Q2 2026 Oversea-Chinese Banking Corp Ltd Earnings Call

Collins Chin: All right. Good morning, everyone. Welcome to OCBC's Q2 H1 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 Moo, our CEO of Bank of Singapore, Mr. Sunny Quek, the Head of Global Consumer Financial Services, then right to the other end, we have Mr. Greg Hingston joining us from Great Eastern, the CEO of Great Eastern. Last but not least, we have Mr. Kenneth Lai, our Head of Global Markets. Choo Yin will start with the presentation, and thereafter, we will have Teck Long sharing with us some of his thoughts before we take Q&A. Choo Yin, please.

Speaker #1: 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 Chek Long, and our Group CFO, Ms. Goh Chin Yi.

Speaker #1: To their left and right, I shall start from Jason. Jason Mu, our CEO of Bank of Singapore; Mr. Sunny Kwek, the Head of Global Consumer Financial Services.

Speaker #1: And then, right at the other end, we have Mr. Greg Hinston joining us from Great Eastern, the CEO of Great Eastern. And last but not least, we have Mr. Canafly, our Head of Global Markets.

Speaker #1: Chin Yi, we'll start the presentation, and thereafter, we will have Chek Long share with us some of his thoughts. Before we take Q&A, Chin Yi, please.

Speaker #2: 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 S$2.2 billion for the second quarter of 2026, up 22% year on year.

Goh Chin Yee: Good morning to all. Welcome, and thank you for joining OCBC's H1 2026 results briefing. OCBC delivered a record group net profit of SGD 2.2 billion for the Q2 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 rates environment, but this was largely cushioned by our strong growth in average assets. Robust growth in non-interest income more than compensated for the lower NII. Non-interest 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%.

Speaker #2: This is the first time that our quarterly profit has crossed $2 billion. ROE was 14.4% on an annualized basis. Total income grew 18% year-on-year to a new high of $4.17 billion.

Speaker #2: Net interest income was 1% lower year-on-year, amid a lower interest rate environment, but this was largely cushioned by our strong growth in average assets.

Speaker #2: Robust growth in non-interest income more than compensated for the lower NII. Non-interest income grew 51% year-on-year, driven by broad-based growth across fees, trading and investment income, and insurance income.

Speaker #2: 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.

Goh Chin Yee: 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. Non-customer 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 continued to maintain cost discipline, with cost income ratio lower at 37.8%. Loans and deposits grew strongly, up 11% and 13% year on year respectively. Asset quality remains sound. NPR ratio was stable at 0.9%. Credit cost was at an annualized 14 basis points. We maintained healthy liquidity funding and capital positions. Common equity Tier I ratio at 14% on fully phase-in basis or 15.7% on transitional basis. For the H1, group net profit grows 13% year on year to a record SGD 4.19 billion.

Speaker #2: Non-customer flow income was also higher for the quarter, largely from $191 million of investment income from Great Eastern, led by strong equity markets. We continue to maintain cost discipline.

Speaker #2: With cost-to-income ratio lower at 37.8%, loans and deposits grew strongly, up 11% and 13% year on year, respectively. Asset quality remained sound, NPL ratio was stable at 0.9%, credit costs 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 transitional basis.

Speaker #2: For the first half, group net profit rose 13% year on year to a record $4.19 billion. Total income grew 11% to $8 billion, underpinned by record non-interest income, which more than compensated for the decline in net interest income.

Goh Chin Yee: Total income grew 11% to SGD 8 billion, underpinned by record non-interest 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 five. We delivered broad-based growth across our banking, wealth management, and insurance franchise in the H1 of 2026, as can be seen from the positive variances in all three 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 Q2, bringing the H1 inflows to SGD 11 billion.

Speaker #2: 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 three charts on this slide.

Speaker #2: 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 $3.29 billion, up 27% year-on-year, and now comprises 41% of the group's total income.

Speaker #2: All wealth segments and channels delivered growth. Net new money inflows were $6 billion for the second quarter, bringing first-half inflows to $11 billion.

Speaker #2: Banking AUM grew 13% year on year, and 2% quarter on quarter to $350 billion. Profit contribution from GE rose 44% to $794 million, underpinned by strong insurance and investment performance.

Goh Chin Yee: 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 banking channels. Invest 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 eight. Q2 2026, NII was SGD 2.26 billion, down 1% year-on-year and up 2% Q-on-Q, despite a lower SORA environment.

Speaker #2: 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 bancassurance channels.

Speaker #2: And Beth 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.

Speaker #2: Second quarter 2026 NII was $2.26 billion, down 1% year on year and up 2% quarter on quarter, despite a lower SORA environment. As shown in the chart on the bottom left, the quarter-on-quarter increase in net interest income was driven by asset growth across both commercial and non-commercial books, which more than compensated for lower loan yields and higher wholesale funding costs.

Goh Chin Yee: 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 non-commercial books, which more than compensated for lower loan use 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. Q2 net NIM declined 6 basis points Q-on-Q to 1.70%, reflecting compression in loan use 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.

Speaker #2: Average assets grew 5% quarter-on-quarter, driven by loan growth and a 5% or $10 billion increase in average balances of high-quality treasury assets.

Speaker #2: Moving to the chart on the bottom right, Q2 NIM declined 6 basis points quarter-on-quarter to 1.70%, reflecting compression in loan yields and higher wholesale funding costs.

Speaker #2: During the funding to support our strong 5% Q-on-Q loan growth, and our continued investments in high-quality treasury assets, which are NII-equitative.

Speaker #2: These assets remain an important lever in helping us to sustain net interest income in a declining interest rate environment, excluding the growth of the non-commercial book.

Goh Chin Yee: Excluding the growth of non-commercial 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 or treasury markets asset growth in H2 to be significantly lower compared to H1, as we continue to balance our NCA growth against commercial lending opportunities and capital deployment. We expect NIM to stabilize in H2 on expectations of a 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 non-interest income. Our non-interest income reached new highs for both the Q2 and the H1.

Speaker #2: The overall decline in NIM would have been 3 basis points quarter-on-quarter instead of 6 basis points quarter-on-quarter. Looking ahead, we expect NCA or Treasury Markets asset growth in the second half to be significantly lower compared to the first half, as we continue to balance our NCA growth against commercial lending opportunities and capital deployment.

Speaker #2: We expect NIM to stabilize in the second half on expectations of the gradual strengthening of SORA towards year end. NII sensitivity, based on a 1 basis point increase in rates across the whole book, was around $6 million on an annualized basis.

Speaker #2: Moving on to non-interest income. Our non-interest income reached new highs for both the second quarter and the first half. For the first half, non-interest income rose 36% year on year to $3.51 billion, lifted by strong double-digit growth across fees, trading and investment, and insurance income.

Goh Chin Yee: For the H1, non-interest 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. Non-interest income now accounts for 44% of our total income. For the Q2, non-interest 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 two slides. Our Q2 fees crossed SGD 700 million for the first time, lifting our H1 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 H1, 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.

Speaker #2: Non-interest income now accounts for 44% of our total income. For the second quarter, non-interest income rose 51% year-on-year and 19% quarter-on-quarter, driven by higher wealth management fees, trading, and investment income.

Speaker #2: I will cover more details of our fees, trading, and investment income in the next two slides. Our second-quarter fees crossed $700 million for the first time.

Speaker #2: Lifting our first-half fee income to a record $1.41 billion. Growth was broad-based, led by wealth management, alongside loans and trade-related, as well as investment banking fees.

Speaker #2: 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.

Speaker #2: Invested AUM improved quarter-on-quarter to 62%. Growth was broad-based across all wealth product channels, including bancassurance, private banking, treasury products, unit trusts, structured deposits, as well as brokerage.

