%.

Customer loans grew 5% Q-on-Q or SGD 17 billion to SGD 364 billion. Our year-on-year loans were up 11% or SGD 29 billion on a constant currency basis. Loan growth was broad-based across corporate and consumer loans. Year-on-year, our corporate loan growth was led by the TMT and digital infrastructure, energy, power and utilities and transport sectors.

By geography, growth was driven by Singapore and Malaysia as well as our international markets, including the U.K., U.S. and Australia. We continue to see strong momentum in the areas of our strategic focus, including Singapore residential mortgages, wealth financing, TMT and digital infrastructure as well as sustainable financing. Our sustainable financing loans rose 12% year-on-year to SGD 60 billion, accounting for 16% of total group loans.

Moving on to portfolio quality. Overall, our loan portfolio quality remains sound. NPL ratio was 0.9%, unchanged since June 2024. Second Q NPAs were SGD 3.13 billion, relatively unchanged Q-on-Q. During the quarter, new corporate NPA formation mainly arose from the downgrade of two Greater China corporate real estate accounts that were previously under special mention and were proactively managed. New NPA formation was partly compensated by net recoveries, which were mostly from Greater China CRE upgrades as well as write-offs.

Total allowances for the first half increased 14% to SGD 372 million. Total credit costs were unchanged year-on-year at 18 basis points on an annualized basis. For the second quarter, total allowances were SGD 156 million, down 28% Q-on-Q and up 36% year-on-year. Total credit costs were at 14 basis points on an annualized basis.

Now, our second Q allowances for impaired assets were largely from the two accounts I mentioned earlier. Non-impaired allowances included ECL from changes in credit risk weights as well as management overlays for macroeconomic uncertainties in Indonesia. These are partly offset by transfers to allowances for impaired assets relating to the two accounts I mentioned earlier.

Our total NPA coverage ratio was unchanged Q-on-Q at 163% and was 7 percentage points higher compared to a year ago. Performing loans coverage ratio was lower Q-on-Q at 0.8%, mainly due to our enlarged loan base. Our coverage levels position us well to navigate uncertainties.

Moving on to deposits. Customer deposits grew 13% year-on-year to SGD 459 billion, driven by 12% growth in CASA deposits from both wholesale and consumer segments. Against last quarter, deposits were up 3% and group loans-to-deposit ratio was higher at 78.4%. Our diversified deposit base supports balance sheet resilience and flexibility in supporting loan growth. Our funding base remains diversified with close to 80% from customer deposits. All liquidity and funding ratios remain well above regulatory requirements.

Moving on to capital. Transitional CET1 was 15.7% and fully phased-in CET1 was 14.0%. The Q-on-Q decline in CET1 ratio reflected the payment of our full year '25 final and special dividends as well as growth in RWA, which offset profit accretion. Our target operating level of 14% for group CET1 capital adequacy ratio on a fully phased-in basis remains unchanged. Our Board declared an interim dividend of SGD 0.47, up SGD 0.06 or 15% year-on-year. This is in line with our target 50% ordinary dividend payout ratio. We remain committed to complete the remaining SGD 2.5 billion capital return plan by FY '26.

With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Teck Long. Teck Long, please.

Thank you, Chin Yee. A very good morning to all of you, and thank you for joining us this morning. As I listen to Chin Yee's presentation, I realize that our profit and growth is quite easy to remember. We made SGD 2.22 billion of profit this quarter Q2 and at a 22% growth rate. Overall, we have delivered a very strong set of financials with income and profit at record high. We saw broad-based growth across all business lines as our Next Frontier strategy continue to gain momentum and deliver results.

Some key highlights. Year-to-date loan growth was strong at 7%. Under our whole wealth strategy, our wealth business continues to gain momentum, achieving 39% year-on-year increase in Wealth Management fee for first half '26. For trading income, we differentiate customer flow trading income and noncustomer flow trading income. For customer flow, we did very well with income increased 47% year-on-year, underpinned by both wealth and corporate segments.

Trading income not related to customer flow also increased by more than SGD 200 million during the quarter. This is largely attributed to recovery in investment held by Great Eastern in line with the rebound of the equity markets last quarter. Asset quality remained resilient with stable NPL ratio. ROE improved to 13.7% despite NIM compression. We are declaring interim dividends of SGD 0.47, up SGD 0.06, in line with our 50% payout dividend policy.

Next, looking ahead, a lot will depend on how the energy crisis triggered by the U.S.-Iran war pan out. We continue to see K-shaped economic growth across major economies, U.S., China, Indonesia and to some extent, Singapore. Our pipeline for loan remains robust, anchored on growth industries, but probably will not grow at the same rate as second quarter '26, simply because second quarter '26 was really outstanding in terms of loan growth. Equity markets continue to be volatile. We saw a slight moderation of customer investment activity in July given the cautious market sentiment. Notwithstanding this, we are pleased that our customer acquisition remains healthy, and we still see good flows. Long-term demand for wealth solutions continues to be strong.

Management guidance. Given the strong first half loan growth, we are raising our full year loan growth guidance to the high single-digit, low double-digit range. Full year income is expected to grow year-on-year with a slight decline in net interest income. Cost-to-income ratio is guided at low 40% range. Credit costs remained benign at 18 basis points during first -- for first half '26. Full year is likely to be at the lower end of our earlier guidance of 20 to 25 basis points. Our capital position remains strong, and we will complete the remaining of our SGD 2.5 billion capital return plan by FY '26.

All in all, we had a very busy second quarter. I thought I'll take a moment to do a very quick recap. Highlights in the second quarter, we announced acquisition of HSBC Indonesia's wealth business. We launched OCBC WoW Avatar Banking, which is the first AI native app in Southeast Asia. We minted GOLDX coin on the back of LGS Physical Gold Fund. We launched gen AI-powered skills training to our -- for our wealth advisers. And of course, we recently announced HELIOS, but that's in July. And my personal favorite is this.

Okay. So I shall hand it back to Ching Ching.

So with that, let's move into our Q&A. All right.

Let's go to Nick.

Let me be the first to congratulate you on a very strong set of results. It's a good performance. In terms of loan growth, I just wonder if you could talk going forward. I mean, it's obviously a very good loan growth number, 5% Q-on-Q. You've raised, I mean, low double digit is quite an attention growing sort of number for the full year.

So I wonder if you could talk about how you're thinking over the next 2 to 3 years. And in particular, the big sort of industrial changes taking place and lots of demand for financing. So I wonder if you could talk about that, where you expect the loan growth to come from? And then if you could put that in the context of the 14% CET1 ratio fully phased in, which is obviously sort of at your target range. So if you could maybe help us think about how you're balancing RWA growth, how are you thinking about CET1 target, what are the levers you can pull?

Okay. I'm going to do further crystal ball gazing since the question is about the next few years as opposed to the next 6 months. I want to bring us back to February. In February, when we launched our Next Frontier strategy, we were actually very aware of a very complex operating environment. I personally referred to it subsequently -- in subsequent speeches I make, as a VUCA environment, volatile, uncertain, complex, ambiguous and K-shaped economic growth. So this is the environment which we are operating in.

So when we came out with the Next Frontier strategy, we are hugely aware of this. So then we decided on a couple of things. First, let's identify the growth industries and be really very focused. So if you look heavily at our Next Frontier strategy, we talk about 4 strategic shifts. The first 3: first, a right Asia shift, which is about rising Asia inbound investments into Asia rejigging supply chain; two, tech shift, which is about financing the tech supply chain, including data centers, equipment for the data equipment manufacturer, et cetera; and third, sustainable finance. And our North Star is trying to make a difference to the environment, financing industries like renewable energy, which makes a difference to the environment, supporting SMEs in their green transition. All this has come up very well for us.

In terms of outlook, I think this trend will continue, and this will anchor our loan growth. And this is what we have been seeing in the past few years as well. So that is your first question.

The second is relating to our loan growth. Loan growth in the second quarter is exceptional, partly because of some M&A transactions, which we are backing. We don't really expect that exceptional growth rate to continue in the third and fourth quarter. It doesn't mean that in fourth quarter, it's weak. It's just relative to the second quarter, we will be at a slower pace than the second quarter. Now we have been focusing on ROE. Our ROE is higher. Our profit accretion will be higher. So we will continue to focus on ROE. Our target operating CET1 CAR will be around 14%, give or take. So I hope that answers your question.

We have Chanya [ Alia ].

Chanyaporn Chanjaroen from Bloomberg. Congrats on the numbers and share price exceeding SGD 30. I have two questions. I mean it's -- with the stocks and many record numbers that you have, what's your thought on gravity rules? Do you -- gravity rules, what goes up may come down one day. Do you see that as a headwind going forward?

And second question, any thought on area of growth that you want to see? You already did HSBC in Indonesia. Do you see more coming in the years to come?

Well, you're asking a very difficult question. Firstly, I think the stock price is what it is. We appreciate the confidence investors have with the OCBC team and our delivery in accordance with our strategy. We focus really on building our franchise and executing our strategy, and then we just let the share price be dictated by how investors view us. Whether it will come down or not, I think there are many experts here we can ask.

On the second question on acquisition, I'm always looking at acquisition but we are very disciplined with acquisition. So I have mentioned before that we exercise a lot of discipline. Acquisition targets is not suitable for our strategy or something which doesn't really make a difference to our growth, we won't consider that. So we will look at inorganic growth, if that's the question carefully, but I am not averse to it. I'm happy to actually do an acquisition if the right target come along.

Let's go to Yong Hong.

This is Yong Hong from Citi. Just 3 questions for me. On your customer-related flows, how much was driven by wealth flows versus your corporate flows? Because on these flows, that is growing faster than your fees. So just wondering some color behind this and the sustainability of this.

And secondly, on the Great Eastern driven noncustomers-related income or the trading income, should we now be expecting this line item to be more volatile depending on the equity market condition? And finally, on the wealth management income, is there a bigger shift towards Hong Kong customers? Or is Hong Kong-related AUM growing faster than other regions that is driving better monetization of your AUM through fees income? These are my 3 questions.

For the first question, I will trouble Ken to take the question.

Thank you for the question. So from the customer income, actually, we're actually seeing a very good diversification in terms of all across customer segments. Obviously, the growth in our wealth income is the highest, but we're also seeing very, very strong growth in terms of our corporate customer base as well as our institutional customer base.

Maybe any commentaries on how sustainable this can grow because it's the line item in your fees income, non-interest income that's growing the fastest.

Yes. We are actually quite confident in terms of this income being sustainable going forward. Reason being we have a very good product diversification and also in terms of regional and geographical diversification.

Maybe I can supplement. Generally, the nature of the business in the wealth income is -- it follows the momentum of the wealth business and may be dependent on market sentiment. For the corporate side of the customer flows for trading income, it's also an annuity-like income, but we may see some ups and downs in certain quarters depending on the size of the deal. So we do a lot of interest rate swaps, FX for transactions.

The second question relates to the Great Eastern contribution, the noncustomer flow trading income. Greg, do you want to take this?

Yes. I think you were talking about volatility and whether we can predict volatility. Obviously, you saw the swing between the first quarter and obviously, the first half. This is -- this has been a particularly volatile year. The first quarter was impacted, obviously, by the events in the Middle East predominantly impacting markets. So the mark-to-market is going to continue, I think, to be volatile through the second half. You can already see that between what was June and July, and we'll have to see how the rest of the year plays out.

Obviously, our investment strategy is one of diversification though. So we continue to diversify our investments to try and smooth that volatility. But I think you also need to look at the insurance results as well. And if you look at the underlying insurance results, they're solid, and we've got confidence that those are going to be sustained going forward.

Yes, I want to add that the nature of the insurance company is very different from the bank. So when we say it refer to noncustomer trading income in the bank is market-facing trading income. But for Great Eastern it is -- because they maintain a portfolio, so it depends on the investment performance of the portfolio, which you can actually have a sense based on the market, how the market perform in general.

Okay. The third question, Wealth Management. Any volunteers?

Yes. Maybe I could just add. I think our Hong Kong business is doing very well. We continue to invest in our Hong Kong. We are also adding more RMs and we also see productivity in RM going up. And if you could see, I think we have already unveiled a new branch with official opening to be in end September. So I invite you all to go there if you're around. I think it's -- and our collaboration with [indiscernible] is proving to be a hit. We see acquisitions of new customers going up in that branch in particular.

And I think we are looking to add more wealth branches in Hong Kong as well. So I think overall, we are very optimistic about our prospects in Hong Kong.

Yes. I think Hong Kong has a lot of legs to run. It's part of our twin hub strategy under the Next Frontier strategy.

Let's go to Jayden.

Just on Hong Kong and I guess, some of the regulatory changes that we're seeing out of China. Obviously, it's been a great story for you and one of the drivers of growth. But did these regulatory changes have any impact on the way you operate or your clients' demand? And will it have any effect on the trajectory of fees, which have been very, very positive? Just wanted to ask on this.

Since almost all of us have spoken except Jason, so I volunteer Jason then.

Sure. Thank you very much for the question. So it's still early days since the news has come out. We have a lot of controls and processes in place to comply with these rules. And we're currently in the process of contacting our clients. We haven't seen any significant asset flows since the news has come out, although we are right now in the process of contacting our clients. But what's quite interesting is that while some clients have, of course, expressed concerns and want more clarification on what these rules mean, we have quite a number of clients who have expressed, I won't say gratitude, but they're actually quite happy and they welcome the clarity that the Chinese authorities have shown going down this direction. So we've got a good balance of clients who have expressed that. So again, still early days, but we'll continue watching the space and see how this continues to affect our business.

Ultra from Reuters.

Just want to ask OCBC, if there's any -- overnight, there's this big Bloomberg story about iron ore trader, Radiant World. And I just want to ask about if OCBC has any exposure relationship with this company.

I first come across this name in the Bloomberg. So no, we don't have exposure to the company.

Let's go to Melissa.

Just the first question, you have done really well in every line that we have seen. ROEs as well has hit a nice high. So maybe can you talk a little bit about your aspirational ROEs from here and how we can see that move higher? And maybe secondly, in terms of your Great Eastern, that has actually pulled itself up very well as well. And you've mentioned the change in terms of product and also in margins.

But maybe we can get a bit of color of what else are we expecting from here from Great Eastern? How well are you working together with the team here in Bank of Singapore? And maybe also if you can comment a little bit, I'm not sure about the tax rules that has come out on China, on insurance? And how do you think that may impact sentiment?

I'm not ready to reveal the ROE. In the Next Frontier strategy, which was launched 6 months ago, we said we are focused on that. And you can see our ROE is going up quite quickly. So we hope to maintain that. Now as to what is the aspirational ROE, I'm not quite ready to share because there are so many factors involved in that.

On your next 2 questions, I'll pass it to the subject matter expert, Greg.

Yes. So I think the first part was, do we work well together? I think the answer is resounding yes. We have a whole of wealth strategy. Great Eastern plays an implicit part in that. So when we think about wealth, it is really whole of wealth, including insurance. So I think if you look at the bancassurance performance, particularly in Singapore, that has improved fairly dramatically over the last sort of 12 months. And that is basically down to the collaboration between the Great Eastern team and the OCBC team, and changes that we've made to the operating model. And obviously, we will continue to optimize that operating model. There's a lot more value upside that we believe within bancassurance.

Beyond bancassurance within Great Eastern, what I'm hoping you're seeing is that we are delivering new products to market. We're launching new propositions. We launched high net worth in March. So this was Great Eastern Private. And we've seen very good traction from -- following that launch, and we've got more propositions coming. And we are now investing in the technology that we're using within the business as well, and that's technology that we will deploy here in Singapore, but also deploy other -- across our other businesses as well, particularly Malaysia. So yes, there's a lot happening within GE. And so we're confident that the momentum in the business can be maintained. And yes, we can update you more as new things come to market.

Greg, there's a third question on the tax relating to insurance company on the China front.

Which one was that? Tax, did you say?

Yes, tax.

Is this the CRS point? So I don't think there's anything new there. I think this is adoption of CRS by China. So I don't think there's any new news in that regard, and it doesn't affect us.

Under the whole wealth strategy, we are moving things very quickly. So the Hewton Fair Suite, which is a high net worth value proposition by Great Eastern, is in close collaboration with Bank of Singapore who understand high net worth very well. On the OCBC banca partnership with Great Eastern, the two teams has collaborated very closely to redesign the end-to-end process to bring more value to the customers and to speed up the way we onboard customers. So we are redesigning that end-to-end at the moment.

Just one thing I should have probably added actually that we just recently announced within GE Financial Advisers that we are now offering not just insurance solutions, but also more sophisticated wealth solutions, so equity structured products, and those are effectively executed through Bank of Singapore in an embedded asset manager arrangement that we have with them. So we're looking at making sure that, again, Great Eastern can obviously bring insurance solutions, but also wealth solutions beyond that, leveraging the other parts of the group.

