Dbs Group Hldgs Ltd S/Adr

Okay good morning everybody and welcome to DBS's fourth quarter and full year 2025 financial results briefing. This morning we announced for the full year that we achieved record income and profit before tax. Net profit came in at 11 billion with ROE at 16.2%. For the fourth quarter net profit was 2.36 billion. With us today, our CEO, Tan Xu Shan, and our CFO, Cheng Sok Huy. Without further ado, let me invite Sok Huy Yat to give us more colour. Thanks, Agnes.

Good morning, everyone, and happy Chinese New Year in advance. Okay, slide two.

On the highlights, we delivered a strong set of results for full year 2025. Pre-tax profit rose to a new high of $13.1 billion. Return on equity was 16.2% and return on tangible equity was 17.8%. Total income grew 3% to a record $22.9 billion despite a challenging rate environment. Average SORA and HIBOR both fell by almost 2 percentage points and there were adverse translation effects from a strong Singapore dollar. Group net interest income was nonetheless modestly higher, driven by record deposit growth and proactive balance sheet management. Fee income and treasury customer sales both grew double digits and reached new highs, led by wealth management. Markets trading income rose to the highest level since 2021. The cost-to-income ratio was unchanged at 40%. Net profit was 3% lower at $11.0 billion. This was due to higher tax expenses of $400 million from the consequential implementation of the 15% global minimum tax. For the fourth quarter, pre-tax profit was $2.8 billion, down 6% from a year ago. Total income declined 3% to $5.33 billion as higher fee income and treasury customer sales were offset by the impact of rate headwinds and the absence of non-recurring gains recorded a year ago. Asset quality remained sound. A previously watch-listed real estate exposure was prudently recognised as an MPL during the quarter, contributing to higher specific allowances. The impact was partially offset by a release of general allowances set aside in prior periods. Allowance coverage stood at 130% and at 197% after considering collateral. Capital levels stayed strong. The transitional CET1 ratio was 17.0%, with a fully phased-in ratio at 15.0%. The Board proposed a final total dividend of $0.81 per share for the fourth quarter, comprising a $0.66 ordinary dividend, up $0.06 from the previous payout, and a $0.15 capital return dividend. The Board remains committed to managing down the stock of excess capital and, barring unforeseen circumstances, plans to maintain the $0.15 per share capital return dividend each quarter through 2026 and 2027. Full year performance. Slide 3. For the full year, total income and pre-tax profit were records. Group net interest income was modestly higher at $14.5 billion, a new high, as record deposit growth and proactive hedging offset the impact of rate headwinds. Within this, commercial book net interest income fell 4% or $549 million as net interest margin narrowed due to the rate's impact. Fee income rose 18% or $730 million to a record $4.90 billion, led by wealth management. Commercial book other non-interest income was $2.13 billion. Treasury customer sales to wealth and corporate clients grew 14% to a new high, but the increase was offset by lower other income, which had non-recurring gains a year ago. Markets trading income rose 49% of $452 million to $1.37 billion, the highest since 2021, benefiting from lower funding costs and a more conducive trading environment. Expenses increased 4%, or $354 million to $9.25 billion, led by staff costs. The cost-income ratio was unchanged at 40%, and profit before allowances rose 2%, or $249 million to a new high of $13.7 billion. Total allowances were 27% or $169 million higher at $791 million. Specific allowances were $854 million on 19 basis points of loans, largely due to the real estate MPL in the fourth quarter. General allowances of $63 million were written back during the year, including the release of allowances previously set aside for the real estate exposure. There was a one-time item relating to the Bank's CSR commitment announced in 2023 to allocate up to $1 billion over 10 years to support vulnerable communities. With $100 million set aside from the year's profits, the cumulative amount since 2023 for CSR stands at $300 million. Next slide. Fourth quarter year-on-year performance. For the fourth quarter, pre-tax profit was $2.80 billion, 6% lower than a year ago. Group net interest income declined 4%. Within this commercial book, net interest income fell 6%, or $239 million to $3.59 billion, as net interest margin narrowed due to the rate headwinds. Fee income rose 14% or $131 million to $1.10 billion, led by wealth management. Commercial book other non-interest income was $486 million, within which Treasury customer sales rose 13% or $56 million. Expenses declined 1% or $23 million to $2.37 billion. The cost-to-income ratio was stable. Profit before allowances was $2.96 billion, 5% or $151 million lower. Total allowances were unchanged at $209 million as higher specific allowances were offset by a write-back of general allowances. Next slide. Fourth quarter. Quarter-on-quarter performance. Compared to the previous quarter, fourth quarter