Goh Chin Yee: 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 H1 trading and investment income rose 46% year-on-year to SGD 1.13 billion, driven by record customer flow income. H1 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. Q2 customer flow income was up 60% year-on-year across all wealth and corporate segments. Non-customer flow income also increased significantly, mainly from Great Eastern's investment income following the recovery in equity markets post our Q1 2026 results. Moving on to operating expenses. We continue to maintain cost discipline while investing strategically to support business growth and our The Next Frontier strategy.

Speaker #2: Our first half trading and investment income rose 46% year on year, to $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.

Speaker #2: Second quarter customer flow income was up 60% year-on-year, across all wealth and corporate segments. Non-customer flow income also increased significantly, mainly from GE's investment income following the recovery in equity markets, which pulled our first quarter 2026 results.

Speaker #2: 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 $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.

Goh Chin Yee: H1 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. H1 cost income ratio improved year-on-year to 38.5%. Q2 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 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 UK, US, and Australia. We continued 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.

Speaker #2: First-half cost-to-income ratio improved year on year to 38.5%. Second quarter cost-to-income ratio also improved year on year and quarter on quarter to 37.8%.

Speaker #2: Customer loans grew 5% quarter-on-quarter, or $17 billion, to $364 billion. Our year-on-year loans were up 11%, or $29 billion, on a constant currency basis.

Speaker #2: 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.

Speaker #2: By geography, growth was driven by Singapore and Malaysia, as well as our international markets, including the UK, US, and Australia. We continued 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.

Speaker #2: Our sustainable financing loans rose 12% year on year to $60 billion, accounting for 16% of total group loans. Moving on to portfolio quality, overall, our loan portfolio quality remains sound.

Goh Chin Yee: 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. Q2 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 NPAs formation was partly compensated by net recoveries, which were mostly from Greater China CRE upgrades as well as write-offs. Total allowances for the H1 increased 14% to SGD 372 million. Total credit costs were unchanged year-on-year at 18 basis points on an annualized basis. For the Q2, 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.

Speaker #2: The NPL ratio was 0.9%, unchanged since June 2024. Second quarter NPAs were $3.13 billion, relatively unchanged quarter-on-quarter. 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.

Speaker #2: 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 $372 million. Total credit costs were unchanged year on year at 18 basis points on an annualized basis.

Speaker #2: For the second quarter, total allowances were $156 million, down 28% quarter-on-quarter, and up 36% year-on-year. Total credit costs were at 14 basis points on an annualized basis.

Speaker #2: Now, our Q2 allowances for impact assets were largely from the two accounts I mentioned earlier. Non-impact allowances included ECL from changes in credit risk grades, as well as management overlays for macroeconomic uncertainties in Indonesia.

Goh Chin Yee: Now, our Q2 allowances for impaired assets were largely from the two accounts I mentioned earlier. Non-impaired allowances included ECL from changes in credit risk grades, 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 that 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.

Speaker #2: These are partly offset by transfers to allowances for impaired assets relating to the two accounts that I mentioned earlier. Our total NPA coverage ratio was unchanged quarter-on-quarter, at 163%, and was 7 percentage points higher compared to a year ago.

Speaker #2: The performing loans coverage ratio was lower quarter-on-quarter at 0.8%, mainly due to our enlarged loan base. Our coverage levels position us well to navigate uncertainties.

Speaker #2: Moving on to deposits. Customer deposits grew 13% year on year to $459 billion, driven by 12% growth in CASA deposits from both wholesale and consumer segments.

Speaker #2: Compared to last quarter, deposits were up 3%, and the Group's loan-to-deposit ratio was higher at 78.4%. Our diversified deposit base supports balance sheet resilience and provides flexibility in supporting loan growth.

Goh Chin Yee: 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 2025 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.

Speaker #2: 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.

Speaker #2: Transitional CET1 was 15.7%, and fully phased-in CET1 was 14.0%. The quarter-on-quarter decline in the CET1 ratio reflected the payment of our full-year '25 final and special dividends, as well as growth in RWA, which offset profit accretion.

Speaker #2: 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 47 cents, up 6 cents or 15% year on year.

Speaker #2: This is in line with our target 50% ordinary dividend payout ratio. We remain committed to completing the remaining $2.5 billion capital return plan by FY26.

Goh Chin Yee: We remain committed to complete the remaining SGD 2.5 billion capital return plan by FY2026. With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Teong. Teong, please.

Speaker #2: With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Thich Long. Thich Long, please.

Speaker #1: Thank you. Thank you, Ching Yi. A very good morning to all of you, and thank you for joining us this morning. As I listened to Ching Yi's presentation, I realized that our profit and growth are quite easy to remember.

Tan Teck Long: Thank you. 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 make 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 a record high. We saw broad-based growth across all business lines as our The Next Frontier strategy continued 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 H1 2026. For trading income, we differentiate customer flow trading income and non-customer flow trading income.

Speaker #1: We made $2.22 billion of profit this quarter, Q2, at a 22% growth rate. Overall, we have delivered a very strong set of financials, with income and profit at record highs.

Speaker #1: We saw broad-based growth across all business lines, as our Next Frontier strategy continues to gain momentum and deliver results. Some key highlights: year-to-date loan growth was strong at 7%, under our Whole Wealth strategy.

Speaker #1: Our wealth business continues to gain momentum, achieving a 39% year-on-year increase in wealth management fee for the first half of '26. For trading income, we differentiate customer flow trading income and non-customer flow trading income.

Speaker #1: For customer flow, we did very well, with income increasing 47% year on year, underpinned by both wealth and corporate segments. Trading income not related to customer flow also increased by more than $200 million during the quarter. This is largely attributed to a recovery in investments held by Great Eastern, in line with the rebound of the equity markets last quarter.

Tan Teck Long: 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 NPR 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 US-Iran war pan out. We continue to see K-shaped economic growth across major economies, US, China, Indonesia, and to some extent, Singapore.

Speaker #1: Asset quality remained resilient, with a stable MPL ratio. ROE improved to 13.7%, despite NIM compression. We are declaring interim dividends of $0.47, up $0.06, in line with our 50% payout dividend policy.

Speaker #1: Next, looking ahead, a lot will depend on how the energy crisis triggered by the US-Iran war pans out. We continue to see K-shaped economic growth across major economies—US, China, Indonesia, and to some extent, Singapore.

Speaker #1: Our pipeline for loans remains robust, anchored on growth industries, but probably will not grow at the same rate as the second quarter of '26, simply because the second quarter of '26 was really outstanding in terms of loan growth.

Tan Teck Long: Our pipeline for loans remains robust, anchored on growth industries, but probably will not grow at the same rate as Q2 2026, simply because Q2 2026 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 H1 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 remain benign at 18 basis points for H1 2026.

Speaker #1: 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 accretion remains healthy, and we still see good flows.

Speaker #1: 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 to low double-digit range.

Speaker #1: 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 the low 40% range. Credit costs remain benign at 18 basis points during the first half of '26. Full-year is likely to be at the lower end of our earlier guidance of 20 to 25 basis points.

Tan Teck Long: 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 FY2026. All in all, we had a very busy Q2. I thought I'd take a moment to do a very quick recap. Highlights in the Q2. We announced acquisition of HSBC Indonesia's wealth business. We launched OCBC WoW, which is the first AI native app in Southeast Asia. We minted GOLDX coin on the back of LionGlobal Singapore Physical Gold Fund. We launched GenAI-powered skills training for our wealth advisors. Of course, we recently announced HELIOS, but that's in July. My personal favorite is this. Okay. I shall hand it back to Chin Chin.

