1H 2026 Financial Results Media Briefing

Thank you. All right. Good morning, everyone. Welcome to OCBC second quarter, first half, 2026 results briefing. On our panel this morning, we have our group CEO, Mr. Tan-Tek Long, and our group CFO, Ms. Goh-Chin-E. To the left and right, I shall start from Jason. Jason Mu, our CEO of Bank of Singapore. Mr. Sunny Quag, the head of global consumer financial services. And then right to the other end, we have Mr. Greg Hinson joining us from Great Eastern, CEO of Great Eastern. And last but not least, we have Mr. Kenneth Lai, our head of global markets. Ginny will start the presentation and thereafter we will have Take Long sharing with us some of his thoughts before we take Q&A. Ginny, please. Good morning to all. Welcome and thank you for joining OCBC's first house, 2026 results with him. OCBC delivered a record group net profit of 2.2 billion Singapore dollars for the second

quarter of 2026, up 22% year on year. This is the first time that our quarterly profit crossed 2 billion. ROE was 14.4% on an annualised basis. Total income grew 18% year-on-year to a new high of 4.17 billion. Net interest income was 1% lower year-on-year amid lower interest rates environment but this was largely cushion 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 base growth across fees, trading and investment income and insurance income. Up 28% for fees, trading

and investment income up 85% and insurance income up 68%. In particular, strong momentum in wealth management drove the increase in fees, while customer flow treasury income was contributed by both wealth and corporate segments. 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 with Cost to income ratio lowered at 37.8%. Loans and deposits grew strongly up 11% and 13% year on year respectively. As that quality remained sound,

NPR ratio was stable at 0.9%. Credit cost at annualized 14 basis points. We maintain healthy liquidity, funding and capital positions. Common equity tier one ratio at 14% on fully phase-in basis

or 15.7% on position basis. For the first half, group net profit grows 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. Analyzed ROE increased 1.1% 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. Higher fees trading and investment income drove stronger banking net profit, which grew 8% year-on-year. growth management income reached a new high of 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 $6 billion for the second quarter, bringing the first half inflows to $11 billion. Banking AUM grew 13% year-on-year and 2% Q1Q to $350 billion. Profit contribution from GE rose 44% to $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 agencies as well as banker channels. 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. Second Q26, NII was $2.26 billion, down 1% year-on-year and up 2% Q1Q, despite a lower solar environment. As shown in the chart on the bottom left, the Q1Q 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&Q, driven by loan growth and a 5% or 10 billion increase in average balances of high-quality treasury assets. Moving to the chart on the bottom right, 2Q and 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-equivative. These assets remain an important lever in helping us to sustain net interest income in a declining

interest rate environment, excluding the growth of non-commercial book. But overall decline in mean would have been 3 basis points Q&Q instead of 6 basis points Q&Q. Looking ahead, we expect NCA, Treasury Market asset growth, in second half to be significantly lower compared to first half, as we continue to balance our NCA growth against commercial lending opportunities and capital deployment. We expect NIM to stabilize in second half on expectations of gradual strengthening of SORA towards year-end. NRI's sensitivity based on one basis point increase in rates across the whole book was around 6 million on an annualized basis.

Moving on to non-interest income. 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. 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% 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 second Q fees crossed $700 million for the first time,

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. In the first half, wealth management fees grew 39% year-on-year supported by a larger AUM base and increased customer activity. Wealth management fees accounted for more than 60% of our total fee income. Invested AUM improved Q&Q to 62%. Growth was brought base across all wealth product channels including bank assurance, private banking, treasury products, unique trust, structured deposits as well as brokerage. 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 well-related activity and corporate hedging, including continued demand for precious matters, foreign exchange and structured products. Second cue 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 post our first Q26 results. Moving on to operating expenses. We continue to maintain cost discipline while investing strategically to support business growth and our next frontier strategy.

First half operating expenses were 3.08 billion, up 10% year on year, mainly due to higher performance-related remuneration and incentives, and continued investment in technology to support business growth. First half, cost-to-income ratio improved year-on-year to 38.5%. Second, Q, cost-to-income ratio also improved year-on-year and Q-on-Q to 37.8%.

Customer loans grew to 5% Q-on-Q or 17 billion to 364 billion. Our year-on-year loans were up 11% or 29 billion on constant currency basis. Loan growth was broad base 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.