net profit declined 20%. Group net interest income was marginally higher. Within this, commercial book net interest income rose 1% or $34 million as deposit growth momentum was sustained. Deposits increased $16 billion or 3% in constant currency terms, offsetting the impact from lower SORA. Fee income fell 19% or $258 million and commercial book at the non-interest income declined 16% or $92 million due to seasonally lower client activity. Markets trading income fell 65% or $285 million from the previous quarter's high base and seasonal factors. The business also took the opportunity to rebalance the portfolio, which will position us well for 2026. Expenses declined 1%, or $21 million to $2.37 billion. Specific allowances were higher, partially offset by a general allowance write-back. Next slide, net interest income. Compared to the previous quarter, group net interest income was marginally higher at $3.59 billion. Net interest margin declined three basis points to 1.93% as SORA continued to trend lower during the quarter. the impact of lower rates was offset by two factors. First, balance sheet hedges that had been proactively increased over the past few years helped mitigate the decline in net interest margin. Second, deposit growth remained strong. Deposits rose 16 billion, or 3%, in constant currency terms during the quarter, bringing the full-year increase to 64 billion, or 12%, the largest absolute increase in the bank's history. The growth outpaced loans and the surplus was deployed into liquid assets. This was accretive to net interest income and return on equity, though it modestly reduced net interest margin. For the full year, group net interest income was modestly higher at $14.5 billion As balance sheet hedging and deposit growth offset the sharp declines in SORA and HIBOR, as well as adverse FX translation from a stronger Singapore dollar. Commercial book net interest income declined 4% from a lower net interest margin. Next slide, deposits. During the quarter, total deposits rose 3% or $16 billion in constant currency terms, mostly from CASA inflows. CASA, current and savings account, increased in both SING dollars and foreign currencies. SING dollar CASA rose from seasonal year-end retail inflows and a continued shift of funds from Treasury bills back into deposits. Foreign currency CASA growth was driven by both wealth and corporate clients. For the full year, total deposits grew 64 billion, or 12% in constant currency terms, the largest absolute increase in the bank's history, with over two-thirds of the increase in CASA. liquidity remains healthy. The group's liquidity coverage ratio was 155% and net stable funding ratio was 117%, both comfortably above regulatory requirements. Next slide, loans. During the quarter, gross loans rose 2% or $10 billion in constant currency terms to $451 billion. The increase was led by trade loans, with modest increases in non-trade corporate and wealth management loans. As deposits continued to grow faster than loans, the surplus was deployed into liquid assets. This was accretive to net interest income and return on equity. For the full year, loans rose 6% or $24 billion, with broad-based growth across trade, non-trade corporate and wealth management loans. And you can see from the chart, the high-quality liquid assets for the year increased by $42 billion. Fee income. Next slide. Growth fee income rose 15% for the full year to a record $5.86 billion. Growth was broad-based and led by wealth management, which increased 29% to a new high. Transaction service and loan-related fees also reached record levels, while investment banking fees strengthened. For the fourth quarter, gross fee income rose 12% from a year ago to $1.38 billion. The increase was led by wealth management fees. Transaction service and investment banking fees were also higher. Compared to the previous quarter, gross fee income declined 13%. Wealth management and loan-related fees fell due to seasonal factors, while transaction service fees were lower compared to a strong third quarter. the declines were partially offset by higher card fees. Next slide. A wealth management segment. The wealth management segment comprises treasurers, private client and private bank. Wealth management was a key growth driver for the year. Full year segment income rose 9% to $5.68 billion underpinned by record investment product and bank assurance sales. Assets under management grew 19% in constant currency terms from a year ago to a new high of $488 billion. This quarter, we have started to disclose net new money at the bottom of this slide. The figures include inflows from Treasures, Treasures Private Client and the Private Bank. Total inflows for the three segments were $12 billion for the fourth quarter, bringing full-year inflows to a record $39 billion, 21% higher than 2024. For the fourth quarter, segment income rose 5% from a year ago to $1.30 billion, driven by higher non-interest income from stronger investment product and bank assurance sales. This more than offset a decline in net interest income from lower rates. Next slide. Customer-driven non-interest income. This slide shows non-interest income from the commercial book that's customer-driven. While fee income and