Just to follow up on Great Eastern and also Hong Kong side. Since OCBC Wealth is also expanding in Hong Kong personally, Greg, are you going to introduce any insurance products in Hong Kong? What's your thought?

It's an interesting market, and we're taking a good look at the opportunity in that market.

You will, but you are not doing that.

Sorry?

Are you considering that?

We might be considering it, yes.

You might...

Can we just go back to Nick, please?

Can I just have one follow-up on the China rules. How big is your trust business? Is it a big part of Bank of Singapore? Are you able to quantify how much assets under management you have under trust?

Thanks. Actually, we don't reveal the assets under management for our trust business. I mean it is a part of our total AUM, but it's not a significant portion of revenue for us. So it's part of our value proposition to our clients, but we won't -- we don't reveal those numbers. So we are -- as mentioned before, we're watching this. We're contacting clients as we speak, and we'll see how this continues to pan out.

And just obviously is a very vague metric, but your peers have quantified it as very small or small. Would that be a fair description of you as well?

As we are going down the path of vagueness, I would continue to reiterate that it's in the small category.

Wai-Fai?

Wai-Fai From HSBC. I have 3 questions. Firstly, going back to CET1 ratio. Just wondering, your target 14%, how sustainable is that given your strong loan growth ambition? And also you are still looking at potential M&A, both of that consume capital. So wondering your thoughts on that. And whether you'll be looking at monetizing your legacy real estate book since you have quite a bit of untapped equity there? Or is equity raising something that you'll be looking at if the potential M&A comes up?

My second question is on Great Eastern Private. How has it done since the launch in March? Are you able to share any numbers? Has it gone according to your expectation, above, below? Some color there would be great.

And thirdly, do you have any targets for VNB growth as Great Eastern kind of realizes synergies with the broader group and perhaps the wider WM customer pool?

So let me address in reverse order. No, we are not anticipating any equity raising. We are actually very comfortable operating at CET1 CAR at around 14%. There are other techniques we can use in terms of balance sheet optimization if we choose to. We haven't even reached there yet. So I'm pretty comfortable with that.

Okay. On Great Eastern, so maybe Greg can give an update on the Great Eastern high net worth strategy.

So yes, you're right. It launched in March. I can't give specific numbers. All I can tell you is that we've seen exponential growth in terms of TWNS and NBEV coming from that proposition. So -- and that proposition is fed through both our agency. So we have agency force and our financial reps introducing clients into that business. And then we also have OCBC, obviously, and now we have a direct referral model as well with Bank of Singapore. So this is a part of our business that's continuing to grow significantly, and it's growing actually probably just ahead of our expectations actually in these early phases. So positive on it.

And I think the feedback we've had from clients who have actually experienced the proposition itself has been very, very positive. So if you get the opportunity and you've got SGD 1 million to invest, you can go to the Hewton Fair Suite in the morning. If you need to be underwritten, we can underwrite you by the afternoon because we can get the medical done there and then and the results are out the same day.

So it's a very efficient service, which is what high net worth clients are looking for, and it's a very pleasant place to experience, and we've got a good sort of range of products coming now, and we've got some new products coming soon that we will supplement that offering with.

I didn't catch the last point on the targets. You mentioned something about targets.

VNB growth target. Do you have any VNB growth target? Value of new business?

No, I can't tell you.

Sorry, just one follow-up. Sorry to harp on just on the CET1 ratio. So given that we are already at 14%, do you expect quarters where we could see that going below 14%? And if that happens, what are the implications? I'm aware of the credit rating implication, but I'm just wondering whether there are any other.

Yes. We target operating at around 14%. So there could be times slightly below, slightly higher. It all depends on the type of loans we do in that quarter. But having said that to rebalance it is not an issue because we have balance sheet management technique. I think that's as much as I can share today.

Now the balance sheet technique can range from, of course, techniques like -- just like you happened to mention about some sort of securitization. But I don't think at this juncture, we need to even go there because we have enough optimization, which we can do within the current balance sheet. So it is a position which I like to be in where I can actually decide on many things on the balance sheet optimization. And the more we optimize the higher the ROE.

So this is Aakash from UBS. So the first question I have is just, again, back on the cross-border rules and 2 specific questions related to that. So first is, I think you have said in the past that as a percentage of flows to the wealth management business, net new money flows, less than 1/3 comes from Chinese investors. I was wondering, is it fair to assume that majority of that cohort is offshore Chinese investors and not Mainland Chinese? If you could comment on that?

And the second question is just overall, I know there's a lot of uncertainty and we need a lot more clarity on that. But it's fair to say that the whole Hong Kong-China corridor is becoming a lot more complex and a lot more uncertain now. In that sort of environment, do you see Bank of Singapore as a net beneficiary of this uncertainty or you wouldn't say that? And not just Bank of Singapore, I mean, in general, the Singapore wealth management industry. So this is the first set of questions.

The second one is simply a very quick question. I just want to understand the rationale for raising the wholesale funding that you said led to a decline in net interest margin this quarter when the loan-to-deposit ratio is still very, very comfortable. Is this something we should expect going forward as well?

Okay. Maybe I'll ask Jason to start before I chime in.

Sure. So two things. One is we deal with offshore. We don't market onshore in China. For obvious reasons, we're an offshore bank, so we can only deal with clients on an offshore basis. So I can't comment on your Mainland. We do have an OCBC private bank onshore, but that only deals with onshore wealth. And we have an -- we have Bank of Singapore operate offshore. So we do not mix those 2, if that makes any sense.

And then the second is, I won't say -- I mean, for sure, we're going to be entering a period of complexity. I don't think I would say that we're going to be a net beneficiary or Singapore is going to be a net beneficiary of it, but we will have to see how this continues to pan out because I think the whole market and the whole street is still watching this space as it unfolds. And then I think it will affect all banks at that point in time. So I wouldn't say that we will definitely benefit or not benefit from that.

Yes. So I will supplement that. We are very strict with our compliance of cross-border marketing. So our bankers don't go to Chinese market, which is one issue which the Chinese is enforcing. So we don't belong to that category.

The second thing I want to supplement is this, in Hong Kong, we have just started. We are refreshing our value proposition for Premier -- PPC and, of course, Bank of Singapore has been there for a while. What we have seen is that momentum continue to be strong. So there's still a lot of offshore money there for us to actually grow.

There was a second question on the wholesale funding rationale.

All right. The growth in wholesale funding started off in first Q. Really, there was sort of preemptive raising of liquidity ahead of the Middle East crisis, post 28th of Feb. And then in second Q, we continue with that because of the very exceptional loan growth that we discussed earlier, is 5% Q-on-Q. So this is really balancing out the need in terms of commercial lending with our continued strategy then in first half of investing in treasury markets noncommercial assets. So for treasury markets noncommercial assets, that is really one of the tool to enable us to keep our NII resilient in light of the continued drop in rates.

As you can see, even in second Q, rates still continue to fall. So that has -- that strategy has, in fact, enabled us to be able to sustain our NII to grow Q-on-Q by 2%. So -- but going forward, as I mentioned earlier, we will be looking at balancing out the investment in treasury markets assets with the opportunities for commercial lending as well as capital deployment. So that could probably slow down in the second half, in tandem of which the wholesale funding needs will also decline in that sense.

Sukriti?

This is Sukriti from Bank of America. A couple of questions. First, on wealth growth. Congratulations on back-to-back strong growth on wealth. Just wanted to understand some of the key drivers that you're seeing. Net new money growth continues to look strong at SGD 5 billion to SGD 6 billion quarter-on-quarter. Do you expect this momentum to sustain? What would be some of the other drivers in terms of -- and also if you could share what are some of the key markets that are looking most attractive to you right now? Where are the flows coming in from? And do you have any target AUM over the next few years that you're looking at reaching?

Secondly, just wanted to understand a quick update on the FY '26 capital return that you mentioned, the outlook given where the stock price is still that if not -- if the SGD 700 million, SGD 800 million that's left in share buyback, that would be returned as special dividend at the end of FY'26.

For the AUM, we target double-digit growth over the next few years. As to the momentum, I'll pass it to Jason.

Suddenly I went from not answering any questions to answering a lot of them. So net new money for us, as you had mentioned, has remained strong across the group. And a lot of that has come from our -- from the ASEAN space. So we continue to see good, strong momentum. But more importantly, I think the pipeline looks just as interesting and just as exciting. So we feel pretty -- quite confident about how the rest of the year is going to pan out in terms of net new money. So hopefully, that answers that question.

Can I quickly follow up? Any outlook you can give on exit NIM? What was that maybe July exit, what was the figure for us?

Yes. June exit NIM is 1.67%.

And on the capital return, the FY '26 dividend?

Yes, we still have the region of about SGD 800 million part of our capital return plan, which we already mentioned that if there's no share buyback for cancellation, we will return in the form of special dividend for -- in conjunction with our final FY '26 dividend payout. So working out SGD 800 million that will translate to SGD 0.18.

Go back to Melissa.

Maybe just one follow-up question lastly. In terms of asset quality, I think you've done pretty okay. But I think in this quarter, you put a provision for Indonesia. Your Indonesian peers don't seem to have that kind of need for additional provisions. So I just wondered what's the difference that you are seeing in Indo on your book?

Yes. Our provisions is relating to non-impaired loans. So for non-impaired loans, sometimes we look at customers, there's some movement, but it's not a lot. There is also -- not a lot for this quarter. So our credit quality remains very sound for our Indonesian portfolio.

The other point I want to make is that our model take into account our views on the overall risk of a particular marketplace, and we will do some overlays and what have you. So -- but in general, it's just a very normal movement of overlays.

Let's go to Ruiwen.

Very nice increase in contribution from associates there. Can we share if this is mainly Ningbo and whether there's opportunity to increase further stake in Ningbo at this moment? And how can we extract more value out of the investment?

I think Bank of Ningbo has been delivering most of the associates, the contribution by associates, a large part -- a very large part is Bank of Ningbo. So we like what we see, Bank of Ningbo is still delivering very good returns to us. So we intend to continue to stay invested in Bank of Ningbo. Now whether we should increase the stake in Bank of Ningbo is something which we have not decided. It's always been in the picture as part of our overall planning, but no particular plan at the moment.

Any other questions from analysts or media?

Vivien Shao from Business Times.

So OCBC has spoken quite a bit on AI. Has AI become a meaningful growth driver for the bank? And if yes, is it showing up in your income?

AI is meaningful for us, definitely. We have launched some AI initiatives with some income implication. We have been using AI along with our data analytics to actually identify the customers and market. So in that sense, yes, the way we think about AI is not in isolation. In fact, if you look carefully, we don't really have an AI strategy per se in isolation. What we have is an ADD strategy. Now ADD strategy means that we want to focus on redesigning process, digitize them and then intensify the use of data analytics. And for AI, where it makes sense to us, where it's fit for purpose, meaning the cost is low enough, then we will adopt it. So we think of it holistically.

Because of our approach, we also don't spend unnecessary resource to quantify which part is due to AI and which part is not due to AI. It's too difficult. We will rather take our energy and go and develop something like Avatar Banking in double quick time, introduce gen AI skills training module for wealth RM to reduce cost as well as increase user experience because the bankers can access the AI training 24/7 at their own leisure. So I think this is how we think about it. So it's quite difficult to identify exactly how much is due to AI.

And by the way, we have a very -- when it comes to AI, actually, we are very cost conscious. AI requires us to burn a lot of tokens compared to, say, alternative or not using AI. But there are alternatives, simple change in processes, simpler AI and not gen AI, we are not hesitate to go there because we get the bang for buck. So in that sense -- the way we think of it is a little bit different.

Yes. Maybe I could just add on, right? In April, we have launched this gen AI power sales training program. What we have seen is that our wealth advisers who went through this, we see their productivity is up by almost 50%. The way the fixed appointment rate is also up by 50%. And we don't really want -- we don't really kind of take this increase to generate that. But I think what we do is it really helps our wealth advisers to be more confident. The benefit you also have is branch manager will probably used to do a role play with the people, right? What it means now effectively if they can all do in the comfort of their home, in an environment where they are comfortable with to practice, right?

So I think that is something which is really used to increase the productivity, and I think that's something that really helps us. But we don't really want to attribute all that to just AI. I think there's a combination, but we do see it as a very effective and useful tool to help to improve our productivity.

Okay. Goola from The Edge.

Congratulations on the results and, of course, on the extra SGD 0.18 payout next year. I just want one question that is slightly -- not really associated with the results. But how do you square the increased use of AI with your sustainability targets? Because apparently, AI takes up a lot more energy than during the time before AI. And there is increased also focus on sustainability in your Next Frontier circle.

AI indeed consumes electricity. So that's why our philosophy when it comes to AI is not gen AI. So I have -- I touched on it just now that if there's a simpler AI, then we'll use a simpler one, which actually consumes less resources than gen AI everything. So I'm not a big fan of gen AI everything. So I use AI quite judiciously. And you can see the results by doing judicious. Interestingly, we are able to launch many more things simply because we're very focused on the value creation more than whether it's AI.

So you think about ADD, the trade secret is it's actually DDA, digital digitalization because that helps us redesign process and make it more efficient, we create value there, intensify the use of data analytics, which historically I find is bang for buck. And then AI may be used in the data analytics, but that is like use of the power generally, as in electricity.

The -- then AI, we say that fit for purpose, so only value-add. So in a way, if you think about that, it's fit for purpose means that it has to be better than other alternatives, then in which case it's a worthwhile use of the power. And therefore, sustainability is not an issue from our perspective.

Felicia from The Edge.

Felicia from the Edge. So earlier on, Mr. Tan, you mentioned that you're happy to do an acquisition if the right target comes along. So what to you is the right target?

In general, my personal preference is portfolio relating to wealth like the HSBC wealth acquisition. My preference or rather I don't have a preference for corporate loan portfolio because we believe that we can grow that portfolio on our own. We are very competitive in terms of gaining market share and growing loans. So I don't really need that. But in between, we have to assess. But generally, it's towards the retail side of the business, especially wealth.

So I have one more thing. We are also very cognizant within our -- although we have shown very good results, actually, at the back of our mind, we are actually quite risk averse. So we balance risk and reward, I would say, so far very well. There's quite a fair bit of risk in the environment. So when it's a loan portfolio, we have to be doubly careful because we don't end up with like spending our time trying to sort out credit losses. So that gives you some context in the -- that you give some flavor of the current environment as well.

Okay. I think it looks like everyone has all their questions answered. With that, thank you very much, and have a good day.

Thank you very much.

So good morning, everyone. We have our media friends with us here, and we have some of our analysts on virtual first in the room somewhere and of course, from the various offices. So we are going to go through our results for first quarter this year. And because of the HSBC Malaysia International Wealth and Premier Banking that we have done, it's under a nondisclosure agreement. So many of the numbers we will not be able to share, and we ask for your understanding on that.

So with that, I will now pass the time to Chin Yee to take us through the results.

Good morning, everyone. Thank you for joining OCBC's first quarter 2026. [indiscernible] OCBC delivered strong performance for first quarter of 2026. Group net profit was SGD 1.97 billion, up 13% Q-on-Q and 5% year-on-year on the back of record total income. ROE was 13% on an annualized basis. Net interest income declined amid lower interest rates, partly cushioned by growth in assets. I will cover more in the later slides. The NII decline was more than compensated by record noninterest income, led by strong growth of our wealth management franchise. Noninterest income grew more than 20% Q-on-Q and year-on-year with broad-based double-digit increase across fee, trading and insurance income.

Despite the escalation of conflict in the Middle East during the quarter, wealth management fees recorded robust growth and our customer flow treasury income reached a new high. We continue to be disciplined in expenses with cost-to-income ratio at 39.3%. [indiscernible] growth momentum was sustained, up 9% and 10% year-on-year, respectively. Our asset quality remained resilient with NPL ratio stable at 0.9%. Factoring in the heightened macro uncertainties, additional management overlays were prudently taken this quarter with total credit cost at 23 basis points on an annualized basis. NPA coverage rose to 163%. Our capital position remains strong with fully phased-in CET1 capital adequacy ratio at 15.2%.

Moving on to our performance by key business pillars on Slide 5. We continue to deliver resilient growth across our diversified franchise of banking, wealth management and insurance. Banking operations profit was up 9% Q-on-Q and 6% year-on-year, driven by strong fee and trading income. Wealth management income rose 14% Q-on-Q and 11% year-on-year to SGD 1.48 billion, comprising 39% of the group's total income. This was supported by growth across all segments from private to premier banking to insurance. Our Wealth Management franchise continues to attract net new money with $5 billion of inflows for the quarter. Banking AUM grew 12% year-on-year to SGD 342 billion and was broadly unchanged Q-on-Q due to a decline in market valuations. For insurance, profit contribution from GEH was SGD 323 million, up 44% Q-on-Q and generally steady year-on-year.

Underlying insurance performance was strong, partly offset by a lower valuation of investments, including those from shareholders' funds. Total weighted new sales and new business embedded value grew 16% and 31% year-on-year, respectively, led by strong sales from Singapore across both agency and banca channels. NPAT margin improved to 48.6% from 43.1% a year ago.