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 remained sound. NPL ratio was 0.9%, unchanged since June 2024. Thank you, MPAs, for 3.13 billion, relatively unchanged Q&Q. During the quarter, new corporate MPA 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 MPA formation was partly compensated by net recall risks, which were mostly from Greater

China's CRE upgrades as well as write-offs. Total allowances for the first half increased 14% to 372 million. Total credit calls were unchanged year-on-year at 18 basis points on an annualized basis. For the second quarter, total allowances were 156 million, down 28% Q on Q and up 36% year on year. Total credit costs were at 14 basis points on an annualized basis. Now our second Q allowances for impact assets were largely from the two accounts I mentioned earlier. impact allowances included ECL from changes in credit risk rates as well as management overlays

for macroeconomic uncertainties in Indonesia. These are partly offset by transfers to allowances for impact assets relating to the two accounts I mentioned earlier. Our total MPA coverage ratio was unchanged Q1Q at 163% and was 7% points higher compared to a year ago. Performing loans coverage ratio was lower Q1Q at 0.8%, mainly due to our enlarged loan base. Our coverage levels positioned as well to navigate uncertainties. Moving on to deposits. Customer B B B B B

B B B B supports balance 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 phase in CET1 was 14.0%. The Q on Q decline in CET1 ratio reflected the payment of our full year 25 final and special dividends as well as growth in RWA, which offset profit

acquisition. Our target operating level of 14% for group CET1 capital adequacy ratio on a fully face-in basis remains unchanged. Our board declared an interim dividend of 47 cents, up 6 cents or 15% year-on-year. This is in line with our target 50% ordinary dividend payout ratio. We remain committed to complete the remaining 2.5 billion capital return plan by FY26. With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Tinglong. Tinglong, please. Thank you, Chingyi. Very good morning to all of you, and thank you for joining us this morning. As I listen to Chingyi's presentation, I realise that our profit and growth is quite

easy to remember. We make 2.22 billion of profit this quarter, Q2 and a 22% growth rate. Overall we have delivered a very strong set of financiers with income and profit at record high. We saw broad base growth across all business lines as our next frontier strategy continued gain momentum and deliver results. Some key highlights. Here today loan growth was strong at 7%. Under our whole wealth strategy, our wealth business continues to gain momentum, achieving 39% year-on-year increase in wealth management fee for first half, 26. For trading income, we differentiate customer flow trading income and non-customer flow trading income. For customer flow, we did very well. with income increased 47% year on year,

underpinned by both wealth and corporate segments. Credit income not related to customer flow also increased by more than $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. As a quality remained resilient, with stable NPL ratio. How we improve to 13.7% despite mean compression. We are declaring interim dividends of 47 cents, up 6 cents in line with about 50% payout dividend policy. Next. Looking ahead, a lot will depend on how the energy crisis triggered by the US year round wall pan out. We continue to see K-shaped economic growth across major economies, US, China, Indonesia,

and do some outstanding Singapore. Our pipeline for loan remains robust and good on growth industries, but probably will not grow at the same rate as second quarter 26, simply because second quarter 26 was really outstanding in terms of loan growth. market continues 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 growth flows. Long-term demand for wealth solutions continues to be strong. Management guidance. Given the strong first half loan growth, we are raising our full year long 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 during at first half, for first half, 26. Full year is likely to be at the lower end of our of our earlier guidance of 20 to 25 basis points. Our capital position remains strong and we will complete the remaining of our 2.5 billion capital return plan by FY26. All in all, we had a very busy second quarter. I thought I'll take a moment to do a very quick recap. Highlight in the second quarter, we announced equation of HSBC Indonesia's wealth business. We launched OCBC Wow Abata Banking, which is the first AI native app in Southeast Asia. It means the gold X point on the back of LGF is the gold fund. We launched Gen AI powered skills training

to our, for our wealth advisors. Of course, we recently announced Helios, but that's in July. And my personal favorite is this. Okay, so I shall hand it back to Ching-Ching. So with that, let's move into our Q&A. All right, if you want to start with your... Let's go to Nick. 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. In terms of loan growth, I just wonder if you could talk going forward. I mean, it's obviously a very good loan growth number, 5% Q&Q. you've raised, I mean, low double digit is quite a attention grubbing sort of number for a full year. So I wonder if you could talk about how you're thinking

