1H 2025 Financial Results Briefing

We are a bit early, but I guess we can start. So good morning, ladies and gentlemen. Welcome to OCBC second quarter 2025 results briefing. On our panel this morning, we have our group CEO, Ms. Helen Wong, and our newly minted Deputy CEO, Mr. Tan Tae-Long, our CFO, Ms. Goh-Ching-E, Mr. Kenneth Lai, our head of global markets. And then to Helen's left. Right. We'll have Mr. Sunny Quack, our head of consumer banking as well as our group CEO, Mr. Jason Moon. So I guess today I'm just a bit too excited because we have our CEO and WCO together. All right. So I think Chini will take over to go through our results and thereafter we will take a Q&A. Ching-Yi, please. Okay, our first half, 2025, group net profit was 3.7 billion Singapore dollars, 6% lower

than last year's record high level. Total income was little change at 7.2 billion. The The decline in net interest income was mostly compensated by growth in non-interest income, reflecting the resilience of our diversified franchise. Net interest income was down 5% to $4.63 billion against the backdrop of declining interest rates. I will spend more time to talk about net interest income in a later slide. income rose 8% to 2.57 billion, lifted by broad-based fee income growth and higher trading income. Expenses were well-managed and controlled, even as we increased our strategic spending to invest for growth.

Cost-to-income ratio stayed below 40% at 38.9%. We achieve solid year-on-year growth in loans and deposits, up 7% and 10% respectively. Asset growth remains resilient, with NPL ratio at 0.9%, total credit cost at an annualized of 18 basis points. Capital position remains strong. common equity tier one ratio was 17% and fully face-in ratio was 15.3%. In line with our target ordinary dividend payout ratio of 50%, in-trim ordinary dividend of 41 cents was declared. Moving on to second quarter performance. Group and

banking operations, second-quarter net profits were 7% below last year, mainly due to lower net interest income. Against the previous quarter, banking operations' net profit was up 2%, from higher operating profit and lower allowances. At group level, net profit moderated by 4% as GEH second-quarter performance was impacted by lower insurance income. Our three key business pillars of banking, wealth management and insurance provide diversified earnings base. Banking business continued to see customer-driven growth, reflected by rising loans and deposit its volume. Net interest income came off from prior year's peak level but mostly compensated

by double digit growth in our non-interest income. We are seeing results of our focused investment in wealth management business. Our wealth management income was up 4% to new high of 2.66 billion, contributing 37% to our group total income. Banking AUM rose 11% year on year to record 310 billion, driven by net new money inflows across all our wealth segments as well as positive market valuation. Our first half, 25, net new money inflows were $9 billion, with $4 billion in second quarter alone. For insurance, first-half profit contribution from GEH grew 10% to $553 million.

GEH's higher contribution was driven by improved investment performance from its shareholders' funds and our increased stake in GEH following our voluntary general offer last year. GEH New Business Embedded Value or MBAF was 16% higher and MBAF margin improved to 44.7%. This reflected GEH's strategic shift towards higher margin products. Moving on to net interest income in slide 10. Second Q, net interest income decreased 3% Q on Q to 2.28 billion. Average assets rose 2%. But this was more than offset by 12 basis points decline in NIM.

We have included additional analysis on this slide to provide more colour on NIM. The main factor was the drop in loan use, which impacted group NIM by 17 basis points. This was largely due to the shortfall in Sink dollar and Hong Kong dollar benchmark rates during second quarter. in loan use outpaced the drop in deposit costs which reprise much slower than loans. Close to half of our loan book are denominated in SingDollar and HongKongDollar. About 80% of our SingDollar loans are on floating rates and nearly all our HongKongDollar loans are on floating rates. the second quarter, one month and three month compounded solar dropped more than 50 basis

points. And high ball fall was even sharper. One month and three month high ball rates were down around 300 basis points and 220 basis points respectively. Strategic equity deployment into income accretive high quality assets during our first water also led to a small drag on NIMM, about two basis points. Now our June exit NIMM was 1.88%. We expect upward inflection from the exit NIMM as we see flow through from ongoing deposit rate cuts. As an end zone, meme sensitivity based on 100 basis point drop in rates across our four major currencies of Singapore dollars, Malaysian ring gate, Hong Kong dollar and US dollars

was around 12 basis points on an annualized basis. For the remainder of this year, we maintain our assumption of three fat rate cuts. But with the unexpected sharp drop in solar and high board that I mentioned earlier, we now expect FY25 NIM to be in the range of 1.9 to 1.95%. Moving on to non-interest income. The first half non-interest income grew 8% year-on-year to 2.57 billion, lifted by strong growth in fee income, trading income, as well as higher realized gains from sales of fixed income securities. This more than compensated for a 9% decline in insurance income. The lower insurance income was largely due to two factors.

Mark to market impact of decline in interest rates on valuation of insurance contract liabilities and revaluation of private equity holdings in our insurance funds. More details have already been shared in GEH result announcement earlier this week. I will cover more details on fee and trading income in the next two slides. First half fee income grew 19% to 1.13 billion from work-based growth underpinned by increased customer activities. From the chart, we can see upward trajectory in fee income over the past few quarters, supported by sustained growth momentum in our wealth management fees. self-wealth management fees rose 25% to $548 million, the highest level in the past three

years. Our strong performance was driven by growth in private banking, bank assurance, unique trust as well as structured deposits. Compared to a year ago, customer increased deployment of funds into investments. Now around 60% of our AUM are placed in investments across all our wealth segments. First half 25, trading income was up 6% to 771 million. Customer flow treasury income, which made up almost 80% of our trading income, grew 10% to a record 594 million. The growth was contributed by both wealth and corporate segments. We also saw higher treasury sales across all our key markets.

On cost, we continued to be disciplined in cost management. First half, operating expenses rose by a modest 3%. Our cost to income ratio held below 40%. Q operating expenses was 2% lower Q on Q. Our overall loan portfolio quality remained sound and PL ratio unchanged at 0.9%. We continue to stay highly vigilant, including conducting ongoing reviews of the potential impact of trade tariffs on our loan book. We have assessed that trade tariffs having first order impact on 3% of our loan book and 2 third of our loan book are in sectors with strong domestic focus. We further stress tested our loan portfolio

and assessed that our portfolio remained resilient. First half 25 total allowances were 326 million, up 4% largely due to higher allowances for non-impact assets. This included preemptive allowances set aside for trade tariffs and macro uncertainties as well as adjustments for macroeconomic variables updates attributable to weaker economic outlook. The first half, total credit cost, is an analyze of 18 basis points. Second queue, allowances decline 46% queue on queue from lower allowances for both non-impact assets as well as impact assets.

