Dbs Group Hldgs Ltd Ord

Good morning everyone and welcome to DBS's fourth quarter and full year 2024 financial results media briefing. This morning we announced record earnings in 2024 of $11.4 billion. ROE of 18% is one of the highest among developed market banks. To tell us more we have our CEO Piyush Gupta, Deputy CEO Tan Sushan and CFO Cheng Sok-Hui without further ado. Sok-Hui please.

Good morning everyone and a very happy Chinese New Year to all. 新年快乐万事如意. We delivered a record performance for full year 2024. Net profit rose 11% to a new high of $11.4 billion with return on equity at .0% sustained at the previous year's record. Total income rose 10% to $22.3 billion from broad-based growth. Commercial book net interest income grew 5% led by a four basis point expansion in net interest margin to .80% and balance sheet growth. Net fee income crossed $4 billion for the first time led by wealth management while treasury customer sales also reached a new high. Markets trading income rebounded 27% to $922 million. Expenses were 10% higher with City Taiwan accounting for 3 percentage points. The cost to income ratio was unchanged at 40%. For the fourth quarter, net profit grew 10% from a year ago to $2.62 billion. Total income rose 10% to $5.51 billion from growth in both the commercial book and markets trading. Asset quality was sound. Non-performing assets rose 4% in constant currency terms from the previous quarter to $5.04 billion as new non-performing assets were partially offset by repayments and write-offs. The NPL ratio of .1% was little changed. Specific allowances were at 20 basis points of loans for the fourth quarter and 13 basis points for the full year. Capital was healthy. The transitional CET1 ratio was .0% with a fully phased-in ratio at 15.1%. The Board declared a final ordinary dividend of $0.60 per share for the fourth quarter, an increase of $0.06 from the previous payout. This brings the ordinary dividend for the financial full year to $2.22 per share or $6.3 billion, an increase of 27% over the previous year. In addition, the Board committed to managing down the stock of excess capital over the next three years. To begin with, it plans to introduce a capital return dividend of $0.15 per share per quarter to be paid out over financial year 2025. For the full year, net profit rose 11% to a new high. Commercial book total income grew 10% or $1.92 billion to $21.4 billion. Net interest income rose 5% or $757 million to $15.0 billion from higher net interest margin and balance sheet growth. Net free income rose 23% or $784 million to a record $4.17 billion led by wealth management which grew 45%. Commercial book other non-interest income was 21% or $379 million higher driven by record treasury customer sales and property disposal gains. Excluding the property disposal gains, commercial book other non-interest income was up 15%. Markets trading income rebounded 27% to $922 million as FX interest rate and equity derivative activities benefited from market volatility. Expenses were 10% or $839 million higher at $8.9 billion with City Taiwan accounting for three percentage points of the increase. The cost to income ratio was unchanged at 40%. Profit before allowances increased 11% to a record $13.4 billion. Specific allowances were $559 million or 13 basis points of loans and general allowances of $63 million were taken. There were one-time items amounting to $119 million. They included $100 million that was set aside as part of the bank's CSR commitment announced last year to allocate up to $1 billion over 10 years for vulnerable communities. For the fourth quarter, net profit rose 10% from a year ago to $2.62 billion. Commercial book income increased 9% to $5.35 billion. Net interest income rose 5% or $194 million to $3.83 billion from a two basis point increase in net interest margin to .77% and from balance sheet growth. Net fee income grew 12% or $101 million to $968 million led by wealth management. Commercial book other non-interest income grew 41% or $158 million to $548 million due to higher treasury customer sales and property disposal gains. Excluding the property disposal gains, commercial book other non-interest income was 19% higher. Market trading income rose 40% or $45 million from the previous year's low base to $158 million. Expenses increased 9% or $190 million to $2.40 billion, while the cost-income ratio remained stable. Profit before allowances grew 11% to $3.11 billion. Specific allowances were $229 million or 20 basis points of loans, while general allowances of $20 million were written back. Compared to the previous quarter, fourth quarter net profit was 13% lower. Commercial book total income fell 1%. Net interest income rose 1% or $35 million as balance sheet growth more than offset a six basis points decline in net interest margin due to lower interest rates. Net fee income fell 13% or $141 million from seasonally slower wealth management activity and a decline in loan-related fees. Commercial book other non-interest income was 6% or $31 million higher from property disposal gains. Market trading income fell 52% or $173 million from the previous quarter's high base and seasonal factors. Expenses rose 6% and profit before