Speaker #1: Our capital position remains strong, and we will complete the remainder of our $2.5 billion capital return plan by FY26. All in all, we had a very busy second quarter. I thought I'd take a moment to do a very quick recap.

Speaker #1: Highlights in the second quarter: We announced the accretion of HSBC Indonesia's wealth business. We launched OCBC Wallet, Abata Banking, which is the first AI-native app in Southeast Asia. We minted GoX coin on the back of the LGI physical gold fund. We launched GenAI-powered skills training for our wealth advisors. And of course, we recently announced Helios, but that's in July.

Speaker #1: And my personal, and my personal favorite is this: Okay, so I shall hand it back to Chin Chin.

Speaker #2: So with that, let's move into our Q&A. All right. Would you like to start with yours?

Collins Chin: With that, let's move into our Q&A. All right. Anybody want to start with you?

Speaker #1: Let's go to the next.

Tan Teck Long: Let's go to Nick.

Speaker #3: Hi, thank you very much. And let me be the first to congratulate you on a very strong set of results. It's a good performance.

[Analyst] (Morgan Stanley): Hi, thank you very much. Let me be the first to congratulate you on a very strong set of results. It is a good performance. In terms of loan growth, I just wonder if you could talk going forward. It is obviously a very good loan growth number, 5% Q1 Q. You have raised, low double-digit is quite an eye-attention-grubbing sort of number for full year. I wonder if you could talk about how you are thinking of the next two to three years, and in particular, where a big sort of industrial change is taking place and lots of demand for financing. 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.

Speaker #3: In terms of loan growth, I just wonder if you could talk about it going forward. I mean, it's obviously a very good loan growth number—5% quarter-on-quarter.

Speaker #3: You've raised—I mean, low double-digit is quite an attention-grabbing sort of number for the full year. So I wonder if you could talk about how you're thinking about the next two to three years. In particular, you know, we're seeing big industrial changes taking place and lots of demand for financing.

Speaker #3: 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.

Speaker #3: So if you could maybe help us think about how you're balancing RWA growth, how you're thinking about CET1 targets, what levers you can pull.

[Analyst] (Morgan Stanley): If you could maybe help us think about how you are balancing RWA growth, how you are thinking about CET1 target, what are the levers you can pull.

Speaker #1: Okay, I'm going to do further crystal ball gazing, since the question is about the next few years as opposed to the next six months.

Tan Teck Long: Okay. I am going to do further crystal-ball gazing since the question is about the next few years as opposed to the next six months. I want to bring us back to February. In February, when we launched our The Next Frontier strategy, we were actually very aware of a very complex operating environment. I personally refer to it subsequently, in subsequent speeches I made, as a VUCA environment. Volatile, uncertain, complex, ambiguous, and K-shaped economic growth. This is the environment which we are operating in. When we came up with The Next Frontier strategy, we are hugely aware of this. We decided on a couple of things. First, let us identify the growth industries and be really very focused. If you look carefully at our The Next Frontier strategy, we talk about four strategic shifts. The first three.

Speaker #1: I want to bring us back to February. In February, when we launched our next franchise strategy, we were actually very aware of a very complex operating environment.

Speaker #1: I personally refer to it, subsequently—you know, in subsequent speeches I made—as a VUCAT environment: volatile, uncertain, complex, ambiguous, and K-shaped economic growth.

Speaker #1: So this is the environment in which we are operating. When we came up with the Next Frontier strategy, we were hugely aware of this.

Speaker #1: 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 carefully at our Next Frontier strategy, we talk about four strategic shifts.

Speaker #1: The first three: First, a right Asia shift, which is about rising Asia, inbound investments into Asia, and rejigging supply chains. Two, a tech shift, which is about financing the tech supply chain, including data centers, equipment for the data, equipment manufacturers, etc.

Tan Teck Long: First, a Rise 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. Third, sustainable finance. 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. This is what we have been seeing in the past few years as well. That is your first question. The second is relating to our loan growth. Loan growth in the Q2 is exceptional, partly because of some M&A transactions which we are backing.

Speaker #1: And third, sustainable finance. Our North Star is trying to make a difference to the environment by financing industries like renewable energy, which makes a difference to the environment, and supporting SMEs.

Speaker #1: In the green transition, all of 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.

Speaker #1: 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.

Speaker #1: 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 the third and fourth quarter are weak; it's just relative to the second quarter.

Tan Teck Long: We don't really expect that exceptional growth rate to continue in Q3 and Q4. It doesn't mean that in Q4 it's weak. It's just relative to Q2, we will be at a slower pace than Q2. Now, we have been focusing on ROE. Our ROE is higher. Our profit accretion will be higher. We will continue to focus on ROE. Our target operating CET1 CAR will be around 14%, give or take. I hope that answers your question.

Speaker #1: We will be at a slower pace than the second quarter. Now, we have been focusing on ROE. Our ROE is higher, and our profit accretion will be higher.

Speaker #1: 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.

Collins Chin: Oh, we have Chanya, Alia.

Speaker #2: Or we have Chania earlier.

Chanyaporn Chanjaroen: Hi, Chanyaporn Chanjaroen from Bloomberg. Congrats on the numbers and share price exceeding SGD 30. I have two questions.

Speaker #4: Hi, Chaniaporn Chancheran from Bloomberg. Congrats on the numbers, and Chair Price exceeding $30. I have two questions. I mean, with the stock and the many record numbers that you have, what's your thought on gravity rules?

Chanyaporn Chanjaroen: Yes. With the stocks and many record numbers that you have, what's your thought on gravity rules? Do you gravity rule? What goes up may come down one day. Yeah. Do you see that as a headwind going forward? 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?

Speaker #4: Do you believe gravity rules? What goes up may come down one day. Yeah, do you see that as a headwind going forward? And second question—any thoughts on areas of growth that you want to see?

Speaker #4: You already did HSBC in Indonesia. Do you see more coming in the years to come?

Speaker #1: Well, you're asking very difficult questions. Firstly, I think the stock price is what it is. We appreciate the confidence investors have in the OCBC team and our delivery in accordance with our strategy.

Tan Teck Long: Well, you're asking very difficult questions. 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, 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. We are very disciplined with acquisition. I have mentioned before that we exercise a lot of discipline. Acquisition target is not suitable for our strategy or something which doesn't really make a difference to our growth, we won't consider that. We'll look at inorganic growth, if that's the question, carefully. I am not averse to it.

Speaker #1: We really focus on building our franchise and executing our strategy, and then we let the share price be dictated by how investors view us.

Speaker #1: 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.

Speaker #1: But we are very disciplined with acquisitions. As I have mentioned before, we exercise a lot of discipline. If an acquisition target is not suitable for our strategy, or does not really make a difference to our growth, we will not proceed.

Speaker #1: We won't consider that. So we will look at inorganic growth, if that's the question, carefully. But I am not—I am not—I am not averse to it.

Speaker #1: I'm happy to actually do an acquisition if the right target comes along.

Tan Teck Long: I'm happy to actually do an acquisition if the right target come along.

Speaker #3: Okay, let's go to Yonghong.

Collins Chin: Okay, let's go to Yong Hong.

Speaker #5: Thanks for the opportunity. This is Yonghong from CD. Just three questions from me. On your customer-related flows, how much was driven by wealth flows versus your corporate flows?

Tan Yong Hong: Thanks for the opportunity. This is Yong Hong from Citi. Just three 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. Just wondering, some color behind this and the sustainability of this. Secondly, on the Great Eastern different non-customers related income or the trading income, should we now be expecting this line item to be more volatile depending on the equity market's condition? 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 all my three questions. Thank you.

