Q1 2026 Oversea-Chinese Banking Corp Ltd Earnings Call

May 8, 2026

Peter Yeoh: First in the room somewhere, of course, from the various offices. We are gonna go through our results for Q1 this year. Because of the HSBC Indonesia International Wealth and Premier Banking business that we are on is under a non-disclosure agreement, many of the numbers we will not be able to share, and we ask for your understanding on that. With that, I will now pass the time to Goh Chin Yee to take us through the annual results.

[Company Representative] (OCBC): First in the room somewhere, of course, from the various offices. We are gonna go through our results for Q1 this year. Because of the HSBC Indonesia International Wealth and Premier Banking business that we are on is under a non-disclosure agreement, many of the numbers we will not be able to share, and we ask for your understanding on that. With that, I will now pass the time to Chin Yee to take us through the annual results.

Speaker #1: Put in a 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 Indonesia International Wealth and Premier Banking, this one that we are buying is under a non-disclosure agreement.

Speaker #1: 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 Chinese and take us through our results.

Speaker #2: Good morning, everyone. Thank you for joining OCDC's first quarter 2026 results briefing. OCDC delivered strong performance for first quarter of 2026. Group net profit was 1.97 billion Singapore dollars, up 13% Q on Q, and 5% year on year.

Goh Chin Yee: Good morning, everyone. Thank you for joining OCBC's Q1 2026 results briefing. OCBC delivered strong performance for Q1 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. We'll cover more in the later slides. The NII decline was more than compensated by record non-interest income, led by strong growth of our wealth management franchise. Non-interest income grew more than 20% Q on Q and year on year, with broad-based double-digit increase across fee, trading, and insurance income.

Speaker #2: 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.

Speaker #2: And we'll cover more in the later slides. The NII declined was more than compensated by record non-interest income. Led by strong growth of our wealth management franchise.

Speaker #2: Non-interest 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.

Goh Chin Yee: 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%. Loan and deposit 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 costs at 23 basis points on 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.

Speaker #2: We continue to be disciplined in expenses. We've cost-to-income ratio at 39.3%. Loan and. Deposit growth momentum was sustained, up 9%, and 10% year on year, respectively.

Speaker #2: Our asset quality remained resilient. We've NPL ratio stable at 0.9%. Factoring in the heightened macro uncertainties, additional management overlays were prudently taken this quarter with total credit costs at 23 basis points on annualized basis.

Speaker #2: NPA coverage rose to 163%. Our capital position remained strong. We fully faced in CET1 capital and equity ratio at 15.2%. Moving on to our performance, by key business pillars on slide 5.

Speaker #2: We continued 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.

Goh Chin Yee: We continued 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 SGD 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.

Speaker #2: Wealth management income rose 14% Q on Q and 11% year on year, to 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.

Speaker #2: 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 342 billion, and was broadly unchanged Q on Q due to a decline in market valuations.

Speaker #2: For insurance, profit contribution from GEH was 323 million. Up 44% Q generally steady year on year. Underlying insurance performance was strong. Partly offset by a lower valuation of investments including those from shareholders' funds.

Goh Chin Yee: 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. NBAP 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 Q1 2026 was SGD 2.22 billion, 5% down year on year and 3% below Q4 2025. On a day adjusted basis, NII was slightly lower by 1% Q on Q.

Speaker #2: 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 agencies and Bangka channels.

Speaker #2: Embedded 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.

Speaker #2: NII for first Q of '26 was 2.22 billion Singapore dollars. 5% down year on year, and 3% below fourth Q of '25. On a day-adjusted basis, NII was slightly lower by 1% Q on Q.

Speaker #2: 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.

Goh Chin Yee: 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. Q1 2026 NIM narrowed to 1.76%. Our March exit NIM was 1.75%.

Speaker #2: 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.

Speaker #2: Driven by loan growth and a 7% or 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 equity high-quality assets.

Speaker #2: These treasury assets were diluted to name but added to asset yield. Compression. First Q '26 mean narrowed to 1.76%. was 1.75%. Income from treasury assets mitigated about 30% of the rate impact on loans.

Goh Chin Yee: 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 Q1. NII sensitivity based on one basis point of drop in rates across our four major currencies of SGD, USD, MYR, as well as HKD, was about SGD 5 million on an annualized basis, with SGD being the key driver of the sensitivity. Moving on to non-interest income. Non-interest 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. Non-interest income now comprise 42% of our group total income.

Speaker #2: 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 one basis point of drop in rates across our four major currencies of sing dollars, US dollars, Malaysian ringgit, as well as Hong Kong dollars was about 5 million on an annualized basis, with sing dollar being the key driver of the sensitivity.

Speaker #2: Moving on to non-interest income. Non-interest income grew by more than 20% to 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.

Speaker #2: Non-interest 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 675 million.

Goh Chin Yee: Our Q1 2026 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 Q3 2025. Fee growth momentum was robust. This is the Q3 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 activities 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. For brokerage and fund management fees are now reported within our Wealth segment to better reflect the full spectrum of wealth-related products.

Speaker #2: 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 600 million.

Speaker #2: In particular, 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 activities from customers and our expanded AUM base.

Speaker #2: Growth was broad-based across all product channels, including private banking, bank insurance, treasury products, unit trusts, brokerage, as well as fund management. For brokerage and fund management fees are now reported within our wealth segments.

Speaker #2: 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 434 million.

Goh Chin Yee: Moving on to trading income. Q1 2026 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. Q1 2026 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 Q4 2025, expenses were down 4%. Our cost-to-income ratio was 39%. Moving on to loans.

Speaker #2: Underpinned by record customer flow income. Customer flow income was up 35% year on year, and crossed 400 million for the first time, driven by both wealth-related activities and corporate customers.

Speaker #2: Increased market volatility and demand for hedging amid economic uncertainty continued to support transactional flows. Moving on to operating expenses. We continued to maintain cost discipline while being targeted on our investments to support our next frontier corporate strategy.

Speaker #2: One Q '26 operating expenses of 1.5 billion were up 6% year on year, mainly due to higher costs to support business growth and continued investment in technology.

Speaker #2: Against fourth Q '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 6 billion or 2% to 347 billion.

Goh Chin Yee: 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 constant currency basis. By geography, this was led by Singapore and Malaysia as well as our international markets like UK and US. 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, TMT 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 growth loans. Our loan portfolio quality remains sound. NPL ratio was 0.9%, unchanged for 8 consecutive quarters.

Speaker #2: Growth was largely broad-based across industries. Compared to a year ago, loans were up 9% year on year on constant currency basis. By geography, this was led by Singapore and Malaysia, as well as our international markets like UK and US.