treasury customer sales are recorded under different P&L lines due to accounting treatment, both are driven by consumer and corporate demand for financial solutions and should be viewed together. For the full year, customer-driven non-interest income rose 16% to $7.04 billion, as net fee income rose 18%. to $4.90 billion and Treasury customer sales grew 14% to $2.14 billion. Both were at new highs, driven by broad-based growth and led by wealth management. For the fourth quarter, growth momentum remained strong. Customer-driven non-interest income rose 13% from a year ago, around the average pace over the prior four quarters. The performance reflected our continued efforts to broaden and deepen relationships with wealth, corporate and institutional clients. Next slide. Expenses. Expenses were tightly managed. Full-year expenses rose 4% from a year ago to $9.25 billion, led by higher staff costs. The cost-to-income ratio was unchanged at 40%. Fourth-quarter expenses were 1% lower, both quarter-on-quarter and year-on-year at $2.37 billion, driven by lower staff costs. Next slide. Hong Kong. Hong Kong's full-year net profit rose 3% in constant currency terms to a record $1.61 billion, as total income increased 6% to $3.52 billion, driven by higher non-interest income. Net interest income was 3% higher at $2.09 billion from deposit growth. Net interest margin was slightly higher as the impact of lower HIBOR on the commercial book was offset by an improvement in markets trading. Deposits rose 10%, led by CASA inflows while loans grew 1%. Surplus deposits were deployed into non-loan assets supporting net interest income. Net fee income rose 22% to $993 million led by wealth management. Other non-interest income was 7% lower at $441 million as lower markets trading non-interest income was partially offset by higher treasury customer sales. Expenses increased 3% to $1.33 billion from higher staff costs. Total allowances doubled to $296 million, reflecting higher specific allowances, largely from the real estate NPL in the fourth quarter. Next slide, non-performing assets. The NPL ratio was unchanged from the previous quarter at 1.0%, notwithstanding the recognition of the real estate exposure as an NPL in the fourth quarter. The exposure had been on our watch list for two years. The borrow is currently not in default status. We reviewed the credit and took a prudent decision to downgrade it to MPL following our subjective default assessment. Next slide, specific allowances. Specific allowances for the fourth quarter rose to $415 million, with a large part of the increase due to the real estate NPL based on asset recovery values. The increase was partially offset by a release of general allowances that had been previously set aside for the exposure. For the full year, specific allowances amounted to 845 million or 19 basis points of loans, broadly in line with our through cycle average. Next slide, general allowances. As at end of December, total allowance reserves stood at $6.28 billion, comprising $2.42 billion in specific allowance reserves and $3.86 billion in general allowance reserves. The slight decline in GP reserves from the previous quarter was partly due to the release of general allowances previously set aside for the real estate MPL, which were reclassified to specific allowances. As communicated previously, we set aside GP once a case is placed on the watchlist. In the event that the watchlisted case is classified as MPL, the GP set aside will be released. General allowance reserves remain prudent, with the GP overlay at $2.4 billion out of the total $3.86 billion. So to recap, the GP overlay of $2.4 billion is in addition to baseline GP generated by the model, and it takes into account stress scenarios such as heightened geopolitical and macroeconomic risk. Allowance coverage was at 130% and at 197% after considering collateral. Next slide, capital. The reported CET1 ratio increased 0.1 percentage points from the previous quarter to 17.0% driven by profit accretion and stable risk-weighted assets. On a fully phased-in basis, the pro forma ratio was 15.0%. The leverage ratio was 6.2%, more than twice the regular tree minimum of 3%. Next slide. The Board proposed a final total dividend of $0.81 per share for the fourth quarter, comprising a $0.66 ordinary dividend, up $0.06 from the previous payout, and a $0.15 capital return dividend. This brings the total dividend for the year to $3.063. per share or $8.68 billion, an increase of 38% from the previous year. Assuming dividends are held at $0.81 per quarter, annualised dividends will be $3.24 per share, representing a dividend yield of 5.5% based on last Friday's closing share price. In summary, we delivered record full-year pre-tax profit and achieved a 16% ROE, demonstrating the resilience and adaptability of our franchise amidst rate and tax headwinds. Fee income and Treasury customer sales reached new highs, led by wealth management, while deposit growth was the strongest in the bank's history. While rate pressures and geopolitical tensions are expected to persist, the quality of our franchise and strong balance sheet provide a solid foundation for the year ahead. Thank you for your attention. I'll now hand you to Sushant.