The decline in allowances for non-impact assets was mainly due to changes in credit risk profiles and exposures. These are partly offset by additional preemptive overlays as well as downward NEV adjustments in 2nd Q. NPA coverage ratio stood at 156% as at end of June 2025. Allowances for non-impact loans were maintained at 0.9% of our total revenue. performing loans. Our loan portfolio remains well diversified across geographies and industries. On constant currency basis loans grew 9% year-on-year and 3% Q&Q to $325 billion. Our robust year-on-year growth was underpinned by

increased Singapore housing loans as we continued to build market share as well as higher trade, higher non-trade corporate loans where we supported customers in sectors covering infrastructure, data centers as well as transportation. Our sustainable financing loans continued to see high growth rising 19% year-on-year to $53 billion, now accounting for 16% of total group loans.

Our group funding position remained strong, anchored by stable customer deposit franchise, which made up 80% of our funding base. Customer deposits grew 10% year-on-year and 1% Q on Q to $407 billion. In particular, CASA deposits grew by $26 billion or 14% year on year across both corporate and consumer segments. Our CASA ratio rose to 49.8%. We maintain a strong capital position. Transitionary CET1 ratio was 17%. 0.6% points lower Q on Q, mainly due to payment of our FY 24 final ordinary and special dividends, which offset profit accretion.

On a fully phase-in basis, CET1 ratio would be 15.3%. After paying our first half 25% interim dividend, pro forma CET1 ratio will be at 14.6%. Our board has declared an interim dividend of 41 cents. This is in line with our target 50% ordinary dividend payout ratio. We remain committed to our previously announced 2.5 billion capital return via special dividends and share buybacks over two years. This includes paying 10% of our FY25 Group Net Profit through a special dividend. Together, we are of target ratio of 50% dividend payout for ordinary dividend. This represents a total dividend payout ratio of 60% for FY25.

With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Helen. Thank you, Ching-Yi. And good morning, everyone, again. It's always a pleasure to have you all in so that we can do a review together on our performance and also have some time to reflect and also look ahead. Just want to send an apology. You may hear that I'm coughing, I have a lingering cough, but I'm okay generally. But if I do have some coughing, so bear with me. Allow me first to just delve a little bit deeper into our first half performance. So if we go to the first page, I just want to say we continue to deliver a resilient set of results. This is with wealth balance earnings, even through a rather complicated economic cycle.

A few points here. Indeed, we benefit from diversified earnings, as we said, with a strong interest income cushioning the impact from declining interest rates. Jing Yi has expressed on how interest rates have shaped the movement of our limb, but if you want to talk about this more, maybe later on we can cover. And indeed, I think why we resilient also reflect that we have been successful in executing our strategic initiatives to drive revenue growth. I think you all remember we talked about the three-year plan of incremental revenue of $3 billion from the period 23 to 25. And as at the first half of 2025, we have achieved nearly close to 90% of that $3 billion. So it's probably a bit ahead of our schedule.

As shared by Ching Yi, net interest income has also in a way declined from the peak, reflecting the significant decline in same dollars and Hong Kong dollars' benchmark rates. But we continue to see volume growth. You can see our loan exposure, our loan expansion, though the pace has indeed moderated in recent quarters. Non-II has shown resilience back by our efforts in driving our strategic priorities. We talked so much about building the wealth business and building the cross-border business linking up with China with ASEAN, where we are well positioned to serve our customer. So on wealth management, I want to mention this is an important key business pillar under our plan. And of course, we have been seeing realisation of the strategic efforts in growing our wealth business.

I have Sunny and Jason here today. As again, if you are more interested in the wealth business, I'm sure they're very happy to share some of the things that we have done that enable us to continue to grow and keep the momentum of the growth in our wealth fees across all the product channels. And indeed this led to a 25% increase in wealth management fees year on year. Wealth management income, as said, we continue to grow that and AUM has also increased 11% from a year ago. We've continued momentum in net new money. I think that is important. We see that in flows across all wealth segments. And just to give you some breakdown, first half we have net new money of $9 billion and this is a $4 billion growth in the second quarter following $5 billion growth in the

first quarter. We also saw an increase in demand for diversified investments options, so clients interested in wealth planning advice and also alternatives investment as well. So this is a testament to how we have enhanced our capabilities and also expanded our RM pool. Remember we talked about in particular for private banking we are growing our RM in our three year plan. So this have helped to enhance the wealth management business all in all. Trade income improve, largely driven by customer flow, this is the good part. And And indeed, we have seen increased client activities. It all comes together when you talk about incremental revenue. Of course, you have to have the initiatives and with a one group approach. But indeed, it is through a few years of working on serving the customer better across more geography, have volume growing, have more customers, and more customer leading to demand

for more and different products. And as we improve our channels, that also helps. Clients continue to also actively hatch the exposures, including long-term rate hatching for infrastructure and also project finance transaction. So what we have is all the way for Sunny and Jason's business, but a lot of our growth is also not just for loans, but anything that related to the loan exposure, as I just mentioned. So for GH or Quick Eastern Insurance Business, right, profit contribution 10% higher than a year ago. The business performance, stay resilient, I think Greg and Roni are in today. If you want to catch up with them, but they did already announce the results and talk about how they have performed and have a bit of a forward-looking, talking about strategy as well.

So, indeed, investment income also improved, right? And this is our growth in the contribution is also in part due to higher shareholdings gained from the VGO. So about the offer for Great Eastern, there's quite a lot of comments in the media and maybe I'll just take a chance to really reiterate OCBC's position on Great Eastern. So if you ask me, I am happy. We are satisfied because we fulfilled our objective of gaining more economic interest in Great Eastern, right? So our objective, which we said, if I bring you back one year, our objective when we said in our 2024 VGO announcement, right, was to increase our stake in Great Eastern with a view to the list. We did say that. We were successful in increasing our stake. rising from 88.44% to 93.72%. So if the increase was substantial enough to result in a delisting,

we welcome it. It did not, but it is also acceptable to us. This year, the delisting resolution was proposed by Great Eastern. Great Eastern's plan, and have to, we solved the 11-month trading suspension. So OCBC supported the listing proposal with an exit offer. So we are consistent. But if the listing is not achieved, we already have the plan to support GE to resolve the suspension by opting to take only class G shares. I think know the whole proposal very well, I don't need to explain it. So the class issues is without voting rights, right? So we maintain our economic interests but help GE. Of course we still need to see the result but this is a plan to help GE to resolve the suspension, right? So and also our strategy with

Great Eastern has not changed. GE has always played an important role in OCBC becoming a leading world management player in the region. And over the years we have increased our stake, we depend our integration and increased synergies with Great Eastern. And we will definitely have more to share as Greg conduce to work very very closely with every one of us in considering and planning for more synergies and collaboration working together. So in the past, we already have built a more comprehensive and innovative suite of investment insurance and estate planning solutions to our customers. And Quick Eastern likewise have benefited with a very committed retail and commercial customer base for them to deliver their products, right? And with the increase in shareholding in GE to 93.72%, we will continue to accelerate

the synergistic work with GE as we grow as one integrated financial services group. So I just want to leave that on the comments on GE, what happened recently. So just want to wrap up this page. Of course, cost to income ratio remains below 40%. Ching Yi talked about type management of cost, but we still want to enhance technology capabilities, especially in AI. So we maintain cost discipline and strong control on discretionary expenses. But for investment, we need to put in. We continue to do so. The hazard quality of course remained resilient. NPL ratio maintained at 0.9% for five quarters in a row and this is since June 2004, or 2024. And of course a lot of people talk about uncertainties due to the trade tariffs.