Speaker #2: 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.

Speaker #2: This includes Singapore residential mortgages, wealth financing, TNT industries, including digital infrastructure, and sustainable financing. Our sustainable financing loans increased 17% year on year to 59.7 billion.

Speaker #2: Now comprising 17% of our total group loans. Our loan portfolio quality remained sound. MPL ratio was 0.9%, unchanged for eight consecutive quarters. NPAs were 3.12 billion, 4% lower Q on Q, as new corporate NPA formation was more than offset by net recoveries and upgrades.

Goh Chin Yee: 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. Q1 2026, new corporate NPAs were an annualized 14 basis points of period stock loans. This is lower as compared to 39 basis points for FY 2025. We are highly watchful of the ongoing Middle East conflict and potential downside risks. 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 nexus. We continue to actively engage our customers and are closely monitoring for potential second and third order impacts should the situation become protracted.

Speaker #2: One Q '26 new corporate NPAs were an annualized 14 basis points of period-start loans. This is lower as compared to 39 basis points for FY '25.

Speaker #2: We are highly watchful of the ongoing Middle East conflict and potential downside risks. We note no significant credit deterioration and continue to refresh our stress test.

Speaker #2: 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 nexus.

Speaker #2: We continue to actively engage our customers and are closely monitoring for potential second and third-order impacts. Should the situation become protracted. Total allowances for one Q '26 were 216 million.

Goh Chin Yee: Total allowances for Q1 2026 were SGD 216 million, up 8% Q on Q, and 2% year on year. Allowances were mostly for non-impact 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 NPL 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.

Speaker #2: Up 8% Q on Q and 2% year on year. Allowances were mostly for non-impact assets. Additional management overlays were set aside in relation to the elevated macro uncertainties.

Speaker #2: 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%.

Speaker #2: Our performance loans coverage ratio helped steady at 0.9%. Our coverage levels positioned us well to navigate the uncertainties. Moving on to deposits. Customer deposits grew 10% year on year to 444 billion, driven by 13% growth in KASA deposits.

Speaker #2: From both wholesale and consumer segments. KASA ratio rose 1.3 percentage points year on year to 50.2%. For the quarter, deposits were up 4% and grouped loan deposit ratio was 77.2%.

Goh Chin Yee: 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 at close to 80% from customer deposits. All 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 2025 final and special dividend will reduce CET1 by 1 percentage point.

Speaker #2: The growth in our wealth 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.

Speaker #2: All 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%.

Speaker #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.

Speaker #2: The acquisition of HFPC Indonesia's 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.

Goh Chin Yee: 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. Peter 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 Peter.

Speaker #2: Teck Long will share more of this in his presentation later. Our capital position remains strong. Allowing us to support strategic growth opportunities and provides buffer against uncertainties.

Speaker #2: 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 Teck Long.

Tan Teck Long: Yeah, thank you, Chin Yee. Normally, Chin Yee's presentation is the main course, but today we have two main courses, because of the HSBC acquisition. First let me give a very quick reflection of our results. Maybe you can move the slide. We are pleased with our results for Q1. It's very strong. We actually checked every boxes in terms of growth. We expanded our loan book, we expanded our deposit book even faster. All the non-interest income was experienced growth. It is a broad-based growth across all business units. For treasury income, we have been focusing on growing the customer profile of the treasury income, and it has come in very strongly at a new high as well.

Speaker #2: Thank you, Ching Yi. Normally, Ching's presentation is the main course, but today we have two main courses. Because of the HFPC acquisition. First, let me give a very quick reflection of our results.

Speaker #2: Maybe you can move the slide. Yeah. So we are pleased with our results for the first quarter. It's very strong. We actually checked every box in terms of growth.

Speaker #2: We expanded our loan book. We expanded our deposit pool even faster. All the non-interest income was experienced growth. It is a broad-based growth across all business units.

Speaker #2: For Treasury income, we have been focusing on growing the customer flow for the Treasury income and it has come in very strongly at a new high as well.

Speaker #2: 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%.

Tan Teck Long: Now, all this work was achieved in the context of a low interest rate environment. 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 war because it's a very direct impact to Southeast Asia in terms of energy supply and therefore the prices. 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 non-impact loans. It's really a third of the effect which we are being prudent about. That would leave our NPA coverage ratio to 1.6 times, which I believe is the highest in the number of years. Outlook-wise, we are very focused on what's to account the Middle East war and the prices of energy.

Speaker #2: Outlook-wise, we remain very concerned about what's happening in the Middle East War because it is a very direct impact in Southeast Asia in terms of energy supply and therefore the prices.

Speaker #2: 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 non-impact loans.

Speaker #2: It's really a third-order effect which we are being prudent about. So that would leave our MPA coverage ratio to 1.6 times, which I believe is the highest in the months of years.

Speaker #2: So outlook-wise, we are very focused on what's the account of the Middle East War and the prices of energy. We are still keeping to our earlier financial guidance.

Tan Teck Long: 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 if the dividends will be paid out in FY 2027. Okay. Shall we go to the HSBC part? I was quite tempted to say let's pause for questions, earlier this week we announced our acquisition of HSBC Indonesia Wealth and Premier Banking portfolio. I shall refer to it as the IWP portfolio. If you recall, under our Next Frontier strategy, we said that we are focused on growing wealth as well as deepening our franchise in our core markets, the three hubs in Hong Kong, Singapore, as well as ASEAN domestic market in Malaysia and Indonesia.

Speaker #2: Now we're standing what's happening in the Middle East. Our capital position remains strong. We expect to complete our 2.5 billion capital return plan by financial year 2026, meaning the dividends will be repaid will be paid out in FY27.

Speaker #2: Okay. Shall we go to the HFPC part? I was quite tempted to say let's pause for questions, but so earlier this week, we announced our acquisition of HFPC Indonesia Wealth and Premier Banking portfolio.

Speaker #2: I shall refer to it as the IWP portfolio. If you recall, under our next frontier strategy, we said that we will focus on growing wealth as well as deepening our franchise in our core markets, the three hubs in Hong Kong, Singapore, as well as ASEAN domestic market in Malaysia and Indonesia.

Speaker #2: When I look at the IWP 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 MAA tends to be a mix of loans and deposits.

Tan Teck Long: When I look at the IWP portfolio, I realize this is the perfect fit for our Next Frontier strategy. Most of the portfolios we have seen in the marketplace available for M&A, they tend to be a mix of loans and deposits. This portfolio is very clean. It's largely deposits and AUM. Why is that a good portfolio? If a portfolio has a loan content, we have to worry about two things. Downside due to credit costs, and secondly, if the portfolio is large, we actually may lose value because of single borrower risk, limit concentration. We have to manage that. For this particular portfolio, it's largely deposits, largely AUM, a small retail loan largely relating to credit cards. 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.