allowances was 11% lower. Total allowances increased by $79 million due to a rise in specific allowances. Compared to the previous quarter, the group's net interest margin rose 4 basis points to 2.15%. Lower funding costs and accounting asymmetry for market trading more than offset a six basis point decline in a commercial book due to lower interest rates. Net interest income increased 4% to $3.73 billion. Commercial book net interest income rose 1% to $3.83 billion as balance sheet growth more than offset the decline in net interest margin. For the full year, the group's net interest income rose 6% to $14.4 billion from balance sheet growth. Net interest margin fell by 2 basis points to .13% as an increase in a commercial book was more than offset by a decline in markets trading. Commercial book net interest income rose 5% to $15 billion from higher net interest margin and balance sheet growth. Net interest margin expanded 4 basis points to .80% due mainly to the repricing of fixed rate assets. During the quarter, gross loans rose $3 billion or 1% in constant currency terms to $437 billion, led by a $4 billion increase in non-trade corporate loans. Trade loans declined $1 billion while consumer loans were little changed. For the full year, gross loans rose $12 billion or 3% led by non-trade corporate loans and trade loans. Deposits During the quarter, total deposits were stable in constant currency terms at $562 billion as Sink Dollar Kasa growth offset a decline in foreign currency deposits. For the full year, total deposits rose $20 billion or 4% with the increase driven by fixed deposits in the first half of the year and by Kasa inflows in the second half. Notably, Sink Dollar Kasa inflow was $5 billion for the full year, in contrast to the $19 billion outflow in the previous year. Fee income Compared to a year ago, fourth quarter gross fee income increased 16% to $1.24 billion. The growth was led by wealth management fees which rose 41% to $520 million from broad-based growth and investment product and bank assurance. Cards, transaction service and investment banking fees were also higher. Compared to the previous quarter, gross fee income fell 6%. Wealth management fees declined 15% due to seasonal factors. Loan-related fees were also lower. The declines were partially offset by increases in cards, transaction service and investment banking fees. For the full year, gross fee income rose 23% to a record $5.09 billion led by a 45% growth in wealth management fees. Excluding City Taiwan, gross fee income rose 17% led by a 38% increase in wealth management fees. For the fourth quarter, commercial book non-interest income, which is boxed up in red, rose 21% from a year ago to $1.52 billion as fee and treasury customer sales benefited from strong wealth management momentum. It declined 7% from the previous quarter due to seasonal factors. For the full year, commercial book non-interest income rose 22% to $6.33 billion led by a record fee income and treasury customer sales. It also included property disposal gains in the third and fourth quarter. Combining the commercial book and markets trading, total non-interest income for the fourth quarter grew 13% from a year ago and declined 18% from the previous quarter to $1.78 billion. For the full year, it was 20% higher than a year ago at $7.87 billion. For the full year, expenses rose 10% to $8.9 billion led by higher staff costs and City Taiwan accounted for 3 percentage points of the increase. The cost-income ratio was unchanged at 40%. For the fourth quarter, expenses of $2.40 billion rose 6% from the previous quarter and 9% from a year ago. The expenses included a special one-time bonus of $1,000 each paid to all staff except senior managers as an additional reward for their contribution to the record performance. A total of $32 million was set aside for this. Full year consumer banking and wealth management income rose 13% from a year ago to $10.2 billion. The growth was led by double-digit increases in investment product sales and cuts. Income from loans and deposits rose 3% to $6.24 billion as growth in loans and deposits was partially offset by a lower net interest margin. Investment product income increased by 41% to $3.03 billion from higher sales of investment and bank assurance products while cut income rose 22% to $856 million on higher spending. Both investment products and cut income were bolstered by the consolidation of City Taiwan. Singapore dollar savings deposits grew 4% of $5 billion to $133 billion. In contrast to a $10 billion outflow in the previous period. The strong wealth management performance was a highlight this year. Full year wealth management segment income grew 18% to a record $5.22 billion. The growth was led by a 45% increase in non-interest income from growth in a broad range of investment products and in bank assurance as well as the consolidation of City Taiwan. Excluding City Taiwan, non-interest income grew 37%. For the fourth quarter, wealth management income rose 10% on year as higher non-interest income more than offset a decline in net interest income. Assets under management grew 17% to a record $426 billion with strong net new money inflows of $21 billion during the year. Strong