We haven't seen the end of it yet but that has been impact but I think we have always been prepared. We look at tariffs, we don't respond to tariffs changes. We prepare ourselves, we prepare our customers for that. And I think the market was quite prepared, as you can see, how market has rebounded since Liberation Day. But having said all that, because of the uncertainty and the volatility, we did put aside additional ECL in both first and second quarter as the trade negotiations progressed, right? And this included overlays for businesses impacted by tariffs or slowdown in global trade, as well as adjustment for our MEV updates, mostly from the change in GDP forecast, right? And we will continue to view overlay approach as the tariff negotiations progress.

Currently, we do not see significant weakness in our portfolio, but do want to highlight that Hong Kong CRE remains a sector that we are closely monitoring and working with our customers to support them in tightening over this difficult time. So, continue to focus on tight underwriting criteria. We do close monitoring proactively derisking a portfolio where appropriate. There are some spots that we grow our business better. I'll ask Tik-Lung to cover those later on. But with our recipient results and strong capital, indeed we're keeping to our dividend policy of 50% payout ratio for the interim results. So turning the page, we did say I think we do have stronger than anticipated first half results and we expect second half to be more challenging though, right?

Because alongside the Brazilian, first half has benefited from the better than expected GDP growth across the region. So regional markets were also supported with front-loading activities ahead of the US tariffs and government policy support. But of course we look into the second quarter, a terrorist and heightened geopolitical tension have created uncertainty and challenges. And there could be further fragmentation of global trade. There could be potential inflationary impact from terror shocks. This continues to cloud the operating environment in the second half, although we have a more calm first month of the second half. We remain though long-term positive on regional growth. Asia, we still say, is the place to be. trade investment and wealth flows across ASEAN and greater China region continue. We still see, as I said, a pocket of growth opportunity in the region and our key markets.

And with that, I now invite Teklong to share more on these. Good morning, everyone. I will start by sharing some thoughts on the tariff situation. I will use two words to describe the tariff situation, actually three words. The first word is uncertainty. So the impact we see in the business environment is really customers reevaluating their investment decision. This is what we see. But in terms of trading flows, it continues on a big EU basis. The second word I will use or the second phrase I will use describe the tariff is chain reaction. That chain reaction hasn't fully manifest itself yet. So what we saw was that when the tariff charge on China products was very high at triple digit, we find that the merchandise from a major manufacturing country such as China find its way to other markets. And because of the sudden influx of merchandise products made in China, some of the local businesses

suffer from this intense competition. So that was what happened. However, there is also a silver lining. A lot of businesses, especially in Singapore, they are net importers. They import products, they import their raw materials for activities conducted in domestically. So like for example, the construction industry can benefit from a lower cost of raw materials. So that's the silver lining. So depending on how the shield of the tarry hand, we were, there's a chain reaction which currently is still developing. In terms of long growth, You will have noticed that we actually registered, I would say pretty healthy loan growth in the first half of the year. And if we focus on the loan growth post-depression day, it continue to be healthy. The one big contribution reason is that a lot of the loan growth which we have been focusing on, the industry sectors actually derive their demand domestically or regionally. For example, data center project,

for example, real estate in Singapore, for example, project financing. So that will continue to anger our loan growth. Outlook-wise, for the next half of the year, we are still optimistic that we can continue our pace of loan growth, ending the year about mid-single digit as per our guidance earlier. Thank you. Thank you, Thich Nong. I just want to re-emphasize that OCBC is well positioned to capture growth opportunities as we identify. And we will continue to use our deep presence in the region, supported with all our overseas network branches. And indeed, we're able to capture the opportunities because we continue to run a strong balance sheet and also a strong capital position. Over the years and continue to do so, we have been focusing on enhancing our capabilities, right?

deepening our presence in our key growth markets. A lot of you have talked to us over the last few years. You've seen the changes, you've seen the people, you've seen how we work together as a group, leading to a few good years of good results and also the incremental revenues that we talked about. So we hope all this also working together as one group, we position ourselves to weather any challenges due to uncertainty. We want to remain and we will remain agile in navigating the challenges and be proactive and will pivot accordingly. With this, let me turn to my last page and provide an update. I've already seen that having reviewed the operating environment and outlook, we now expect our net interest income to come slightly lower than the record levels achieved in 2024. The NIR will be down by a mis-single digit percentage.

So as mentioned by Jun-Yi, we are guiding down the net interest margin, the LIM, to be in a range of 1.9 to 1.95% in light of the current market conditions. Long yields likely will come down further, but will be mitigated by lower funding costs. So deposit cost savings expected to fall through from the third quarter, falling from interest rate reductions on our flagship accounts in Singapore in particular. This is effective in May, and we have announced another cut in August as well. growth we want to maintain at mid-single digit cost to income ratio maintain at low 40s as we continue to exercise strict cost discipline. But again, it would depend on the income, right? But we will be very disciplined in maintaining our cost. Credit cost, we put it between 20 to 25 basis points, but we will continue to exercise proactive

risk management. We will continue to focus on tightening underwriting criteria, a selection of clients, close monitoring and proactive de-risking of portfolio where appropriate. We remain committed to deliver the 60% dividend payout ratio coupled – remember, we still have the share buyback plan over a two-year period together delivering a $2.5 billion return of capital to our shareholders, of course barring unforeseen circumstances. Before we move on to Q&A, and before you ask, maybe I talk a bit about this is the first chance I talk about my retirement since the announcement about three weeks ago. Just drawn to say people ask me why and all that. There's only one simple reason, I need more time to be with my family in Hong Kong.

This is one simple reason and a very important reason. I actually advised the board this thinking early last year. Why you have to start so early? Because the session planning is a very serious thing. You cannot just say I want to retire and I go the next day. Can you say I go in six months? Or even can you say you go in one year? Everything remains normal when we plan on this. And indeed, the board was supportive of course after quite some discussion, right? And we began the succession process. And of course, with the view only to decide on the retirement date after a successor is chosen and the approvals have been obtained. So you cannot say I want to retire in six months time and then we turn out with a CEO with a magic wand and that is not the case for CEO's accession.