of the next two to three years and in particular, you know, where a big sort of industrial change is taking place and lots of demand for financing. So I wonder if you could talk about that, where you expect the loan growth to come from. And then if you could put that in the context of the 14% CT1 ratio fully phased in, which is obviously sort of at your target range. So if you could maybe help us think about how you're balancing our WA growth, how you're thinking about CT1 target, what are the levers you can pull? Okay, I'm going to do further crystal ball gazing since the question is about the next few years as opposed to the next six months. I want to bring us back to February. In February, when we launched our next frontier strategy, we were actually aware of a very complex operating environment. I personally refer to it subsequently, you know, in subsequent speeches I made as a boycott environment. Volatile, uncertain, complex, ambiguous, and case-shaped

economic growth. So this is the environment which we are operating in. So when we came up with the next frontier strategy, we are hugely aware of this. So then we decided on a couple of things. First, let's identify the growth industries and be really, very focused. So if you look carefully at our next frontier strategy, we talk about four strategic shifts. The first three, first, a right Asia shift, which is about rising Asia, inbound investments into Asia, rejigging supply chain. Two, tech shift, which is about financing the tech supply chain, including data centers, equipment for the data, equipment manufacturer, et cetera. And third, sustainable finance. And our North Star is trying to make a difference to the environment, financing industries like renewable energy, which makes a difference to the environment, supporting SMEs in their green transition.

All this has come up very well for us. In terms of outlook, I think this trend will continue and this will anchor our loan growth. and this is what we have been seeing in the past few years as well. So that is your first question. The second is relating to our loan growth. Loan growth in the second quarter is exceptional partly because of some MMA 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 fourth quarter is weak. It's just relative to the second quarter. we will be at a slower pace than the second quarter. Now, we have been focusing on ROE. ROE is higher, our profit acquisition will be higher. So we are continuing to focus on ROE. Our target operating CET1 car will be around 14%, keep for take. So I hope that answers your question.

Oh, we have Chenya earlier. Hi, Chenya Pong, Chenya Jiren from Bloomberg. Congrats on the numbers and a chat price exceeding $30. I have two questions. I mean, with the stocks and many record numbers that you have, what's your thought on gravity rules? Do you use gravity rules? What goes up may come down one day. Do you see that as a headwind going forward? And second question, any thought on area growth that you want to see? You already did HSBC in Indonesia. Do you see more coming in the years to come? We'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. And then we just let the share price be detected by how investors view us. Whether it will come down or not, I think there are many experts here we can ask. On the second question on acquisition, I'm always looking at acquisition. But we are very disciplined with acquisition. So I have mentioned before that we excise a lot of discipline. target is not set up for our strategy or something which doesn't really make a difference to our growth, we won't consider that. So we'll look at inorganic growth if that's the question carefully but I am not averse to it. I'm happy to actually do an equation if the right target

comes along. That's good, 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? First, on these flows, there is growing faster in your fees, so just wondering some color behind this and the sustainability of this. And secondly, on the greatest non-customers' related income or the trading income, should We now expect this item to be more volatile depending on the equity markets condition. And finally, on the wealth management income, is there a bigger shift with Hong Kong customers or is Hong Kong related EUM growing faster than other regions that is driving better monetization of your EUM to a fees income? These are all my three questions. Thank you. For the first question, we will try to take the question.

Yeah, hi. Thank you for the question. So from the customer income, actually, we're actually seeing a very good diversification in terms of customer segments. Obviously, the growth in our wealth income is the highest, but we're also seeing very, very strong growth in terms of our corporate customer base as well as our institutional customer base. Maybe any commentaries on how sustainable this can grow because it's the line-and-turn year of income, more interesting income that's growing the past. Yeah, we're actually quite confident in terms of this income being sustainable going forward. Reason being, you know, we have a very good product diversification and also in terms of regional and geographical diversification. Maybe I can supplement. Generally, the nature of the business in the wealth income is...

it follows the momentum of the wealth business and may be dependent on market sentiment. For the corporate side of the customer flows for trading income, it's also an annual decal income, but we may see some ups and downs in certain quarters depending on the size of the deal. So we do a lot of interest rate swaps, effects for transactions. The second question relates to the Great Eastern contribution, and long customer flow of trade income. Greg, do you want to take this? 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. This has been a particularly volatile year. The first quarter was impacted obviously by the events in the Middle East, predominantly impacting markets. The market is going to continue to be volatile through the second half.