investor sentiment continued to fuel the conversion of deposits to investments and the proportion of assets under management in investments rose from 54% to a new high of 56%. Full year institutional banking income declined 2% from a year ago to $9.16 billion as higher loan related fees, cash management fees and treasury customer income were offset by a decline in net interest income. Loan income was little changed at $3.38 billion as higher volumes and fees were offset by a lower net interest margin. Trig income declined 4% to $638 million due to lower average volumes and net interest margin. Cash management income fell 6% to $4.08 billion as higher fees and a 1% growth in deposits partially mitigated the impact of lower net interest margin. Treasury customer income rose 6% to $907 million. Investment banking income was little changed. Full year treasury customer income rose 20% to a record $2.32 billion from growth across most products. For the fourth quarter, treasury customer income was $546.8 million, 8% lower than the previous quarter due to seasonality slower activity and 21% higher than a year ago from increased sales to wealth management customers. Market trading income was $922 million for the full year. Rebounding 27% as FX, interest rate and equity derivative activities benefited from market volatility. Fourth quarter market trading income fell 52% to $158 million from the previous quarter's high base and from seasonal factors. It rose 40% from the low base a year ago. Hong Kong's full year net profit was stable in constant currency terms at $1.60 billion. Total income increased 6% to $3.39 billion driven by higher non-interest income. Net interest income was 4% lower at $2.08 billion as net interest margin declined 11 basis points to 1.80%. Loans were 6% lower in constant currency terms from sluggish loan demand. The impact was partially offset by 3% growth in deposits which were deployed into non-loan interest bearing assets. Net fee income grew 25% to $831 million led by wealth management. Other non-interest income rose 26% to $481 million from an increase in treasury customer sales and trading gains. Expenses rose 10% to $1.33 billion from higher staff costs and general expenses. Total allowances were 11% higher at $152 million as a decline in specific allowances was more than offset by an increase in general allowances. Non-performing assets Asset quality was sound. Non-performing assets rose 4% in constant currency terms from the previous quarter to $5.04 billion as new non-performing assets were partially offset by repayments and write-offs. The NPL ratio was little changed at 1.1%. For the fourth quarter, specific allowances were $228 million or 20 basis points of loans. While new IBGE-specific provisioned charges of $124 million were inline with recent quarters, write-backs of $18 million were materially lower due to timing. For the full year, specific allowances were $560 million or 13 basis points of loans similar to the 11 basis points in the previous year. Lower new charges and higher write-backs for IBGE were offset by higher specific allowances for consumer banking cards and unsecured loans. Total allowance reserves stood at $6.51 billion with $2.55 billion in specific allowance reserves and $3.97 billion in general allowance reserves. General provision overlays were little changed at $2.4 billion. Allowance coverage stood at 229% and at 226% after considering collateral. Capital ratios. The reported Common Equity Tier 1 ratio was 0.2 percentage points lower at .0% based on transitional arrangements, while the Pro-Forma ratio on a fully phased-in basis was 0.1 percentage points lower at 15.1%. The declines were due to an increase in risk-rated assets. Credit RWA rose mainly from currency effects and Operational RWA was also higher. The leverage ratio was at 6.7%, more than twice the regulatory minimum of 3%. Dividends. The Board declared an ordinary dividend of $0.60 for the fourth quarter, an increase of $0.06 from the previous payout. This brings the dividend for the full year to $2.22 per share or $6.31 billion, an increase of 27% over the previous year. In addition, the Board committed to managing down the stock of excess capital over the coming three years. To begin with, it plans to introduce a capital return dividend of $0.15 per share per quarter to be paid out over financial year 2025. In the subsequent two years, it expects to pay out a similar amount of capital through this or other mechanisms barring unforeseen circumstances. Taking together the ordinary dividend of $0.60 and the capital return dividend of $0.15 per quarter, the annualized dividend yield is .7% based on last Friday's closing share price. In summary, we achieved another record performance for the full year. ROE was 18%, sustained at the previous year's record and is one of the highest among developed market banks. Balance sheet management supported net interest income growth and improving sentiment drove wealth management fees and treasury customer sales to new highs. While macroeconomic and geopolitical uncertainties persist, our franchise and digital transformations position us well to continue delivering healthy shareholder returns. Thank you for your attention.