So at OCBC as I said we take accession planning very seriously and for key positions we always have identified internal candidates and we have also relevant development plans for all our candidates. And indeed, as you said, when I took over as CEO, we also have some changes to the management team, and quite a number of them are internally selected. And this is important because it ensures continuity, ensures stability, and also alignment with our long-term strategic goals, right? And for succession to CEO, we have to look outside as well, right? because this is only where we find the best candidate and confirm the best candidate. And that's why we did have comprehensive global search. And this was performed and we identified potential external candidates as well. And the board has finally, ultimately, and I want to say unanimously considered

take long as the most suitable candidate amongst all the candidates we have looked at. And that's why we come on to the approvals and working with the regulators and ultimately announce. And I think it is also fine and right to say that between announcement to my retirement we have six months and we have Tae Long who have already started to do more but again to have a very smooth handover as well. And Tae Long as you know most of you have met with him and talked to him. He has been our key member. He joined us for more than three years by now and he's part of a a very significant member in our whole corporate strategy. We talk so much about the trade flows linking up ASEAN and Greater China and building the

team in the region. Tic Long has really been there, anchoring on the success of our one group approach. I have been placing a great emphasis on since I took office back four and a half years ago. than four and a half years ago, but more than four years ago. So take a moment, as you would expect, we will refine our strategy. He's very deep in looking at what's happening to the business, to the world, to where we are put in, what we can continue to improve, and I'm sure he will share more details next year. As you read from the announcement, I stepped down from my role as CEO. I will continue to serve as the Chairman of OCBC China and Director of OCBC Hong Kong. That allows me to spend more time with my family in Hong Kong, but indeed I want to remain linked and connected with OCBC and want to be committed to support OCBC's growth in

these capacities. And while I have more time with my family in Hong Kong, I will come back quite often. And if you do see me on the street somehow, please say hi. I would like to catch up. And I need to come back as well because I am still a board member of Enterprise Singapore. And I will come back because I will have family in Singapore somehow. But that's very private. But anyway, I want to – sorry, I'm not getting married here. No, no, I'm not getting married in Hong Kong either. I will have family members in Singapore, just what I'm trying to say. I would like to invite Long to say a few words. I was also trying to interpret what Helen meant by every family.

Anyway, I feel very excited about my impending appointment to lead OCBC. It's a huge privilege for me to be given this opportunity because OCBC is a really very storied bank with a very, very long history. I have joined OCBC for more than two years and even before that I got an opportunity to meet Helen and we had a lot of long and numerous conversations and I find that we see a lot of things, you know, we have a visual document perspective and she's an indisputable expert in China matters and because of my stint in China there were a lot of things which we discuss and ideas which we exchange. So the end result, I joined OCBC. So while we are in sync with many things, that's however one thing which is not in sync with Helen. And that is a very hot topic between the two of us.

She don't take spicy food very well. So I'm always concerned why I choose restaurants the time with her. In terms of my thoughts about the OCBC franchise, I think we have a great platform. I think OCPC has one of the best platforms in Southeast Asia and Greater China. Well, we are all concerned about the economy hit winds and we worry about the wave. But structurally, if you think about it, this is the place to be. One, our GDP growth rate in this region, instead of one of the fastest in the world. When we talk about China's slowdown, it's slowdown at the rate of 5% growth. 5% you translate a number, roughly it's about $900 billion. To give you a perspective, every four, five years, the value added by China at 5%, so-called slower growth, equals to the whole ASEAN growth, which is at $3.8 trillion today. So I think it's a good place to be in. And ASEAN is growing in a slow year,

four, five percent, in a fast year, maybe six, seven percent. So it's still a very good region to be in. I am a banker who started my career in Singapore. So I understand the ASEAN region very well. I also was based in China and helped to build the China franchise. So it was a very wonderful experience. Broadly speaking, for myself, I spent about one third of my career in risk, two third of my career in the front line. So I think in today's environment, I think I do have a very good insight on how to stay nimber and have the right risk-reward relationship. So, with every economy hit-win we face, there will be opportunities for us and we need to stay nimber. Finally, I want to say one more thing, which is I think pretty unique about OCBC group as a huge strength. We are actually integrated financial services group.

So there are still a lot of synergies which can be reaped from working together in closer collaboration. I think Helen has put us on the right track with the One Group strategy, which I am part of the management team. And this will serve a strong foundation for us to chart the next chapter of growth alongside with the rest of the management team in OCBC. Thank you. Thank you, Ziklong. Please feel free to follow him questions. questions. But we'll pass out the currently session on Jun-Jin. Please. So, Chanya put her hand first, I'll let Chanya go first. Chanya from Bloomberg. Congratulations on the big bid, and I would like to ask about Red Eastern. Are you still considering charging bank assurance fee on Red Eastern? This was mentioned some time before. So a second question would like to ask whether the tariff imposed today, the rates imposed

today and also given that China's rate is still under new positions, are you still giving review on your book and do you think the current preparations, including ECL, is it adequate? Are you going to increase that? Mr. Huan would like to hear the dialogue's view on the growth, inorganic growth of OCBC and in which areas and regions that you want to see. Thank you. On Great Eastern, charging Bank of Serensuite is only one of the things that we keep our options open discussing with Great Eastern. But the emphasis is definitely on how we work closer together and realize some of the synergies that we can do together. And I think through this one whole year,

and don't forget I have been a board member on GE for a while. So with also with Greg Hinson, having joining, time for us to pass through further, it's almost coming up to a year soon. So that is I assure you there's so much discussion and working together that remain very positive about how we can deliver better results in the future together. On the tariffs, yes, you mentioned that there is still China coming up and last night we see a few more conclusions. If you see how do we look at tariffs, it's again, we look at it all the time. When we look at our portfolio, it's not one stop to say that, oh, even if the tariff situation of China has been announced, it doesn't mean that we won't stop looking at the impact, right? So it is an ongoing process. We mentioned first half of the year already have some overlay. Will we consider some more?

It depends. It depends on the results on how we see the book and how we see market conditions. So nothing to share at the moment, but what we have done in the first half of the year, we're quite happy with. So I pass on to take long to address the other question. Yeah. I think the question is about how interested we are in organic growth. I would say that we are very interested in growing organically, as well as in organically. For organic growth, we want to continue to strengthen our competitive position in the market to serve our customers better. For inorganic growth, we are also looking at opportunities. But inorganic growth is opportunistic. For any organic growth, my view is that it must fit two main criteria. One, it must fit our strategy. And two, it must be a reasonable cost. So we certainly don't want to overpay. I hope that can give you some insights at this juncture.

Can we take a question from the sales side, maybe Akash, first, and I'll move on to you guys. I saw your hands. Thank you. This is Akash from UBS. Thanks for the opportunity. Wish you a very happy retirement, Helen, and congratulations next long and all the best. The first question is just on asset quality. So this quarter, while generally the NPL ratio was flat, but there was a bit of pickup in NPLs in the consumer private banking space, roughly 150 million. So if you could share some more color on that. And then related to this, the Hong Kong banks that have reported have showed some renewed stress in the CRE space. So I just wanted to get your thoughts on why do you think this happened? Is there a chance this could happen to you in the coming quarters? That's the first question, and then I have a few follow-up questions. I think Jason, we covered the first one. I think commenting on Hong Kong's and all your stick around to do that. Sure. So the increase in the NPLs relates to some of the loans

that we've done in the private bank. To be fair, we actually in a line with our risk appetite, we've taken the prudent approach to these loans. We are still working through them. We're actually making very good progress. So we hope at some point in time that we will be able to write back. But it is just a few loans that sits within our book that we're being quite prudent in our approach and working them through. And we hope to be able to write that back pretty quickly. Do you see which market it is? And is it like margin loans? Or is it a large number of clients, or maybe just few clients? No, they're actually spread across a few. I'd rather not talk about the region just yet. But we are pretty confident on being able to recover a lot of this. So it's, again, to be very clear, it's just us being prudent. It's not a lost cause, for lack of a better term. On the Hong Kong CI situation, actually it's not a new one to us.