Moving on to more details of our group performance trends, starting with net interest income on Slide 8. NII for first Q of '26 was SGD 2.22 billion, 5% down year-on-year and 3% below 4Q of '25. On a day-adjusted basis, NII was slightly lower by 1% Q-on-Q. To highlight, SORA dropped more than 160 basis points, HIBOR more than 120 basis points and SOFR more than 60 basis points from a year ago. These key benchmark rates were also down Q-on-Q. The impact of lower interest rates was partly cushioned by average asset growth and assertive management of deposit costs. Average assets grew 4% Q-on-Q, driven by loan growth and a 7% or SGD 12 billion increase in average balances of high-quality treasury assets.

Surplus liquidity from robust deposit growth and a preemptive increase in wholesale funding due to macro uncertainties were deployed into NII accretive high-quality assets. These treasury assets were dilutive to NIM, but added to asset yield compression. First Q '26 NIM narrowed to 1.76%. Our March asset NIM was 1.75%. Income from treasury assets mitigated about 30% of the rate impact on loans. This underscores our approach to protect NII. We intend to continue to build this up, but likely at a slower pace than first quarter. NII sensitivity based on 1 basis point of drop in rates across our 4 major currencies of Sing dollars, U.S. dollars, Malaysian ringgit as well as Hong Kong dollars was about SGD 5 million on an annualized basis with Sing dollar being the key driver of the sensitivity.

Moving on to noninterest income. Noninterest income grew by more than 20% to SGD 1.61 billion, which is a quarterly record for us. Fee trading and insurance income all grew by double digits year-on-year and Q-on-Q. Noninterest income now comprised 42% of our group total income. Our first quarter '26 fee income rose 12% Q-on-Q and 24% year-on-year to SGD 675 million, a few million shy of the record we had in third quarter of '25. Fee growth momentum was robust. This is the third quarter in a row that our fee income was above SGD 600 million. In particular, all wealth segments continued to deliver strong performance, reflecting the results of our ongoing efforts in growing our wealth management franchise.

Wealth fees rose 34% year-on-year, driven by higher investment activity from customers and our expanded AUM base. Growth was broad-based across all product channels, including private banking, bancassurance, treasury products, unit trust, brokerage as well as fund management. On brokerage and fund management fees are now reported within our wealth segment to better reflect the full spectrum of wealth-related products.

Moving on to trading income. First Q '26 net trading income grew 10% Q-on-Q and year-on-year to SGD 434 million, underpinned by record customer flow income. Customer flow income was up 35% year-on-year and crossed SGD 400 million for the first time, driven by both wealth-related activities and corporate customers. Increased market volatility and demand for hedging amid economic uncertainty continued to support transactional flows.

Moving on to operating expenses. We continue to maintain cost discipline while being targeted on our investments to support our next frontier corporate strategy. 1Q '26 operating expenses of SGD 1.5 billion were up 6% year-on-year, mainly due to higher costs to support business growth and continued investment in technology. Against 4Q '25, expenses were down 4%. Our cost-to-income ratio was 39%.

Moving on to loans. During the quarter, we expanded our loan book by SGD 6 billion or 2% to SGD 347 billion. Growth was largely broad-based across industries. Compared to a year ago, loans was up 9% year-on-year on a constant currency basis. By geography, this was led by Singapore and Malaysia as well as our international markets like U.K. and U.S. The sustained momentum in loan growth reflects the continued traction in our strategic focus areas in wholesale as well as consumer and private banking segments. This includes Singapore residential mortgages, wealth financing, key and key industries, including digital infrastructure and sustainable financing.

Our sustainable financing loans increased 17% year-on-year to SGD 59.7 billion, now comprising 17% of our total group loans. Our loan portfolio quality remains sound. NPL ratio was 0.9%, unchanged for 8 consecutive quarters. NPAs were SGD 3.12 billion, 4% lower Q-on-Q as new corporate NPA formation was more than offset by net recoveries and upgrades. 1Q '26 new corporate NPAs were an annualized 14 basis points of period stock loans. This is lower as compared to 39 basis points for FY '25. We are highly watchful of the ongoing Middle East conflict and potential downside risk. We note no significant credit deterioration and continue to refresh our stress test.

First order impact is not material at less than 3% of loans or 1% of total assets. This includes petrochemical and refinery sector and other direct Middle East. We continue to actively engage our customers and are closely monitoring for potential second and third quarter impacts should the situation become protected. Total allowances for 1Q '26 were SGD 216 million, up 8% Q-on-Q and 2% year-on-year. Allowances were mostly for non-impaired assets. Additional management overlays were set aside in relation to the elevated macro uncertainties, reflecting our prudent and proactive risk management approach. Total credit costs were 23 basis points on an annualized basis.

With the increase in cumulative allowances and drop in our NPAs, NPA coverage ratio was higher at 163%. Our performance loans coverage ratio held steady at 0.9%. Our coverage levels position us well to navigate the uncertainties. Moving on to deposits. Customer deposits grew 10% year-on-year to SGD 444 billion, driven by 13% growth in CASA deposits from both wholesale and consumer segments. CASA ratio rose 1.3 percentage points year-on-year to 50.2%. For the quarter, deposits were up 4% and group loan deposit ratio was 77.2%. The growth in our well-diversified deposit base enables us to continue expanding our balance sheet and increase funding resiliency in an uncertain environment.

Our funding base remains balanced with close to 80% from customer deposits. Our liquidity and funding ratios remain well above regulatory requirements. Wrapping up on capital. Transitional CET1 was 17.0% and fully phased-in CET1 was 15.2%. On a pro forma basis for fully phased-in CET1, the payment of our full year '25 final and special dividend will reduce CET1 by 1 percentage point. The acquisition of HSBC Indonesia International Wealth and Premier Banking, which we announced earlier this week, will utilize up to 0.2 percentage points of CET1 when completed in the middle of next year. I will share more of this in his presentation later. Our capital position remains strong, allowing us to support strategic growth opportunities and provide buffer against uncertainties. Our CET1 target of 14% over the medium term remains unchanged.

With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to [indiscernible]

Thank you, Chin Yee. Normally, Chin's presentation is the main cause. But today, we have 2 main causes because of the OSBC. First, let me give a very quick reflection of our results. Maybe we can move to the slide. Yes. So we are pleased with our results for the first quarter. It's very strong. We actually check every box in terms of growth. We expanded our loan book. We expanded our deposit book even faster the noninterest income was experienced growth. It's a broad-based growth across all business units. For treasury income, we have been focusing on growing the customer about the treasury income that has come in very strongly at a new high as well.

Now all this was achieved in the context of a low interest rate environment. So as a result, our year-on-year growth in terms of profit is 5% Outlook-wise, we remain very concerned about what's happening in the Middle East because it's a very direct impact in Southeast Asia in terms of energy supply and therefore, the prices. So to be prudent, although we don't see credit quality issue in our portfolio, to be prudent, we have put in some provisions, general provisions for [indiscernible] loans is really a third effect, which we are being prudent about. So that will leave our NPA coverage ratio to 1.6x, which I believe is the highest in Outlook-wise, we are very focused on what's the Middle East war and the prices of energy.

We are still keeping to our earlier financial guidance, notwithstanding what's happening in the Middle East. Our capital position remains strong. We expect to complete our SGD 2.5 billion capital return plan by financial year 2026, meaning the dividends will be paid out in FY '27. Okay. We go to the HSBC [indiscernible] let's pause for questions. So earlier this week, we announced our acquisition of HSBC International Wealth and Premier Banking portfolio. I shall refer to it as the IP portfolio.

If you recall under our Frontier strategy, we said that we are focused on growing wealth as well as deepening our franchise in our core markets, the 3 parts in Hong Kong, Singapore as well as the ASEAN domestic market in Malaysia and Indonesia. When I look at the IP portfolio, I realize this is a perfect fit for our next frontier strategy. Most of the portfolios we have seen in the marketplace available for MA depends to the mix of loans and deposits. But this portfolio is very clean with large deposits and AUM. Why is that a good portfolio? If a portfolio has a loan content, they do worry about 2 things. downside due to credit cost. And secondly, if the portfolio is large, we actually may lose value because of single borrower risk limit concentration.

So we have to manage that. So for this portfolio is largely deposits, largely AUM, a small retail loan relating to credit cards. So that's the business we are buying. Now what I really like when I look at the deposits part of the acquisition, they have sizable CASA. So CASA to the bank, if we book on the CASA, we will actually make money straight away because CASA is a low-cost CASA for us to help to fund our loan business. So as a wealth portfolio, IWP is highly complementary to our existing Indonesian franchise with clear synergies across customers and capabilities. It will add further scale to our AUM and customer base.

Now this is a big competitive advantage we have in Indonesia. We are one of the top 3 privately owned banks in Indonesia. We enjoy big economy of scale. We can bolt on this acquisition and gain cost synergy very quickly. Not many banks can match our economy of scale in Indonesia. We expect the acquisition to be earnings accretive, excluding onetime integration costs. Under our whole wealth strategy, products, channels, insights belonging to any of our wealth units of OCBC Group will be tapped to support the whole group. We will leverage Bank of Singapore's product capabilities and insights to help further uplift our enlarged wealth franchise in Indonesia.

The acquisition also come with a small retail loan book that I referred to just now of SGD 300 million, largely related to the credit card business. It is a nice addition to our credit card business, our credit card balance will increase by 1.5x. Indonesia is still a very important market for us. It is a core market. If you really think about it, ASEAN is still a very good place to be in right now given the global environment. And Indonesia remains the largest economy in ASEAN. Even though there are economic headwinds in the short term, we are still committed to investing and growing our franchise in ASEAN in Indonesia as part of our next strategy. We have a strong capital position.

More importantly, we have good local insights in this region. We are well positioned to navigate an uncertain environment and take advantage of any opportunity which may arise. As we speak, we are already one of the top 3 privately owned banks in Indonesia. With this acquisition, we have further expanded our franchise in the largest economy in ASA. Thank you.

Thank you. We will take questions from the media. And analysts online, you are free to stay on. Otherwise, we will see you later at about 10:30. So we'll start with the media now, questions.

Congratulations and also share price while going down [indiscernible] So I'd like to ask first 3 questions. First, how do you expect to maintain the earnings momentum for the rest of the year given the NII slowdown and your NIM contraction on a quarterly basis is quite sharp. The second question, with departures in the Middle East and that of Singapore, do you see impact on the AUM in terms of?

The departure [indiscernible] in Dubai, and we are now expecting more departures from that front. Do you see much impact on AUM on wealth? For Indonesia, can you give a bit more color on valuation given high liabilities of the unit that some people expect, meaning that are you getting a very good discount because of the bank's debt obligations? I took note of your commitment to [indiscernible], but do you expect this to be short term given concerns and also [indiscernible]

I'm sorry, just to clarify the question about discount you referred to...

I mean you did -- I think mentioned a premium to NAV, but NAV is not available. I think some analysts expect like say that...

I see because...

Indeed. So basically, you get it. Is it something that we could confirm...

So first question is that are we able to maintain our earnings momentum given interest rate which may continue to decline. Actually, the decline has slowed down. So the quarter-to-quarter fluctuation is because we got some recovery of NPL, which adds on to the interest rate recovery. In the NPL management, we are conservative. The moment we put a case into NPL, we actually do not recognize interest. And we so happen to have put some cases into NPL quite early on, and therefore, the interest later.

So it's a one-off when we recover. So it's actually good news. It proves that we have been prudent in managing our NPLs or our loan book and then we get some recovery now and then. So that's good. So to answer your question, the interest rate decline has slowed down. Our fee business is what we are focusing on consistent with our next strategy. The second question is about what's happening in Dubai. Dubai, while it's a center for Bank of Singapore, the contribution from Dubai is actually not that much. So even if we have some temporary outflow or temporary impact, we don't expect material impact to our franchise.

Anyway, Dubai at the moment is still under state of day is a war. So we have to see what's happening. So overall, structurally, we do see some increased inquiries from Dubai customers in general. So I think that will also mitigate the impact of any staff.

Yes, and the war is still going on, but your operations remain there. You haven't -- have you moved any relocated?

When the war, I mean, now is some sort, earlier on, when things were a lot more, some staff on their own decided to leave the country. So we have maybe 10%, 10% of staff on a voluntary basis left the country. It doesn't impact our operation. In fact, throughout the whole situation, we have been operating so it's BAU, but our staff work remotely from home.

So about 10% to 20% already.

They're still working remotely. But the staff in Dubai also work remotely. You have quite a number of points relating to the HSBC acquisition in Indonesia. I think firstly, maybe let me explain the structure of this. So deposits to a bank is a liability, right? But it's what we want to grow, unlike other companies. So for most companies, we talk about liabilities in the negative sense because you own people money.

But for the bank, we like it because our liability is not about us owning people money, it's actually deposits kept with us. So technically, it's a liability. So because of this, right, we can estimate the cash flow stream from the liabilities as well as the AUM business. Now on the asset side, because it happened to be so small, which is only a SGD 300 million loan book, the total AUM deposit is like 10x more. So than -- so because of this characteristic, it makes. So in other words, if you think about it from a banking viewpoint, we have a portfolio which we have minimal credit risk, but it provide us.

You see, I mean, Indonesia is well featured about, [indiscernible] you at all a short-term thing?

I think I can comment this way. For Indonesia, we have been there for more than years many, many sectors. Alluded to that to operate in this part of the world, we need a lot of capabilities and insights. So in a way, the barriers to entry is quite high. What we are seeing are some banks reducing their operation in Indonesia. But as you can see in our Indonesia business, we remain very committed. On a BAU basis, we continue to expand. And now there's opportunity we manage buy it. So we are -- we will be able to run. So our view on Indonesia is that there will be ups and downs. And over a long period of time, the outlook is good.

On the wealth talent, right? Are you planning to expand that headcount? And I think among all the local bank more stable sort of headcount [indiscernible] the wealth talent you also expect overall headcount to sort of remain stable year-to-year and also the competition amongst the banks, right because every bank is also chasing wealth management income. Is there more you think for such talent and also when you do the M&As when you are bidding for the business, is there more competition? And how do you navigate this?

The headcount you're referring to the whole banking group [indiscernible]. So for the whole banking group, we still maintain high cost discipline. headcount which are relating to sales, we will continue to expand it. So because it's crucial for us to have the talent to help us expand the wealth business. So I hope that answered the first part of your question. The second part of the question, are we seeing more competition? Well, the way I think about it is that competition has been intense over the last 10 years. It's not new to us.

But the more important thing is about our capabilities. So I will describe it in 2 ways. One, the competitive landscape in A. Interestingly, we see ex of some players once it's actually less crowded. And we have a good franchise in the ASEAN core markets because we have product capabilities in the group, whether it's the Bank of Singapore or OCBC Singapore, we do have very strong product capabilities. In each of the countries, we have tailored the products will be launched in these countries. So there's a lot of comm sharing, which we can do under our whole wealth strategy. So in a sense, that is a differentiating advantage for us.

I know you mentioned regarding the third order effect that you're being prudent about -- can you elaborate a bit on that in terms of sectors or sectors or markets where you are kind of a bit more about? And on the wealth side, apart from the increased inquiries from Dubai, where else do you see the greatest opportunities within the region and the rest of the world?

When we actually -- so first order, second and third order effect to us, first order effect are those industries which are directly impacted by the Middle Eastern situation. The second order impact are the industries who might experience some pickup in the supply chain due to the Middle Eastern impact. So this is a general sizing. The third order impact to be more accurately described is actually a macroeconomic impact. So what we have is actually for the third quarter.

Your second question is relating to opportunities [indiscernible] Our wealth business is actually very diversified. So we draw from all over the world. So that's one. So that opportunity remain because if you look at it, Singapore is actually a very attractive place to be a wealth hub. So that competitive advantage remains. The second is the rising affluence. So in the ASEAN, we continue to see economic growth and we continue to see rising affluence. So this is another we want to -- sorry, I forgot to add domestic market. Our strategy is hub. So Hong Kong also capture China, Hong Kong flows, and there's also a lot of wealth within Hong Kong and also neighboring Hong Kong, the Greater Bay region. So this is not a high net worth ultra-high net worth business. So we won both. We won ultra-high net worth business. We also won our DPC premier wealth business.

Our OCC premier private clients the higher [indiscernible]

One is on the dividends and the capital return. So there is a share buyback portion of that. How much have you completed? And do you -- what will you do if you don't complete it? Will you return the rest of it to the shareholders? That's one question on that. Another question is, I don't know whether this is the right place to ask. But under current of all this competition between the 3 local banks. The one you came from has a specific competitive advantage in its treasury business. And I think you were part of that whole you bring some of that under competition to bring some of that so that OCBC [indiscernible] the other CEO that OCBC has had. So if you [indiscernible]

I'll take the question on the dividend, share buyback as well as capital return. So for the share buyback for cancellation, we have completed 20%. So there's about [indiscernible]. That means we have left about SGD 800 million or so. Yes. So we will be monitoring the situation to see whether conditions is feasible or conducive for further buyback. If not, we are flexible in terms of returning in the form of special dividend. Now also mentioned during the full year financial results February this year that given our retail -- our sort of investor base are the long-term sort of shareholders, the preference will be for special dividend personally -- so that is certainly an area for us.