Speaker #2: For this portfolio, it's very clean. It's largely deposits and AUM. Why is that a good portfolio? If a portfolio has a loan content where to worry about two things.

Speaker #2: Now, downside due to credit costs and secondly, if the portfolio is large, we actually may lose value because of single borrower risk limit concentration.

Speaker #2: So we have to manage that. So for this particular portfolio, it's largely deposits, largely AUM, a small retail loan, largely relating to credit cards.

Speaker #2: 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.

Speaker #2: 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.

Tan Teck Long: 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. 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. This is a big competitive advantage we have in Indonesia. We are one of the top three privately owned banks in Indonesia. We enjoy big economy of scale. We can book 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 one-time integration costs.

Speaker #2: So as a wealth portfolio, IWP is highly complementary to our existing Indonesian franchise with clear synergies across customers' tangibilities. It will add further scale to our AUM and customer base.

Speaker #2: Now, this is a big competitive advantage we have in Indonesia. We are one of the top three privately owned banks in Indonesia. We enjoy big economy of scale.

Speaker #2: We can book 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 equity excluding one-time integration costs.

Speaker #2: Under our whole wealth strategy, products, channels, insights, belonging to any of our wealth units or OCBC group will be tapped to support the whole group.

Tan Teck Long: Under our whole wealth strategy, products, channels, insights belonging to any of our wealth units or 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 1.5 times. 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. Indonesia remains the largest economy in ASEAN.

Speaker #2: We will leverage Bank of Singapore's product capabilities and insights to help further uplift our enlarged wealth franchise in Indonesia. The acquisition also comes with a small retail loan book that I referred to just now of 300 million.

Speaker #2: Sing dollar. Lastly, related to the credit card business. It is a nice addition to our credit card business. Our credit card balance will increase by 1.5 times.

Speaker #2: 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.

Speaker #2: 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.

Tan Teck Long: 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 Frontier 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 three privately owned banks in Indonesia. With this acquisition, we have further expanded our franchise in the largest economy in ASEAN. Thank you.

Speaker #2: In Indonesia. As part of our next frontier strategy. We have a strong capital position. More importantly, we have good local insights in this region.

Speaker #2: We are well positioned to navigate and uncertain environment and take advantage of any opportunity which may arise. As we speak, we are already one of the top three privately owned banks in Indonesia.

Speaker #2: With this acquisition, we have further expanded our franchise in the largest economy in ASEAN. Thank you.

Peter Yeoh: Yes, thank you, Teong. Thank you, Shini. We will take questions from the media. Analysts online, you are free to stay on. Otherwise, we will see you later at about 10:30AM.

[Company Representative] (OCBC): Yes, thank you, Tan Teck Long. Thank you, Goh Chin Yee. We will take questions from the media. Analysts online, you are free to stay on. Otherwise, we will see you later at about 10:30AM.

Speaker #1: This was thank you, Teck Long. Thank you, Ching Yi. We will take questions from the media. And analysts online, you are free to stay on.

Speaker #1: Otherwise, we will see you later at about 10:30. So we'll start with the media. Now, questions. Okay, Chanya, go ahead.

[Company Representative] (OCBC): We'll start with the media now, questions. Okay, Tanya, go ahead. Yes. A long congratulations, and also share price is wary on why your rivals are going down. Happy Friday.

[Company Representative] (OCBC): We'll start with the media now, questions. Okay, Tanya, go ahead.

Speaker #3: Yes. Teck Long, congratulations. And also, share price is very why your rivals are going down. Happy Friday.

[Analyst 1]: Yes. A long congratulations, and also share price is wary on why your rivals are going down. Happy Friday.

Speaker #2: Happy Monday, happy Friday.

Tan Teck Long: Happy Monday, happy Friday.

[Company Representative] (OCBC): Sure. I would like to ask first three questions. First, how do you expect to maintain the earnings momentum for the rest of the year given the NII slowed down and your NIM contraction on the quarterly basis is quite sharp? The second question, with departures in the Middle East and Bank of Singapore, do you see impact on the AUM in terms of wealth?

[Analyst 1]: Sure. I would like to ask first three questions. First, how do you expect to maintain the earnings momentum for the rest of the year given the NII slowed down and your NIM contraction on the quarterly basis is quite sharp? The second question, with departures in the Middle East and Bank of Singapore, do you see impact on the AUM in terms of wealth?

Speaker #3: Sure. So I'd like to ask first three questions. First, how do you expect to maintain the earnings momentum for the rest of the year given the NII slowdown and your NIN?

Speaker #3: Contraction on the quarterly basis is quite sharp. Second question, departures in the Middle East and Bank of Singapore. Do you see impact on the AUM in terms of wealth?

Tan Teck Long: Sorry, again.

Speaker #3: The departure by Ranjit Kannar in Dubai and we are now expecting more departures from that front. Do you see much impact on AUM? On wealth?

[Company Representative] (OCBC): The departure by Ranjit Khanna.

[Analyst 1]: The departure by Ranjit Khanna.

Tan Teck Long: Oh.

[Company Representative] (OCBC): Dubai, 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 Indonesia, do you expect this to be short-term, given difficult insolvents and also sovereign rating risk? Thank you.

[Analyst 1]: Dubai, 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 Indonesia, do you expect this to be short-term, given difficult insolvents and also sovereign rating risk? Thank you.

Speaker #3: For Indonesia, can you give a bit more colors on valuation? Given high liabilities of the unit, that's some people expect. Meaning that are you getting at very good discount because of the bank's debt obligations?

Speaker #3: I took note of your commitment to Indonesia. But do you expect this to be short-term given physical concerns and also sovereign rating risk? Thank you.

Tan Teck Long: I'm sorry. I don't. Just to clarify the question about the discount, just how you referred to.

Speaker #2: I'm sorry. Just to clarify the question about the discount, just like you referred to the.

[Company Representative] (OCBC): I mean, you did, I think your statement mentioned, the premium to NAV, but NAV is not available. I think some analysts expect, like, say that.

[Analyst 1]: I mean, you did, I think your statement mentioned, the premium to NAV, but NAV is not available. I think some analysts expect, like, say that.

Speaker #3: I mean, you didn't I think your statement mentioned the premium to NAB. But NAB is not available. I think some analysts expect say that the.

Tan Teck Long: Oh, I see because.