We have been tracking that market for quite a while. I think if we recall in the past sessions, I did talk a little bit more about Hong Kong. So it's been very prudent. Firstly, we have been proactively managing our exposure. The overall CI exposure has just came down for us in the more vulnerable segment. Secondly, to the proactive management, we have been downgrading the cases, which means the outcome of which is that ECL2 or ECL3 get increased. So it has been put into the system as we speak today. So as long as the Hong Kong situation do not deteriorate in terms of the CI evaluation, I think we are quite comfortable. To give you another point, is that our provisioning policy has been quite conservative and based on some of the recovery action we had done in the past, is more or less in that ballpark. Thank you. The second question that is on the dividends. So based on the current payout policy that you have committed to 60% for this year,

I think the way earnings are trending, it's a good chance that your earnings would be down 5, 7%, 9% year on year. There's a good chance that the absolute DPS might be lower. So last year it was 101, this year might be 95, 96. I just want to get a sense, are you OK with the absolute DPS going down, despite the fact that you still have a lot of excess capital and buffer to be able to keep it flat year on year? OK. I want to reiterate that we have a different policy and we want to be very transparent with our investors. In the past, we have considered being above our dividend policy. And do not forget we do have a commitment of a share by back plan as well. Whether we would consider a different level of dividend depends a lot on how we see our balance sheet and capital position. And so I can't tell you, will we pay more, right?

But a different policy is a different policy, meaning it is very clear. So if you have the percentage, that means we are paying at least that amount out from our profit. But will we pay more? Then it will depends on how we look at our capital position. Should we have anything to add? It should not be ruled out, the possibility of a flat DPS. Should not rule out. I wouldn't say that, but we'll just say that in the past, we have experienced a pain above. It doesn't mean that we're necessary, we'll repeat it, but it's all the time we will consider our capital position before we decide our final dividend. Yeah, adding on to what Helen has mentioned, notice since we announced our dividend policy in early 2023, right, for interim dividend is always 50%. And we said there's a target, 50% dividend payout barring unforeseen circumstances and we have delivered that three years in a row for interim dividend.

Now, your question about whether our, I've mentioned, we have mentioned 60%, right? Overall, dividend payout ratio for FY2025 as part of our capital return plan and that makes up 10%, that comprise 10% of our dividend, dividend, which are in special dividend form. Now, at the end of the year, when we look at our final dividend, that is when we will really take into account various sort of factors to decide whether we want to go beyond, you know, like 50% ordinary dividend. And as you We can see in the past two years, FY23 and 24, we did go beyond. We paid 53%. And this is an exercise that we will continue to do. And what we look out for are really, you know, a position, what the captain needs to support

our business growth, to support strategic initiatives in our corporate strategy. Are there any market hate wins whereby we need to set aside more buffer to navigate uncertainties? And of course, there was a question to take long ride on inorganic opportunities. There were also, I'm also very aware that we should set aside some dry powder for new CEO who may want to go shopping. Although I'm very glad that he said that valuation matters a lot. So these are really a lot of factors that we take into consideration in our comprehensive sort of capital return plan as I mentioned before, as well as going forward position on dividend payoff. Thank you, Shini. So just a quick question is in the past, there was a bit of a reduction in staff for quarter and quarter.

There was a bit of reduction in staff costs, quarter and quarter. So just want to understand, is it part of some initiative, or is it just accruing bonuses in different quarters of the year? What drove that staff cost reduction? Do you want to cue? Partly is because of economic activity, because some staff are enumerated with performance. And so if your result number is lower, so potentially that's lower too. And partly also we haven't really grown our headcount much. Which is part of our type course control. And yeah. It can stay at that level, right, the stuff cost? I hope so. And then finally, what's the plan with GE? Like if the read listing does not happen,

Are we back to square one in trying to figure out what's the next step here? There is no back to square one. We increase our stake in GE as we have planned. And as I said, the discussion of GE continues. Not a discussion so simply put, it is really working together. I think Greg can testify to that. We talk about so much more different opportunities and how we can actually pull resources together, realize better synergies as well. So I don't think we are going back to square one, but we did say that we have achieved what we want to set out to do. I mean, no one guarantee that you can achieve the listing because it is up to the multi-shadows. So, but the whole point is we did increase. So that means GE's contribution to OCBC group

will be bigger going forward. I like that fact. And then we'll see. I mean, why don't we wait for the results of this business issue, and then we talk. But we also said that this delisting offer, exit offer, is to help GE to support GE. I don't like the word help as well, is to support you to resolve the suspension. So that is why, if you look at the UGM, the resolutions are all out there. We are not waiting for anything to say that if the listing does not happen, then we then come back and think about it because we want to help them to resolve this. We thought the proposal of the bonus share and the class issue is a very valid resolution to support GE to resolve the suspension, right?

So let's see how that is like, meaning that we don't really have any imminent plan to launch and yet another offer. Manauti shareholder is opting for class C also. And I think it puts you in a difficult. If the Manauti shareholder is also opt for the class C share. If they do. If they opt for the class C share. Then we see the result first. What's the deadline for this? Would you remind us? What is the deadline? When do we find out? Seven of August. Seven of this. To some nation, that's right. But just remember, if they are not picking crossing, they don't need to do anything. That means they will receive the bonus share. Mr. Thank you. OK, thank you. Maybe at the front, Jaden from Macquarie. Thank you. Congratulations, Tech Long, on the appointment. And Helen, it's hard to believe for and a half years that time flies. So you're wishing you all the best as well.

So I had a couple of questions just on more on the NIM and the deposit side. So I think, Chinya, you said that we had an exit NIM of 1.88% and we are expecting some good momentum from some of the deposit rate cuts. Can you help us to quantify this? And maybe also to think about what the quantum would be from the reductions in the 360 account, because I think that was one of the important factors that you mentioned. sort of help us to size this up that'd be wonderful thanks. Yeah not so much going right into the quantum but what we are expecting is I also give you the rates assumption for the benchmark rates from 1.88 we expect a little bit of inflection upwards rather than stay at 1.88 and the assumptions are really firstly on the deposit cards that Helen has already mentioned and secondly we expect the SORA and high ball to stay steady at current levels.