You can already see that between June and July. We'll have to see how the rest of the year plays out. Obviously, our investment strategy is one of diversification. 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. If you look at the underlying insurance results, they're solid. We've got confidence that those are going to be sustained going forward.

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

Okay, the third question, wealth management. Any volunteers? I think it is. 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 RIM going up. And if you could see, I think we have already unveiled a new branch with official opening to be in September. So I'll invite you all to go there if you're around. I think it's an up-collaboration with Osean Choon is proving to be a hit. We see acquisitions of new customers going up in that branch in particular. And I think we are looking to add more wealth branches in Hong Kong as well. So I think overall we are very optimistic about our prospects in Hong Kong. Yeah, I think Hong Kong has a lot legs to run. It's part of the team hub strategy under the next front-end strategy. Okay, let's go to Jaden.

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. But these regulatory changes have any impact on the way you operate or your clients demand, and will it have any effect on the trajectory of fees, which have been very, very positive? Just wanted to ask on this. Thank you. Since almost all of us have broken expectations So I've all it did Jason it. Sure. Thank you very much for the question. So it's still early days since the news has come out. We have a lot of controls and processes in place to comply with these rules. And we're currently in the process of contacting our clients. We haven't seen any significant asset flows since the news has come out, although we are right now in the process of contacting our clients. But what's quite interesting is that while some clients have, of course, expressed concerns

and wants more clarification on what these rules mean, we have quite a number of clients who have expressed, I won't say gratitude, but they're actually quite happy and they welcome the clarity that the Chinese authorities have shown going down this direction. So we've got a good balance of clients who've expressed that. So again, it's still early days, but we'll continue watching the space to see how this continues to affect our business. I'll try from Reuters. Thank you. Yes, just want to ask OCBC if there's any overnight days of this big Bloomberg story about iron ore trader radiant wall. And just want to ask about if OCBC has any exposure relationship with this company. Thank you. I first come across this name in the Bloomberg. So no, we don't have exposure to the company.

That's good, Melissa. 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 has hit a nice high. So maybe can you talk a little bit about your aspirational ROEs from here and how we can see that move higher? That may be secondly, in terms of your Great Eastern, that has actually pulled itself up very well as well. And you've mentioned the change in terms of product and also in margins. But maybe we can get a bit of color of what else are we expecting from here, from Great East Eastern. How well are you working together with the team here in Bank of Singapore? And maybe also if you can comment a little bit, I'm not sure about the tax rules that has come out on China, on insurance, and how do you think that may impact sentiment?

Thank you. I'm not ready to review the ROE. In the next frontier 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. 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. 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. Great Eastern plays an implicit part in that. So when we think about wealth, it is really whole of wealth, including insurance. So I think if you look at the bank insurance performance, particularly in Singapore, that that has improved fairly dramatically over the last 12 months.

And that is basically down to the collaboration between the Great Eastern team and the OCBC team and changes that we've made to the operating model. And obviously, we will continue to optimize that operating model. There's a lot more value upside that we believe within bank assurance. Beyond bank assurance within Great Eastern, what I'm hoping you're seeing is that we are delivering new products to market. We're launching new propositions. We launched High Net Worth in March, so this was great, East and private. And we've seen very good traction from following that launch, and we've got more propositions coming. And we are now investing in the technology that we're using within the business as well, and that's technology that we will deploy here in Singapore, but also deploy across our other businesses as particularly Malaysia. So, yeah, there's a lot happening within GE and so 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. Great. There's a third question on the tax relating to insurance company on the China front. Which one was that? Tax, did you say? Yes, tax. Was this the CRS point? So I don't think there's anything new there. I think this is an adoption of CRS by China. So I don't think there's any new news in that regard, and it doesn't affect us. And under the whole wealth strategy, we are moving things very quickly. So the human fair suite, which is the high network value proposition by Great Eastern, is in close collaboration with Bank of Singapore, who understand the high network very well. on the OCBC Tunka partnership with Great Eastern. The two teams has collaborated back closely to redesign the end to end process to bring more value to the customers