Speaker #5: Because on these flows, they are growing faster than your fees. So just wondering if you could provide some color behind this, and the sustainability of this. And secondly, on the Great Eastern-driven non-customer-related income or the trading income, should we now be expecting this line item to be more volatile depending on the equity market conditions?

Speaker #5: 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?

Speaker #5: That is driving better monetization of your AUM through fee income. These are all my three questions. Thank you.

Tan Teck Long: For the first question, I will trouble Ken to take the question.

Speaker #1: So for the first question, we'll travel, can do, and take the question.

Kenneth Lai: Hi. Thank you for the question. 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 strong growth in terms of our corporate customer base as well as our institutional customer base.

Speaker #3: Yeah, hi. 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.

Speaker #3: Obviously, the growth in our wealth income is the highest. But we're also seeing very, very strong growth from our corporate customer base, as well as our institutional customer base.

Speaker #5: 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.

Tan Yong Hong: 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 fast.

Speaker #3: Yeah, we're actually quite confident in terms of this income being sustainable going forward. The reason being, you know, we have very good product diversification, and also, in terms of regional and geographical diversification.

Kenneth Lai: We're 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.

Speaker #1: Maybe I can supplement. Generally, the nature of the business in the wealth income area follows the momentum of the wealth business, and may be dependent on market sentiment.

Tan Teck Long: Maybe, I can supplement. Generally, the nature of the business in the wealth income, 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 is also an annuity kind of income, but we may see some ups and down in certain quarters depending on the size of the deal. We do a lot interest rate swaps, FX for transactions. The second question relates to the Great Eastern contribution, the non-customer flow trading income. Greg, do you want to take this?

Speaker #1: For the corporate side of the customer flows for trading income, it's also an annuity kind of income, but we may see some ups and downs in certain quarters, depending on the size of the deal.

Speaker #1: So we do a lot of interest rate swaps and FX for transactions. The second question relates to the Great Eastern contribution in the non-customer flow trading income.

Speaker #1: Greg, do you want to take this?

Speaker #5: Yeah, 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.

Greg Hingston: Yeah. I think you were talking about volatility and whether we can predict volatility. Obviously, you saw the swing between Q1 and, obviously, H1. This has been a particularly volatile year. Q1 was impacted, obviously, by the events in the Middle East predominantly, impacting markets. The market is gonna continue, I think, to be volatile through H2. 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. I think you also need to look at the insurance results as well. If you look at the underlying insurance results, they're solid, and we've got confidence that those are gonna be sustained going forward.

Speaker #5: This has been a particularly volatile year. The first quarter was impacted, obviously, by the events in the Middle East predominantly, impacting markets.

Speaker #5: 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, you know, we'll have to see how the rest of the year plays out.

Speaker #5: 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.

Speaker #5: 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.

Speaker #1: Yeah, I want to add that the nature of the insurance company is very different from the bank. So when we refer to non-customer trading income, for the bank, it is market-facing trading income, but for Great Eastern, because they maintain a portfolio, it depends on the investment performance of the portfolio, which you can actually get a sense of based on the market—how the market performs in general.

Tan Teck Long: Yeah. I want to add that the nature of the insurance company is very different from the bank. When we say refer to non-customer trading income, in the bank is market-facing trading income. For Great Eastern, because they maintain a portfolio, so it depends on the investment performance of 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? I take it.

Speaker #1: Okay, the third question: wealth management. Any volunteers? Oh, I'll take it.

Speaker #5: Yeah, maybe if I could just add. I think our Hong Kong business is doing very well. We continue to invest in our Hong Kong operations.

Jason Moo: Yeah. Maybe if 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. If you could see, I think we have already unveiled a new branch with official opening to be end September. I'll invite you all to go there if you're around. I think it is a collaboration with OCBC is proving to be a hit. We see acquisitions of new customers going up in that branch in particular. I think we are looking to add more wealth branches in Hong Kong as well. I think overall, we are very optimistic about our prospects in Hong Kong. Yeah, I think Hong Kong has a lot of legs to run.

Speaker #5: We are also adding more RMs, and we also see productivity in RMs going up. And if you could see, I think we have already unveiled a new branch, with the official opening to be at the end of September.

Speaker #5: So I'll invite you all to go there if you're around. I think it's enough collaboration with OC, and June is proving to be a hit.

Speaker #5: 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.

Speaker #5: So, I think overall we are very optimistic about our prospects in Hong Kong.

Speaker #1: Yeah, I think Hong Kong has a lot of legs to run. It's part of our team hub strategy under the expanded strategy.

Jason Moo: It's part of our team hub strategy under The Next Frontier strategy.

Speaker #5: Okay, let's go to Jayden.

Collins Chin: Okay, let's go to Jayden.

Speaker #4: Thank you very much. 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.

[Company Representative] (Macquarie Capital): Thank you very much. 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. Do these regulatory changes have any impact on the way you operate or your clients' demand? Will it have any effect on the trajectory of fees, which have been very, very positive? Just wanted to ask on this. Thank you.

Speaker #4: But did these regulatory changes have any impact on the way you operate or on your clients' demand? And will it have any effect on the trajectory of fees, which have been very, very positive?

Speaker #4: I just wanted to ask about this. Thank you.

Tan Teck Long: Since almost all of us have spoken, except Jason, so I volunteer Jason then.

Speaker #1: Since almost all of us have spoken as Jason, I've volunteered Jason then.

Speaker #3: 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.

Jason Moo: Sure. Thank you very much for the question. 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. 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. 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. We've got a good balance of clients who've expressed that.

Speaker #3: We are currently in the process of contacting our clients. We haven't seen any significant asset flows since the news came out, although we are right now in the process of contacting our clients.

Speaker #3: But what's quite interesting is that while some clients have, of course, expressed concerns and want more clarification on on on what these rules mean, we have quite a number of clients who have expressed I won't say gratitude, but they they're actually quite happy and they welcome the clarity that the Chinese authorities have have shown going down this direction.

Speaker #3: So we've got a we've got a good balance of of of of of clients who've expressed that. So again, still early days, but we'll continue watching the space and see how this continues to to affect our business.

Jason Moo: Again, still early days, but we'll continue watching this space and see how this continues to affect our business.

Collins Chin: Ultra from Reuters. Thank you. Yes, just want to ask OCBC if there's any overnight risk of this big Bloomberg story about iron ore trader Radiant World. Just want to ask about if OCBC has any exposure or relationship with this company. Thank you.

Speaker #5: I'll I'll try from writers.

Speaker #4: Thank you. Yes, I just want to ask OCBC if there's any—overnight there's this big Bloomberg story about iron ore trader Radian Wall. I just want to ask if OCBC has any exposure or relationship with this company.

Speaker #4: Thank you.

Tan Teck Long: I first come across this name in the Bloomberg. No, we don't have exposure to the company.

Speaker #1: I first came across this name in Bloomberg. So no, we don't have exposure to the company.

Collins Chin: Let's go to Melissa.

Speaker #4: Let's go to Melissa.

Speaker #2: Thank you for taking my questions. Just the first question: you have done really well in every line that we've seen. ROEs, as well, have hit nice, aspirational levels. From here, how can we see that move higher?

[Analyst] (Goldman Sachs): Thank you for taking my questions. Just the first question, you have done really well in every line that we've seen. ROE as well has hit a nice high. Maybe can you talk a little bit about your aspirational ROE from here and how we can see that move higher? 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. 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?

Speaker #2: Then 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.

Speaker #2: But maybe we can get a bit of color on what else we are expecting from here, from Great Eastern. How well are you working together with the team here and in Bank of Singapore?