I would like to mention to Gula here, this is my 61st and last quarterly briefing. So as you can imagine, I'm actually quite pleased that I'm able to go out on a high note. It's a good thing to do. Our 2024 was actually a solid year and frankly we outperformed the guidance that we've been giving through the course of the year. We had 10% growth in income, we sort of guided to high single digit, we actually hit double digit. We had 11% growth in impact, which is very solid. And that's despite the 100 basis point cut in the rates in the fourth quarter. What is more pleasing is our fee income, the non-interest income was very solid, 20% plus. Again, we guided to high teens. And so we outperformed pretty much across the board in fees and treasury sales and trading across the board. And ROE of 18% is that I think if you look at compare most global bank ROE's, even the ones which have recovered have recovered to -14% range. So at 18% I think we are ready to stand out. Outside of the financials last year allowed us to continue to build on much of our agenda. So I'm actually quite pleased with the progress with our technology resiliency, the progress with the use of artificial intelligence and generative artificial intelligence across the company. Our whole approach of managing through journeys, horizontal organization, each of our strategic initiatives actually continue to see very good progress in the course of the year. And finally, as we can imagine, I'm very pleased also with the very successful transition. I've been handing over to Sushant now for the better part of five, six months. It's gone extremely well. She's pretty much on top of things. Many of the decisions we are taking now, Sushant has an active role in making them happen. And as you'll see from announcements data, our entire chain of internal succession, the consequential moves are pretty much internally driven. That speaks to the robustness of our bench and our entire talent management succession process. Fourth quarter, just a quick comment. It was solid. We had 10% -on-year growth in income for the fourth quarter. And again, the fee income was very strong. I saw some of the analyst comments earlier and there were some question marks on the quarter. It's a little bit soft. Actually, it's not 16% gross fee income growth for the fourth quarter. It's very solid. It's 12% net income growth. And that was actually powered across many things. Wealth grew 41% in the quarter. And this quarter doesn't have City Taiwan because that was already there in the previous year. So 40% growth was solid. Trading was up 40% -on-year. Now, it's a small number and down quarter on quarter, but fourth quarter is always a soft number for trading. And credit cards, transaction banking, everything was up. Loan fee was somewhat down, but loan fee is very cyclical. It depends on a lot of idiosyncratic loans which come in and go out. And so, very pleased with the overall trajectory of the fourth quarter financial performance. Loan demand was healthy. We grew 3 billion, mostly non-trade loans, which is good. Trade came off a bit cyclical. But non-trade growth, because our pipeline is strong. And that's despite some pay-downs, continued pay-downs in North Asia, in Hong Kong, China. It was broad-based. It's real estate. It's metals and mining. It's in Southeast Asia. It's in India. It's in the Western Hemisphere. So, fairly broad-based loan growth. Deposits, the good thing with deposits were two. One was that the Kasa outflow turned around. And we saw an inflow of Kasa about, ,000,000 Kasa was up by about 5 billion for the quarter. And so, the outflow going out to treasury bills and going out for the last two years, that's now got stemmed. And in fact, we saw an inflow now for the quarter. So, that's good news. Another good news is that our overall deposit costs came off. So, if you look at our performance summary, deposit costs for the quarter are down by 25 basis points. Which means a large part of the market reduction in interest rates, we are able to flow back into our cost of deposits. So, that's also good news. Group NIM, as you saw, surprisingly went up. Even though commercial bank NIM came off six basis points. Group NIM went up and this is the trading. This is why we started splitting out commercial book NIM from trading NIM. Because the trading book has benefited from both things. One, they fund in the market and market rates come down. That's helpful. But also, they do a lot of swaps. They swap from one currency to the other. And that creates accounting anomalies. Because they get their gains or losses below the line, in the other non-interest income. And they get the drag on the interest income line. So, it's a little noisy. And the uplift was really from that. In the third quarter, I had actually already indicated that July, August were challenging. September was slightly better. So, we anticipated as we went into this quarter that trading would give us some benefit. But to be told that by the end of the early this year, the trading benefit will disappear. So, I won't assume that the NIM upside is going to be long lasting. I think guidance that NIM will track around last year's level, maybe a couple of basis points lower, is the right way to think about our NIM. Moving on slide. If you want to wealth management, I just want to circle back to, I mean, it's just been very, very strong. As you know, last, now this is our third year running, when our new, net new money is well over $20 billion. It was 23, 24 couple of years. Last year was still $21 billion. And that's been very strong. People are counting to put the money to work at the same time. So, the deposit investment ratio has been going up as well. And therefore, overall, the 40% plus increase in wealth management fee income is solid. If we exclude the city, Taiwan impact is still 37%, 38%, which is very, very robust. And the good news is momentum continues. We had a very strong start to this year. So, it's not slowing down. Expenses, by and large, well managed. 10% growth for the year, massed the 3% from city Taiwan, so it's 7%. The fourth quarter growth, as Sakui pointed out, we took the opportunity to reward almost all of our staff, -95% of our staff with a special bonus for recognizing the performance. We obviously took the previously declared community contribution. I think Sushant may talk a bit more about that as well. Asset quality. So, if you look at our NPL rate, it looks like it popped up, but half the pop-up is translation, is exchange rate. And it's actually a give-back. If you look at the third quarter, we pointed out that we benefited from exchange rate. In the fourth quarter, we gave up on the exchange rate. So, if you take out the exchange rate impact, it's not that materially different from most quarters, which is why our NPL ratio is pretty flatish. Asset quality continues to be quite sound. We are seeing some stress in the property in China, Hong Kong, but it's secured to a large extent. And the good news is that where we've had and been able to put two transactions, we've recovered our loan value. So, I'm relatively comfortable with where we are on the front as well. And so, as we wind up the year, I think we're in good shape. And we've asked Sushant, since it's going to be her baby, to tell you what she thinks 2025 is going to look like.