And I mentioned about tree rate cuts, right? Looking increasingly, possibly to more tree rate cuts, you know, now we using the tree rate cuts assumption, we assume historicals or transmission rate to the two key rates, right, of high ball as well as SORA. So for high bore, 100% transmission from the tree rate cuts, and for SORA, it is like 50, 60% transmission. So lesser degree. Now, based on this, we still, we expect our second, the Q and fourth Q-nim to be above the S-zitnim. So that's why we still give, you know, 1.9 to 1.95. It is likely to come closer to the higher end, you know, if all my assumptions come true. Of course, you know, depending on why we give a range, right, it is also barring, you know,

a sharp drop again, you know. And then with that, we also look at volume growth to make up for some of the possible drop further in the grades and as a result which this time round we also give some guidance in terms of NII, sort of missing the digit percentage drop just to put into some perspective of what sort of assumptions that we have put through and then the NIM guidance as well. Yeah okay but I think all of the factors that you just described are actually like negative for for the NIMH, right? Because if we're saying there's gonna be more rate cuts. So then are we sort of saying that there'll be some management of the overall deposit portfolio? Like LDR has come down, are we saying that we're gonna let some expensive funding go? Maybe if you could elaborate a bit more. No, you see, we always welcome deposits in the sense that, remember, we were also deploying liquidity, right,

into the treasury markets assets, right? This is where if we have more deposit, we can let go of some of the wholesale funding as well. So, and deposits to us is franchise. So it's all around managing funding costs, as well as being able to still keep the volume to grow NII. But that could be at the expense of NIM, right? Because our interest earning assets base would grow as well. So it's a delicate balance of NII as well as NIM. Okay, thank you very much. Jaden, maybe easier if you pass the mic. Thanks. I asked for a GP Morgan. Thanks. A couple of questions. One, if I look at the guidance, 1.995, and you said probably higher end of the range, but even at higher end, it is flat name mathematically.

Mid single digit loan growth kind of in line with YTD may be slightly lower. Cost income ratio of low 40 means slightly higher than first half. Red Cross 2025 again higher than first half. So it looks like half on half metrics are worsening or weakening on half and half basis. Is that a fair read or all of this guidance lines are very conservative and hence most likely, as in I'm unable to reconcile that, bit of a positive commentary overall, but if I look at the numbers, the seems like half and half would be deteriorating. Thank you for that comment. I thought in the very beginning, the first question is how's the terrorist situation, right? The uncertainty is still there. I think you, even beginning the year, we probably not people expected

even further escalation in the Middle East situation, right? So I want to say whether you say this is prudent or what, it is uncertain. We hope that it will be better, right? But it is uncertain. And we will take long also said that there were some, the first half we also see that there's a little bit of pre-selling, right? Doing more export first before the tariff comes in. So now that some of the terrorist rates have been firm, What exactly will happen to the customer? We do see our momentum because you can look at your loan growth. But eventually, would it even be tighter priced because people do rush to the better quality loans, right? So that means no margin could be tighter. So I'm not saying that this would certainly happen. I don't really have a crystal ball.

This is really how we actually see the situation. We don't want to, we never are overly aggressive anyway in looking at our numbers. I thought, and when we feel that we need to revise it, we revise it like the NIMM situation. We also don't want to over promise. So just hope that, I mean, there's no strict answer to your question because it is still uncertain. And as said, to today, we don't know the situation with China as yet. point. Now thanks for that Helen and then the second question coming back to NIMM because some of the assumptions if you think about high bar SORA have not really held year-to-date. High bar movement have been significant right and there were other drivers that was dollar strength again SORA movement we are down 200 basis point almost year on year. So the normal pass through from Fed rates rates to sing dollar rates has not exactly happened. So over next, let's say three, six

months, first, what is your exit name in second quarter? And next three to six months, if some of the similar trends continue and we have a meaningful gap between Fed rates of so far and high bar and Sora, then can we get to the lower end of your margin range? Is that where that margin of safety you have built in your guidance? Yeah, that's possible. I mean, if you work mathematically, I'm sure all of you have thought that, you know, at 1.9, the remaining two quarters will be below that, right, 1.82 or something like that, right? So that sort of could possibly happen if my assumptions on steady, sore and high ball only the historical transmission from the factory cuts did not hold.

And you can see how much, and you yourself mentioned, how much sauras has fallen, and how much highball has fallen in the first half. So if they continue to fall in this range, 1.9 is a possibility. And that is where how are we able to bring in volume, to be able to at least bring, you know, stabilize our NII will lead to NIM coming off straight away. Yeah. So we really have to balance this to us. NII is important. And then the exit NIM, Chinay? Sorry? Exit NIM in second quarter, what was that? Yeah, I mentioned there's now 1.88%. 1.88? Okay. And the final question on this weakness in SORA, this departure from SOFR, any broad thoughts why that is happening? And any reason why that could change

and go back to historical assumptions, relationships? I think for high borders, clear, right? There was the Hong Kong government defending the pack as a result, which they were really flushed liquidity. for Singapore is again really a lot of liquidity coming in.

Okay, thanks. I'll pass the mic to Nick in front of you.

Thanks very much. And again, good luck at your retirement and congratulations take long. And just coming back on this business points and I got a question on wealth management. Can you maybe help us a little bit by giving us, I mean, effectively your banking name, I guess, came down 10 basis points or whatever and then you've got the two basis point impact from the deployment to HQLA, or even just on a loan basis, can you give us a breakdown percentage-wise between the importance of the move in high-bore and the importance of a move in SORA in driving that shift down in asset yields or banking NIM? And then maybe you can help us just in terms of our sensitivity, I mean, as Harsh points out, obviously, The relationship between Asian rates and US rates has completely broken down in the last few months. That's likely to persist. So is it possible for you to give us that sensitivity by currency?

So how much of it, not precisely on basis points, but a third of it's US, a third of it's Singapore dollar rates, a third Hong Kong rates, whatever. Because there's, I mean, very important point here is that if high-bor is a big driver of what's happened, I mean, obviously the future is expecting, but high board doubles in the next three months or six months. So it's very difficult for us to sort of work out what would happen to your NIM unless we know the currency sensitivity. And I have a second question. Yeah, we did give NIM sensitivity, but across the four major currencies, right? Yeah, and then I also did give a breakdown of our sort of like 50, about 50% of our loan bulk in you know in the same dollar as Hong Kong dollar and also the reprising profile 80% of same dollar assets reprice Sorry

80% on floating rates and then for Hong Kong dollar almost The fool on floating rates and usually the reprising for Hong Kong dollar is very quick, right? One month you know majority of that and then some on three months basis and having said that you know usually when we look at NIM sensitivity is over one year that also assume that the reprise of the deposits kicked in. Why we are seeing such a high impact on our NIM due to the sharp drop right in solar and high borders in second quarter alone also is a reflection of the lagging effect of some of the deposit reprising kicking in. For Hong Kong dollar the deposits are actually also quite sensitive to rates but they reprice longer compared to the reprising of the asset side for Hong

So, you know. So, put it in a way, of your 14 basis points in the decline Q on Q, yeah, two basis points was, I think it was 14, was it 12, sorry, 12 basis points. Two basis points was because of the... Yeah, because enlarged base of the deployment into the high quality assets I mentioned in first quarter, so there's still a lagging effect of that, you know, average sort of volume effect that come in in the second quarter. Okay, and then 10 basis points was because of movements in the loan and deposit spread. Is it fair to say that two thirds of that was high ball? I mean, bear in mind that high ball came down 300 basis points and one third sing dollar. Is that a fair guess? Yeah, it's a fair guess because high ball in second cue alone or redock dropped 220 and 300 basis points. Okay, so that's a good range. And then just on your sensitivity on the house through rate cuts, everything remains linked.