Speaker #2: Oh, I see. Because you.

[Company Representative] (OCBC): They are indebted, basically you get it as good deal. Is it something that you could confirm?

[Analyst 1]: They are indebted, basically you get it as good deal. Is it something that you could confirm?

Speaker #3: They are indebted. So basically, you get it as good deals. But is it something that you could confirm?

Speaker #2: Okay.

Tan Teck Long: Okay.

[Company Representative] (OCBC): Confirm if it's a good deal or that's it. That was it.

[Analyst 1]: Confirm if it's a good deal or that's it. That was it.

Speaker #3: Is it a good deal or something? They're indebted.

Tan Teck Long: Okay. 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. The quarter-to-quarter fluctuation is because we got some recovery on NPL, which in turn 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. We so happen to have put some cases into NPL quite early on and therefore the interest accumulated. It's a once off when you measure recovery. 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. That's good. To answer your question, the interest rate decline has slowed down.

Speaker #2: Okay. 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.

Speaker #2: So the quarter-to-quarter fluctuation is because we got some recovery of MPL, which kind of adds on to the interest rate recovery. In the MPL management, we are conservative.

Speaker #2: The moment we put a case into MPL, we actually do not recognize interest. And we saw happen to have put some cases into MPL.

Speaker #2: Quite early on. And therefore, the interest accumulated. So it's a once-off when you measure recover. So it's actually good news. It proves that we have been prudent in managing our MPLs or our loan book and then we get some recovery now and then.

Speaker #2: 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 frontier strategy.

Tan Teck Long: Our fee business is what we are focusing on in consistent with The Next Frontier 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. Even if we have some temporarily outflow or temporary impact, we don't expect material impact to our franchise. Anyway, Dubai at the moment is still under state of Well, one day it's ceasefire, one day it's a war, don't really know. We have to see what's happening. Overall structurally, we do see some increased inquiries from Dubai customers in general. I think that will also mitigate the impact of any staff leaving.

Speaker #2: 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.

Speaker #2: So even if we have some temporarily outflow or temporary impact, we don't expect material impact to our franchise. Anyway, Dubai at the moment is still under state of well, one day it's one year, one day it's a war.

Speaker #2: So I don't really know. We have to see what's happening. So overall structurally, we do see some increased inquiries from Dubai customers in general.

Speaker #2: So I think that will also mitigate the impact of any stop-leaving?

[Company Representative] (OCBC): Just Yeah, and the war is just still going on, but, your operations remain there?

[Analyst 1]: Just Yeah, and the war is just still going on, but, your operations remain there?

Speaker #3: Yeah. And the war is just still going on. But no operations remain there. You haven't met anyone?

Tan Teck Long: Yeah.

[Company Representative] (OCBC): You haven't moved anyone?

[Analyst 1]: You haven't moved anyone?

Speaker #2: Yes. We have sorry?

Tan Teck Long: We have Sorry?

Speaker #3: Have you moved any relocated any staff or?

[Company Representative] (OCBC): Have you relocated any staff or?

[Analyst 1]: Have you relocated any staff or?

Speaker #2: Yes.

Tan Teck Long: Okay.

Speaker #3: What's the long-term plan?

[Company Representative] (OCBC): What is the long-term plan?

[Analyst 1]: What is the long-term plan?

Speaker #2: Okay. When the war I mean, now it's some sort of ceasefire. Earlier on, when things were a lot more tense, some staff on their own decided to leave the country.

Tan Teck Long: When the war, I mean, now it's some sort of ceasefire. Earlier on when things were a lot more tense, some staff on their own decided to leave the country. We have, about maybe about 10%, 20% 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. Our staff work remotely, from home.

Speaker #2: So we have about maybe about 10, 20 percent of staff on the voluntary basis left the country. It doesn't impact our operation. In fact, throughout the whole situation, we have been operating.

Speaker #2: So it's BAU. But our staff work remotely. From home.

Speaker #3: So about 10 to 20 percent already left already.

[Company Representative] (OCBC): About 10% to 20% already left.

[Analyst 1]: About 10% to 20% already left.

Tan Teck Long: Yes, but they're still working.

Speaker #2: But they're still working.

Speaker #3: Yeah, of course.

[Company Representative] (OCBC): Yeah.

[Analyst 1]: Yeah.

Tan Teck Long: Yes, remotely. Yes. The staff in Dubai also work remotely.

Speaker #2: Yes, remotely. Yes. But the staff in Dubai also work remotely. Yes. Okay. Okay. You have quite a number of points relating to the HSBC acquisition in Indonesia.

[Company Representative] (OCBC): Understood.

[Analyst 1]: Understood.

Tan Teck Long: Okay, 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. Deposits to a bank is a liability, right? It's what we want to grow, so unlike other companies. For most companies, we talk about liabilities in a negative sense because you owe people money. For the bank, we like it because our liabilities, it's not about us owing people money, it's actually deposits kept with us. Technically, it's a liability.

Speaker #2: 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.

Speaker #2: So 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 it's not about us owning people money.

Speaker #2: It's actually deposits kept with us. So technically, it's a liability.

Speaker #3: I understand.

[Company Representative] (OCBC): I understand. Yeah.

[Analyst 1]: I understand. Yeah.

Tan Teck Long: Yes. Because of this, right, we can estimate a cash flow stream from the liabilities as well as the AUM business. Now, on the asset side, because it happens to be so small, which is only a SGD 300 million loan book, the total AUM and deposit is like 10 times more.

Speaker #2: Yes. So because of this, right, we can estimate a cash flow stream from the liabilities as well as the AUM fee business. Now, on the asset side, because it happened to be so small, which is only a 200 million dollar loan book, the total AUM deposit is like 10 times more.

Speaker #2: So is it 10 times more?

[Company Representative] (OCBC): Is it 10 times more?

[Analyst 1]: Is it 10 times more?

Tan Teck Long: More than 10 times.

Speaker #3: More than 10.

[Company Representative] (OCBC): More than 10 times, yeah.

[Analyst 1]: More than 10 times, yeah.

Tan Teck Long: Yeah, it's 20 times more.

Speaker #2: 20 times more. The deposit is 10 times almost 10 times more. The total is bigger than that. Yeah. So because of this characteristic, it makes it very attractive.

[Company Representative] (OCBC): Because the deposit is so-

[Analyst 1]: Because the deposit is so-

Tan Teck Long: The deposit is 10 times.

[Company Representative] (OCBC): Yeah, yeah.

[Analyst 1]: Yeah, yeah.