Thank you, Sokhui. So, slide please. So when I look back at 2025 and I think about all the things that we can't control, you can't control geopolitics, you can't control where interest rates go, you can't control where the FX goes or the market goes, and you can't control where tax goes. So we really had the perfect storm in 2025 in terms of rates, you know, where Sora and Hibor went, in terms of the FX, strong Sing Dollar, and also, you know, our tax rates, as you know, went up Notwithstanding all these, really, what we call a perfect storm in the macros, the fact that DBS delivered record, you know, group total income, record net, group net interest income in spite of the rates, record fee income. But more pleasing, you know, record net profit before tax, sorry, record PBT, profit before tax. But more pleasing for me was the record in volume. You saw, we talked about the record in deposit growth, 12%. I was also very happy to see the record net new money growth, which is structural, record AUM And I think this, you know, suggests that I think our engines are firing okay Right, so record total income and PBT I would credit the group net interest income reaching a profit in spite of those headwinds to our teams doing a really good job both on nimble balance sheet management on also increasing our fixed rate assets that went up to $210 billion and also all the teams firing on all cylinders on gathering deposit growth This I can attribute to the hard work we've done over the past in using AI, using machine learning, using contextual nudges, all the hard work that we've done to gather new-to-bank customers, to be customer-centric, to have our nudges automated, and to use AI smartly So I think the snowballing effect of volume growth is happening. In terms of markets, we had the highest markets trading since 2021. Markets trading income rose 49% to $1.37 billion. And because 2025 was such a good year for trading, we decided to take advantage of it and to rebalance our portfolio in the fourth quarter. Fourth quarter normally is down, it's seasonal By December, everybody close their books, go on holiday So fourth quarter is normally quite seasonal We are off to a strong start in 2026 January was very good indeed We saw wealth management as well, a record high total income at $5.7 billion And more pleasing was the wealth management non-interest income, which is the fee income, was up 27% It's strong everywhere Offshore wealth, onshore wealth, we saw growth in China, India, Indonesia, Taiwan, and then the two big hubs of Hong Kong and Singapore also both, you know, growing very nicely We talked about—Sok Hui has now told us that we will start sharing the AUM growth for all three segments It's important for you to understand that DBS has the wealth continuum So we look at wealth holistically because we don't believe that wealth is static We believe that wealth grows And so you start with the priority bank, which is Treasures, you go up to Treasures Private Client, which is where you become an accredited investor, you start to invest more, and then you go up to the private bank where you get access to more sophisticated products. All that continuum, we really got very seriously, and that's what I think has been our secret sauce in growing our wealth management franchise. So delivering high ROE, that was really structural growth. I think all the structural stuff that we said, be it wealth management, be it in IBG, we saw structural growth in TMT, especially around the tech ecosystem. We saw structural growth in the financial institutions group, especially around the institutional equity space. We saw a recovery in investment banking, you know, our long-awaited IPO market finally came back in 2025, both Hong Kong and Singapore doing remarkably well But also in payments, I think this is what I was pleased with In terms of payments, transaction services, so DBS was named the best bank for cash and corporate banking in Asia by Coalition Greenwich Coalition Greenwich is rated by the customers, not by us You can't pitch for it, you know, the customers rate you And I think that was validation of the good work done by the GTS and IBG team And also pleasing was the record loan-related fees So this is where we start to win loan structuring mandates, right, as the lead bank So loan-related fees was up 14% to $733 million And we really captured growth in the event-driven space So it's quite a lot of big, chunky deals that came in This is event-driven, you know, LBO, structured deals, M&A, et cetera And that was up some 59% year on year So I'm pleased to see that we are, you know, winning wallet share, mind share and going up the tiers with our clients So as the quality remains sound, our NPL ratio remains stable. As