So if we saw three rate cuts in the US, you would assume that highball came down 75 bips as well. That's how we should think about that sensitivity. Yes. Okay, perfect. Thank you. And then, sorry, secondly, just on wealth management, can you give us any split between where the net new money came from, between CFS and Bank of Singapore? So you've given us before billion in the quarter, any indication, nine billion in the half, any indication as to, was it 50-50 or 25-75? We don't normally give that split, but I think I can say that both have registered good growth. Okay, thank you. Long for the city. Hi, thank you for the opportunity. And also maybe just following up on the wealth management, just wanting to check if there's any change in the product offering or changing customer behavior or even are

you seeing higher lending in wealth driving leverage simply because the rates have come off. I think when I'm coming from just wondering how sustainable this wealth momentum is and whether is it due to one off volatility or some structural shift behind the scene. I asked Jason and maybe Sunny to talk a bit about the trends and behavior of customers in wealth and then take Ron to cover the SME a bit on that. Sure. I'll start with the back of Singapore. So for our client base, actually, although we were relatively worried about Liberation Day, as you can see from the markets, they continue to show strength and they continue to grow day after day. So we've seen clients actually across the board do a lot of trading and structured products and continue to trade into the volatility of the market. Leverage

has actually been relatively, I won't say muted, but it's not as big as we anticipated because I think there is still that fear of drops in the market. So we haven't seen outsized leverage. In addition, we've also grown, at least in the Bank of Singapore, quite a lot about fee-based business this year alone. So we've grown quite significantly to create more resilient revenue within the private bank. But it's much more broad-based and not so one-off, as you may imagine. For consumer side, we do see a pretty much broad base in all the assets like treasury, the bonds, and structure products. We also do see our bank insurance growing quarter and quarter. And of course, we do have some new products to get the G, and that's also helping us to grow our bank insurance, both in TWP, our embed, and also our revenue portion.

the loan side leverage side, we're also seeing pretty much good growth on the consumer side as well. And even in the trade environment, likely to remain low, we do see that there probably could be a sustained on the leverage portion as well. Yeah, thank you. Sorry, I didn't quite catch the pounder SME. You were asking about wealth or only wealth, right? Okay, thanks. Maybe also growing up on rates, even the rates have evolved quite a bit in Hong Kong, southern Singapore, and I think the last two, three years, greater China saw lots of repayment. Can we expect loans from greater China to also pick up on these levels partly due to lesser repayment? I presume you are referring to the repayments from China companies because of cheaper RMB? Yeah. Is that the question? More competitive highball.

More competitive highball. Because rates are lower, are you more comfortable to grow? We haven't seen customers moving from R&B financing to highball. Because highball is seen as short term situation. So for some categories, they may use Hong Kong dollars. But the major trade currency remains US dollars. and for Chinese companies to understand that their home currency is ring big, they still continue to tap ring big. That's what we have seen. Let's not forget the very intense price competition among the Chinese banks within domestic China, which is a single largest source of RMB. So the tapping Hong Kong dollar, I don't think that is a major, I don't see that as a structural change at the most, it's a temporary situation. And final question, maybe something more short then. One of the assumption was three months, I assume, will be flat of the year.

If you look at one month's order, is there any databases point behind? Should it also be a risk to the names kind of the second quarter? You know, under current market conditions, predicting interest rate is getting to be something that I've given up doing. Yeah. Okay. Thank you. Okay, I pass to Felicia. Felicia from the edge. I have two questions, one is more of a follow-up. First of all, I note that the ECL, I think you guys said it's estimated to rise by 2.63 billion from 2.16 or 7 billion last year. This is should all stage one exposures migrate to stage two. What What is the probability of such a scenario occurring and what indicators are you guys

looking out for that might trigger such a migration? And my second question is, are there customer loans in private banking that have been downgraded from ECL one to two? You are talking about ECL on the general book and then private banking? Yeah, the first one is general book. This is I think page 10 on your financial statements. Then the second one is specifically on private banking. You are asking whether we will do more or what are you referring to? You guys said that the ECL is estimated to rise, but this is in the event if all stage one exposures migrate to stage two. So we were just wondering about the possibility of such a scenario happening and what are you guys looking out for that might trigger that? I don't think we can provide an answer on how the migration is going to work because is I don't think I can have an answer to that. You were trying to ask because...

And we just noted that you guys are looking to your ECLs estimated to rise. As in so we were just wondering whether what is your probability or what's the possibility of all of your stage one exposures migrate to stage two? We don't, yeah I don't think we can provide an answer on that. Let's pick this up. I really want to understand what exactly you want, but we can pick it up after we close. So there's a question on the – because I think the – it's the consumer banking and the private banking loans are in your MPLs at $148 million. So – and you said there were just a few accounts of this. Are there any more – are there any more that you're likely to see in that bucket? I'll take it from the private bank side. We are always constantly monitoring our loan

book exposure. Right now, we don't see anything in the pipeline that causes us any concern, any worry that it would increase. And as I mentioned before, all of the loans that we are currently classifying this, it's part of our prudent approach. They're well-secured and well-secured ties, so we feel confident about working through them, and we don't have anything in the pipeline that causes any concern. So I will pass it to Sikit from China News Asia. Hi, I have a question on leadership transition. So when it comes to ensuring a smooth transition, can you give us some details on what has been done so far, for example, tech law, immediate priorities, key areas that you are already starting to focus on and you will be doing more so in the next months. A few months ahead. Helen, I know we still have a few more months to go, but is it possible for you to do a brief look

back on your past four and a half years as CEO and what do you think was the biggest challenge you faced? Thank you. Shall we do that in January? I think it's too early to say I am reflecting on what has happened, right? Of course, I'm very happy we have ticked long. I'm actually very proud that I managed to convince him to join OCBC three years ago. So I think reflection is something I will do later on in the year, not now. I still have a job to do, we still have to deliver, we still want to be able to make sure that our our year-end results is not at least live up to expectation on our plan. I will approach this question from two perspectives. One is I'm actually part of the senior team. I'm on the management executive committee working very closely with Helen and the rest of my colleagues. So I do not just cover my own department division. I actually cover