and to speed up the way we onboard customers. So we are redesigning that end to end at the moment. Just thanks. I should have probably added actually that we just recently announced within G financial advisors that we are now offering not just insurance solutions, but also more sophisticated wealth solutions. So, equity structured products, and those are effectively executed through Bank of Singapore and a embedded asset manager arrangement that we have with them. So, we're looking at making sure that again, Great Eastern can obviously bring insurance solutions, but also wealth solutions beyond that, leveraging the other parts of the group. Just to follow up on Great Eastern and also Hong Kong side, Since the 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? Yeah, it's an interesting market and we're taking a good look at the opportunity in that

market. You will, but you are not doing that. Sorry? Are you considering that now? We might be considering it, yeah. You might. Sorry, just go back to Nick first. Can I just have one follow-up on the channel rules? How big is your trust business? Is it a big part of Bank of Singapore? Are you able to quantify it by how much assets under management you have under trust? Thanks. Actually we don't reveal the assets under management for our trust business. I mean it is a part of our total AUM but it's not a significant portion of revenue for us. So it's part of our value proposition to our clients, but we won't we don't reveal those numbers So we are as mentioned before we're watching this we're contacting clients as we speak

And we'll see how this continues to plan to pan out 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 of? to you as well. As we are going down the path of vagueness, I would continue to reiterate that it's in the small category. Wifi. Hello. Wifi from HSBC. Thanks for the opportunity. I have three questions. Firstly, going back to the 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&E, both of that consume capital. So wondering your thoughts on that and whether you'll be looking at monetizing your legacy real estate book since you have

quite a bit of an attack either or is equity raising something that you'll be looking at if potential M&E comes up. My second question is on great eastern private. How has it done since the launch in March? Are you able to share any numbers? Has it gone according to your expectation above, below? Some color there would be great. And thirdly, do you have any targets for V&B growth as we isn't kind of realizes synergies with the broader group and perhaps the wider WM system of both. Thank you. So let me address in reverse order. No, we are not in defense anticipating any equity raising. We are actually very comfortable operating at CT one car around 14%. There are other techniques we can use in terms of energy optimization.

If we choose to, We haven't even reached that yet, so I'm pretty comfortable with that. Okay, on Great Eastern, so maybe Greg can give an update on the Great Eastern high net worth strategy. So yeah, you're right. It launched in March. I can't give specific numbers. I can tell you is that we've seen exponential growth in terms of TWMS and MVEV coming from that proposition. So that proposition is fed through both our agency. So we have agency force and our financial reps introducing clients into that business. And then we also have OCBC obviously and now we have a direct referral model as well with Bank of Singapore. So this is a part of our business that's continuing to grow significantly and it's growing actually probably just ahead of our expectations actually in these early phases. So positive on it.

I think the feedback we've had from clients who have actually experienced the proposition itself has been very, very positive. So if you get the opportunity and you've got a million dollars to invest, you can go to the Houden fair suite in the morning. If you need to be underwritten, we can underwrite you by the afternoon because we can get the medical done there and then and the results are out the same day. So it's a very efficient service service, which is what high net worth clients are looking for. And it's a very pleasant place to experience. And we've got a good sort of range of products coming now. And we've got some new products coming soon that we will supplement that offering with. I didn't catch the last point on the targets. You mentioned something about the targets. A VNB growth target. Do you have any VNB growth target? Not that I can tell you. OK. OK. That's fine. OK. Sorry. Just one follow up. I'm sorry to harp on this on the CT1 ratio. So given that we are already at 14%,

do you expect authors where we could see that going below 14% and if that happens, what are the implications? I'm aware of the credit rating implication, but I'm just wondering whether there are any other. Yeah, we target operating around 40%, So there could be a time slightly below, slightly higher. It all depends on the type of loans we do in that quarter. But having said that, to rebalance it is not an issue because we have balance sheet management technique. I think that's as much as I can share today. Now, the balance sheet technique can range from, of course, techniques like just like happened to mention about some sorts of characterization, but I don't think at this juncture, We need to even go there because we have enough optimization which can do within the current balance sheet. So it is a position which I'd like to be in