So, since it's Fuchsia's last quarterly results, I have to say thank you so

much. You are really going out with a big bang. It's a fabulous fourth quarter, and you're handing the bank over to me and our team in robust shape. So, thank you for your incredible leadership for the last 15 years. You will continue to be an inspiration to all of us in DBS. So, 2025, our outlook, I will talk about it through interest rates, through fees and through expenses, and therefore through our profit line. When we last met, our previous guidance was actually for four US rate cuts in 2025. We are now assuming two rate cuts, and probably likely in the second half as opposed to the first half. So, with that, NII will probably be slightly above the 2024 level, and having said that, we still expect Group NIM to fall slightly with a decline in the commercial book name because of the rate cuts. However, with the lower funding costs, our treasury team will have some tailwinds there, and Group NIM should reach about 210 or plus or minus a few basis points, depending on the asymmetry impact from the market trading book. And we still assume loan growth of around mid-2010. So, we expect to see a bit of single-digit growth. And as Piyush had said, the loan growth is primarily in the corporate non-trading book, which is a good book, and the pipeline still looks pretty robust. And in terms of the fee income, the commercial book non-interest income growth will probably still be in the high single digits. Again, you saw the numbers from Wealth Management. The good news is the Wealth Management AUM continues to grow quite nicely, and that gives us the further to continue to grow our wealth management fees. IBG also has been growing the fees quite nicely, and so I think we should be expecting a continued high single-digit growth there. And in terms of our cost-income ratio, we are looking for it to be in the sort of the low 40s, -41-ish range. So, we maintain our guidance there. And for SPs, we are assuming that SPs will probably normalize back up to 17 to 20 basis points. On SPs, we are comfortable, but we are not complacent. So, we are mindful of all the geopolitical risks that stand in front of us. We continue to stress test our portfolio very, very regularly. Whatever new news comes out from the Trump administration, we try to stay on top of it. So, it depends on what happens for the rest of the year, but there could be some potential for GP right banks as well. If the external conditions remain stable, we might be able to reduce it. If it deteriorates sharply and SPs exceed the normalized range of 17 to 20 basis points, then there could be a shift from the model GPs to SPs. So, therefore, pre-tax profits will be pretty flat to last year, and net profit will be below because of the new BPS minimum tax rate of 15%. That takes out about $400 million from our net profit line. So, distributing our earnings, sharing our earnings with all our major stakeholders, from our shareholders to our community, to our employees. Both Sok Hwe and Piyush mentioned that the dividends will go up by $0.06 to $0.60. Based on our fully phased-in CET1 of 15.1%, we'll probably have about $8 billion in excess capital. If you use the midpoint of $12.5 to $13.5 target, with this $8 billion, we already committed to $3 billion in share buybacks, and that leaves another $5 billion available to distribute. If you assume a $0.15 quarterly capital return for three years, this will amount to roughly about $5 billion, right? $1.7 billion per year. But we've decided to give ourselves some flexibility, so this year we'll do it. Next two years, we'll give ourselves some flexibility, because if you think about it, we've come up with multiple ways to return capital to our shareholders, right? You've got your normal dividend, you've got special dividends, capital return dividends, share buybacks and bonus issues. So, we'll give ourselves some flexibility for the next two years and see what's optimal depending on the market situation. So, for the community, another $100 million, part of our 10-year commitment that Pews spearheaded of $1 billion to support all the vulnerable segments in our societies. And for employees, we will be giving a one-time bonus of $1,000 sinh, or the PPP equivalent in the other countries, to all our staff except the senior managers, and this is to recognize everyone's contribution to our record profits. That's

it from me. Thank you, Sushant. We can now go to media Q&A. So, before you ask your question, I request that you see your name as well as the media publication you represent. Do speak into the mics in front of you because we have a live stream going on just so that the people watching virtually can hear your question. Alternatively, we do have roving mics around so you can also put your hand up if you want to be passed to you. Felicia first and then Chanya.

Hi, good morning. And congratulations. I'm Felicia from the Edge Singapore. I have a total of four questions. The first two is for Sushant. The first one is, what are the likely changes that you will be making to your management team and what sort of CEO are you likely to be?

A good one. A better one.

The second one is, what are your immediate plans and goals for the bank, if any? The third one is for all three of you, what is the bank's Malaysian angle and can you comment on the reported purchase of the alliance stake? The last one is, we want to know your thoughts on bank deregulation. How will deregulation affect the Singapore banks and their ratings? And do you have any thoughts on Trump's tariffs?