Sokhui alluded, we did take a subjective NPL in the fourth quarter. It's important to say that the customer has not defaulted, but we had watch-listed this name for some time now, and we had set aside some GP. So overall, we are comfortable on our exposures. The GP reserve remains sufficient. And just to remind you, the GP reserve, the GP overlay stands at 2.4 billion. Slide. And just to recap, again, the ordinary dividend increased by $0.06 to $0.66. Capital returns of $0.15 per quarter. That will be maintained for this year and next year. And so with the fourth quarter total dividend of $0.81, we're looking at $324 for the year going forward. And of course, being a purpose-driven bank, we want to continue to contribute. We made a 10-year commitment. We will stick to the commitment of $100 million, you know, to support vulnerable segments. And we have since given $300 million in contributions since 2023. Okay, so what's our 2026 outlook? I think it's hard to predict, so I tell all our clients, buckle up, it's going to be a volatile year I mean, first week of Jan, we had Venezuela, we had Greenland, we had... and then further down the month, we had Bitcoin, we had... dollar-diversive, well, there's, you know, dollar movements, Japanese elections, Thai elections There's a whole host of things It feels like, you know, a year condensed into a month And people are getting used to such volatility And because of such volatility, I think our customers will still want to look for stability they want to look for resilience, they want to look for reliability, and they want to diversify their concentrator exposures, whether it's in currencies, it's in markets, or in supply chains They'll be looking for safe havens, they'll be looking for dependable long-term partners And here, I hope that DBS will continue to be a beneficiary of these global volatile wins, right? We want to be standing up as a safe, long-term, dependable, and future forward bank So what's our outlook? Our outlook for total income will be around 2025 levels in spite of the rate headwinds and that is because we're assuming SORA of 1.25 So the SORA has come down, as you know, some 200 bits from last year We're predicting two more rate cuts and we're predicting the dollar to remain strong However, like last year, we are looking for strong growth in deposits We continue to look for strong growth also in volumes in terms of net new money We will continue to be nimble Here's the good thing about volatility is you get some You have risk, but you also have opportunities. When markets are very volatile, you can trade, you can be nimble, you can also lock in hopefully some good rates during the market falls. So we want to continue to capture this volatility that will give us hedging opportunities and also growth. Commercial book, non-interest income growth to be in high single digits But for wealth management, we are looking for mid-teens growth So again, continued structural tailwinds continuing for next year We'll also continue to grow our FIG business, our GFM business, et cetera Continuing our cost discipline around costs, mid-single digital expense growth, so around 4% compared to the last few years of 8%. This is indicative of where we want to go. And SPs should be pretty comfortable between 17 to 20 bps. Again, depending on the macroeconomic situation and the geopolitical situation, we might have some room for GP write-backs this year as well. So for net profit, we're looking at slightly below 2025 levels But as I said, we will maintain our cost discipline We will maintain our credit discipline We will maintain our operational discipline And all this underpinned by continued work to make our tech resilient through automation and AI to make our data resilient through focus on cybersecurity and data lifecycle management And most importantly, we will continue to upskill our people the adoption of AI, the speed of which has been strong And we can basically free our staff from mundane work, administration work, and use AI to upskill them And this is the work that we are doing right now, which is exciting for us So for DBS, looking forward, we want to keep the three moats to stay ahead What are the three moats? We believe we have a moat in data We have good precious customer data that we can use as a moat that we got very, very seriously We have a trust mode. I think we have proven to be a safe bank through thick and thin and trusted and a dependable bank and strong credit ratings. And we have a cultural mode. I think our staff, I'm very proud of our staff's ability to be nimble, to be agile, to work with new technologies and to work with new ways of working. So this enables us to build a long-term firm foundation for growth. That's it from me.