Speaker #2: And maybe also, if you can comment a little bit—I'm not sure about the tax rules that have come out on China, on insurance—and, you know, how do you think that may impact sentiment?

[Analyst] (Goldman Sachs): 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? Thank you.

Speaker #2: Thank you.

Tan Teck Long: I'm not ready to reveal the ROE. In The Next Frontier strategy, which was launched 6 months ago, we said we'll focus on that. If 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 the next two questions, I'll pass it to the subject matter expert, Greg.

Speaker #1: I'm not ready to review the ROE in the Next Front strategy, which was launched six months ago. We say we'll focus on that, and if you can see, our ROE is going up quite quickly, so we hope to maintain that.

Speaker #1: Now, as to what the aspirational ROE is, I'm not quite ready to share, because there are so many factors involved in that. On the next two questions, I'll pass it to the subject matter expert, Greg.

Speaker #5: Yeah. So I think the first part was, do we work well together? I think the answer is a resounding yes. We have a whole-of-wealth strategy.

Greg Hingston: I think the first part was do we work well together? I think the answer is a resounding yes. We have a whole of wealth strategy. Great Eastern plays an implicit part in that. When we think about wealth, it is really whole of wealth, including insurance. I think if you look at the bank insurance performance, particularly in Singapore, that has improved fairly dramatically over the last sort of 12 months. 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. Obviously, we will continue to optimize that operating model. There's a lot more value upside that we believe within bank insurance. Beyond bank insurance, within Great Eastern, what I'm hoping you're seeing is that we are delivering new products to market. We're launching new propositions.

Speaker #5: Great Eastern plays an implicit part in that. So, when we think about wealth, it is really the 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 12 months.

Speaker #5: And that is basically down to the collaboration between the Great Eastern team and the OCBC team, and the changes that we've made to the operating model.

Speaker #5: And obviously, we will continue to optimize that operating model. There's a lot more value upside that we believe exists within bancassurance. Beyond bancassurance, within Great Eastern, what I'm hoping you're seeing is that we are delivering new products to market.

Speaker #5: We're launching new propositions. We launched High Net Worth in March—this was Great Eastern Private—and we've seen very good traction following that launch.

Greg Hingston: We launched High Net Worth in March. This was Great Eastern Private. We've seen very good traction from following that launch. We've got more propositions coming. We are now investing in the technology that we're using within the business as well. That's technology that we will deploy here in Singapore, but also deploy across our other businesses as well, particularly Malaysia. There's a lot happening within GE, we're confident that the momentum in the business can be maintained. We can update you more as new things come to market.

Speaker #5: And we've got more propositions coming. We are now investing in the technology that we're using within the business as well. That's technology that we will deploy here in Singapore, but also across our other businesses as well, particularly in Malaysia.

Speaker #5: So yeah, there's a lot happening within GE, and we're confident that the momentum in the business can be maintained. And yeah, we can update you more as new things come to market.

Speaker #1: All right, great. There's a third question on the tax relating to the insurance company on the China front.

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

Speaker #5: Which one was that? Tax, did you say?

Greg Hingston: Which one was that? Tax, did you say?

Speaker #1: Yes, tax.

Tan Teck Long: Yes, tax.

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

Speaker #5: Was this the CRS point? So I don't think there's anything new there. I think this is the adoption of CRS by China, so I don't think there's any new news in that regard.

Speaker #5: And it doesn't affect us.

Tan Teck Long: Under the whole wealth strategy, we are moving things very quickly. The Hewton Fair Suite, which is the 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 Bank partnership with Great Eastern, the two teams have 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. We are redesigning that end to end at the moment.

Speaker #1: And under the whole wealth strategy, we are moving things very quickly. So the Hilton Fair Suite, which is the high net worth value proposition by Great Eastern, is in close collaboration with Bank of Singapore, who understand high net worth very well.

Speaker #1: On the OCBC Bank partnership with Great Eastern, the two teams have 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.

Speaker #1: So, we are redesigning the end-to-end at the moment.

Speaker #5: So, countering, I should have probably added, actually, that we just recently announced within GE Financial Advisors that we are now offering not just insurance solutions, but also more sophisticated wealth solutions.

Greg Hingston: Okay, thanks. I should've probably added actually that we just recently announced, within Great Eastern Financial Advisers, that we are now offering not just insurance solutions, but also more sophisticated wealth solutions, equity structured products. Those are effectively executed through Bank of Singapore in an embedded asset manager arrangement that we have with them. 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.

Speaker #5: 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.

Speaker #2: Just to follow up on Great Eastern and also the 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?

Chanyaporn Chanjaroen: 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?

Speaker #2: What's your thought?

Speaker #5: Yeah, it's an interesting market, and we're taking a good look at the opportunity in that market. Yeah.

Greg Hingston: It's an interesting market. We're taking a good look at the opportunity in that market.

Chanyaporn Chanjaroen: You will, you are not doing that.

Speaker #2: Will, but you are not doing that. Are you considering that now?

Greg Hingston: Sorry?

Chanyaporn Chanjaroen: Are you considering that now?

Speaker #5: We might be considering it, yeah.

Greg Hingston: We might be considering it, yeah.

Speaker #2: You might.

Chanyaporn Chanjaroen: You might.

Speaker #4: I guess we'll go back to Nick first.

Collins Chin: All right. Yes. Go back to Nick first.

Speaker #3: 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, or are you able to quantify it by how much assets under management you have under trust?

[Analyst] (Morgan Stanley): 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, or are you able to quantify it by how much assets under management you have under trust?

Speaker #1: Thanks. Actually, we don't reveal the assets under management for our trust business. I mean, it is part of our total AUM, but it's not a significant portion of revenue for us.

Jason Moo: Thanks. Actually, we don't reveal the assets under management for our trust business. It is a part of our total AUM, but it is not a significant portion of revenue for us. It is part of our value proposition to our clients, but we don't reveal those numbers. As mentioned before, we are watching this. We are contacting clients as we speak. We will see how this continues to pan out.

Speaker #1: 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.

Speaker #1: We're contacting clients as we speak, and we'll see how this continues to pan out.

[Analyst] (Morgan Stanley): Just that, obviously, is a very vague metric, but your peers have quantified it as very small or small. Would that be a fair description for you as well?

Speaker #3: And just that this is a very vague metric, but your peers have quantified it as very small or small. Would that be a fair description for you as well?

Speaker #1: As we are going down the path of vagueness, I would continue to reiterate that it's in the small category.

Jason Moo: As we are going down the path of vagueness, I would continue to reiterate that it is in the small category.

Speaker #4: Wi-Fi. Hello. Hi. Wi-Fi from HSBC. Thanks for the opportunity. I have three questions. Firstly, going back to CET1 ratio, just wondering, your target of 14%, how sustainable is that?

Tan Teck Long: Wai-Fong.

[Analyst] (HSBC): Hello. Hi. Wai-Fong from HSBC. Thanks for the opportunity. I have three 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. Wondering your thoughts on that and whether you will 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 will be looking at, if a 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.

Speaker #4: Given your strong loan growth ambition, and also that you are still looking at potential M&A—both of which would consume capital—I am wondering about 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 a potential M&A comes up?

Speaker #4: 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.

Speaker #4: And thirdly, do you have any targets for VNB growth as Great Eastern kind of realizes synergies with the broader group and taps the wider WM customer pool?

[Analyst] (HSBC): Thirdly, do you have any targets for VNB growth as Great Eastern kind of realizes synergies with the broader group and taps the wider WM customer pool? Thank you.

Speaker #4: Thank you.