And just now mention that if we were to return that in the form of special dividend, we will complete the entire SGD 2.5 billion of capital return by full year financial year 2026, meaning if the special dividend payout, that will be for final year '26 dividend paying out typically in May of 2027.

Okay. On treasury business, thank you for the question. You give me a chance to elaborate on this business. The treasury business is a very important business for us. We have to think about treasury business in 2 parts. Even though it's described trading income in our accounting term is actually 2 parts. One part is trading as people may perceive it to be.

The second part is more important to us, which is trying to grow the customer flows using treasury products. So that's classified under trading income. So this is the part which we are building up. Talent, we do have a very good talent bench strength at OCBC to start. We have been executing it. If you look carefully at the quarterly results, the customer flow has been going higher and higher. So to continue to sustain that growth, we have onboarded some talent mainly in different product categories and in sales.

So the product category is important because the product capability will help to drive the growth of the fund-facing business, in particular, the wealth business as well is about structuring products for sale. So this is very important. So think of it as this way. Treasury business will continue to grow. We add resources to support the growth of the customer flow business in both wealth and the corporates.

And do you have like a certain amount you think will be treasury income per quarter? Do you look at it that way?

I think for this particular meeting, I think we should look at the path and project forward. We have, of course, in fact, in our strategy in the next go back to the strategy, we actually speed up that we want to scale up in Hong Kong because Hong Kong is a big as well.

Any other questions?

On AI, what's your thoughts on like do you see that Singapore banks will have access [indiscernible]

[indiscernible] indeed a cause of concern, and we are monitoring the situation quite closely. Internally, we accelerated scanning our system to make it as strong as it can be in terms of protecting us cycle risk. Now [indiscernible] is a new development. Currently it is released to selected tech vendors and selected American banks. The tech vendors are also our vendors. And the tech vendors discover the vulnerabilities, we also stand by to hatch any vulnerabilities they discover. For us, I don't think we can tender this risk as a bank alone.

We will be a lot -- we will have a lot more safe if we can approach it together with our peers, together with our vendors and together with the government agencies. So this is something which is development, and we are paying close attention to it. Just curious following China question. How does this change OCT way of using third-party AI? And the other question is, do you still see AI as a net benefit to profit and productivity or you rather see it as a new cost or a new kind of risk in terms of your -- so there are a couple of parts to the question. It doesn't stop us from using third-party AI.

In fact, using third-party AI as benefits. It could be a lot cheaper. It could be a lot more rigorous. It's tested by more people. But this AI is more like plugging in into certain parts of the operation. The more important thing in terms of our approach is that we actually see -- we have an ADV strategy, which we see AI as being plugin fit for purpose. And one of consideration for fit for purpose besides capability is also the cost because a lot of people may think that AI solve everything. But AI can be very expensive if you are too early adopter.

So our strategy contemplates the cost and the benefit equation when we adopt AI. So that's how we -- now does AI bring new risk? Yes. DO is a new risk. The rest of AI risk, I think, has been well articulated, like, for example, hallucination and to what extent you should -- you can get the AI use AI. So we are very, very careful with that. Most of the AI we are using are related to augmenting our operation. So therefore, there's a human using that to improve its productivity. But AI, we can only use it in a very limited way. We have a very good risk framework to decide where we can go and where we cannot.

I ask one more question, how much of the record noninterest income you saw this quarter attribute to the new front strategy, right, your whole wealth proposition?

This is the toughest question so far. The reason is because I was appointed the Deputy Group CEO last July, right? And also under Helen's leadership, when she transit to me, there's a lot of continuity. Some of the next front strategy, especially the past which we so far have not talked about, which are really important like the shift, which is how to write the technology wave to increase revenue for the bank. We have been executing that for a while, and it continues to be a high-growth industry, and we'll continue to have that zero shift, we have been talking about executing it that continues.

We have actually started talking and organizing ourselves more wealth even during time. But after I became the Deputy Group CEO, we also accelerated the organizational construct to facilitate our wealth business. So that goes to the next strategy, some of which we started executing some of which we started execution last year. I did not spend time to say which part is which. I mean there's continuity in leadership transition, which is a very smooth one. [indiscernible]

[indiscernible] So you have any specific target to achieve in terms of the AUM and also in [indiscernible]

We expect a double-digit growth. So it's in our plan.

What's your net new money for this quarter?

SGD 5 billion.

It looks like we are good. [indiscernible] Friends here are okay. Okay, good. So thank you very much for your questions, and thank you for joining us this morning.

Okay. Good morning. Welcome to OCBC's Full Year 2025 Fourth Quarter 2025 Results Briefing. On our panel this morning, we have our Group CEO, Mr. Tan Teck Long; our CFO, Ms. Goh Chin Yee; as well as our colleagues from our whole of wealth, which our CEO will be talking about, which is Mr. Sunny Quek, Head of Consumer Financial Services; CEO of Bank of Singapore, Mr. Yi Sin Moo. And we have today with us the CEO of Great Eastern, and that's Mr. Greg Kingston. And last but not least, our Head of Global Markets, Mr. Kenneth Lai.

So Chin Yee, our CFO, will take us through our presentation slides, and thereafter, we will take Q&A. Chin Yee, please.

Good morning, everyone. Thank you for joining us in our FY 2025 results briefing. OCBC's profit before tax for full year of '25 rose 2% year-on-year to a record SGD 9.12 billion. This was the first time our pretax profit crossed the SGD 9 billion mark. FY '25 group net profit of SGD 7.42 billion was 2% below our record SGD 7.59 billion a year ago due to higher tax expense. The rise in tax expense was mainly because of the increased profit contribution from higher tax jurisdictions and implementation of the 15% minimum global tax from the start of 2025.

Our record pretax profit was driven by 3 key factors: Firstly, record total income; secondly, well-managed expenses and thirdly, lower allowances. Net interest income fell 6% to SGD 9.15 billion in the declining interest rate environment. Noninterest income grew 16% to a new high of SGD 5.46 billion from broad-based growth. This more than compensated for the decline in NII.

Fee and trading income both rose to record levels, up 22% and 10%, respectively. In particular, our wealth management fees and customer flow treasury income also hit new highs, driven by increased client activities and franchise strength. Insurance income also delivered a strong 17% increase. Operating expenses were well managed, up 2%. Cost-to-income ratio was largely maintained at 40%. Our disciplined risk management kept NPL ratio stable at 0.9% across the past 7 quarters. Credit costs were lower at 17 basis points. On capital, CET1 ratio was 16.9% on a transitional basis and 15.1% on fully phased-in basis.

With our resilient financial results and sound capital position, we are pleased to announce a final ordinary dividend of $0.42 and a special dividend of $0.16 for FY '25. Together with our interim dividend of $0.41, total dividend for FY '25 will amount to $0.99. This represents a 60% dividend payout ratio.

On our fourth quarter performance, group net profit was 3% higher than a year ago, driven by 6% growth in income and 4% lower allowances. Against the previous quarter, net profit was 12% lower, mainly due to income seasonality and higher allowances.

Moving on to our performance by 3 key business pillars on Slide 5. Wealth Management and Insurance delivered strong results, which more than compensated for the lower profit from banking. Wealth management income and AUM both rose to new highs. Wealth management income was 14% higher at $5.6 billion. It now contributes more -- contributes to 38% of group total income, up from 34% a year ago. Banking AUM expanded 15% to 343 billion, driven by both net new money inflows as well as positive market valuation. Net new money inflow in the fourth quarter was $6 billion. For the full year, our net new money inflows totaled $27 billion, up by close to 30% from a year ago. On insurance, profit contribution from Great Eastern rose 28% to $1.13 billion, driven by stronger insurance and investment performance. New business embedded value or NBEV grew 19% and our NBEV margin improved to 48.2% as Great Eastern continued to shift towards higher-margin products. Banking profit before tax was 2% lower at $7.65 billion, mainly due to lower net interest income, partly mitigated by double-digit growth in noninterest income.

I'll move on to details of our group performance trends, starting on Slide 8. FY '25 NII declined to $9.15 billion, impacted by sharp declines in key benchmark rates, in particular, SORA and HIBOR. This was mitigated by an 8% growth in our average assets and the benefits from our cash flow hedges. The asset growth was driven by loans, up 7% year-on-year and on a constant currency basis, up 9%. Our deposits also grew strongly, up 10% year-on-year. The excess liquidity was deployed to high-quality assets. For the fourth quarter, NII was 6% lower year-on-year and 3% up Q-on-Q. Our Q-on-Q rise in NII was driven by a 2% asset growth, lower funding costs and continued deployment of excess liquidity to high-quality assets.

NII sensitivity based on 1 basis point drop in rates across our 4 major currencies of Singapore dollars, Malaysian ringgit, Hong Kong dollars and U.S. dollars was about $6 billion on an annualized basis. NIM for FY '25 was 1.91%. Our exit NIM for December was 1.84%. We will continue to lower our cost of deposits to manage funding costs, deploy liquidity to income accretive assets to grow income and capture hedging opportunities to mitigate loan yield compression.

Moving on to noninterest income. Our full year net interest income rose 16% to a record $5.46 billion, driven by broad-based growth across fee, trading and insurance income. For the quarter, noninterest income rose 37% year-on-year, but was 16% lower Q-on-Q as wealth management and customer flow treasury income were impacted by seasonality in the fourth quarter. Full year 2025 fee income grew 22% to a record $2.41 billion, lifted by growth across all major fee businesses, in particular, wealth management.

Our wealth management fees surged 33% to a new high of $1.23 billion and contributed to more than half of our group fee income. The strong performance were driven by 2 factors. First, improved client sentiment and higher average percentage of invested AUM across all wealth segments. Our invested AUM is now above 60%. Second, our strategic drive to strengthen our wealth franchise, including increasing RMs and use of digitalization. These are starting to deliver improved revenues and productivity.

On trading income, our trading income grew 10% to $1.68 billion as customer flow treasury income rose 20% to a new high of $1.33 billion. The growth was driven by both wealth and corporate segments with continued demand for FX, hedging and investments products. Next, on operating expenses. FY '25 expenses increased by a modest 2%, mainly from higher staff and technology costs to support our business growth and raise productivity. Cost-to-income ratio was maintained at around 40%. We continue to invest strategically for growth while executing strong discipline in our discretionary expenses.

Loan growth momentum was sustained. On constant currency terms, loans grew 9% year-on-year and 4% Q-on-Q to $341 billion. Loan growth for the year was contributed by both corporate and consumer segments. By industry, the increase was broad-based, in line with our group strategy to capture opportunities in various growth sectors. This includes sustainable financing, TMT, including digital infrastructure, transport as well as our Singapore residential mortgages. In particular, sustainable financing loans grew 13% year-on-year to $56.5 billion and now accounts for 17% of our total group loans.

Our loan book remains well diversified across geographies and sectors. Overall loan portfolio quality remains sound. NPL ratio was stable at 0.9% for 7 consecutive quarters since June 2024. NPAs were 9% higher Q-on-Q at $3.24 billion, mainly due to downgrades of 2 corporate real estate accounts in Greater China in the fourth quarter. These accounts were previously classified as special mention loans and have been proactively managed. We remain vigilant and continue to actively monitor our loan portfolio.

Total allowances for the full year declined 4% to $665 million. Total credit costs were lower at 17 basis points. For the fourth quarter, total allowances were $200 million and mainly comprised $2.36 million for -- sorry, $236 million for impaired assets, largely for the 2 corporate real estate accounts that were downgraded. This was offset by a net write-back of $36 million for non-impaired assets, mainly due to migration to allowances for impaired assets and adjustment of NEV updates to reflect the improved GDP forecast.

Our cumulative allowances were higher year-on-year at $4.91 billion. NPA coverage stood at 151%. Allowances for non-impaired loans were maintained at 0.9% of total performing loans. Customer deposits rose 10% year-on-year and 4% Q-on-Q to SGD 428 billion, mainly driven by CASA. Our CASA deposits increased 14% year-on-year across corporate, SME as well as consumer segments. CASA ratio has improved steadily over the last 7 quarters to 50.7%. This is a reflection of our efforts to gather lower cost and stickier deposits as well as the lower interest rate environment.

Our funding position remains stable with 80% comprising of customer deposits. All funding and liquidity ratios are well below regulatory requirements. Next on capital. Transitional CET1 ratio was 16.9% and fully phased-in CET1 ratio was 15.1%. Our robust capital position supports our growth strategy and enables us to deliver sustainable shareholders' returns.

Moving on to my final slide on dividend. Our Board has proposed a final ordinary dividend of $0.42 and a special dividend of $0.16 per share. Together with our interim dividend of $0.41, the total dividend for FY '25 will be $0.99 per share, representing 60% of group net profit. This is in line with our target payout ratio of 50% for ordinary dividend and 10% for special dividend for FY '25 as part of our previously announced capital return plan. We remain committed to complete our $2.5 billion capital return plan by FY 2026.

With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Teck Long. Teck Long, please.

Great. Thank you.

Thank you, Chin Yee. A very happy Chinese New Year to all of you. Last year was a year of the snake and the economy and the uncertainties in the world of a pattern. So I wish that for everyone in the room and for the economy of the world at large that in the year of the horse is a shear-footed one and not a wow horse.

If you recall, last year was actually a challenging year, especially after the announcement of the deration day tariffs. The bank also faces interest rate pressure. And if you recall, in the second quarter of last year, HIBOR actually took a dive from 400 basis points to almost overnight, sub-100 basis points.

Fortunately, it has resurfaced somewhat, and I hope for more stability. So nevertheless, despite all these challenges, the bank managed to deliver a new high in income. To achieve this, we need all cylinders firing. We expanded our loan book, we grew our deposit and for noninterest income, we achieved a double-digit growth. Great Eastern also came in very strongly year-on-year.

Our customers flow business for trading also registered double-digit growth, contributed by the wholesale bank and our cost of wealth business, which has been a standout in last year's financial performance. So all in all, we delivered a strong financial performance. Expenses remained well managed at cost-to-income ratio of 40%. Credit quality remains sound with NPL ratio stable at 0.9%. It's worthwhile to note that we have maintained this NPL ratio across 7 quarters so far, and this despite the challenges we see in the market.

Looking forward in 2026, we expect market conditions to remain uncertain with continued pressure from softening of interest rates. We expect a slight to moderate decline in net interest income, but we are still aiming for stable to growing total income. Loan growth is expected to be in the mid-single-digit range. Cost income Credit cost, we expect it to remain benign at 20 to 25 basis points. But let's bear in mind that we are at the beginning of the year.

I'm crystal ball gazing a little bit. So 20 to 25 basis points is what we are guiding. We will continue with our 50% ordinary dividend payout policy, but we will complete our earlier announced $2.5 billion capital return plan by financial year 2026. Okay. Next, I assume that with a new CEO in town, there will be interest to hear our new strategy. But if I'm wrong, please raise your hand and then maybe I'll skip this section. So when we craft our corporate strategy, there were 2 thoughts at the backdrop in our mind. One is a very deep Asian insights, having operated in this part of the world in ASEAN and Greater China for almost a century. With this deep insight, given the challenges in the marketplace, we want to leverage these insights to capture new opportunities.

So that's one thought behind the corporate strategy. The second is really with an eye to the future. In the 30 years I have been in the banking industry, I witnessed 3 transformation. First, Internet banking; second, digital mobile banking. And now with the rapid advancement of AI, we could be on the cusp of a third transformation. I can't think of it, this could be the fourth because we joined the banking industry, there were still tech writers around and we migrated computer processing.

Next page, please. We have identified 5 megatrends and we group our thoughts into 4 strategic shifts to drive these mega trends. Asia, tech, net zero and franchise shift with ADD at the center. ADD stands for AI, digital and data. Now we quite easily put AI in the center. There's some thought process behind that, and we did choose ADD. We don't think AI alone can give us all the synergy we want. So we want to view holistically using AI, digital, data, focusing on customer journey holistically, focusing on employee journey holistically to get the synergies we can get. We also think that the AI technology, some are more mature and can give us benefit, and we have already created synergies out of that. But Agent AI is a very promising field, and that can give us even more bang for buck.

However, the technology may not be ready today, but it is a fast advancing field. So as a result, our focus on customer journey supported with a deliberate digital and data strategy make us AI ready so that when the AI technology is mature, as and when it's mature, we plug it into our system. So next page, Asia shift. We want to capture opportunities from a rising Asia. Even though we may be carried away and be confused by the uncertainties in the marketplace, ASEAN is actually a good place to be in. We are seeing a rising Asia with rising intra-Asia trade, rising intra-Asia investments and wealth flows. Indeed, ASEAN is projected to become the fourth largest global economy as a block by 2030.