We're now happy to take questions. If you could state your name and the publication you represent before you ask your question. The other request is because we asked for you to make this briefing, when you ask your question, if you could speak into a mic in front of you, or if you raise your hand, we can bring a roving mic to you as well. First question to Chania.

The first one, given the record high deposit, are you looking to lend it to MAS like what you did in a previous year? Second, any colors on the Hong Kong specific provisions that you said? What do you call it? Subjective assessment, but can you give details or colors on that? Third question is on Indonesia. Given the outlook downgrade by Moody's, what do you see in terms of impact, and particularly on your loan books? Are you lending more over there? And Rizvika has one question as well.

Hi, thank you. You mentioned 4Q expenses benefited from lower staff costs. Can you, you know, expand a little bit if this leads to headcount reduction and quantify it perhaps? And is this optimization continuing into 2026?

Okay, I mean, so we and I can take all the questions together. So certainly, you know, as we gather deposits, deposit growth have been stronger than loan growth. We invest the surplus deposits into high-quality HQLAs, right? So it's across the board in different, you know, good credit rating, good credit-rated high-quality assets, government bills, et cetera. In terms of the Hong Kong SP, we cannot mention names, and you're right, it's subjective, but we are comfortable that, you know, because as I said, we reduced our GP to increase our SP, so we were already prudent in the past, so this shouldn't be any surprise to anyone. In terms of Indonesia, I think this will be good in the long term for Indonesia. Short term, there is some market volatility and some market pain, but I think the long term implications for increased transparency, governance, increased free float and all that is a good thing. And the swift action taken by the authorities, I mean, right after the announcements, you saw a lot of announcements coming out from the authorities, I think is quite commendable. Our books in Indonesia are pretty focused around the large quality blue chip names. We've looked at it over and over again. I really don't have too much concerns about the credit quality there. It's not a big exposure anyway, so I think it should be okay. And then the fourth quarter lower staff costs, that's because there was the LVB integration in India, and then there was also the City-Taiwan integration. So post-integration, we have a lot of dual jobs that were rolling off. So a big chunk of that was the rolling off of the post-integration synergies from the two countries. Looking forward, I know where your question is going. I do think that AI, whether it's generative, agentic, or just traditional machine learning type of AI, will change the way white-collar jobs... This is the world. It's not DBS alone, or Singapore, or Hong Kong, or Asia alone. It's the world. But companies that embrace this new technology, embrace it and look to use it to your advantage, that means human and machine interaction is important. How do you train humans to work with machines? How do you train humans to use agents safely, but also to use it to increase your capacity, to move them to higher order roles? Frankly, I'm excited. So the work that we are doing right now is precisely that, to retrain, whether it's our engineers, our RMs, our call center people, our operations people, everybody, everybody in DBS is trying to adapt to this new way of working, which we want people to feel safe to learn and to use this new capacity, this new superpower that you now have to do a higher order role. You want to supplement?

I think the only thing I would add is that fourth quarter, I think our results were not so good compared to third quarter. So you should expect that we accrue less bonus. So it's a natural effect of the drop in staff costs as well. OK.

Thank you. Anyone else have a question? Maybe Bun Pin. OK.