where I can actually decide on many things on the balance sheet optimization and the more we optimize the higher the ROE. Great, so 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. 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. I was wondering, is it fair to assume that majority of that cohort is offshore Chinese investors and not mainland Chinese? If you could comment on that. And the second question is just overall, And there's a lot of uncertainty, and we need a lot more clarity on that. But it's fair to say that the whole Hong Kong-China corridor is becoming a lot more complex and a lot more uncertain now. In that sort of environment, do you see Bank of Singapore

as a net beneficiary of this uncertainty? Or you wouldn't say that. And not just Bank of Singapore. I mean, in general, the Singapore wealth management industry. So this is the first set of questions. The second one is simply a very quick question. I just want to understand the rationale for raising the wholesale funding that you said led to a decline in net interest margin this quarter when the loan to deposit issue is still very, very comfortable. Is this something we should expect going forward as well? Okay, maybe I asked Jason to start before I chime in. Sure, so two things. One is we deal with offshore, We don't market onshore in China. For obvious reasons, we're an offshore bank, so we can only deal with clients on an offshore basis. So I can't comment on your main lens. We do have an OCBC private bank onshore,

but that only deals with onshore wealth. And we have Bank of Singapore operates offshore, so we do not mix those two, if that makes any sense. And then the second is, I won't say, I mean, 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, but we will have to see how this continues to pan out because I think the whole market and the whole street is still watching this space as it unfolds and then it will affect all banks at that point of time. So I wouldn't say that we will definitely benefit or not benefit from that. So I was supplement that we are very strict with our compliance across border marketing. So our bankers don't go to China market, which is one issue which the Chinese is enforcing. So we don't belong to that category. The second thing I want to supplement is this.

Hong Kong, we have just started refreshing our value proposition for premier PPC and of course Bank of Singapore has been there for a while. What we have seen is that momentum continues to be strong. So there's still a lot of short money there for us to actually grow.

There was a second question on the wholesale funding rationale. The growth in wholesale funding started off in first queue. Really there was sort of preemptive raising of liquidity, ahead of the Middle East crisis, post 28 of fab. And then in second queue, we continue with that because of the rare exceptional loan growth that we discussed earlier is 5% Q on Q. So this is really balancing out the need in terms of commercial lending with our continued strategy then in first half of investing in treasury markets non-commercial assets. Yeah so 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 we can see, even in second

queue, rates still continue to fall. So that has that strategy has in fact enabled us to be able to sustain our NII to grow Q on queue by 2%. So, but 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. So that could probably slow down in the second half in terms of which the wholesale funding needs to also decline in that sense. Sukriti? 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 $5 to $6 billion, quarter on quarter. Do you expect this momentum to sustain what would be some of the other drivers in terms of? And also, if you could share what are some of the key markets that are looking most attractive for you right now? where are the flows coming in from? And do you have any target AUM over the next few years that you're looking at reaching? Secondly, just wanted to understand a quick update on the FY26 capital return that you mentioned, the outlook given where the stock prices are still that if the 700, 800 million that's left in shared buyback, that would be returned as special dividend at the end of FY20. For the EOM, we target double digit growth over the next few years as to the momentum opposite to JSON. 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. 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. So we feel quite confident about how the rest of the year is going to pan out in terms of net new money. So hopefully that answers that question. Can I quickly follow up? Any outlook you can give on exit NIMM? What was that? Maybe July exit, what was the figure for us? Yeah, our June asset name is 1.67%. And on the capital return, the FY26 dividend? Yeah, we still have the region of $800 million.

Part of our capital return plan, which we already mentioned that if there's no share buyback for cancellation, we will return in the form of special dividend for in conjunction with our final FY26 dividend payout. So working out, a hundred million, they will translate to 18 cents. Director Muthisa.

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

Our provisions is relating to non-impact loans. So for non-impact loans, sometimes you look at customers, you know, there's some movement, but it's not a lot. There is also not a lot for this quarter. So our credit quality remains very sound for our intonation portfolio. The other point I want to make is that our model takes into account our views on the overall risk of a particular marketplace and we will do some overlays and what have you. But in general, it's just a very normal movement of overlays. That's for the Raywen. A very nice increase in contribution from associates there. Can we share if this has been meaningful and whether there's opportunity to increase further

stick in the import at this moment and how can we extract more value out of the investment? I think back on import has been delivering more so the associates, the contribution by associates a large part, a very large part is back on import. So we like what we see back on import is still delivering a very good returns to us so we intend to continue to stay invested in back on import. Now whether we should increase the stake in back on import 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? Vivian Shao from Business Times.