We are very fortunate that our core markets, Malaysia, Indonesia and Singapore account for 60% of the GDP of ASEAN. If we include our branches in Vietnam and Thailand, we can cover 85% of the GDP in ASEAN. To do this effectively to leverage our single branch presence besides our core market presence, we are working on digital solutioning, especially upgrading our transaction banking services to provide one ASEAN value proposition to our customers. We will continue to leverage our twin hubs in Singapore and Hong Kong to capture high net worth wealth flows. This is not a new strategy. It's an existing strategy, and we have experienced high growth, and we will continue to tap on this. Next. The second strategy shift is the technology shift. With advancement of technology, we have an opportunity to create a customer-centric ADD strategy where we gain a better understanding of the customer through technology in order to deliver to the right customers, the right products at the right time. So we are going to make investments in this area and grow it. We have also been very successful in identifying and expanding our coverage of TMT sector in the last few years.

We have managed to register double-digit growth in the past 3 years. We managed to ride on the AIQwins to finance digital infrastructure such as data center, but we are also in financing the tech supply chain. The third strategic shift, net zero shift. Sustainability remains very important for us. And we will continue to help reduce carbon emissions by financing renewables and greening of industries, including support for SMEs. If you really think about the content of that sentence, it means that we are trying to make a difference to the environment. The fourth strategic shift, franchise shift. This is a very big slide because we attempt to cover our 4 core markets. For this briefing, we have distilled a slide to focus our discussion on the several big ideas. We have hubs, and we have the ASEAN domestic markets.

In Singapore, we are unique compared to other competitors that we have the full capabilities in OCBC, Bank of Singapore and Great Eastern. This gives us a unique opportunity to deliver what we call the whole of wealth value props across banking, wealth and insurance. But if you want, you can call us as a WO strategy. We have product capabilities under each of our wealth units, and each of them have their respective customer base. Under the whole wealth initiative, we want to have a much more integrated and coordinated effort in delivering our services to the whole wealth continuum. To underline the importance of the whole wealth strategy, we have set up a wealth management committee starring Greg, Sunny and Jason and myself to -- I don't know whether they'll give me a starring role or I'm going to be a supporting actor.

Anyway, I'll be sharing the wealth NC because it's a really important initiative for us. Hong Kong is a gateway city for Greater China flows, and that positioning has not changed. It is also an affluent city. We want to grow the affluent segment in Hong Kong. Last year, OCBC premium banking in Hong Kong grew 70% year-on-year. As Hong Kong is a financial hub, we also want to scale up our Hong Kong global market business, and this is a really important initiative. I emphasize, we are trying to crystallize and distill the ideas for easy presentation.

So when it appears here, it's actually really important. So in Malaysia, under ASEAN domestic markets, Great Eastern's customer base, you may not be totally aware. The customer base of Great Eastern Malaysia is almost the size of half of Singapore's population. So the bank and Great Eastern in Malaysia can work together to deliver value propositions to the customer base. It's an immense opportunity here. For Malaysia, we are also very excited about the Johor Singapore special economic zone, given our presence on both sides of the costway. We have already financed more than MYR 15 billion worth of projects. We have 4 branches in Johor Baru to serve our customers, and we are seeing very good business flows. Indonesia, Indonesia is a very big and fast market. We will be embarking on a digital digital journey to serve this market effectively. Although we have more than 200 branches in Indonesia, but we don't think it is sufficient to cover such a big marketplace. We also aim to extend our OCBC Indonesia services to the wealth customers to move them to cover the higher end of the wealth spectrum. As part of our whole wealth strategy, to help OCBC Indonesia differentiate its value proposition as we move up to the higher end of the wealth spectrum, we can tap on the insights and capabilities of Bank of Singapore.

So I wanted to illustrate with some real-life example of what is meant by the whole of wealth strategy. As an integrated financial services group, we are able to address the need of seniors across the entire wealth continuum. And this is very important as Singapore enter a super aged society this year. So if you look at the 3 columns, on the left, for seniors who need simple banking needs, we have OCBC senior care with special deposit rates and OCBC care ambassadors to assist. In the center, for business owner and ultra-high net worth, they have other considerations such as a smooth transition of business leadership for family business to the next generation.

High net worth families also are very concerned about preservation of wealth and how to do the intergenerational transfer of wealth. Great Eastern is able to provide protection as well as annuity income for seniors. So this is just examples of the wealth product services we can bring to the table as an integrated financial services group. Now interestingly, if you look on the left-hand side, smart tax resizing in the OCBC app, it's actually quite important. When we announced this feature, I have a lot of friends taxing me and congratulating me on this feature because they think that this is exactly what they need.

So I think this also suggests to you the age of my friends. Next, somehow I feel very compelled to talk about gold in the current climate. We have actually embarked under the leadership of myself since last year to come up with a comprehensive growth strategy. What you can see on the slide is a sample of our gold products. So again, we are trying to serve the whole wealth continuum. We have customers who have simpler banking needs who are not used to go investment. We have our OCBC app under our consumer financial services, which allows an easy entry into gold investing. They can buy 0.01 hours of gold as low as 0.01 hours of gold, that translates to less than $100 investment in the CFS app. if want to know the customer experience we have put in for this product, well, after the briefing, please don't do it now. But after the briefing, you can try and buy $100 or $1,000 or $10,000 worth of gold in our app.

The second, there are customers who want to buy gold, but don't want a hassle of storing gold at home. And Singapore being a safe haven is also an ideal place to go. So we have launched a gold fund under Lion Global, which addresses this need. Right now, it's focused on large institutional investors and high net worth. When the customers want to exchange the units for gold, they can do so. The final product feature here is that we have launched an insurance product, which combine protection with investment-linked plan for growth under Great Eastern. Next slide, please. So we are forging ahead in summary with our new frontier of growth strategy. It is very much a growth strategy. And because we are going to focus quite a lot on higher returning business, businesses which requires less capital to support the business, we expect stable to improve ROE.

So with this, I end my presentation.

All right. We will take questions. Maybe we start with the journalists and we'll come to the analysts. Okay.

Congratulations, OCBC on your beat and also wishing for a very successful journey and leadership. Looking forward to writing more about you in future. I have 2 questions for you and one for Brett since you are here. For your 3-year plan, you mentioned ROE. Could you give specific numbers what kind of ROE you expect by the end of your implementation of the plans -- also for excess capital with some analysts estimates at about $2 billion. Could you share on capital management, whether -- how you are going to do this? Any extension of special dividend, any M&A on the cards? Second question, you mentioned growing private banking in Indonesia. What's the opportunity there that you see? You mentioned high net worth, the higher end. Also, please share your thoughts on the turmoil that the country is in and where -- how do you look to manage the situation? For Greg, I mean, Singapore just saw a record high single life policy issued here by your competitor. What are your plans on the high net worth segment?

Okay. Firstly, that wasn't 2 questions. I thought at least 4 questions. So we are at the early stage of implementing the new corporate strategy. I think we are not ready to share the ROE. But directionally, we have positioned it. We have planned for it to be uplifting ROE. So as we execute the strategy, we will probably be more comfortable to share more insights.

Second, on the excess capital, we have a new strategy and the new strategy is very much focused on growth. So we need the capital to support the growth. Although I did talk a lot about the wealth business, the loan book remains important, and we do have a couple of businesses, which is focused on the loan book, such as, for example, financing tech, financing sustainability, and we intend to continue to grow as much as we can.

So with a growth strategy, we will need capital at this point in time. I will also point out that we use our insights to capture opportunities, but the world actually has a challenging environment. In fact, right now, as simple a question as what is the trade tariff being levied by banks by the U.S. is also very uncertain. So nobody even really know how you will land and how you evolve. So given such a climate, we also want to hedge the downside by making sure we have a strong capital position. And when the downturn happened, we also want to take the opportunity to acquire things where it fits our corporate strategy.

So yes, in short, we will stick with our dividend policy of 50%, and we will complete our capital return as in 2026. Then for future dividend, it's still a 50% dividend policy, but with a growth strategy, it can translate a higher dividend even though it's a 50% dividend policy. You have a question on the turmoil on Indonesia, correct? See, I listen to all your questions very carefully. turmoil. I would say Indonesia, we have been there for 80 years. We have seen up and down. We are a long-term player. We continue to be invested and is very committed to the Indonesian market. It also appears in my strategy as part of the ASEAN domestic market. I spoke about it being a very big market. I spoke about the potential for us to use digital model to continue to grow market share. So the turmoil will be there, but we will continue to execute our strategy.

In terms of moving up the spectrum for the high-end customers, I think Indonesia is a market where we don't want to say the customer is either a high net worth or a PC type of premium because actually, the behavior of customers, there's quite a bit of overlap. A customer high net worth and they overseas wealth investments, but they also have wealth domestically to deploy. Also, because the market is very large, there's still a slice of customers which we can aim to target to grow our wealth business at the higher end of the wealth continuum. Have I answered the question or your questions?

I'll pick up on the Great Eastern question around high net worth. And so quite a timely question, actually. So yes, we see this as a very significant opportunity for Great Eastern. It's a segment that we've probably been underweight in historically. It's been a very fast-growing segment, obviously, and particularly here in Singapore, given the international financial center status.

So you'll be hearing more from us next week actually on our high net worth strategy. We will be launching the first phase of that to the market. So we will be announcing something next week. So I can't talk about it in detail now, but you'll see the first evolution of Great Eastern really focusing on that segment. Why? Because we have a large number of customers that we serve already that have those needs. And obviously, I operate within a group that has a private bank and a very large retail and commercial bank with a lot of wealthy customers, and we want to be serving those needs more effectively. And working more closely with the parts of the bank to bring best-of-breed solutions, not just on insurance, but investments as well to our client base as well as the bank's client base. So it's a big opportunity. You will be seeing a lot more of Great Eastern in the space, and you'll hear more about that next week.

This is Yong Hong from Citi. I just have 3 questions, 2 on capital and one on your new strategy. And firstly, on capital, the 14% target CET1 ratio was in the deck and gain. So just wondering how do we reconcile this 14% CET1 ratio with your new strategy, which appears to be across capital-light business. And you also talked about conserving some capital for M&A. So how much capital or any ballpark number will be helpful just to understand how much will be conserved for M&A? And maybe I'll ask my second question later.

Okay. That will be your third and fourth question, not a second. The first question is our target CET1 in the near term, we are still aiming for 14% I think it really depends on how we execute our strategy and the market environment. If we grow very fast, we actually will need more capital to support. On M&A opportunities, we are always keen to look at M&A opportunities as long as there's a strategic fit. But it's very difficult to say how much is set aside for MAA because it really depends on the size of the opportunity. So we'll look at the opportunity as and when required and our capital position there and then.

Maybe second question, again on your $2.5 billion capital return. $1.5 billion is done by specialists, $225 million done via buybacks, leftover of $800 million or about $0.18 per share. And this time, you didn't talk about 60% payout ratio like what you did last year. So any high-level view on how this $800 million remaining capital can be returned? Because if you're thinking about OCBC profits growing year-on-year, your payout ratio will be above 60%.

We will continue to execute our share buyback plan in FY '26. And if we did not acquire as many shares as we would like to, we will return capital via special dividend.

I think on buyback previously, it was communicated that 1 year ago, at current multiples, it may be more beneficial for shareholders as dividends. So just wondering your thinking on balancing buyback dividends.

My preference is that between -- between return of capital via share buyback versus special dividend, I have preference for special dividend.

Maybe just one final question to wrap up the strategy.

Maybe I want to add on finish. If you really think about our shareholding base, we have a lot of long-term shareholder. I think a special dividend actually rewards our shareholders in a in a broader way. If we do share buyback, basically is shareholders who return the shares back to the bank. So I think there's a slight difference in terms of thinking. So we really want to reward our long-term shareholder base.

And maybe just one more question to wrap up the strategy. You talked about many noninterest income opportunities across OCBC Bank, Great Eastern and also Bank of Singapore. Any high-level numbers or target that we can think about for noninterest income in the near term or in the longer term? And how does that translate into higher ROE for your long-term targets? These are my questions.

We are aiming for double-digit growth in noninterest income. If you think about our guidance just now, we expect loan business to be mid-single digit. We will calibrate the deposit business to what we need for loan business so that we don't overpay for deposits at least for the high-cost deposit. such as FD. The second -- so if you look at the mix, if we are growing noninterest income at a pace of double digit for wealth and then even for the wholesale bank, we are still aiming high single digit to double digit as well, the mix will change, and therefore, it will help us in the returns.

I will go to Reika from Bloomberg.

Congratulations. I'm Ruika with Bloomberg, and I have a question for you on AI. You've been adding RMs to drive wealth growth. As AI and digital tools become more embedded, do you see that hiring pace continuing? Or will there be a point where technology starts to replace some of the roles in the bank?

That is assuming if the business don't grow, we intend to grow our business, and we intend to grow in all the segments of wealth, whether it's premier, PBC or the high net worth business. Because of this, some of the businesses such as high net worth business is you require attention to the customers, you require the human touch. We will use AI to help them to do their job better so that they can become more productive.

So in the Bank of Singapore business, for example, we have already implemented AI, which helps to shorten the time taken and be more efficient in the curation for the KYC assessment. So that has been very helpful with the -- from that perspective for the RMs. So the answer is yes, as we use more AI technology, the ADD strategy, we will address the lower end of the wealth spectrum more effectively. So that may not require a lot more hiring in RMs. But in the mid- to high end of the spectrum, the human touch is absolutely necessary.

Okay. Can I also just ask a quick follow-up? Which part of the bank is furthest along on AI adoption? And where are you seeing the biggest impact on productivity so far?

Sorry, I can repeat it.

Where are you seeing the biggest impact on productivity so far due to the automation, like which part...

That means our benefit -- when we approach the when we approach it from an AI angle, we look at every opportunity. So it's quite across the board. We look at opportunities. For Gen AI, we use it for some of the branch work where we can save R& time. So we have done that in the wholesale bank. We have done that in the private bank. So this -- we have done it. In the technology side, we also use AI to accelerate our writing of codes to make it simpler and faster.

Let's go to Harsh...

Three questions, if I may. First is provisions guidance of 20 to 25 basis points. What is driving that? It is slightly higher than last 2 years. Any particular segment or segments that worries you? And I'll have a follow-up after that.

Okay. I will take this question first before your next question. The 20 to 25 basis points, we are crystal ball gazing at the beginning of the year. It is through the cycle credit cost, which we anchor our thinking. We hope to do better than that. If you look at the risk spot currently, obviously, we continue to monitor and track the Hong Kong portfolio for real estate. Having said that, we have been tracking and actively managing it for the last 2 years. So what you see is the outcome of our active management. At the same time, we also managed to lift our provision to asset coverage, provision to NPA coverage to 150%. That's pretty high compared to the market average.

All right. The second one is on the 14% CET1. -- by when?

Well, it depends on how fast we deliver the targets under the strategy -- the new corporate strategy. Well, over the next couple of years is what we are thinking of.

So you think in next 2 years, by end of '27, you can get from 15.1% to 14%...

Okay. I want to be a little bit more measured in the response. I think over the next -- when we say high growth, it really depends on what we can achieve. As you have heard, some of the businesses we managed to achieve 70% growth. There are many other businesses in the corporate strategy, especially those which are refreshed on the current strategy where we execute like technology, we actually grow at north of 20% or even 30%. So therefore, you will need the capital to acquire to support the growth. So I can't really give you a timing, but certainly, in the faster we achieve some of this growth target, the faster you reach the 14%.

Right. So I guess the question just take long that, okay, that is the organic aspiration. But if for whatever reason, let's say, organically, let's say, you end up growing in the less capital-intensive segments, is there still a commitment that you will get to 14% CET1 by a particular time frame? How do we understand that 14%? Is it just an aspirational number? Or is it a number that you are committing to deliver by a particular date?

It is a target number. We don't have a fixed time line to say that we need to get to 14% because that's not realistic in real life, especially when you throw M&A opportunities and the way the whole environment is working. So -- we are committed to that 14% over the next few years, but we don't have a concrete time line for it.

All right. And the last one, if I may. You touched on M&A. What kind of gaps in the overall franchise as you would have gone through the different businesses, either geography or business, where, let's say, over the next couple of years, you would want to supplement with some kind of inorganic opportunities. So any kind of details you can talk about broadly, that would be great.

Okay. In terms of geography footprint, we are very committed to our Twin Hub and ASEAN domestic strategy. So if the right portfolio come along, we will be very keen in these markets. So stay in this part of the world.

I have 2 questions. The first one is your assessment on the latest Trump situation, especially following the court tariff ruling. Do you see like a better or improving environment going forward? And the second question interestingly is on your gold product launches. I just want to get more details on is it something new that has just been launched? And if yes, how has the reception by the customers has been? And the other thing, I would presume that OCBC has a physical [indiscernible] of gold, right, just for this product. And lastly, I want to get your view on -- broadly on the gold as an outlook on gold.