So congratulations Shushan and Chokhui on the strong and credible set of results, especially with the perfect storm you mentioned. Looking at the year, the different segments have carried the bank differently. Retail funding, corporate lending, wealth advisory, and distribution and treasury flows each contributing their own way. Do you see DBS as getting through a transition in your earning model, or this is already the new shape of the business? And within that, how do you see the role of the retail franchise here in Singapore, in Hong Kong, and how has that changed in our mind and what changes in customer behavior stood out for you in the year? That's first question. Second question, with the RMB clearing role only now starting, how does it actually add to your existing transaction or treasury businesses? Does it depend? operating balances and climate mandates, or is it mainly to improve settlement efficiency for flow you already handle? How do you intend to scale that? You mentioned about AI. How is AI changing the business or how the bank is run, efficiency or decision being made, revenue being generated? Do you have a data value capture equivalent for AI? Those are the questions.

A lot of very big questions, all of them. So to your first question, which is basically, do I see this as a new shape of DBS's business? Look, I think that we are in two big financial hubs, Hong Kong and Singapore. And as long as deposit growth continues to be strong, these are two big financial hubs. So Hong Kong benefits from southbound flows from China, Singapore benefits from global flows as well. So both these flows are structurally good for us. If deposit growth continues to be stronger than loan growth, then we will continue to deploy them in HQLAs. That's just the trend that we're seeing. In terms of, is there a new shape? So we think it's going to continue to be a bit of a K-shaped So unfortunately, the strong will get stronger. Some of the SMEs are still seeing some stress in the system. There's some segments particularly suffering more than others, and they might need more help from governments, et cetera. Then in our other core markets, we have structural strong, growth in India. That will continue apace. China looks to be in recovery. Indonesia has some short-term challenges, but again, structurally long-term, we remain constructive on Indonesia in the long term. Taiwan has been a fantastic growth story and will continue apace because of the tech hardware, as well as the onshore wealth growth. And they are also promoting onshore wealth management. There are structural tailwinds which we want to harness. There will be headwinds in terms of markets and rates and effects we just have to maneuver and manage. And we have to be aware of the K-shaped kind of economy and reduce risks where we think there are still credit headwinds in some segments. Your second question around the RMB clearing role. Yes, we announced it in December. We think that the role of RMB has risen as a trading currency, as an investment currency, and that will continue. So yes, there will be mandates to be won. The team is working very hard to do it. The dollar dominance will still be. I mean, the dollar is still 80% of the world's trade financing. It's still clear in dollars. But RMB, Euro, people want to diversify. And those who trade with China may want to use RMB as a currency for trade. But as the world also diversifies, and if people want to invest in RMB, or they want to use it as a payments currency, I think that trend will also be there. And then AI changes to the business. I can share that we call it operating model transformation, OMT for short. And here we have different OMTs in the bank. Examples would be KYC, credit memo writing. Huizhan, who's our IBG head together with Ken Zhang, our credit head, their teams have worked together to create an OMT around credit memo writing, and the AI can really help to shorten that whole process. Wealth Management and Retail, Zukun and the team also have several OMTs. Our COO office have done an OMT around operations, so using more of the chatbot to answer queries. We've got quite a few different OMTs, as you will. But since the advance of generative AI, we already rolled it out and we said there are horizontal use cases which all and sundry can use, the DBS GPT which we rolled out middle of last year. The first rollout, not so good, but after that it got better and better and better and we are seeing already people using it for myriad things, from translation to what are your policies and procedures to how do I answer queries internally, externally, etc. I think quite good usage, 60 over percent are using it very actively. With the rise of agents, agenting AI, we have also come up with our own framework to make sure that it's safe. We have guardrails around the use of personal agents, team agents, enterprise agents, et cetera. As for the DVC, traditionally, when we were using machine learning AI models, which are more deterministic and rules-based, we use A-B testing to derive the economic value, whether it's real revenue growth, cost saves, or loss saves. But when you have whether it's agentic AI, generative AI, or other, you know, to supplement what we do. I think it will be harder to separate it out because everyone's going to be using it. So we'll have to rethink how do we do a deliver, you know, a DVC, as you said, we haven't landed. We might still try to capture the economic value based on what we've been doing in the past, which is A-B testing, but I suspect there will be a lot more in terms of capacity building and speed of testing The resolution of tech debt, for example, what used to take months, many months, years, can now take weeks, right, for example, and that time saved, we can deploy to newer things to grow, because we still need to grow. The team needs to grow on wealth, they need to grow on trading, we need to grow on financial institutions, on tech, on GTS payments, there's so much growth. that we need to build. But I think what excites us is the ability to use what we can harness from capacity to then redeploy for growth.