Speaker #1: So let me address in reverse order. No, we are not anticipating any equity raising. We are actually very comfortable operating at a CET1 CAR of around 14%.

Tan Teck Long: 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. Maybe Greg can give an update on the Great Eastern high net worth.

Speaker #1: There are other techniques we can use in terms of balance sheet optimization if we choose to. We haven't even reached that point yet, so I'm pretty comfortable with where we are.

Speaker #1: Okay. On Great Eastern, maybe Greg can give an update on the Great Eastern high net worth strategy. Yeah.

Greg Hingston: Yeah

Tan Teck Long: strategy.

Greg Hingston: Yeah. Yeah, 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. That proposition is fed through both our agency. 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. 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. Positive on it.

Speaker #5: So, yeah, you're right. It launched in March. I can't give specific numbers. What I can tell you is that we've seen exponential growth in terms of TWNS and MBEV coming from that proposition.

Speaker #5: So that proposition is fed through both our agency—so we have our agency force and our financial reps introducing clients into that, we have OCBC, obviously, and now we have a direct referral model as well with Bank of Singapore.

Speaker #5: 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.

Speaker #5: 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.

Tan Teck Long: I think the feedback we've had from clients who have actually experienced the proposition itself has been very positive. 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 same day. 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. We've got a good range of products now, and we've got some new products coming soon that we will supplement that offering with. I didn't catch the last point, though, on the targets. You mentioned something about targets.

Speaker #5: So if you get the opportunity and you've got a million dollars to invest, you can go to the Houghton Fair Suite in the morning.

Speaker #5: 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.

Speaker #5: 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.

Speaker #5: 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.

Speaker #5: I didn't catch the last point, though, on the targets. You mentioned something about targets.

Speaker #4: The VNB growth target? Do you have any VNB growth target?

[Analyst] (HSBC): A VNB growth target. Do you have any VNB growth target?

Speaker #5: Not that I can tell you.

Tan Teck Long: No, I can tell you.

[Analyst] (HSBC): Value of new business. Okay. Fine. Okay. Sorry, just one follow-up. Sorry to harp on this, on this CET1 ratio. Given that we are already at 14%, do you expect quarters where we could see that going below 14%? If that happens, what are the implications? I'm aware of the credit rating implication, I'm just wondering whether there are any other.

Speaker #4: Okay, that's fine. Sorry, just one follow-up. Sorry to harp on this—on the CET1 ratio. So, given that we are already at 14%, do you expect quarters where we could see that going below 14%?

Speaker #4: 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 others, yeah.

Tan Teck Long: Yeah. We target operating at around 14%, there could be times slightly below, slightly higher. It all depends on the type of loans we do in that quarter. Having said that, to rebalance it's 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 now you happen to mention about, some sorts of prioritization. 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. It is a position which I like to be in, where I can actually decide on many things on the balance sheet optimization. The more we optimize, the higher the ROE.

Speaker #1: We target operating at around 14%. So there could be times when it's slightly below or slightly higher. It all depends on the type of loans we do in that quarter.

Speaker #1: But having said that, do we balance it? It's not an issue, because we have balance sheet management techniques. I think that's as much as I can share today.

Speaker #1: Now, the balance sheet technique can range from, of course, techniques like adjustment—you happen to mention some sort of characterization. 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.

Speaker #1: So it is a it is a it is a position which I like to be in where I can actually decide on many things on the balance sheet optimization.

Speaker #1: And the more we optimize, the higher the ROE.

[Analyst] (UBS): Great. This is Akash from UBS. Thanks for taking my questions. The first question I have is just, again, back on the cross-border rules, and two specific questions related to that. 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 a third 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. 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.

Speaker #3: Great, so this is Akash from UBS. Thanks for taking my questions. The first question I have is, again, back on the cross-border rules, and I have two specific questions related to that.

Speaker #3: 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 a third comes from Chinese investors.

Speaker #3: I was wondering, is it fair to assume that the majority of that cohort is offshore Chinese investors and not mainland Chinese? If you could comment on that.

Speaker #3: And the second question is just, overall, when there's a—I know there's a lot of uncertainty, and, you know, we need a lot more clarity on that.

Speaker #3: 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 would you not say that?

[Analyst] (UBS): In that sort of environment, do you see Bank of Singapore as a net beneficiary of this uncertainty, or you wouldn't say that? Not just Bank of Singapore, I mean, in general, the Singapore wealth management industry. 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 comfortable. Is this something we should expect going forward as well?

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: When the loan-to-deposit ratio is still very, very comfortable, is this something we should expect going forward as well?

Speaker #1: Okay, maybe I’ll ask Jason this part before I chime in.

Tan Teck Long: Maybe I ask Jason to start before I chime in.

Speaker #5: Sure. So, two things. One is we deal with offshore. We don't market onshore. In China, for obvious reasons, we are an offshore bank, so we can only deal with clients on an offshore basis.

Jason Moo: Sure. 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. I can't comment on your mainland. We do have an OCBC private bank onshore, but that only deals with onshore wealth. We have Bank of Singapore operates offshore, so we do not mix those two, if that makes any sense. The second is, for sure we're gonna be entering a period of complexity. I don't think I would say that we're gonna be a net beneficiary or Singapore is gonna be a net beneficiary of it. 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.

Speaker #5: So I can't comment on your mainland. We do have an OCBC Private Bank onshore, but that only deals with onshore wealth.

Speaker #5: And we have an offshore we have a we have Bank of Singapore operates offshore. e. So we do not we do not mix those two if that makes any sense.

Speaker #5: 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 that Singapore is going to be a net beneficiary of it.

Speaker #5: But we will have to see how this continues to pan out, because I think the whole market and the whole street are still watching this space as it unfolds.

Speaker #5: And then it will affect all banks at that point in time. So, I wouldn't say that we will definitely benefit or not benefit.

Jason Moo: It will affect all banks at that point in time. I wouldn't say that we would definitely benefit or not benefit from that.

Speaker #1: Yeah. So, I would supplement that. We are very strict with our compliance on cross-border marketing, so our bankers don't go to China and market, which is one issue that the Chinese are enforcing.

Tan Teck Long: I will supplement that. We are very strict with our compliance across border marketing. Our bankers don't go to China and market, which is one issue, which the Chinese is enforcing. 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 the momentum continue to be strong. There's still a lot of offshore money there for us to actually grow.

Speaker #1: 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.

Speaker #1: What we have seen is that the momentum continued to be strong, so there's still a lot of offshore money there for us to actually grow.

Speaker #3: Okay. There was a second question on the wholesale funding rationale.

[Analyst] (UBS): There was a second question on the wholesale funding rationale.

Speaker #2: All right. The growth in wholesale funding started off in Q1. Really, that was a sort of preemptive raising of liquidity ahead of the Middle East crisis, post 28th of February.

Goh Chin Yee: The growth in wholesale funding, started off in Q1. Really there was sort of preemptive raising of liquidity ahead of the Middle East crisis, post 28 February. In Q2, we continued with that because of the very exceptional loan growth. That we discussed earlier is 5% Q1 Q. This is really balancing out the need in terms of commercial lending with our continued strategy then in H1 of investing in treasury markets, non-commercial assets. For treasury markets, non-commercial assets, that is really one of the tools to enable us to keep our NII resilient in light of the continued drop in rates. As you can see, even in Q2, rates still continue to fall. That strategy has in fact enabled us to be able to sustain our NII to grow quarter-on-quarter by 2%.

Speaker #2: And then in second quarter, we continued with that because of the rare, exceptional loan growth that we mentioned. We discussed earlier it's 5% quarter on quarter.