a little bit broader where I can contribute, I contribute. And having been someone who is actually very familiar with the customer base and having operated across many divisions, I have been working very closely with Helen on many things. So in that sense, it paved a good ground for the succession. Of course, we didn't expect that the succession is, I mean, when I joined two years ago, we have been working together very closely. Now, the second thing is that recently, because the bank is forward-looking, we have set up a unit called, a task force called the Strategic Resilience Group. The Strategy Resilience Group took into account what's happening in the world, where there's a little bit of geopolitical tensions in the North Asia, in Middle East, and it affects also, for example, shooting routes of our customers, et cetera, et cetera. And we also took into account the evidence of AI

as a fast moving, fast developing space. So because of many reasons, we decided to set up the strategic resilience group, and I chaired that group. So on that group, there are some core members, such as the CFO, the CIO, head of global markets, and our technology aid, and also we include some of our business aid. So together we have been charting and making recommendations on how we should position the bank. So that's a much wider mandate than my GWB mandate and the report to Helen and the on this Strategic Residence Group recommendations. There is also another forward-looking set of taskforce, looking at certain businesses which we should grow. That is what we call bank of the future task forces. So you look at specific area on how to improve wealth further, how to get synergies from

Great Eastern, the insurance arm and our wealth, et cetera, et cetera. So I'm actually a co-chairman together in our transformation group here. Thank you, Melissa from Gomensek's. Thank you very much. Happy retirement, Helen, and congratulations take long. I just had three questions. Just firstly, back on the NIM. In terms of the NIM, in terms of cash flow hedges, do you still have that on your NIM? And what will it be if it didn't have these hedges? Just wanted to understand, like after we've seen the fall, in terms of the Fed, to cut, Do we anticipate that NIM will continue to roll down after that as the hedges roll off? The effect of the cash flow hedges which we put in in 2019 and 2024 are still there. So it does help a bit.

Right. So we will see the roll off happening after the fed cuts and then after the year ends, we will still see some pressure coming through. So the effect of casserole hedges will end when, you know, when we point casserole hedges, it's like for two to three years. So when the two to three years mature, you know, that's where you will taper off. Okay then, I think then into the next question in terms of your ROE targets, I guess you know previously you mentioned ROE targets of 14% in the medium term. I guess given the environment it might be a bit tough, but do you have any thoughts about what this ROE targets in this current environment would be for a medium term? Yeah, so I mean if you look at the mix of our business, right, we are over the years we have been trying to raise, you know, the non-interest income, right?

And this is where we do see increasing proportion of our total income shifting towards non-interest income and the integrated financial services group that Tae-gong mentioned is really a very key part of moving our, you know, composition of revenue into more fee-based sort of income, right? This is where, this is sort of a long term sort of plan to really shift towards higher ROE. Because if we are still very reliant on loans, NII, and that's where the RWA, the creep up and usage of capital will go up as well. This is where we will have to maintain a larger proportion of E to be able to sustain those businesses, bringing in more and more fee trading income, customer

treasury flow trading income, so on and so forth, are really part and parcel of a long-term sort of goal to bring our ROE up. If you recall in the past, the interest rate was low. ROE was like 11% or sometimes even less than 10%, right? But now, even for a second queue where our NII were pretty impacted due to the rates that we mentioned, annualized basis is 12.6%. So this is where we do see a larger proportion of wealth, fees, the momentum that we mentioned start showing some results of that. insurance income, making up a bigger proportion of our earnings as well will also help. So would you say like we won't be at 14, we can be at 13 in the next two years perhaps? Yeah, there's certainly a handle that I will want to work towards. 14 at the time, you know, was when NII was still quite a big factor. Right now

that we know NII is softening, you know, and then how much we can grow our fee as well as trading income to make up for that will determine how fast we can move, you know, towards the 13 plus percent over how many years. Yeah, and also we still have our share buy back, you know, capital return plan which will also help in a way in terms of the ROE as well. So these are various areas that we are looking at to really be able to sustain a higher level of ROE under a low interest rate environment, let's say, not the sub 11% anymore. more. Okay thank you. I think lastly in terms of Great Eastern we didn't get the full privatization but does that change any of the plans that you have with them? What could you have done differently if you had full privatization versus not in

terms of you know the forward-looking synergies working together, capital optimization, what changes? I think that's that's Let's clarify, we were never talking about privatisation in a way. Of course, we use it very loosely with delisting. You know GE is a very old company. It probably will never have 100% of GE in that sense, right? But I thought there are always two things on this whole video last year on GE. The first one is definitely the use of our capital. We want to buy into an entity that we know very well. I mean, you're always keen to ask me, Helen, where's your M&A plan? And to an extent, buying into GE, you can see it is more like an M&A because I am increasing

state investment. But we chose GE because we know them and instead of having to assess whether to go outside and buy something that we do not know, we thought that was a very good move and we liked GE all the way and so we did that. So the listing should help a bit more because of course if they stay as a listed company, There are listed rules to adhere to and may impact some of the related transaction, right, and all that. But it doesn't mean that we cannot work on a lot of things that we want to work together. But I thought this show of our wish to increase in our economic state in Gihi is also a very Alongside that, a very keen ask that together we can actually work better.

Because having high economic stakes means that you will do more to make sure that they also generate more profits, right? Otherwise, you earn more economic stake of a worse company. That's not the way. So that's why I would say that it is also a very strong signal to say that we are intensifying all the efforts that we have been doing and identifying new areas that we can work together. So delisting or not does not impact that. But of course, delisting is a signal that we truly intensifying the way we work together. Okay, then maybe just follow up. In the 900 million that you set aside for this delisting will happen on the second phase. Now that that's no longer there, what are you considering for it? Does it go back into the port for inorganic? Or would there be considerations of hopefully raising dividends?

It goes back into the port of the capital. And we did say that whether we would have anything we want to do depends on how we evaluate the whole capital situation. I have lots of questions, but I just asked two and they are to take now. I'm just wondering whether he will continue your one group strategy and also one of the reasons that I think Helen was very appreciated by shareholders is she changed the dividend strategy to raise the payout to 50%. Now, I just wanted to know what your philosophy is on capital management and dividend payouts and she preferred dividends to, you know, being pressured by these analysts to do these share buybacks. And what's your philosophy

on all that? That's it. On one group strategy, I have indicated that for us, we are in the greater financial services group, so certainly there's synergies to be rid of that and therefore certainly we will continue with elements of that. The second question is not so much philosophy. It's professionally, I feel, don't feel pressurized. It's a question of like what is the capital, what's the optimal capital we need to hedge this uncertain times. It's a question of how do we kind of look at value adding to the shares. So there are multiple considerations. I'm really focused on right now is the strategy of how to continue to grow our franchise. I think that's the most imperative task for me. Okay, all right, I'm on. Thank you. Thank you, Gula, for the last question and thank you, Tech Long, for ending that very well. You should hear from Tech Long more on next year.

But with that, thank you very much, everyone, for joining us this morning and have a good day. Thank you.