Tan Teck Long: Close to 10 times more. The total is even bigger than that. Yeah, because of this characteristic, it makes it. In other words, if you think about it from banking viewpoint, we have a portfolio where which we have minimal credit risk, but it provide us with some stream.

Speaker #2: So in other words, if you think about it, for banking viewpoint, we have a portfolio which we have minimum credit risk. But we provide us with some stream.

Speaker #3: And you see I mean, Indonesia as well featured about credit breaks, sovereign breaks. Is it a worry to you at all? That's a short-term thing?

[Company Representative] (OCBC): You, as you see, I mean, Indonesia is well featured about credit breaks, sovereign breaks. Is it a worry to you at all?

[Analyst 1]: You, as you see, I mean, Indonesia is well featured about credit breaks, sovereign breaks. Is it a worry to you at all?

Tan Teck Long: It is so-

[Company Representative] (OCBC): As a short-term thing?

[Analyst 1]: As a short-term thing?

Tan Teck Long: I think I can comment this way. For Indonesia, we have been there for more than 8 years. We ride through many cycles. Just like I alluded to that to operate in this part of the world, we need a lot of capabilities and insights. In a way, the barriers and entries are quite high. What we have seen are some banks reducing their operation in Indonesia. As you can see, our Indonesia business is remain very committed. On a BAU basis, we continue to expand, and now there's opportunity, we manage by it. We will be able to run. Our view on Indonesia is that there'll be ups and downs and, you know, over a long period of time, the outlook is still good.

Speaker #2: I think I can comment this way. For Indonesia, we have been there for more than 80 years. The right to many, many cycles. So just like I alluded to that, to open in this part of the world, we need a lot of capabilities and insights.

Speaker #2: So in a way, the barriers and entries are actually 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.

Speaker #2: We continue to expand. And now there's an opportunity. We managed to buy it. So we are so we will be able to run so obviously, Indonesia is that there'll be ups and downs.

Speaker #2: And over a long period of time, the outlook is still good.

Speaker #3: Thank Okay. Changing to the question answer. Okay. Good. Thank you. Any other questions? No? Okay. Go ahead. Renald Yee.

[Company Representative] (OCBC): Thank you. Okay. Roger, any further question for us? Okay, good. Thank you. Any other questions, Reynold? Okay, go ahead, Reynold from Nikkei.

[Company Representative] (OCBC): Thank you. Okay. Roger, any further question for us? Okay, good. Thank you. Any other questions, Reynold? Okay, go ahead, Renald from Nikkei.

Speaker #4: Good morning. Renald from the Business Times. Congratulations on the occasional results. Questions on the wealth talent, right? Are you planning to expand that account?

[Analyst]: Morning. Reynold from Business Times. Congratulations on the operational results. Questions on the wealth talent, right? Are you planning to expand the headcount? I think among all the local banks, this is the most stable sort of headcount for the past few years, year-on-year. If you're expanding the wealth talent, do you also expect overall headcounts to sort of remain stable, year-to-year? Also the competition amongst the banks, right? Cause now every bank is also chasing a wealth management income. Is there more competition now, you think, for such talent? Also when you do all these M&As, when you are bidding for the business, is there more competition there? How do you navigate this? Thank you.

Renald Yeo: Morning. Reynold from Business Times. Congratulations on the operational results. Questions on the wealth talent, right? Are you planning to expand the headcount? I think among all the local banks, this is the most stable sort of headcount for the past few years, year-on-year. If you're expanding the wealth talent, do you also expect overall headcounts to sort of remain stable, year-to-year? Also the competition amongst the banks, right? Cause now every bank is also chasing a wealth management income. Is there more competition now, you think, for such talent? Also when you do all these M&As, when you are bidding for the business, is there more competition there? How do you navigate this? Thank you.

Speaker #4: And I think among all the local bank hosting here, the most stable sort of account in terms of valuations here on here. If you're expanding the wealth talent, but do you also expect overall account to sort of remain stable year to year?

Speaker #4: And also the competition amongst the banks, right? Because now every bank is also chasing a wealth management income. Is there more competition now you're seeing for such talent?

Speaker #4: And also when you do all these M&As, when you are getting for the business, is there more competition there? And how do you navigate this?

Tan Teck Long: The headcount you're referring to the whole banking group?

Speaker #2: The account you're referring to, the whole banking group, is our person in the whole banking group, right? Correct.

[Analyst]: Yes. Our wealth management and the whole banking group.

Renald Yeo: Yes. Our wealth management and the whole banking group.

Tan Teck Long: Sorry. Yes. Right. Yeah. For the whole banking group, we still maintain high cost discipline. The headcounts which are relating to sales, we'll continue to expand it, because it is crucial for us to have the talent to help us expand the wealth business. I hope that answered the first part of your question. The second part of your 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 a new thing to us. The more important thing is what are our capabilities. I will describe it in two ways. One, the competitive landscape in ASEAN. Interestingly, we see exits of some players. Once they exit, it's actually a less crowded field.

Speaker #4: Yes.

Speaker #2: So for the whole banking group, we still maintain high-cost discipline. The headcounts which are relating to sales will continue to expand it. So because it is crucial for us to have the talent to help us expand the wealth business.

Speaker #2: 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 tense over the last 10 years.

Speaker #2: It's not a new thing to us. But the more important thing is what our capabilities. So I will describe it in two ways. One, the competitive landscape in ASEAN.

Speaker #2: Interestingly, we see, as it's of some players. And once they're as if it's actually less crowded field. And we had a and we have a good franchise in the ASEAN core markets because we have the we have productivities in the group, whether it's the Bank of Singapore or OCBC Singapore, we do have very strong productivities.

Tan Teck Long: We have a good franchise in the ASEAN core markets because we have productivities in the group, whether it is Bank of Singapore or OCBC Singapore, we do have very strong productivities. In each of the country, we have tailored some products to be launched in these countries. There is a lot of capabilities with sharing, which we can do under our whole wealth strategy. In that sense, that is a differentiating advantage for us.

Speaker #2: In each other country, we are tailors of products to be launched in these countries. So there's a lot of capabilities sharing which we can do under our whole wealth strategy.

Speaker #2: So in a sense, that is a differentiating advantage for us.

[Company Representative] (OCBC): Yes.

Speaker #3: Okay. I agree from Renald. So thanks for the regarding the third-order effect that you're being included about regarding the general provision. Can you elaborate a bit on that in terms of is it sectors or certain sectors or markets where you're kind of going a bit more cautious about?