So on your first question on what are the changes that we are making, we have announced already that my last job as IBG head will be taken over by Han Kuijuan, who used to be the Singapore country head, and the Singapore country head will be taken over by Lin Hym Chuan. Zou Kun remains our consumer and wealth head. We will be announcing a few more, a couple more internal shifts or moves this week. So we have been grooming, as Piyush said, grooming our internal slate of sub-session quite thoughtfully over the last 10 to 15 years. So all these, when we make the announcements, shouldn't really be any surprise to anyone internally. And we should keep the stability of the management and the way we manage in our operating process. So what kind of CEO will I be? I'll give it my best shot. You know, I always say Piyush is a hard act to follow, we wear different shoes, we have different styles, but whatever has been set in terms of our cultural, the culture of the bank, the way we do things, the embracement of digital transformation, the purpose, and the focus on returns, right? Whether it's high ROE businesses, whether it's releasing capacity from the use of generative AI, I want to be a CEO that is conscious of the macro movement, so risk aware, and also conscious of what are the big trends in the market, whether it's technology or geopolitics, and bringing it to bear to how DBS can optimize or be ahead of the curve and serve our clients better and continue to grow. So focus on high ROE business, focus on the connectivity, focus on the cross-buy, cross-sell, focus on digital transformation and optimization there. And also, you know, and also be humble and continue to be humble and hungry. What was your second question? What was the plans and goals? What were the immediate plans and goals, if any? Oh, okay. So we will be having our various leadership off-sites in the next few weeks, and I don't want to share too much yet, but the team and I have been working around some of the key things that we can do in the short term and the medium term. And the first is around, obviously, transformative technology. And I think that AI changes can be profound. And I'm glad to say that DBS has created a mold, both around the way we manage our data and our digital assets. And we've already come up with our various AI machine learning models. So continue to harness what new technology there is there, and as the cost comes down, it's useful to create better customer experiences and to also release some capacity from the mundane jobs that we have to do today to do more customer-facing roles, to have more customer-facing time, and to deepen the relationships, and to get more customers. So when I talked about some of the high ROE businesses, obviously, wealth management, as you can see, stands out. And the team led by Zicoon and the team have done a great job to both increase the net new money, which is really for the growth in wealth fees, also increase the number of RMs, which is also for the increasing customer touch points. And the wealth continuum, we will continue to sharpen that. So not just the high end, but also the middle, priority banking, so it's private banking, private client priority banking, also down to digital wealth. So the whole continuum is where we want to serve, better, and grow more. And then in the other higher ROE businesses, like financial institutions group, other treasury sales, both in both IBG and CBG, we want to focus on that as well. And also, of course, GTS, you know, payments, GTS are also high ROE businesses. Malaysia, sorry, cannot comment. And your last question was around bank deregulation and Trump's tariffs. When, media regulation?

Oh,

okay. On the Johor Singapore SEZ, obviously we do believe there are opportunities, especially for Singapore and Singapore Singaporean, Singapore SMEs particularly, but also, you know, it's a mix of large corporates and SMEs to benefit from a lower cost. We believe that with our digital capabilities and our, you know, big push into technology, sustainability, you know, renewable assets, and the ability to connect both countries, there will be, if the SEZ can be like the GBA is to Hong Kong, I think that's quite a lot of potential outside for Singapore and DBS, of course. Trump's tariffs, so there's, what do you mean by deregulation? Sorry.

Yeah,

I guess there is a view in the US that the Trump administration is going to do active deregulation of the banking system. But yes, first of all, MES has always been a very pragmatic regulator. So if you really look at the way a lot of the Western central banks and agencies apply the regulatory prism, MES hasn't, in fact, most of the Asian regulators haven't been like that. If you look at the heart of the regulation in the last decade, which is dialing up capital, dialing up liquidity, actually, I think they were sensible. And if it's applied sensibly, I'm not overly concerned. As you can see, we already have a lot of capital. If it turns out on the back of deregulation, capital requirements start heading down south, I think it's an open question whether banks like us in Asia will follow that. And so I do think that a certain level of capital is not a bad thing to have. Outside of that, a large part of the regulation tends to be around disclosure and reporting requirements. And if that obviously starts getting cleaned up, it will be helpful. Some of that has been around increasing reporting for new stuff, sustainable dealing stuff, etc. And some of that can be onerous. So if that actually starts getting simplified, that would be helpful. But on the whole, if you ask me, would this deregulation make a dramatic difference to a bank like us, I doubt it.

So on the Trump tariff question, I think, you know, certainly from what we see from China, there is the well, they're prepared, they're better prepared this time, Trump 2.0. And like this morning's metals announcement, you know, frankly, the team tells me that the metals that they use that is fungible anyway, and this exchange traded. So it shouldn't be too much. I think what we will be looking for is better intra-regional trade with the RCEP. And we'll be focusing more on what are the trade opportunities between ASEAN and North Asia, and certainly Europe as well, some of the Western MNCs from Europe and Asian MNCs are looking to do more within Asia as a result of this. So I think we just focus on where we see some growth opportunities.

Chon Nyeo, you had a question? Oh, yes, actually, thanks to Teresa for asking questions on tariff. But just to follow up a little bit, do you see more impacts on growth, economic growth in the region because of Trump's tariff, especially on North Asia? And I just want to say this because this is a huge last quarter. So thank you so much. I mean, your candid style of answering makes all this Q&A very fun to cover. And thank you so much for that. Sorry, second question. Could you talk about your exposure to New World development because DBS is listed as a principal banker? And have you started setting up provision for New World?