Okay. This is -- this is a very difficult and as well as easy question, which I said so in the past when it comes to trying to predict President Trump's policy. I have always maintained that the trade tariff situation has not worked its way to the whole economy. Part of the reason is because the supply chain take time to absorb that. But more importantly, is actually since liberation date until now, trade tariffs has been changing and it's not quite settled globally.

So it does affect a lot of investment decision. So we are still in uncertain time. What I really want to focus is are the fundamentals. And this is where we come in with a position of strength. We have a strong balance sheet. We know our location well. We are very forward-looking with our deployment of ADD. So using this, we are actually looking for opportunities to help our customers to help grow our business. I wanted to point to last year's outcome. If you look at last year outcome, aside from the wealth business, if you look at the loan business, we expanded high single digit.

On a constant currency basis, we almost approached double digit. So we are able to navigate this environment quite well. But having said that, I still want to be cautious because the environment changes so quickly, just like what happened in the second quarter. We never expect HIBOR to take a dive trip all the way down and then we surface up again, right? 300 basis points overnight is a very big movement.

Your second question is relating to gold. We had some gold products in the past. But last year, we became very concerted about our growth strategy. In terms of the numbers, I'll invite our [indiscernible] had to share some of the outcome.

Yes. Maybe I can provide a little bit of context. We have gold trading on our app since 2024. In 2025, we grew 8x. And for the first 2 months of this year, we're almost at last year's level already. We do not have a physical gold. We don't do physical gold in the OCBC. And so this is -- because I think it's a lot of it's very cumbersome for customers to buy, to sell back the goal and the goal has to be intact in the wrapping and all these things.

So I think we -- and we -- through the studies, we see there is a segment of customers who prefer to just buy on the app, right, because they just want to enjoy the price appreciation of the gold. So it's a very hands a free and convenient way and you can do it anywhere, 24/7 at night, you feel like buying, you just buy off the app itself. I will supplement that the CFS app, the OCBC app is very user-friendly.

So although I talk about like the hurdle to invest is set low, but actually, customers who could be a higher net worth may also use this app to buy because of the sheer convenience. Of course, they also may buy even bigger amounts through the RMs. For GO, we -- the reason why we decided to focus on GO last year was also because we saw some trends. We saw central banks buying. We saw a lot of retail investors' interest. We saw a lot of the basement trade as well. So do you want to say something Ken?

Yes. Just to add. So currently, as Tong and Sunny alluded to, our GO offering is unallocated, so paper go, and that's being offered on our online platforms or through voice as well. We also offer that 24/7. So even after the GO market closes after New York hours, we continue to offer pricing to our customers over the weekend.

So that's unallocated goal. Now in terms of how we are approaching our growth strategy is twofold. Basically, one is custody on chain and out of chain, right? So the out of chain business is something that requires a bit more thought because that involves basically retail clients buying gold and taking out. So from that point -- from that perspective, we feel that our current offering is adequate enough and we've actually been gaining a lot of traction in terms of just offering paper go. But that's something we are continuing to explore to see whether it makes sense. The custody on chain business is that's where we're going to be offering physical gold, and that's mainly to institutional clients, and that's also to high net worth clients. So we -- so your question towards do we have a vote. We have a vote with our custodians because in terms of offering allocated gold, physical gold to institutions, you probably need to custodize that with reputable custodians today.

We'll take a question online.

Sorry, it's Nick from Morgan Stanley. Hopefully, you can hear me. Congratulations on the results. A couple of questions from me. First of all, I just wonder if you could talk a little bit more about your Malaysia wealth strategy. It sounds quite interesting. I'm just interesting how you're thinking specifically you will tie together the sort of 3 bits of the business to deliver on that.

Second, linked to that, I mean, obviously, you've done a big review of wealth. And I'd like you to just explain to us how you think you are competitively positioned, especially in the Bank of Singapore space. What makes me become a client of Bank of Singapore rather than, say, a Standard Chartered or a DBS, for example? And then just finally, a small question. I noticed a big uptake of the dividend from Great Eastern yesterday. So I just wondered if you could talk about sort of dividend policy at Great Eastern and how you're thinking about getting capital out of Great Eastern and into the bank.

Sorry, what was your last bit? I miss how do we get the...

So Great Eastern Great Eastern dividend stepped up quite nicely. I think it almost doubled yesterday, full year. So I just wondered if you could talk a little bit about sort of capital policy for Great Eastern and how you're thinking on getting capital out of Great Eastern and into bank.

Okay. Yes, I'll leave the easier question for Jason and Greg. For Malaysia, we are reenergizing our consumer financial services. And so we want to target the premium all the way to the higher end of the wealth continuum. In Malaysia, currently, we have a lot of competitive advantage because GE actually services a customer base equal to half of Singapore's population.

So that will keep us really very busy thinking of how to deliver value proposition to the customer base. Now we must bear in mind that in all the wealth business, we need to segment the customers and understand the need of the customer in order to deliver the correct journey. So this is our thinking in Malaysia to give us an edge. under the whole wealth initiative, the other units of the bank, such as Bank of Singapore, which actually publishes their insights and the strategic allocation of asset view will also be helpful to grow our wealth business in Malaysia.

Now I will ask Jason to address the question on how competitive it is and Jason, please.

I don't necessarily think it's the easier question, but I will try nonetheless. So thank you very much for the question. So for the Bank of Singapore, we've spent the last 3 years really building out our intellectual capital and our thought leadership. So in 2024, we convened our Global Advisory Council to identify super trends, which our clients have been able to capitalize and build on things like digital infrastructure, AI trends that we hope clients will benefit for multiyears.

Teck did talk about a strategic asset allocation model, which we've developed proprietary to Bank of Singapore, which we will make available also over time to the OCBC ecosystem in general. We also have a best-in-class transaction engine with pricing and speed capability that is probably top of the market right now. So I really feel confident that clients who bank with us also get the benefit of Bank of Singapore's intellectual advice and investment capability, plus with the backing of OCBC, they have an access to a broader array of services, both on the corporate side where needed and obviously, over insurance and banking capabilities. So I think combine all of that, we've got a very strong proposition to stand out amongst all the other private banks.

Do you want to cover...

Just on the Great Eastern dividend policy. So we have a progressive dividend policy. So we won't go backwards based on the dividend we paid this last year. So even if it's a volatile year going forward, shareholders are going to get this at least the same as what they got previously, but our policy is actually to move progressively up to 50% payout. So we will be paying out more as we go forward. And obviously, we will be looking at opportunities to deploy that capital. So we will be looking to grow the business substantively over the next few years. So we will be investing significantly in the business. So we will be using that capital to grow the business organically. And we are also looking at inorganic options, as Tan mentioned earlier.

Business.

I just have a few questions on the wealth management side. Firstly, it's on the new sort of wealth management committee that the CEO talked about. Maybe you just share why setting up this committee is important and more of the thinking behind it? Second question is on the whole of wealth strategy. Does this also mean basically we might see a more concerted effort in cross-selling across all the different parts of OCBC? And does this mean changes in perhaps how teams work or how teams work together across the different parts of the bank...

Answering the second question first, yes, indeed, it will be a much more concerted effort working across the whole group. Right now, there's a lot of collaboration already which exists within the group. So a lot of the product owners and the customer segment owners have been collaborating. But what we really want is to be even more ambitious and think about the whole group as in not just Singapore, not just in-country collaboration, but also a global collaboration. So I think that's one big change.

Now -- the wealth business is a complicated business. Sometimes we think in simplistic term, high net worth, PPC, premier. But actually in real life, it kind of overlap because some high net worth customers will prefer to be in PPC, some premium are premier only because we haven't managed got the AUM from the other banks yet. So it's a whole spectrum. Now in any management construct, tone from the top is very important. With this wealth MC, we will have a coordinated home from the top where the 3 wellhead will jointly lead wealth initiatives, which cuts across the whole group, whether is it getting the benefit of ADD strategy, whether is it get the benefit of new product launches, whether is it mutual support for our products, like, for example, we have a high net worth strategy, which Greg just spoke about for GE.

You can just imagine the potential if we take what they have. Of course, we haven't reviewed the full plan yet, so I shall refrain to talk a little bit more. But it's very exciting. The way I look at it, when I evaluate the plan for high net worth for Greatystern, I can see so much synergy with Bank of Singapore customers. Well, wealth is important. But at some point in time, health is also important. So this is a teaser for the future yet to be launched high net worth strategy. So in short, everything starts from leadership. That's our belief. So we have set up the leadership correctly to make sure that we have a tighter and more coordinated approach to wealth to deliver value to the customer. If I can add on a little bit. I think in the past, we will look at customers from our own business perspective, and we tend to collaborate. But I think what we are doing things now is we look at the customer and how all of us can chip in and make the customer experience to be seamless. And customer move through different life stages.

So I think it's important that we are there to cater the customer journey from end to end and all we just take a look and see how can we chip in and make customer at the center of everything that we do and instead of just looking at our own business perspective. Can I share something a little bit more BAU. On a BAU basis, all the wealth units have their own system and processes reengineering to get more efficiency and productivity. With the WealthMC, will be much more coordinated even in systems investments. So that will also give us benefit. If all the wealth MC members decide to do certain things, then we can start to plan which unit go first, which is the one which can get the most bang for buck and then after that roll it out. We can test new products with certain customer segments across some of their units before we roll out to the broader customer base. So there are a lot of synergies beyond like let's just go for a coordinated strategy with the middle management working middle management. So I think this is really the tone from the top.

Take another question online...

I just have a follow-up on the wealth to be the first question. I think you talk a lot about it and there's a strong focus. Maybe just put it into numbers for us. What are you thinking in terms of your AUM target growth or your fee growth? You talk a lot about the revenue synergies and moving on that part, but will there be cost synergies as we work together? That's my first question.

We are not ready to talk about the AUM target of flows. But if you look at our revenue target, we continue to aim for double-digit growth in wealth. So you can -- it's underpinned obviously by AUM flows as well. and transaction volume based on the AUM. Now would there be synergies, cost synergies across the wealth group? The answer is yes. When we develop system, a lot of the systems -- in today's world, we think about micro services. So as we create micro services, we can then use that and replicate it across the wealth unit and also where it's applicable across the whole OCBC greater group. So I think there's a cost synergy as well. We will also be thinking about the human resource, how to equip them correctly to make sure that we have the ideal mix of product specialist and the RM. So quite a lot of synergies there in terms of cost synergies.

Right. Maybe just in terms of some housekeeping questions first. On the NII guidance, I think at the bottom of the deck, it says that you are looking for SRA at about 1.4% and NII then will decline. Do you know where SOA is today and if SA stays at the level today, does it mean there will be more downside for NII? Or are you protected from some of the hedges that you have put in place?

Currently, we have done a -- we have a house view on SORA. We know that SA is a little bit low now. The house view is that SOA could retrace. So it's at 1.4% assumption. If SORA is below 1.4%, there will be downside risk to our revenue expectation.

Right. Okay. And then lastly, maybe just a quick one from you. In terms of your strategy, I mean, just to be a bit picky on it, you said stable to rising ROEs. Just wanted to understand the risk or the thoughts on where or how or why we would be stable in any case in the, let's say, in the 2-, 3-year phase?

Actually, currently, the bank is still digesting the effect of NIM compression. So that is a big uncertainty. So that's why we are a little bit cautious. Despite the uncertainty, if you just look at our guidance for 2026, we are still aiming to grow total income. Now the NIM compression has a direct impact on ROE. So that's why we are a little bit more reserved. Otherwise, as a corporate strategy, we will just say that we can uplift the ROE. So it's really the NIM environment, which is uncertain.

Right. Maybe if I can sneak in just one last one. I think Great Eastern said that they will be looking for rising dividend numbers, EPS numbers on a total basis. Any thoughts on the group for OCSBC as well? Do you think that we can also have other than the 50% payout, a step on rising...

I think for 2026, we have our ordinary share dividend, and we probably will be looking at share dividend moving from a share buyback to special dividend if we cannot complete the share buyback. The dividend policy remains at 50%. If we grow our revenue, if we grow our profit, that 50% actually translate to a higher dividend. So our policy remains unchanged. In fact, what we aim is to sell a steady ship to this choppy water, whether it's a capital position, whether is it the way we do loan business.

Maybe we have not been selling ourselves about how well we have done, for example, in the loan business, challenging market, we managed to be higher than system average growth in the last 3 years. Despite the challenge in Greater China, you don't really see our NPL rate going up. You see provisions. In fact, we also took the opportunity to increase our ECL too and just that our provisions right now is 1.5x of the NPA. And for those who might not be so familiar with this ratio, NPA is a whole nonperforming asset. It's not -- and our nonperforming asset, especially when it comes to real estate is typically also secured. So you won't lose the whole loan, but we don't need to go there because we are already at 1.5x of NPA. So if you really think about the whole thinking, actually, we have done very well.

Can we have [indiscernible] from the edge, please?

Congratulations on your good results. And I'm also happy to hear that you prefer special dividends to share buybacks because the analysts love share buybacks. So I have 2 separate questions on 2 separate topics. First, on the NPAs, which I mean you've done you've done very well on your credit costs and versus what your peers have reported. So what differentiates your sort of credit risk management from your peers? So that's the first question. And the second question is that in terms of your -- you've got a capital-light focus in your new frontier strategy. So I'm just wondering whether if you could -- I mean, I know ROEs are difficult over this year because of the NIM compression. But in the next 2 years or 3 years, could you get to the mid-teens or towards where your previous bank got to? That's the second question. And the third question is the first time we mentioned the word China was what you just said a moment ago. So there appears to be a geographic shift to ASEAN from Greater China because there was a sort of Greater Bay Area focus previously. So I'm just wondering what are you looking at? I mean I know you've talked about it, but are you looking at in terms of organic opportunities. But what about inorganic opportunities? Does your ASEAN shift include that? So those are the 3 questions.

Sorry, just a matter of clarification, you are referring to inorganic shift in China?

No, I'm referring to the inorganic. I mean, you've got a shift to ASEAN -- is there any inorganic opportunity there...

Okay. I cannot comment on other banks credit policy. For us, we took a very conservative view have been observing ahead -- slightly ahead of the -- if I were to judge based on the questions relating to Hong Kong CRE as a thermometer on -- focusing on the issues there for real estate. Actually, even before that started, we have started to take positive action. We have actually stopped growing the higher risk segment and degear that part. Our growth in Hong Kong, you will see that we are still growing, but we are focusing on loans to quality customers. Secondly, when it comes to provisioning, we have been -- or way we managed our cases, we have been very proactive in downgrading the cases. So as we downgrade the case, our system is just that ECL 2 would also increase.

So automatically, there's a buffer zone even before it go to ECL 3. And where the situation warrants, we will downgrade into ECL 3 and have more provisioning. And that provisioning is quite conservative. So this is how we have been managing it. Our peers, I cannot really comment. On the second question, help me along. You were talking about capital-light and NIM compression compared to the peer.

Okay. I want to be very grounded in the way we think about strategy. We are at the start of execution our strategy. I think in 1 year time, we will have a better picture on what works well, what works really very well. And then maybe at a point in time, we also the NIM impact digested, then maybe we are more ready to share some thoughts on what could be a guided CET1, what could be a guided ROE.

Okay. The next question is -- so you have picked up the messages. Thanks for picking up the messages. Indeed, there's a pivot to focus on ASEAN domestic market. Hong Kong remains important to us. So like what I mentioned, what we have done in that slide relating to franchisee is a very big slide. We did not include a lot of the BAU stuff, which we are also gaining momentum. Like, for example, loan growth in Hong Kong, despite the challenge, we managed to also keep the loan -- I mean, it's a bit slower growth than the rest of our franchise, but we also managed to grow our loan franchise there. We also managed to grow our fee franchise across the wholesale bank, across the wealth business. Our fee growth in Greater China in global markets is also double digit from customers. So very good set of results. I just did not have time to go into detail. So Hong Kong is important. ASEAN, there's huge opportunity for us. If there's any inorganic opportunity in ASEAN, we will certainly want to take a look.

Let's go to the next question.

I just wanted to clarify on the $2.5 billion to be returned completed this year. Can I just confirm that the remaining amount is in the low $700 million? I think Yong Hong mentioned $800 million, but I had a different number. And then I think you've made it very clear that you prefer special dividends. Would you sort of look at spacing that out? Or would it all come at the end of the year if you don't do the buyback? Because I guess we've become accustomed to seeing it sort of sequentially. So it would be great to see that consistency would be keen for your thoughts. And my second question is just on the strategy, which was very helpful. You've sort of kept the guidance though at pretty consistent costs. I just wanted to know if any of the strategy is going to require any significant investment? Like would there be a period where the cost will be higher in anticipation of better revenues and better growth later on? It would be good to understand the thinking on that.

Okay. Chin, you want to take the question on the share.