[Analyst] (Reuters): This is from Reuters, and thanks for the presentation. Earlier you mentioned, you know, regarding the third-order effect that you're being prudent about regarding the general provisions. Can you elaborate a bit on that in terms of is it sectors or certain sectors or markets where you just, you know, kind of a bit more cautious about? On the wealth side, apart from the increase in queries from Dubai, where else do you see the greatest opportunities within the region and the rest of the world? Thank you.

Speaker #3: And on the wealth side, apart from the increase in queries from Dubai, where else do you see the greatest opportunities within the region? And the rest of the world?

Speaker #5: Thank you.

Tan Teck Long: When we actually, 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 hiccup in their supply chain due to the Middle Eastern impact. This is a general sizing. The third-order impact, to be more accurately describe it, is actually a macroeconomic impact. What we have sized up is actually for the third-order effect. Your second question is relating to,

Speaker #2: 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.

Speaker #2: The second-order impact are the industries who might experience some hiccup in their supply chain, due to the impact. So this is a general sizing.

Speaker #2: The third-order impact will be more accurately described is actually a macroeconomic impact. So what we had sized up is actually for the third-order effect.

Speaker #2: Your second question is relating to.

[Company Representative] (OCBC): Opportunities.

[Analyst] (Reuters): Opportunities.

Speaker #3: Opportunities.

Tan Teck Long: Right, opportunities for wealth.

Speaker #2: Sorry. Opportunities for wealth.

Tan Teck Long: Right, opportunities for wealth.

Speaker #3: In terms of flows and opposite getting queries from.

[Analyst] (Reuters): In terms of like slows and

[Company Representative] (OCBC): Because they're getting queries from.

[Analyst] (Reuters): Because they're getting queries from.

Speaker #2: Yeah. Our wealth business is actually very diversified. So we draw wealth from all over the world. So that's one. So there are opportunity remain because you look at it, Singapore is actually a very attractive place, to be a wealth hub.

Tan Teck Long: Our wealth business is actually very diversified. We draw wealth from all over the world, so that's 1. That opportunity remains because you look at it, Singapore is actually a very attractive place to be a wealth hub. That competitive advantage remains. The second is the rising affluence. In the ASEAN, we continue to see economic growth, and we continue to see rising affluence. This is another catchment we want to target. I would, sorry, I forgot to add, because just now I was talking ASEAN domestic market. Our strategy is being hubs. Hong Kong also captures, you know, China-Hong Kong flows, and there's also a lot of wealth within Hong Kong and also neighboring Hong Kong, the Greater Bay region. This is not a high net worth, ultra-high net worth kind of business.

Speaker #2: 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.

Speaker #2: So this is another catchment we want to target.

Speaker #3: Okay.

Speaker #2: Sorry. I forgot to add. Because just now, I was talking ASEAN domestic market. Our strategy is green hubs. So Hong Kong also capture China-Hong Kong flows.

Speaker #2: 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 kind of business.

Speaker #2: So we want both. We want the ultra-high-net-worth kind of business. We also want our EPC Premier kind of wealth business.

Tan Teck Long: We want both. We want the ultra-high net worth kind of business. We also want our PPC premier kind of wealth business.

Speaker #3: I see you said OCBC Premier Private Client. So it is a higher-end of the Premier affluent sector. Thank you.

Goh Chin Yee: See, it's our OCBC Premier Private Client. It is a higher end of the premier, affluent segment.

[Analyst]: Thank you.

[Analyst] (Reuters): Thank you.

Speaker #2: Thank you.

Speaker #3: Thank you. Okay. Good. Oh, was I going to ask?

Tan Teck Long: Thank you.

[Company Representative] (OCBC): Okay, go on. Oh, I was gonna ask.

[Analyst] (Reuters): Okay, go on. Oh, I was gonna ask.

Tan Teck Long: You may ask the question. Sorry, my throat is not very good today, so.

Speaker #2: Sorry. My toilet's not very good today. Two questions.

[Company Representative] (OCBC): Two questions. One is, of course, on dividends and the capital return. There is a share buyback portion of that. How much have you completed, and 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, you know, in the undercurrents of all this competition between, you know, the three local banks, the one you came from had a specific competitive advantage in its treasury business.

[Analyst] (Reuters): Two questions. One is, of course, on dividends and the capital return. There is a share buyback portion of that. How much have you completed, and 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, you know, in the undercurrents of all this competition between, you know, the three local banks, the one you came from had a specific competitive advantage in its treasury business.

Speaker #3: One is cost on 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?

Speaker #3: Will you return the rest of it to the shareholders? That's one question on that. And the other question is, I don't know whether this is the right place to ask, but you know in the undercurrents of all this competition between the three local banks, the one you came from had a specific competitive advantage in its treasury business.

Speaker #3: And I think you were part of that whole will you bring some of that? And I'm talking about undercurrents of competition. To bring some of that here so that OCBC has a fourth leg, this?

[Company Representative] (OCBC): You know, I think you were part of that whole. Will you bring some of that, I mean, I talk about undercurrent of competition, to bring some of that here so that OCBC has a fourth leg, you know?

[Analyst] (Reuters): You know, I think you were part of that whole. Will you bring some of that, I mean, I talk about undercurrent of competition, to bring some of that here so that OCBC has a fourth leg, you know?

Tan Teck Long: Well, I guess, I mean, not that.

Goh Chin Yee: Well, I guess, I mean, not that.

Speaker #5: Well, I guess, I mean, not going to.

[Company Representative] (OCBC): Will you-

[Analyst] (Reuters): Will you-

Speaker #3: Well, you jumped in.

[Company Representative] (OCBC): I'm certain by the by how the person.

Goh Chin Yee: I'm certain by the by how the person.

Tan Teck Long: It's okay.

[Company Representative] (OCBC): Again, Teck Long himself is helping because actually they're helping our treasury business. Yes.

Goh Chin Yee: Again, Teck Long himself is helping because actually they're helping our treasury business. Yes.

Speaker #5: But I guess we want to talk about how we're going to actually building up our treasury business.

Speaker #3: Different from the other CEOs that OCBC has had, so. If you could.

[Company Representative] (OCBC): Different from the other.

[Analyst] (Reuters): Different from the other.

Tan Teck Long: Yeah

Tan Teck Long: CEOs that OCBC has had.

[Analyst] (Reuters): CEOs that OCBC has had.

Tan Teck Long: I'm the easiest one.

[Company Representative] (OCBC): They're all different.

Goh Chin Yee: They're all different.

Speaker #5: They're all different.

Tan Teck Long: You're the Yeah, share buyback.

[Company Representative] (OCBC): Yeah, yeah. Very different boys. Yeah. Don't you?