Speaker #2: So this is really balancing out the need in terms of commercial lending with our continued strategy, then, in the first half of investing in treasury markets and non-commercial assets.

Speaker #2: Yeah. So, for treasury markets—non-commercial assets—that is really one of the two enablers to keep our NII resilient in light of the continued drop in rates.

Speaker #2: As we can see, even in second quarter, rates still continue to fall. So that strategy has had an effect, enabling us to be able to sustain our NII to grow quarter on quarter by 2%.

Speaker #2: So, 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.

Goh Chin Yee: Going forward, as I mentioned earlier, we will be looking at balancing out the investment in treasury market assets with the opportunities for commercial lending, as well as capital deployment. That could probably slow down in H2, in tandem of which the wholesale funding needs will also decline in that sense.

Speaker #2: So that could probably slow down in the second half, in tandem with which the wholesale funding needs will also decline in that sense.

Speaker #3: So Kriti?

Tan Teck Long: Sukriti?

[Analyst] (Bank of America): Hi. Thank you, management. 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 five to six billion quarter-on-quarter. Do you expect this momentum to sustain? What would be some of the other drivers? 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? Do you have any target AUM over the next few years that you're looking at reaching?

Speaker #4: Hi, thank you, management. This is Sukriti from Bank of America. I have a couple of questions. First, on wealth growth—congratulations on back-to-back strong growth in wealth.

Speaker #4: I just wanted to understand some of the key drivers that you're seeing, as net new money growth continues to look strong at $5 to $6 billion quarter on quarter.

Speaker #4: Do you expect this momentum to sustain? What would be some of the other drivers, and also, if you could share, what are some of the key markets that are looking most attractive to you right now?

Speaker #4: 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, I just wanted to get a quick update on the FY26 capital return that you mentioned.

[Analyst] (Bank of America): Secondly, just wanted to understand a quick update on the FY26 capital return that you mentioned, the outlook given where the stock prices are still that if the SGD 700, SGD 800 billion that's left in share buyback, that would be returned as special dividend at the end of FY26.

Speaker #4: The outlook given, where the stock prices are still, is that if the $700–800 million that's left in the share buyback is not used, that would be returned as a special dividend at the end of FY20.

Speaker #1: For the AUM, we target double-digit growth over the next few years. As to the momentum, I'll pass it to Jason.

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

Speaker #5: Sorry. 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.

Jason Moo: Suddenly I went from not answering any questions to answering a lot of them. Net new money for us, as Euan mentioned, has remained strong across the group. A lot of that has come from the ASEAN space. We continue to see good, strong momentum. More importantly, I think the pipeline looks just as interesting and just as exciting. We feel quite confident about how the rest of the year is going to pan out in terms of net new money. Hopefully that answers that question.

Speaker #5: And a lot of that has come 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.

Speaker #5: So we feel pretty, pretty quite confident about how the rest of the year is going to pan out in terms of net new money.

Speaker #5: So, hopefully that answers that question.

[Analyst] (Bank of America): Yes. Can I quickly follow up? Any outlook you can give on exit NIM? What was that, maybe July exit, what was the figure for that?

Speaker #4: 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?

Speaker #2: Yeah, our June exit NIM is 1.67%.

Goh Chin Yee: Yeah. Our June exit NIM is 1.67%.

Speaker #4: And on the capital return, the FY26 dividend?

[Analyst] (Bank of America): On the capital return, the FY2026 dividend.

Speaker #2: Yeah. We still have the region of $800 million as part of our capital return plan, which we already mentioned. If there's no share buyback for cancellation, we will return it in the form of a special dividend in conjunction with our final FY26 dividend payout.

Goh Chin Yee: Yeah. 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 in conjunction with our final FY26 dividend payout. Working out SGD 800 million, that will translate to SGD 0.18.

Speaker #2: So, working out $800 million, that will translate to 18 cents, Director Melissa.

Tan Teck Long: Back to Melissa.

[Analyst] (Goldman Sachs): Maybe some follow-up question lastly. In terms of asset quality, I think you have done pretty okay, but I think in this quarter you put a provision for Indonesia. The Indonesian peers don't seem to have that kind of need for additional provisions. I just wondered, what's the difference that you are seeing in Indo on your book?

Speaker #4: Maybe some follow-up questions, lastly. In terms of asset quality, I think you have done pretty okay. But I think in this quarter, you put a provision for Indonesia.

Speaker #4: The Indonesian peers don't seem to have that kind of need for additional provisions, so I just want to ask: what's the difference that you are seeing in Indo on your book?

Speaker #1: Yeah. Our provisions are relating to non-impaired loans. So for non-impaired loans, sometimes you look at customers—you know, there's some movement, but it's not a lot.

Tan Teck Long: Yeah. Our provisions is relating to non-performing loans. For non-performing loans, sometimes you look at customers, there's some movement, but it's not a lot. There is also not a lot for this quarter. 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. In general, it's just a very normal movement of overlays. Let's go to Rae-Yin.

Speaker #1: There is also not a lot for this quarter. So our credit quality remains very strong for our Indonesian portfolio. The other point I want to make is that our model taken into account our our views on the of our views on the overall risk of a particular marketplace.

Speaker #1: And we will do some overlays and what have you. But in general, it's just a very normal movement of overlays.

Speaker #3: That's quite a rare one.

Rae-Yin: Great. 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? How can we extract more value out of the investment?

Speaker #4: Great. Very nice increase in contribution from associates there. Can we share if this is mainly Ningbo, and whether there's opportunity to increase our stake in Ningbo at this moment?

Speaker #4: And how can we extract more value out of the investment?

Speaker #1: I think back on Ningbo has been delivering more so the associates the the contribution by associates a large part a very large part is back on Ningbo.

Tan Teck Long: I think Bank of Ningbo has been delivering more. A very large part is Bank of Ningbo. We like what we see. Bank of Ningbo is still delivering very good returns to us, 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 overall planning, but no particular plan at the moment. Any other questions from analysts or media?

Speaker #1: So, we like what we see with Bank of Ningbo. It is still delivering very good returns to us, so we intend to continue to stay invested in Bank of Ningbo.

Speaker #1: 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 overall planning.

Speaker #1: But no particular plan at the moment.

Speaker #3: Are there any other questions from analysts or media?

Speaker #4: Okay. Vivian Shaw from Business Times. Hi. So, OCBC has spoken quite a bit on AI. Has AI become a meaningful growth driver for the bank?

Collins Chin: Okay. Vivian Shah from Business Times.

Vivian Shah: Hi. OCBC has spoken quite a bit on AI. Has AI become a meaningful growth driver for the bank? If yes, is this showing up in your income?

Speaker #4: And if yes, is this showing up in your income?

Tan Teck Long: 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. In that sense, yes. The way we think of 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. ADD strategy means that we want to focus on redesigning process, digitize them, and then intensify the use of data analytics. For AI, where it makes sense to us, where it's fit for purpose, meaning the cost is low enough, then we'll adopt it. We think of it holistically. Because 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.

Speaker #5: AI is meaningful for us, definitely. We have launched some AI initiatives with some income implications. We have been using AI along with our data ethics to actually identify the customers and market.

Speaker #5: So in that sense, yes. The way we think of AI is not in isolation. In fact, if you look carefully, we don't really have an AI strategy per se in isolation.

Speaker #5: What we have is an ADD strategy. Now, ADD strategy means that we want to focus on redesigning processes, digitizing them, and then intensifying the use of data ethics.

Speaker #5: 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.

Speaker #5: So we think of it holistically. Because of our approach, we also don’t spend unnecessary resources to quantify which part is due to AI and which part is not due to AI.