So I'll take the tariff questions and we can take the New World question together. On the tariff question, yes, I mean, there will be policy swings, right? So we are expecting a lot more volatility both in markets and in rates and in effects as a result of, you know, announcements from the Trump administration. And they're now daily. However, I think it's important to look at both the short term and the longer term, right? This is a four year administration. So I think we can't manage, I know we're already, I can see some people rolling their eyes, but, you know, we can't manage our business day by day. We have to take a view and then be guided by longer term trends. And as I said earlier on, we still believe that, you know, there will be, whilst there will be reactions around some of the tariffs, at least for our markets in Asia, especially in China and Southeast Asia, the countries here are looking to be more resilient internally and to look at more, more intra-regional trade. Having said that though, we will stress test the portfolio. There will be inflation. There will be, there will be longer routes to be taken, et cetera. There will be inflation, which will, which may keep rates higher for longer. So we have to prepare for that. And if rates remain higher for longer, then, you know, there might be some stresses in the SME book or in the consumer book that you have to be ahead of and be risk aware. In terms of the large corporates, we continue to stress test based on real estate, based on some of the dislocation that we might be seeing in things like autos or potentially metals and mining, et cetera. And as long as we stress test and we make sure, okay, on the margin, do we have enough buffer? Will these guys survive? And do we have enough collateral to repay them? Then these stress tests will be instructed to us on how we manage our total exposures.

Thank you, Sushant. It's actually interesting. If you look at Trump 1, it didn't impact global trade materially, right? And so nobody knows what they're going to do this time. But what's also interesting is the total amount of global trade, ex the US, continues to go. And therefore, while there might be tariffs in the US per se, I do see that there is enough tailwind around connectivity and interactivity around other countries in the world. So that gives us an opportunity. In Trump 1, we also found, we don't know how it will play out this time, that the shift from China to China plus one was quite helpful to us. And so that is another upside. So it depends on how exactly they levy tariffs, but it could actually have some interesting possibilities as well. On New World, we can't talk about it, obviously. You know, we're listed as a banker and we have exposure. But I'll just make two, three comments. One, a large part of our exposure tends to be secured and without getting into details, overall, our loan to value of our commercial book in Hong Kong are about 50%. And so far, the market clearing prices for most assets has been north of that. So the couple of ones that we had to actually, we were concerned about, we've been able to clear well above that and recovered our loans, not from New World in general. So I think the security cover is actually not bad. They're looking at in discussions, as you know, right now on commercial refinancing for stretching out some of the payments. There was a lot of support from the family. The Chinti Fook has a lot of resources. They've been helping New World. They've bought a lot of their assets in the last year or two at market prices, high prices. The company has a lot of land bank in the northern part of Hong Kong. They've got properties in China where there's a lot of interest in those properties. So they have an active plan to actually monetize some of their assets as well as part of their restructures. I think the refinance, which there will be, it will be in commercial terms. For us, it's a current exposure. It's not in a special mention exposure right now. They're paying. There's still current.

And they have a lot of land bank as well.

CNA, Alexandra. Hi,

my first question is to Mr. Piyush. Looking back at the bank's growth over the past, well more than a decade, what are you most proud of in terms of what you're leaving behind? And my second question to Ms. Sushant, looking ahead to 2025, what are you most excited about regarding the bank's prospects in the face of, of course, growing global uncertainties and how the bank plans on staying ahead of that? Thank you.

I'm obviously very pleased with the financial performance of the bank. You know, in this period, we've more than doubled our ROE from 8, 9% to 18%. And, you know, we've quadrupled or quintupled our net earnings over this period of time. The market cap's huge. And so, obviously, financials are good. I'm actually quite even more pleased with the customer franchise. We used to have 5-odd million customers. We today have 18 million. And more important, the customer feedback we get from all of the surveys and so on have seen our customer service evaluation go from middling to the top of the pack in every market that we're in. But if I had to choose one thing I'm most pleased about, it is the culture and the employee base. You know, we've grown triple our size, 40,000 odd people. But we've been able to create a culture which is innovative, a little bit risk-taking, a little bit forward-looking, while retaining what's special about DBS, a sense of purpose, and people working together. We're not a political company. We work together. But we've been able to create a nimble, agile culture. So that translates into a lot of stuff, whether it's the digital agenda, whether it's use of AI, use of Gen.AI, working differently. I think that nimbleness and agility is going to be critical to us as we go forward. I firmly believe that competitive advantage in the future will come as much from what you do, not just what you do, but how you do it. Because what you do, the change is so incredible, you just can't predict what's going to come down the pike. So you have to build the core in the company to respond. And I think we've been able to do that. And so that's actually quite pleasing.