Goh Chin Yee: I'll take the question on the dividend share buyback as well as capital return. For the share buyback for cancellation, we have completed 20%. That's about SGD 200-ish million, you know. That means we have left about SGD 800 million or so. Yeah. 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. Teck Long also mentioned during the full year financial results, saying in February this year that given our retail, our sort of investor base, which are the long-term sort of shareholders, you know, the preference will also be for special dividend. Personally, Teck Long also wants the dividend.

Speaker #3: 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% or so.

Speaker #3: So there's about 200-ish billion that means we have left about 800 million or so. Yeah. So we will be monitoring the situation to see whether the conditions is feasible or conducive for further buyback.

Speaker #3: If not, we are flexible in terms of returning in the form of special dividend. Now, Teck Long also mentioned during the full year financial results being in February this year, that given our retail, our sort of investor base, which are the long-term sort of shareholders, the preference will also be for special dividend.

Speaker #3: And personally, Teck Long. Yeah. So that is certainly an area of flexibility for us. And just now, Teck Long did mention that if we were to return that in the form of special dividend, we'll complete the entire 2.5 billion of capital return by full year financial year 2026, meaning if it's special dividend payouts, that would be for final year '26 dividend paying out typically in May of 2027.

Goh Chin Yee: Yep.

Tan Teck Long: Yep.

Goh Chin Yee: That is certainly an area of investment for us. Just now, Teck Long mentioned that if we were to return that in the form of special dividend to complete the entire SGD 2.5 billion of capital return by full year, financial year 2026, meaning if the special dividend payout, that would be for final year 2026 dividend paying out typically in May 2027. Yes, today's the day we get our dividend.

Speaker #2: Today is the day we get our dividend.

[Company Representative] (OCBC): Yes. Today is the day.

Speaker #3: Yes. Today you get the.

Tan Teck Long: That's why I say it's happy Friday.

Speaker #2: That's why I say it's a happy Friday. Okay. On treasury business, thank you for the question. You gave me a chance to elaborate on this business.

Goh Chin Yee: Yes.

Tan Teck Long: Okay. On treasury business, thank you for the question. It gave 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 two parts. Even though it's described as trading income in our accounting term, it's actually two 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 with using treasury products. That's classified under trading income. This is the part which we are building up. Talent, we do have a very good talent bank 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.

Speaker #2: The treasury business is a very important business for us. We have to think about treasury business in two parts. Even though it's described as trading income, in our accounting term, it's actually two parts.

Speaker #2: One part is trading trading, as people may perceive it to be. The second part is more important to us, which is trying to grow the customer flows.

Speaker #2: We're 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 bank strength at OCBC to start.

Speaker #2: 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.

Tan Teck Long: To continue to sustain that growth, we have onboarded some talent, mainly in different product categories and in sales. The product category is important because the product simplicity will help to drive the growth of the front-facing business, in particular the wealth business, because wealth is all about structuring products for sale. This is very important. 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.

Speaker #2: Many 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 front-facing business.

Speaker #2: In particular, the wealth business. We also wealth is all about structuring products for sale. So this is very important. So think of it as this way.

Speaker #2: Treasury business will continue to grow with added resources to support the growth of the customer flow business in both wealth and the corporate.

[Analyst]: Do you have, like, a certain amount you think will be treasury income for quarter to look at it that way or?

Speaker #3: So do you have a certain amount you think will be treasury income per quarter to look at it that way?

[Analyst] (Reuters): Do you have, like, a certain amount you think will be treasury income for quarter to look at it that way or?

Speaker #2: I think for this particular meeting, I think we should look at the past and project forward. We have, of course, big alternatives. Yes. In fact, in our DreamHub strategy in the next Friday, we go back to the next Friday strategy.

Tan Teck Long: I think for this particular meeting, I think we should look at the past and project forward. We have, of course, beat the numbers. Yes. In fact, in our twin hub strategy in The Next Frontier, we go back to The Next Frontier strategy, we actually spell out that we want to scale up treasury in Hong Kong in particular because Hong Kong is a big hub as well.

Speaker #2: We actually spell out that we want to scale up treasury in Hong Kong in particular. Because Hong Kong is a big hub as well.

[Company Representative] (OCBC): Okay. Any other questions?

Speaker #3: Okay. Any other questions?

[Company Representative] (OCBC): Any questions?

Speaker #5: I mean, in addition on AI, what's your thoughts on Midnorth and do you see that Singapore banks will have access to this new software?

[Analyst]: Yeah, please send.

[Company Representative] (OCBC): Yeah, please send.

[Analyst]: On AI, what's your thoughts on Mythos and, do you see that Singapore banks will have access to this maybe somewhere?

[Analyst] (Reuters): On AI, what's your thoughts on Mythos and, do you see that Singapore banks will have access to this maybe somewhere?

Speaker #2: Okay. Midnorth is indeed a cause of concern, and we are monitoring the situation quite closely. Internally, we accelerated scanning our own system to make it as strong as it can be in terms of protecting us against cyber risk.

Tan Teck Long: Mythos is indeed a cause of concern. We are monitoring the situation quite closely. Internally we accelerated scanning our own system to make it as strong as it can be in terms of protecting us against cyber risk. Mythos is a new development. Currently it is released to selected tech vendors and selected American banks. The tech vendors are also our vendors. When the tech vendors discover the vulnerabilities, we also stand by to patch any vulnerabilities they discover. I don't think we can handle this risk as a bank alone. We will have a lot more say if we can approach it together with our peers, together with our vendors, and together with the government agencies. This is something which is development. We are paying close attention to it.

Speaker #2: Now, Midnorth is a new development. Currently, it's released to selected tech vendors, and selected American banks. The tech vendors are also our vendors. And the tech vendors discovered the vulnerabilities.

Speaker #2: We also stand by to patch any vulnerabilities they discover. For us, I don't think we can handle this risk as a bank alone. We will be a lot we will have a lot more say if we can approach it together with our peers together with our vendors and together with the government agencies.

Speaker #2: So this is something which is development, and we are paying close attention to it.

Speaker #3: All right. I'll turn this off.

[Company Representative] (OCBC): Right. Okay, Mr. Tan.

Speaker #2: Sorry. Just curious on following on China's question. How does this change OCBC's 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'd rather see it as a new cause or a new kind of risk in terms of your management staff?

[Analyst]: Just curious, following on Chyan's question, how does this change OCBC way of like using third-party AI? The other question is. Do you still see AI as a net benefit to profit and productivity, or you rather see it as a like a new cost or a new kind of risk in terms of your management style?

[Analyst 2]: Just curious, following on Chyan's question, how does this change OCBC way of like using third-party AI? The other question is. Do you still see AI as a net benefit to profit and productivity, or you rather see it as a like a new cost or a new kind of risk in terms of your management style?