Yes. Jan, you asked about the share buyback remaining portion, whether it's $700 million or $800 million, it's about $780 million...

Because we have done 22% of the $1 billion.

Okay.

Just the timing, like when would you -- if you don't actually -- because you've been buying back based on market conditions, right? If you actually deploy it, would you do a special in the first half?

Yes. We mentioned that remaining of that $780 million, if we do not continue to execute our share buyback for cancellation, we will return that in the form of dividend by financial year 2026.

Thank you. On the execution strategy, yes, we are the on-site execution of a new strategy, and we have a refreshed ADD strategy. ADD strategy is about strategy. It's also about culture. It's also about how do we get value out of our ADD efforts in a more concrete manner shall we say, right, so that we have visibility, right? Now there will be investments required, but we are cognizant of the trade-off between cost-to-income ratio during the gestation period. So perhaps during the gestation period, we will have slightly higher cost-to-income ratio, but we keep an eye on it. So in my last slide, I actually also explicitly stated that we will keep the cost-income ratio within a certain range. So we could pace our investments, for example, I mean, there's a trade-off, right? So we will do that trade-off to measure the cost-to-income ratio, maybe a couple of percentage points for investments, but we don't want to deviate from the 40% to 45% guidance.

We'll take the last question online...

I just have 2 very quick questions. First one is on -- I just want to hear your thoughts on GE and whether there's a need to pursue another buyout in the near term, given how you've been talking about GE as being an important part of your wealth strategy going forward? And second question is on whether there is any exposure to private credit, both your direct lending and indirect through the wealth management distribution business. Maybe some rough numbers on the percentage of AUM in private credit would be very helpful.

For GE, we have initiated the excise and complete the to buy more shares in GE or even to privatize it. So we have -- that is a chapter behind us already. We will not be looking at acquiring more GE shares in the foreseeable future. Secondly, we today own 93.7% of GE. That's good enough for us to collaborate within the group. So we are -- so at this level, we don't feel the need to increase the share just for the collaboration. On private credit, if you have been about private credit in Asia. So if you really think about it, the biggest market for private credit is in the United States. We don't end up in that space. In Asia, well, there are a lot of private credit outfit being set up and so on and so forth. We think we know Asia the best. We have not embarked on any private credit strategy just that we put our -- we took on risk assets. So private credit is not part of -- we don't have private credit exposure here in our book today. So on the AUM front, I think it's less about AUM. It's about us having -- because of the demand for certain high net worth customers, we might have some private credit funds on the shelf for the customers to invest if they choose to.

We have one more minute. If any analysts have a question, we -- I guess we can take that because there were many hands earlier.

[indiscernible] from Bank of America. Just a quick one on the wealth. I mean, extremely strong growth expected on back of a strong 2025 base at double digit. Just wanted to understand a little bit where the net new money, like which pockets is it coming more from? And where do we expect this to continue coming from in addition to the synergies, of course. that we see?

It's actually quite broad-based. Maybe I'll ask the [indiscernible] case to share a little bit on the net new money. Maybe he can ask Sunny will speak for. So I think we -- quarter 4, we saw $6 billion of net new money, and we end up the year with $27 billion of net new money. As said, I think it's very broad-based. I think basically, some of the things that we do are also about engaging our customers and deepening the relationship. For example, I think attracting customers, making our payments very efficient. In fact, if you take a look at our mobile app, we have 10 wallets that we have added the most number of wallet you can see in Southeast Asia, meaning you can transfer money to 10 wallets in the region. And also, if you look at scan and pay capabilities in China, we have Alipay, UnionPay and Weixin Pay. So we are the only bank that has the most comprehensive payment.

So I think it is strategies like this that we are engaging customers. We give them a reason to put more money with us by putting money inside them and they also give us the opportunity to cross-sell into them. And the other thing that we do also is look at the senior care. We launched a senior care. And this elderly, this group of customers tend to be sort of neglected in the way that you can't really sell them too much things. But we coming from a super country that we are coming in 2030. I think this is an opportunity where we really want to engage this group of customers. And there's a whole 2 main pillars that we are in trying to engage them. And we do see customers moving money here as well, and there are many opportunities that we can do with them. And in fact, if I can add one more point. In Hong Kong, right, I think we've done very well. I shared earlier, we are wealthy up 70%. The year before, it was about close to 60% as well. And we also -- and you can see that we are investing in Hong Kong. We have recently just unveiled our flagship branch in Queens Road Central. And what we did there was, I think we also bought the local SME there and Sun. And we are the first in Hong Kong, whereby in the retail bank, we have is a consumer bank branch with a retail concept.

So in our flagship branch in Hong Kong, we have about 100 square feet of space dedicated for customers. Hong Kong love Hong Kong people love Singapore Pan. So we brought our Singapore SME there. It's the first of its kind in Hong Kong and in fact, it's gone viral in Hong Kong, right? A lot of customers are very impressed and their queues forming up. We're probably going to give Jenny around for his money in the queue as well.

Maybe I'll just add on from the Bank of Singapore perspective. We found, especially with 2025, we found a lot of clients deploying their excess cash into investments. So we did very well on the trading front as well. So we found ourselves also being the primary kind of money manager for clients. So a lot of clients have put large amounts of money for asset allocation with us and discretionary portfolio management. So our fee-based business has risen as well. So I think we're trying to migrate ourselves, as I mentioned earlier, into the intellectual thought leadership space and being the main investment -- mean bank for investments for clients in the future.

So I think that's where we are looking to generate most of our revenues from.

Have permission to say something.

She controls the meeting. I just want to -- in summary, says that we are going to be very focused on growth. We are going to be very focused on the customer journey. So all the digital data, these are tools to help the customer journey. Despite the challenges in the environment, we are still going to focus on growth because we believe our Asian insights really give us a competitive advantage to understand where the pockets of opportunities are.

So this is the -- so in summary, we are going to for ahead of our new frontier of growth strategy. So...

With our next frontier of growth that bringing us forward, I will end this morning's session. Thank you very much for joining us this morning. Thank you.

Good morning, everyone. Thank you for joining us to our third quarter results briefing. This results briefing will be Helen's last results briefing. And so of course, we all wish her all the best, and from the fourth quarter and full year results, we'll see Teck Long [indiscernible] next year.

Okay. So without further ado, I'll pass the time to Chin Yee to take us through our results.

Good morning, everyone. Thank you for joining us in OCBC's third Q 2025 results briefing. Our third Q '25 group net profit was SGD 1.98 billion, up 9% from last quarter and largely unchanged from a year ago. This was our second highest quarterly net profit. ROE was an annualized 13.4%. Total income grew 7% from previous quarter. The growth was driven by record noninterest income, which more than compensated for the decline in net interest income.

NII fell 2% to SGD 2.23 billion quarter-on-quarter amid declining benchmark rates. We continue to prioritize asset growth to support NII. Noninterest income rose 24% to SGD 1.57 billion, driven by fee, trading and insurance income.

The strong results were supported by our wealth management franchise, which continued to scale and deliver record wealth management income. Our insurance business also contributed strongly, reinforcing the benefits of our diversified income streams. Loans and deposits continued to register healthy growth, up 7% and 11%, respectively, year-on-year.

Asset quality remained resilient. NPL ratio stable at 0.9% for the past 6 quarters. Total credit costs in third Q of '25 were 16 basis points on annualized basis. Total NPA coverage was 160%. Our capital position remains sound. Common equity Tier 1 ratio was 16.9% on a transitional basis and 15% on a fully phased-in basis. With our solid third quarter earnings, our 9 months of '25 group net profit reached SGD 5.7 billion, 4% below 9 months of '24.

The strength of our One Group franchise is reflected in the performance across our banking, wealth management and insurance pillars. Our banking net profit grew 3% from last quarter, demonstrating resilience despite a declining interest rate environment. Double-digit growth in noninterest income more than compensated for the moderation in NII.

Wealth management income and AUM were at record highs. Our wealth management income grew 25% to SGD 1.62 billion, contributing 43% to group total income. Banking AUM rose 18% year-on-year and 8% Q-on-Q to SGD 336 billion, driven by net new money inflows and positive market valuation. Net new money inflows were SGD 12 billion in third quarter, above the run rate for the past 2 quarters of about SGD 4 billion to SGD 5 billion. Year-to-date 9 months, net new money inflows were SGD 21 billion.

On insurance, profit contribution from GEH grew 50% Q-on-Q to SGD 347 million. This was driven by improved investment performance from insurance and shareholders' funds. GEH new business embedded value or NBEV rose 9% and NBEV margin improved to 48.8%, reflecting GE's strategic shift towards higher-margin products.

Moving on to details of our group performance trends, starting with NII on Slide 8. NII for the quarter came in at SGD 2.23 billion, 2% lower from last quarter. Average assets grew 1%, but this was offset by an 8 basis point decline in NIM to 1.84%. Referring to the waterfall chart on NIM. NIM narrowed primarily from lower loan yields, which reduced margin by 21 basis points.

This was driven by the fall in benchmark rates, particularly the average rates for SRA and HIBOR. The progressive reduction in our funding costs as well as cash flow hedges partly mitigated the compression in loan yields. About half of our loan book is denominated in Sing dollar and Hong Kong dollar. For these currencies, around 80% of our Sing dollar loans and almost all Hong Kong dollar loans are either on floating rates or due for repricing within a year.

The exit NIM for September was 1.84%. At end September, our NIM sensitivity based on 100 basis point drop in rates across our four major currencies of Singapore dollars, Hong Kong dollars, Malaysian ringgit and U.S. dollars was about 11 basis points on an annualized basis. On NII -- sorry, on noninterest income now. For the quarter, noninterest income was up 24% Q-on-Q, supported by broad-based growth across fee, trading and insurance income.

For the 9-month period, noninterest income grew 10% year-on-year to a new high of SGD 4.14 billion, listed by the same growth drivers. Fee income was a key contributor, increasing 24% to SGD 1.8 billion. Our fee income reached SGD 683 million in third Q of '25, up 18% Q-on-Q and 34% year-on-year, driven by higher corporate as well as wealth customer activities. As can be seen from the chart, our fee income has maintained an upward trajectory over the past 5 quarters, contributed mainly by the strong momentum in wealth management.

The record third quarter wealth management performance lifted our 9-month fee income to a new high of SGD 1.8 billion, up 24%. Wealth management fees surged 35% to SGD 923 million, contributing more than half of fee income. Compared to last year's, customers deploy more funds into investments across all wealth segments with around 60% of banking AUM invested. Trading income for the quarter was SGD 518 million, up 38% Q-on-Q.

The strong growth was driven by customer flow treasury income, which was at a quarterly high. Noncustomer flow trading income also improved, reflecting better investment performance across our global markets portfolio as well as GE's shareholders' funds. For the 9-month period, trading income was up 4% to SGD 1.29 billion, underpinned by record customer flow treasury income. The growth was contributed by both wealth and corporate segments.

Moving on to expenses. Our operating expenses continued to be well managed even as we invest strategically for growth. For the 9-month period, operating expenses rose by 3% year-on-year. Cost-to-income ratio was held below 40% at 39.3%. Our loan book remains well diversified across geographies and sectors.

Loans grew 7% year-on-year and 1% quarter-on-quarter to SGD 327 billion. Growth over the past year was broad-based across consumer and corporate segments. In particular, the transport, storage and communication sector grew the most as we focus on capturing opportunities in the new economy sectors and high-growth industries. Singapore housing loans also grew as we build market share.

Sustainable financing continues to gain traction. Loans grew 17% year-on-year to SGD 55 billion and now accounts for 17% of our total group loans. Our overall loan portfolio quality remains sound. NPL ratio stable at 0.9%. NPAs declined by 1% Q-on-Q, largely due to higher recoveries, upgrades and write-offs, which more than compensated for new NPAs.

We remain vigilant and continue to conduct ongoing reviews of our loan portfolio, including assessments on the potential impact of trade tariffs. Total allowances for 9 months of '25 were SGD 466 million, down 4% due to lower allowances for impaired assets. Allowances for non-impaired assets were higher. This included preemptive allowances set aside for trade tariffs and macro uncertainties and adjustments, MEV updates mainly to reflect the weaker economic outlook.

Credit costs for 9 months '25 were at an annualized 17 basis points. Our third Q '25 allowances were higher quarter-on-quarter as we set aside allowances for impaired assets. Our NPA coverage ratio was around 160% over the past 5 quarters. Allowances for non-impaired loans maintained at 0.9% of total performing loans. Moving on to deposits. Customer deposits rose 11% year-on-year and 1% Q-on-Q to SGD 411 billion. CASA deposits grew by SGD 27 billion or 15% year-on-year across both corporate and consumer segments.

CASA ratio improved to 50.3%. Our strong deposit franchise contributed to 80% of our funding structure. All funding and liquidity ratios are well above regulatory requirements. Moving on to capital. Our capital position remains strong. Transitionary CET1 ratio was 16.9%, broadly stable quarter-on-quarter. On a fully phased-in basis, our CET1 ratio was 15%. Our robust balance sheet and capital position enable us to pursue growth opportunities, navigate uncertainties and enhance shareholders' returns. With this, I end my presentation. Thank you. And I will now hand the floor over to Helen. Helen?

Thank you, Chin Yee. Good morning, everyone. As usual, very happy to see faces. I always say that because when I started, we can't see faces. It was COVID. So it's always good to have you at office. Just want to start with some comments on the third quarter results. Of course, it is our strongest quarter this year, and it's the second highest on record. I think we lost out -- this quarter lost out to first quarter '24 by like SGD 4 million.

So -- and it's all in all, a very good quarter. Of course, net profit is up Q-on-Q by 9% and SGD 1.98 billion, of course, and is closest, as we said, closest to first quarter '24. I think we achieved this despite a declining shipment environment through a few things. I think the first thing has to mention is the ability of our diversified business pillars, right, and producing or generating balanced earnings through economic cycles.

And covered by -- as covered by Chin Yee, NII and NIM moderated, but our noninterest income rose 24% quarter-on-quarter to a new high with double-digit growth across quite a variety on fees, on trading and insurance income as well. So to sustain our NII, we are focused on asset growth. I did mention before in some of the other briefing on interest rate cycles, there are always interest rate cycles, they are always up and down.

You cannot rely on high interest rate to generate a wider margin. So the cost of the matter is always to focus on growth and asset growth is important to defend the NII. So -- but equally important is to manage the funding cost. So growing deposits in the right manner, especially lower cost deposits is key as well. So I think we have been able to and we continue to focus on driving regional account openings for corporates and also for commercial banking customers and capturing a lot more cash management mandates.

Cash management mandates are important as they bring in the money and the operating account normally are not fixed deposits because they work on that. And indeed, as you gather the cash management mandate, that means the remittances, the FX, everything comes in as well. So this is what is important. So our robust noninterest income also reflected results of our strategic actions to strengthen our franchise. Be it in wealth and be it in our cross-border capital flow, sustainability, as Chin Yee has mentioned, our sustainable finance is growing well and also some of the newer economy customers that we are able to start to bank with more and more.

Wealth management strategy, of course, continue to play out positively. We are well positioned for long-term growth. As shared by Chin Yee, net new money for the third quarter is SGD 12 billion, and this is quite good, well spread across and contributed by all segments. By that, we mean the private banking side, our premier private and our premier customer wealth segments. Quarterly wealth management fees and income grew to record levels with sustained momentum across all segments as well and product channels.

We do talk about our investing in more relationship managers, but our wealth platform has been very effective for our customers. And indeed, whenever we come up with new products, we will be able to apply across our wealth platform for different segments. Of course, we check the suitability, right? So -- but that means whenever we invest in anything, we can consider to launch on the same platform, which makes our channels very effective.

We continue to deepen our regional private banking and premier banking franchise. RM bank strength, we talk about private banking and also our PPC segment having more RMs. But I think importantly is the products that we develop and the advisory capabilities across the wealth spectrum, including insurance. I think productivity also is another key. Recently, we did announce private bank using AI to have our RMs to do KYC and which has significantly shortened the time spent, meaning they have more time facing the clients, but will be -- continue to be effective and protected.

Trading income, we're happy with it as well, rose 38% Q-on-Q. It's now above SGD 500 million in the third quarter as customer flow treasury income hit an all-time high. This is again both for wealth and also for corporate customers as we built on cross-selling as One Group. And this is not just in Singapore, but across geographies as well. And for insurance, the profit contribution from GE was up 50% Q-on-Q. GE indeed is working on increasing collaboration with the whole group.

And I would say insurance plays an essential role in our Wealth Management business. We have also seen more insurance policy working together with the trust side to -- as a way to protect the wealth of our customer. So we always talk about wealth continuum. This is what we have been working on, and it is important that we continue to have that. So cost-to-income ratio is around 40%. Of course, we exercise quite a good cost discipline as well.

And important to continue to invest in our business, in our people and also in technology. This is indeed for future growth. Asset quality is sound. NPL ratio held steadily at 0.9% since June 2024. And we are closely watching risk arising from trade tariffs, but we've talked about it for the last 3 quarters already. So I think there is, of course, potential impact, but I think we have been tracking well.