Hi, so OCBC has spoken quite a bit on AI. Has AI become a meaningful growth driver for the bank? And if yes, is this showing up in your income? AI is meaningful for us, definitely. We have launched some AI initiatives with some income implication. We have been using AI along with our data analytics to actually identify the customers and market. So in that sense, yes. The way we think of AI is not in isolation. In fact, if you look carefully, we don't really have AI strategy per se in isolation. What we have is an ADD strategy. Now, ADD strategy means that we want to focus on redesigning process, digitize them, and then intensify the use of data analytics. And for AI, where it makes sense to us, where it's fit for purpose, meaning the cost is low enough, then we'll adopt it.

So 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. It's too difficult. We'd rather take our energy and go and develop something like avatar banking in double quick time. introduce Gen AI skills training module for a world of RM to reduce cost as well as increase user experience. Because the bankers can assess the AI training 24 by 7 at their own leisure. So I think this is how we think about it. So it's quite difficult to identify exactly how much is due to AI. And by the way, we have a very, when it comes to AI, actually we are very cost conscious. The AI request has to burn a lot of tokens compared to, say, alternative or not using AI. But there are alternatives, simple changing processes,

simple, simpler AI and not Gen AI. We are not hesitate to go there because we get the bang for buck. So in that sense, the way we think about it is a little bit different. Yeah, maybe I could just echo on. In April, we have launched this Gen EI, our sales 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 appointment, the appointment rate is also up by 50%. And we don't really want, we don't really kind of take this increase as generating debt, but 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 use to do a role play with the people. What it means now effectively is they can all do in the comfort of their home, in the environment where they are comfortable with to practice. So I think there is something which is really useful, increase the productivity,

and I think that is something that really helps us. But we don't really want to attribute all that to just AI, I think that's commutative, but we do see it as a very effective and useful tools to help improve our productivity. Okay, Agola from the edge. Thanks, thanks for taking my question. Take a look. 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? because apparently AI takes up a lot more energy than during the time before AI. And there is increased also focus on sustainability in your next frontier circle.

AI indeed consumes electricity. So that's why our philosophy when it comes to AI is not gen AI. So I have touched on it just now that if there's simpler AI, then you use a simpler one which actually consumes less resources than gen AI everything. So I'm not a big fan of gen AI everything. So I use AI quite judiciously, and you can see the results. By doing judicious, interestingly, we are able to launch many more things, simply because we're very focused on the value creation, more than whether it's AI. So you think about AED, the trade secret is actually the DDA, digitalization, because that helps us redesign process and make it more efficient. We create value there, intensify the use of data analytics, which historically I find is bang for buck. And then AI may be using the data analytics, but that is a lack use of the power generally,

as in electricity. The AI, we said that fit for purpose, so only value add. So in a way, if you think about that, it is fit for purpose means that it has to be better than other alternatives, then in which case it's a worthwhile use of the power. And therefore, sustainability is not an issue from our perspective. Felicia from the Edge. Hi, Felicia from the Edge. Thanks for taking my question. So earlier on, Mr. Tan, you mentioned you're happy to do an acquisition, the right target comes along. So what to you is the right target?

In general, my personal preference is portfolio relating to wealth, like the HSBC Wealth Acquisition.

My preference, or rather I don't have a preference for corporate loan portfolio, because we believe that we can grow that portfolio on our own. We are very competitive in terms of gaining market share and growing loans. So I don't really need that. The in between we have to assess, but generally it deals towards the retail side of the business, especially wealth. I want more things. We are also very cognizant. Within our, although we have shown very good results, actually at the back of our mind, we are actually quite risk adverse. 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 be doubly careful because you don't end up with like, you know, spending our time trying to sort out credit losses. So that gives you some context

in the that you give some flavor of the current environment as well. Okay, I think it looks like everyone has all their questions answered with that. Thank you very much and have a good day. Thank you very much.