Tan Teck Long: 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 has its benefits. It could be a lot cheaper. It could be a lot more rigorous. It's tested by more people. This type of AI is more like plugging in certain into certain parts of the operation. The more important thing in terms of our approach is that we actually see, we have an ABB strategy, which we see AI as being plugged in where it's fit for purpose. One of consideration for fit for purpose, besides capability, is also the cost. A lot of people may think that AI solve everything, but AI can be very expensive if you are too early an adopter.

Speaker #2: 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 has its benefits.

Speaker #2: It could be a lot cheaper. It could be a lot more rigorous. It's tested by more people. But this type of AI is more like plugging in certain into certain parts of the operation.

Speaker #2: The more important thing in terms of our approach is that we actually see we have an ADD strategy, which we see AI as being plugged in where it's fit for purpose.

Speaker #2: And one of the considerations for fit for purpose besides its capability is also the cost. Because a lot of people may think that AI solves everything.

Speaker #2: But AI can be very expensive. You are too early to adopt it. So our strategy contemplates the cost and the benefit equation when we adopt AI.

Tan Teck Long: Our strategy contemplates the cost and the benefit equation when we adopt AI. That's how we've been operating. Does AI bring new risk? Yes. Mythos 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 let the AI be agentic AI. We are very careful with that. Most of the AI we are using are related to augmenting our operation. Therefore, there's a human using that to improve his productivity. Agentic AI, we can only use it in a very limited way. We have a very good risk framework to decide where we can go agentic and where we cannot.

Speaker #2: So that's how we've been operating. Now, does AI bring new risk? Yes. Midnorth is a new risk. The rest of AI risk, I think, has been well articulated.

Speaker #2: For example, hallucination, and to what extent you should you can let the AI use adjective. We adjective AI. So we are very, very careful with that.

Speaker #2: 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 adjective AI, we can only use it in a very limited way.

Speaker #2: We have a very good risk framework to decide when we can go adjective and when we cannot.

[Company Representative] (OCBC): Next one.

Speaker #3: Thanks, Renald.

[Analyst]: If I could ask one more question, for the record. Non-interest income you saw this quarter and sort of attribute to the new Next Frontier strategy, right? You know, your Whole Wealth proposition.

[Analyst 2]: If I could ask one more question, for the record. Non-interest income you saw this quarter and sort of attribute to the new Next Frontier strategy, right? You know, your Whole Wealth proposition.

Speaker #2: Can I ask one more question? How much of the record non-intress income you saw this quarter instead of attribute to the new next Friday strategy, right?

Speaker #2: I know your whole wealth proposition. Well, this is the toughest question so far. The reason is because I was appointed the deputy Crucio last July.

Tan Teck Long: Well, this is, this is the toughest question so far. The reason is because I was appointed the deputy group CEO last July, right? Also under Helen's leadership, when she transitioned to me, there's a lot of continuity. Some of the Next Frontier strategy, especially the parts which we so far have not talked about, which are really important, like the tech shift, which is how to ride the technology wave to increase revenue for the bank. We have been executing that for a while, and we continue to be a high-growth industry, and we'll continue to have that. Net-zero shift, sustainability, we have been talking about it, we've been executing it. That continues. Wealth, we have actually started talking and organizing ourselves for wealth, you know, even during Helen's time.

Speaker #2: Right? And also under Helen's leadership when she transited to me, there's a lot of continuity. Some of the next Friday strategy, especially the parts which we so far have not talked about, which are really important, like the tech shift, which is how to write the technology way to increase revenue for the bank.

Speaker #2: We have been executing that for a while. And we continue to be a high-growth industry. And we'll continue to have that. Net zero shift, sustainability, we have been talking about it.

Speaker #2: We've been executing it. That continues. Wealth, we have actually started talking and organizing ourselves for wealth. Even during Helen's time, but after I became the deputy group CEO, we also accelerated the organizational construct to facilitate a wealth business.

Tan Teck Long: After I became the deputy group CEO, we also accelerated the organizational construct to facilitate a wealth business. That goes to The Next Frontier 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 month. I mean, there's continuity in leadership transition, which is a very smooth one. That's not top priority to segue.

Speaker #2: So that goes in the next Friday 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 month.

Speaker #2: I mean, there's continuity in leadership transition, which is a very smooth one. So there's no top priority to sank it.

[Company Representative] (OCBC): Okay. Question.

Speaker #3: Okay. Question: what is the key wealth management? I mean, because it's a key segment to grow. So do you have any specific target to achieve in terms of the AUM and also the income in the wealth business target?

Tan Teck Long: Sorry.

[Analyst]: wealth management. I mean, because it's a key segment to grow. Do you have any specific target to achieve that in terms of the AUM and also the income?

[Analyst 3]: wealth management. I mean, because it's a key segment to grow. Do you have any specific target to achieve that in terms of the AUM and also the income?

Tan Teck Long: The wealth management business target.

Speaker #2: Yeah. We expect a double-digit growth. So it's in our plan.

[Analyst]: Yeah. Yeah.

[Analyst 3]: Yeah. Yeah.

Tan Teck Long: We expect a double-digit growth. It's in our plan.

[Company Representative] (OCBC): One more question. What's your net new money for this quarter?

Speaker #3: I forgot. What's your net new money for this quarter?

[Analyst 3]: One more question. What's your net new money for this quarter?

Tan Teck Long: SGD 5 billion.

Speaker #2: $5 billion. Yeah, $5 billion. Yeah. Where do you look?

[Company Representative] (OCBC): Mm-hmm. SGD 5 billion?

[Analyst 3]: Mm-hmm. SGD 5 billion?

Tan Teck Long: Yeah, SGD 5 billion. Yeah. Why you look surprised?

Speaker #3: No, no. 1, 5, 10.

[Company Representative] (OCBC): No, no. 1, 5, 10.

[Analyst 3]: No, no. 1, 5, 10.

Speaker #2: Oh, 1, 5, 10.

Tan Teck Long: Oh, 15. Yeah.

Speaker #3: Okay. In looks like we are good. Or one of our friends here are okay? Okay, good. So thank you very much for your questions, and thank you for joining us this morning.

[Company Representative] (OCBC): Okay. It looks like we are good. All of our friends here are okay. Okay, good. Thank you very much for your questions, and thank you for joining us this morning.

Tan Teck Long: Thank you.

[Analyst]: Thank you.

[Analyst 1]: Thank you.

[Company Representative] (OCBC): Thank you. Bye-bye.