So it's a good segue to my answers. What am I excited about? I talked about remaining hungry and humble. And I think we need to add agile to it. So the hunger, well, let's deal with the humble first. We need to stay ahead of the risks that the geopolitics and the markets will throw at us and also the technology risks that will be there for everybody. So staying humble and being resilient is key for us to stay ahead and look after our customers. And staying hungry because there's still a lot of growth, there's still a lot of white space for us, whether it's in wealth management, it's in GTS, it's in corporate banking, Western MNCs, Asian MNCs. I mean, we still see a lot of growth opportunities, connectivity flows that we can harness. And the hunger for learning. You said rightly that our culture today is one of being innovative, curious, open to experimentations. And because of the way we've organized ourselves, both in terms of being horizontal, but also because we have machine learning, AI. And the culture of the bank is such that we're willing to work not in silos, but as one bank and be able to move fast, experiment, fail, fail fast and tweak around the edges. That gives us, I hope, an advantage to harness whatever new generative AI technology there is. I'm excited. I think the changes will be profound. I think if we get this right, there will be capacity release, as I said, for more customer facing good outcomes. Obviously, as I said, we have to be risk aware. We have to make sure that we are responsible in the use of such technology and data. But if we get this right, there is some exciting upside to be had here.

I'll just add one thing. Tushan referred to it as humble humility. I talked about purpose. As I reflect, it's something which is really different about DBS. I think it comes back from its root as the development bank of Singapore and owning POISB and all that stuff. But to me, that's been special and continues to be. That our outlook on doing real things for people. When we committed a billion dollars to give back to community, there was broad, unanimous acquistances in the board. It was the right thing for us to do. And I think before purpose became a buzzword in the West, it was there in DBS. And after DEI is out of favor in the West, it is still there in DBS. So that sense of genuinely believing that we need to do real things for people, I think that I'm very proud of that.

I think we have time for maybe one last question. Gula? OK. Can you speak into the mic?

Can I ask some very mundane questions? Some mundane questions. Can you explain the impact of Shenzhen Rural Commercial Bank on the capital? Do you deduct because you have less than 20 percent still? And will you deduct 19 percent? 19 percent. And do you deduct it from your set? We have capacity under

the Basel rules to accommodate it based on risk-rated assets. OK.

And then, OK, so Sushant mentioned that you see two interest rates, two falls in interest rates. So how would you manage your securities based on that? I mean, will you extend duration, shorten it, or whatever? OK.

The risk,

the premium that you will get from extending, you know, the ten-year now is quite flat. You know, it was obviously steeper in the last couple of years, last year certainly. It's now quite flat. So it depends on where the U-curve goes. But right now, you know, there isn't a lot of reason to extend it yet. OK.

And then the other question is on the IPO pipeline. You haven't had many IPOs in the last year or two. The region

hasn't had many IPOs in the last year or two. Yes. So what

is, I mean, what's your pipeline like for this? It's good. It's good? Pipeline is very solid. But the pipeline has been very solid for

a year. The question is the market has not been ready to be able to take IPOs to market, right? And so we have a solid pipeline. As you know, typically most years we've done a lot of read and read-related IPOs. We obviously need that in Singapore. But we've also done a lot of stuff actively in recent times in Hong Kong, China, et cetera. The pipeline's been there. We have mandates on hand. So if the sentiment turns around and we can take things to market, we're actually quite constructive. It's actually a bit funny. Every year we budget for our ECM, you know, annual budget. And we do it based on the mandated pipeline. And based on the mandated pipeline, our budgets have been aggressive. And the last two years, the actual realization has been a pittance. And that's because the markets have just not been supportive. So the markets turn a little bit positive. I think there's upside there.

Just for clarification, you mentioned that net new money for the past three years exceeded 20 billion.

I think why is that we had 24 and 24 billion and 22 and 23. Last year we had 21, 22 billion.

Any more colors on that, like origin? No, it's all very broad

-based. So we still, it's not changed very much. We get about 40 percent from North Asia. We get 40 percent from Southeast Asia. And the balance we get now increasingly from India, Middle East, Europe, et cetera. It's quite diversified. I see.

Okay, I'm afraid that's all the time we have. I mean, I know Jovi has a question. We have an analyst briefing, I'm afraid. Sorry, just bring one up. One question, Jovi.

So thanks. So, Sushant, you mentioned earlier the various ways DBS has returned earnings to shareholders. What other sorts of mechanisms could DBS explore? And conversely, what is not on the table for DBS? Like, would you consider a share split?

Oh, I

thought that five ways was quite a lot already. You know, I think more than most in terms of returning capital share split. Doesn't return capital.

The share split doesn't return capital. So the question in the old days used to be at 45 bucks, are we too expensive for the common manager to split? But what happens now because you can buy 100 shares. So when you couldn't buy 100 shares, it mattered. Today you can buy 100 shares. So it could be an optical thing you look at doing at some stage, but it doesn't really result in returning capital.

Singaporean retail, I know, looks at the share price, right?

Okay, thank you for all your questions. I'm afraid that's all the time we have, so we'll draw this time to a close. Thank you. All

right, everybody, thank you. It's one week. Thank you to all of you. You've been great supporters. So thank you all for your support. Please continue to give that to Sushant.