Our customers have been managing quite well as well. One sector we remain particularly cautious, of course, Hong Kong CRE is a question that some of you will raise, but indeed, we have been quite cautious. We're comfortable with current level of allowance coverage. I think 160% as an NPL coverage is quite satisfactory. And then coverage on performing loans is at 0.9%. Loans will also grow, I think, 7% and 4% on a constant currency basis.

We have gained market share in Singapore mortgages. And through -- for one example, we have a partner care program, which we work very closely with property agents and to encourage them to bank with us more and also through the referral customers and mortgages to us as well. For corporates, we continue to expand, deepen relationships with new-to-bank customers as well as supporting customers across our international network.

So that is not limited to ASEAN and Greater China, but through our major international branches as well. I'll pass to Teck Long later to talk a bit about that. Flipping the page, of course, we always say there is uncertainty and uncertainty become more complex as well. But happy to say that global trade and most major economies have shown signs of resilience. And of course, this year, in particular, supported by some front loading for trade and also technology up cycling, particularly for Asia.

For this year, we are keeping to our previous guidance on our financial numbers, except for NIM, we want to -- and we are changing it to around 1.9% from the previous 1.9% to 1.95%. Looking ahead, I think as we said, operating conditions continue to be complex and 2026 may see slower economic growth across various countries and geographies. And of course, trade policies can continue to shift. Geopolitical tensions are still there that could have an implication on the demand and supply chains for our key markets, but we do feel that the fundamentals remain resilient, and we are positive on the mid- to longer-term growth prospects as well.

Also want to report on our strategy. I think we refreshed our corporate strategy in 2022. We talked about a 3-year plan of incremental revenues of SGD 3 billion. Glad to report by end of September, we have already surpassed that growth of SGD 3 billion. So hopefully, we'll end the 3-year plan quite ahead. First thing is ahead of schedule, but also above plan. That means the initiatives we all put together and how we work as One Group has bear fruit.

And I think this will shape up well as a firm foundation to capture growth opportunities going ahead as well. We talk about growth pillars, but also fundamentally what is important is a One Group approach, and this is an important enabler. Today, we work much more closer as One Group. That means not just collaboration, but synergy and synergy is both in business volumes and more customer and also synergy in terms of cost savings as well.

So this is important because it is -- as we have more customers and they bank with us on more products and more and more countries and more effectively because we also make digital a very important offering. So I think we are managed to work as One Group together. We are well placed for the future and -- because we still have a very strong balance sheet position and the business franchise.

For 2025, we stick to our commitment to deliver the 60% of dividend payout ratio, and we will complete the share buyback plans by end of 2026. That is still there. So we stay committed. So we now hand over to Teck Long to talk a bit more about the business and the business environment.

Thank you, Helen. I will share two key factors which we are monitoring. One factor is obviously the tariffs. And I would say it's not just the tariffs, but also the broader trade restrictions other than tariffs. We feel that the ripple effect of the tariffs and trade restriction has not been fully filtered throughout the economy. So we are watching this very closely.

Having said that, some sectors are still growing, for example, digital infrastructure, domestic construction boom. So we see these sectors continue to grow. Indeed, from a different angle, because of trade tariff where materials come from, for example, a large market, a large manufacturer market like China, the input cost could be lower for some of these corporates in these industries.

The second big factor is interest rate. Interest rate helps in the sense that the wealth customers start to relook at onboarding risk in their investment. And also for corporates, it has an effect on them evaluating the hurdle rates for investment. Having said that, the overall tone of the environment is still cautious in investing. So I will pass that back to the colleague, Ching Ching.

Right. We'll open the floor now for questions. Maybe [indiscernible].

Yes, so to start off, what does this mean for OCBC moving forward? And what's the outlook for the next quarter and...

Which one? Sorry, can you repeat that once more?

What does this mean for -- [indiscernible] for us.

Okay. It's an exciting set of numbers. We are happy, reflects on some of the investments and the commitment we have made in the past. We did talk about the corporate strategy, where we are focusing on and indeed improving for the wealth segment, in particular, we said we are hiring more RMs. I remember last quarter, we did talk about we achieved the number, in particular for the private bank, we achieved the number earlier than we expected, meaning we hire faster than we hope.

The use of AI has generated a lot more -- some cost savings, meaning we become more productive in a sense. So we hope that this is a good foundation going forward. Fourth quarter since we're going to only announce by next year, and we're only 1 month into the fourth quarter. Of course, we hope momentum is still there.

But generally, the last quarter is a more quiet time for wealth. Normally, it is the case. And we have changed our -- [indiscernible] some of our guidance, meaning we think loan growth can still be mid-single digit. We continue to try to defend our NII. But again, I think the noninterest income sees most results from what we have invested in the past. So we hope this is laying a good foundation for 2026.

Okay. So with AI assisting [indiscernible] helping RMs do KYC, so [indiscernible].

If we have RMs, that's great, right, because they have more time to talk to customers. So they're able to generate business volume. I think I also mentioned in the past with the use of technology, you have not actually seen there is any need for us to say that we have to release people. First thing is because we continue to train our people so that they will be able to take on more complicated jobs.

But the second thing is you invest in technology, it brings on more volume. So you also need the people to do the job. And there's always natural attrition. So I wouldn't say that because of AI, suddenly there will be a loss of job. We haven't seen that, and I do not expect it in the foreseeable future.

Anyone else? [indiscernible].

So one question I had was how critical is wealth management to Singapore's growth strategy right now, especially as lending margins compress? And then my second question is, how do you balance the growth opportunity from ultra-wealthy clients with heightened regulatory scrutiny around money laundering and sanctions compliance.

The first one you're also referring to wealth. And you asked about loan margins?

No. Mostly just how critical is wealth management to Singapore banks right now as a strategy?

I think wealth management has been a very important -- also in our own corporate strategy, it's a very important growth pillar. And the reason being that Asia is getting more affluent over the years. And so Singapore definitely is the center in particular for ASEAN. And wealth management -- and Singapore is a highly rated country. And even you have seen over COVID or some uncertainty in the world, actually, there will be net new money coming into the country.

So that's why this is a very important growth pillar for Singapore banks. And in particular, most research would say that the Wealth business will continue to grow like high-single digit or even double digit, right? Over the next 5 years or so. So that is why it is important. When we say it is important, that means we should be able to handle business in a fair manner. Fair manner meaning that you serve your customer well, but, of course, you stick to your laws and regulations.

And also we uphold to the higher standards, right, because we are responsible to -- not just to our regulators or rules and regulation, it's to our stakeholders as well, right? We defend our reputation, we defend our business franchise. So when you need that history -- to the second question, how do you balance that? I wouldn't even call it a balancing act. We strongly adhere to -- of course, we have to adhere to rules and regulations.

But it is not rules and regulations that Sing -- that keeping us from not doing business. Rules and regulation is there. And if there is no rules and regulations, how do people conduct business. So that's the fundamental. So adhering to rules and regulations, there's no negotiation, yes. And then it is about how do you use your people, use your technology to identify what is not suitable. So KYC is a very important thing.

And it doesn't mean that if you do KYC, you cannot put clients on. But KYC is the way for us to keep away not suitable clients, right, those -- and so I don't think it's a balancing act. It is we need to continue to invest in how we conduct our KYC. The world has become a lot more complicated. That's why AI comes in handy.

Using AI information, it can summarize much better than you put in a lot of manual hours to do it, right? But I want to recap that this is not a balancing act. You just have to do it, but that doesn't stop us from able to put in more customers and offer our service to them.

Maybe Thomas...

So I have a question for them because you just mentioned that digital infrastructure is growing sector, but a significant portion of investment obviously [Technical Difficulty] so do you foresee any possible [indiscernible] or overheating? And how do you monitor?

I think the demand will be sustained. The digital infrastructure is needed because of the trends of companies adopting digitization in their processes. It also has to do with consumer behaviors, individual behaviors, serving the net using video services as opposed to just searching on Google for information. So all these are data intensive and this fuel the growth of AI and therefore -- sorry, fuel the growth of digital infrastructure. Now AI is even more demanding for data center. So this is the beginning of the AI wave, and I think the trend will sustain.

Sorry, maybe I go to [indiscernible] .

I have one question on the net new money inflows. So it's SGD 12 billion, and it's about the run rate of about SGD 4 billion to SGD 5 billion in the past 2 quarters. So I was wondering what changed. And in terms of the geographies, where are they coming from?

It's a good number, of course, and it is also a result of some of the early work we have done, the hiring of the new RMs are beginning to bear fruit, right, because we did say that we accelerated the hiring a bit more for the last 2 years. With that sometimes people say, is this the new normal? I think you cannot see it as like what you call a new normal because a lot depends on the market conditions as well.

And when the interest rate coming lower also help because customers maybe actually be more active. And if you have good products and then, of course, they said, I give money -- put money into OCBC Group because you can offer me good products and give me good investment plans. Generally, fourth quarter is a bit more quiet as we always see.

So don't take it that SGD 12 billion will repeat in the fourth quarter necessarily, okay? But as to the spread, it's quite well spread among our three segments that we report, meaning the private banking side and then our premium and also premier private. And it also comes from various places. It's not limited to -- I'm not to say that it's particular one country contribute the most.

[indiscernible].

I have two questions. The first one is what's the basis of the assumptions for the new guidance on NIM of 1.9% as the basis of assumption? And the second question is how confident are you with the asset quality amid all this macro uncertainty? And do you see any -- foresee any like specific sector stress, for instance, like Hong Kong, CRE and...

Yes. I think NIM, we provide guidance because we have been providing a guidance on NIM in the past. In an interest rate cycle as now interest rate going lower, NIM will continue -- I mean NIM will have pressure, yes. So what we have been focusing this year, which we described in the past is very much protecting our NII, yes. So NIM becomes like a pointer. It's not really like a target.

It is a pointer to help us to look at how -- in particular, look at how we manage our funding costs. And how we defend, of course, our loan margin as well. So I think the reason why we do want to show this is because we have been showing NIM before, and we don't want to misguide because we do see NIM dropping in the last quarter, which would mean that the whole year -- I mean the last quarter and also the coming quarter because interest rates coming down. So that's why we want to provide an updated NIM.

But it is -- it doesn't serve as a target. We say we need to protect that NIM because I said before, interest rate cycle -- I mean we cannot control how interest rate turn, but we can control and we can invest what we can do to bring in more volume to counter that loss and more volume also pointing to more volume on noninterest income as well.

So that is it. The second question is on the quality of our portfolio. We are quite uncomfortable. It has been stayed -- the NPL ratio has been staying at 0.9%. Our coverage, I think, is quite comfortable as well. We do not see any systemic risk. There are sectors that we watch much more closer. It doesn't mean that we foresee something very bad coming up. But of course, nobody can look too far beyond.

Everything is about -- I think Teck Long just talked about it. We always know that there is geopolitical tension, there is trade tariff situation, doesn't mean that it's entirely gone. And so -- but what we can -- what we are more comfortable is we feel that the area we are in still offer a lot of resilience in the economic situation. Next year, maybe the global growth may be slower. But if we are in more resilient regions, we hope that through the opportunities we have identified, through the work and investment we have put in, we'll be able to continue to grow our franchise and to grow our business.

Just a couple of questions. I think you mentioned that there will be some focus on asset growth. Will this be loans? And if so, what sectors? And will it also be on your book, your securities book? And if so, what currencies are these likely to be? That's one question. The second one is, of course, Great Eastern. You said that there were higher margin products.

Just wondering -- and we're wondering what sort of products these were that give higher margins versus what they had been, I think, last year because less powerful last year. And then the -- there's one question which I'll ask to you later. It's about the strategy over your regulatory loss allowance reserves. You have it, but one of your peers doesn't. And I don't understand the reason for it because you can't use it, right? You can't -- it's not like an overlay which you can draw on if you want to boost your [indiscernible].

I will answer that -- you want me now?

No, no, answer that to me -- so basically, asset growth and [indiscernible].

I think I start with asset growth, but I want Teck Long to comment on it. It's both our loan book because we have onboarded more customers, especially the corporate customers as well. Mortgages, we mentioned, we have gained a bit more market share. And of course, we want to serve customers across geographies and which we have done quite well.

And when we onboard big customers, we are able to serve them indeed in different countries. And of course, we do have funding growth, which we will put into high-quality securities asset. That would be quite a bit in U.S. dollars, but also in, of course, in Sing dollars, which is our home base currency as well. So I pass to Teck Long to talk a bit about the loan growth.

[indiscernible] one of our banking franchise, and we will continue to focus on that. I think the question also has to do with the overall economy, the overall uncertainty in the economic environment at the moment. As you can see that uncertainty has been there for quite a while, whether you look at it from duration day or caused by the spike of interest rate a couple of years ago. So we have navigated quite well.

We see growth potential in the corporate sectors where the demand is certain, like domestically driven industries like construction or even renewable energy, where usually there's involvement of the government or major energy corporates in offtaking the generation of the power. So we look at it from an industry-led aspect to manage the risk. So we are industry specialists who will look at this valuation closely and navigate that environment.

So we expect continued growth in the corporate loan book. On the other aspect is really the individuals and to some extent, the corporates as well. It relates to real estate in Singapore. So real estate in Singapore, the price is holding up and the demand for real estate continues to be there. So we will also get our market share in this part of the loan book.

Can I ask you how confident are you about the U.S. dollar? Because you mentioned that you will raise some of the U.S. dollar, you will increase -- you will buy U.S. dollar treasuries based on the asset for the securities book. So how confident are you of the U.S. dollar remaining [indiscernible].

Okay. I think it's a new question. I didn't say anything about U.S. dollar. I think Helen made a comment. Yes, I can start answering this, right? U.S. dollar is still a major currency. So its use is still very prevalent. So although people may talk about the basement trades, that's largely focused in gold, so which also from our perspective is really U.S. dollar is still very dominant at the moment.

And gold is while growing in prominence, it's not used for trade or day-to-day use. So in that sense, from a reserve viewpoint, maybe gold has grown a little bit more in prominence because of the volume as well as the price of the gold. But generally, U.S. dollar is still the dominant currency.

You are comfortable with only U.S. dollar treasuries.

Yes.

[Technical Difficulty] insurance products at...

Yes. I don't think we should speak on behalf of Chin Yee. They have that results session. But I think it's quite normal that you stay focused in doing a business, balancing volume and margin, right? So -- but I don't think we can speak on behalf of them. I think Chin Yee will take the RLAR question.

Okay, RLAR, that is regulatory loss allowances reserve. When you look at our NPA coverage, we do have that as part of the total allowances. How RLAR came about was in the past, whereby there's a requirement to meet -- regulatory requirements to meet the regulatory allowance -- sort of allowances for -- allowances reserved at a minimum level from a regulatory sort of requirement. Now we have already met all that. But given the uncertainty in the environment, we decided not to release that but instead to just keep that. We can actually release that. We -- in terms of the regulatory -- meeting the minimum regulatory requirements anymore.

[indiscernible].

Question is from the -- I think Q1, you mentioned about some cost optimizations that the bank was looking at? [indiscernible] give an update. [indiscernible] about 3% operating cost. Is that sort of within expectations [indiscernible]?

I think this is part of it, meaning when we talk about cost discipline, we have -- in a way we have grown volume without need to hire a lot more people. I think that is one thing. Synergy, we also save some money on synergy because, for example, Bank of Singapore, a lot of the support functions is -- we have one -- actually one support function to serve both -- it's a separate legal entity, but they're also served by the same support functions.

GE, we've discussed a lot more. And I think in the future, that's another opportunity. But very much it's also because of technology investments as well that, as we said, you do things faster. So you can generate more without investing or putting more money.

Okay. It looks like everyone is happy.

At least a lot more information this quarter in your presentation really [indiscernible].

Yes, maybe Helen wants to...

Yes, I just want to say something. It's -- as Ching Ching said at the beginning, this will be my last results communications with the media. It's been a very fruitful and wonderful 6 years stay in Singapore with a bank that I actually started with. To me, it's always discreet feeling, a bank that I started with and I ended my career with. Retirement is just another phase of life.

It doesn't mean that I forget about OCBC and all the wonderful people I have met and worked with, including you guys. So thank you all for the support all these years. You always come up with a very good question and sometimes make me think, a, are we missing something? You are interested in something that must be a reason. So help us to improve ourselves along the way as well.

So I want to thank you all the while to -- of supporting the OCBC Group and supporting me very much. I hope that you will continue to provide the support to Teck Long. I'm very sure -- Teck Long has been with us for more than 3.5 years now. So he's part of the leadership team, and I'm very happy we have Teck Long to lead the group going forward.

And I'm very sure that he will bring OCBC to the next stage. So a lot of things have happened over the last 6 years. But as again, I have nothing but gratitude and really feel honored to have been the Group CEO for OCBC. So thank you very much.