Speaker #5: It is, it's too difficult. We would rather take our energy and go and develop something like avatar banking in double-quick time, you know, introduce Gen AI skills training modules for wealth RMs to reduce costs as well as increase user experience, because the bankers can access the AI training 24 by 7 at their own leisure.

Tan Teck Long: It's too difficult. We would rather take our energy and go and develop something like avatar banking in double quick time, introduce GenAI, skills training module for our wealth RM to reduce costs as well as increase user experience because the bankers can access the AI training 24 by 7 at their own leisure. I think this is how we think about it. It's quite difficult to identify exactly how much is due to AI. By the way, when it comes to AI, actually, we are very cost-conscious. The AI requires us to burn a lot of tokens compared to, say, alternative of not using AI. There are alternatives, simple change in processes, simpler AI and not GenAI. We are not hesitant to go there because we get the bang for buck.

Speaker #5: 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 we when it comes to AI, actually we are very cost conscious.

Speaker #5: The AI requires us to burn a lot of tokens compared to, say, an alternative or not using AI at all. But there are alternatives—simply changing processes, using simpler AI, and not necessarily Gen AI.

Speaker #5: We will not hesitate to go there because we get the bang for our buck. So in that sense, the way we think about it is a little bit different.

Tan Teck Long: In that sense, the way we think about it is a little bit different. Yes.

Speaker #5: Yes.

Speaker #3: Yeah. If maybe I could just add on right in April, we have launched this Gen AI powered sales training program. What we have seen is that our wealth advisor who went through this we see there are practically is up by almost 50%.

Sunny Quek: Yeah. If maybe I could just add on, right? In April, we have launched this GenAI powersales training program. What we have seen is that our wealth advisor who went through this, we see their productivity is up by almost 50%. The way they fix appointments, the appointment rate is also up by 50%. We don't really take this increase as generic there. I think what it do is it really helps our wealth advisor to be more confident. The benefit you also have is branch manager would probably used to do a role play with the people, right? What it means now effectively is they can all do in the comfort of their home, in an environment where they are comfortable with to practice, right?

Speaker #3: The way they fix appointments, the appointment rate is also up by 50%. And if we don't really want, we don't really kind of take this increase that's generated there.

Speaker #3: But I think what it does is it really helps our wealth advisors to be more confident. The benefit you also have is, the branch manager will probably use it to do a role play with the people, right?

Speaker #3: But it means now, effectively, if they can all do it in the comfort of their home, in the environment where they are comfortable, they can practice, right?

Speaker #3: So I think that is something which is really useful in increasing productivity, and I think that is something that really helps us. But we don't really want to attribute all of that to just AI.

Sunny Quek: I think that is something which is really useful, increase the productivity, and I think that is something that really helps us. We don't really want to contribute all that to just AI. I think there's combination, we do see it as a very effective and a useful tool to help to improve our productivity.

Speaker #3: I think there's a combination. But we do see it as a very effective and useful tool to help improve our productivity.

Speaker #4: Okay. Gola. From the edge.

Collins Chin: Okay. Goola from DBS.

Speaker #2: Thanks. Thanks for taking my question. It looks congratulations on the results and of course on the extra 18 cents payout next year. I just want one question that is slightly off you know not really associated with the results, but how do you square the increased use of AI with your sustainability targets?

[Company Representative] (The Edge): Thanks for taking my question. Congratulations on the results and of course, on the extra SGD 0.18 payout next year. I just want one question that is slightly off, not really associated with the results, how do you square the increased use of AI with your sustainability targets? Apparently, AI takes up a lot more energy than during the time before AI, and there is increased also focus on sustainability in your The Next Frontier circle.

Speaker #2: Because apparently AI takes up a lot more energy than during, you know, the time before AI. And there is increased, also, focus on sustainability in your Next Frontier Circle.

Tan Teck Long: AI indeed consumes electricity. That's why our philosophy when it comes to AI is not GenAI. I touched on it just now that if there are simpler AI, we'll use a simpler one, which actually consumes less resources than GenAI everything. I'm not a big fan of GenAI everything. I use AI quite judiciously, and you can see the results. By being judicious, interestingly, we are able to launch many more things simply because we are very focused on the value creation more than whether it's AI. You think about ADD, the trade secret is this, it's actually DDA. Distur, digitization, 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.

Speaker #5: The AI indeed consumes electricity. So that's why our philosophy when it comes to AI is not Gen AI. So I have I touch on it just now that if there are simpler AI, then we'll use a simpler one which actually consumes less resources.

Speaker #5: Then Gen AI everything. So I'm not a big fan of Gen AI everything. So I use AI quite judiciously. And you can see interestingly we are able to launch many more things simply because we are very focused on the value creation more than whether it's AI.

Speaker #5: So, if you think about ADD, the trade secret is this: it's actually DDA—digital digitization, because that helps us redesign processes and make them more efficient.

Speaker #5: We create value there. Intensify the use of data ethics which historically I find is bang for buck. And then AI may be used in the data ethics but that's that that is a light use of the power generally as in like electricity.

Tan Teck Long: AI may be used in the data analytics, but that is a light use of the power, generally, as in like electricity. AI, we said that fit for purpose, only value add. In a way, if you think about that, if it's fit for purpose, means that it has to be better than other alternatives, in which case it's a worthwhile use of the power, and therefore sustainability is not an issue from our perspective.

Speaker #5: The, the then AI, we said that's fit for purpose. So only we value add. So, in a way, if you think about that, if it is fit for purpose, it means that it has to be better than other alternatives.

Speaker #5: Then, in which case, it's a worthwhile use of the power, and therefore sustainability is not an issue from our perspective.

Collins Chin: Felicia from The Edge.

Speaker #4: Alicia from the edge.

Speaker #2: Hi, Felicia from The Edge. Thanks for taking my question. So earlier on, Mr. Tan, you mentioned that you're happy to do an acquisition if the right target comes along.

[Company Representative] (The Edge): Hi, Felicia from The Edge. Thanks for taking my question. Earlier on, Mr. Tan, you mentioned that you're happy to do an acquisition if the right target comes along. What to you is the right target?

Speaker #2: So, what to you is the right target?

Tan Teck Long: In general, my personal preference is a portfolio relating to wealth, like the HSBC wealth acquisition. 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. I don't really need that. The in between, we have to assess, generally, it tilts towards the retail side of the business, especially wealth. I want to add one more thing. We are also very cognizant. Although we have shown very good results, actually at the back of our mind, we are actually quite risk-averse. We balance risk and reward, I would say, so far very well. There's quite a fair bit of risk in the environment.

Speaker #5: In general, my personal preference is for portfolios related to wealth, like the HSCC wealth acquisition. I don't have a particular preference for the corporate loan portfolio, because we believe that we can grow that portfolio on our own.

Speaker #5: We are very competitive in terms of gaining market share and growing loans. So I don't really need that. The in-between we have to assess.

Speaker #5: But general it tilts towards the retail side of the business especially wealth. I want one more thing. We are also very cognizant within our although we have shown very good results actually at the back of mind we are actually quite risk averse.

Speaker #5: We 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 we doubly careful because we don't want to end up with like you know spending our time trying to sort out credit losses.

Tan Teck Long: When it's a loan portfolio, we have to be doubly careful because we don't want to end up with spending our time trying to sort out credit losses. That gives you some context, that you give a flavor of the current environment as well.

Speaker #5: So that gives you some context, in that you get some flavor of the current environment as well.

Speaker #4: Okay, I think it looks like everyone has all their questions answered with that. Thank you very much, and have a good day.

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

Tan Teck Long: Thank you very much.