Can I have a follow-up question? Just on your K-shaped economy growth going forward, how are you tackling the lower trajectory growth area? Are you de-risking those areas, repricing those areas? And those are segments as well as geographies? Yeah.

So we've been always very supportive of our SME and SME clients, and we'll continue to be supportive. What we do is we do constant stress tests. I mean, since COVID, I think this whole stress testing has been second nature to us. And we try to stay ahead of these trends so that we can actually proactively identify the weak cases and help them through it. You can help them, you can do M&A, you can give them forewarning to reduce risk, etc. We have certainly in our portfolio set reduced risk in, for example, the consumer side, the unsecured loans space, and we've been very thoughtful in our SME space as well.

Ray from Reuters.

Hi, thanks for the presentation. Just a follow-up on Indonesia, how do you plan to navigate the near-term headwinds despite the longer-term outlook?

Well, as I said, we have been looking at our book and I don't think I don't think there should be any panic. I think, as I said, I do believe that structurally this is good for Indonesia in the long term. And Indonesia is a very resilient country. They've been through a lot of ups and downs, but the fundamentals of the country in terms of resourcing, in terms of their ambition to adopt AI, their ability to be resilient, will still be there. As I said, I don't think our exposure is too large. We are very focused on the quality names as well. So in the short term, I'm not too worried. In the long term, I see this as a net positive. But Kui Juan, my IBG head is here. You want to supplement anything?

Yeah, so I think for, as what Sushant said, for Indonesia, right now we are continuing to support the larger clients there. And what you see in terms of the market volatility relates to the market, whereas we lend to the operating company that are generating the cash flows. so that day-to-day is not affected by the market. And so I think that's the differentiation that we need to see. And as Sushant said, the overall improvement in the way the market is going to be more well-managed, it's a plus for the market itself.

Any other questions? Okay, Gula.

Careful, you've got water on you.

Hi, thanks. Well, anyway, congratulations for the results. It was a tough year. But I'm just wondering, you said that you want to deploy the surplus deposits into HQLA, and you mentioned that a couple of times. But is there no loan growth? I mean, because ideally you should have put it into loan growth. That's one question. And the second question is on the types of HQLA. Are they sovereigns? And how can that be NII accretive? That's the other question. And then, of course, for NIM, what was your exit NIM? How do you see NIM developing into 2026? And has your NIM sensitivity dropped because of the way you manage your book?

I'll take the first and then you can take the second.

So I want to address the question on loan growth. We are still forecasting loan growth to grow by mid-single digits. So it's not like we're not seeing loan growth. We are. And as I said earlier on, we are actually structuring a lot of deals. So frankly, as rates come down, the deals will start to come in, right? January was indicative of, if any January is indicative of the year, we're very busy on large corporate loan growth. We see growth or so in other areas, even mortgages, you know, the new mortgages coming through the door also saw steady growth. So it's not that we're not seeing loan growth, we are, it's just that deposit growth was so high right it's higher than the actual loan growth has been quite steady it's you know say it's five six whatever percent right so this keeps growing but deposit growth has been stronger and that's why there's a delta um you want to address the

For deposits, we can generally deploy deposits that come in on an average about 1 percentage point NIM. So that's not an issue. You can also write the U-curve, take a view if the rates are constructive. So putting into HQLA, frankly, is good because the ROAE is very high, and we only put into mainly sovereigns. So it's not like we are taking big risks running any HQLA portfolio. So you can see it in our pillar three disclosures. On the question about NIM, our fourth quarter NIM was 1.93. Our January NIMs were 1.92, so it's been fairly stable at the group NIM level. And sensitivity actually has increased for SING dollars because as more and more deposits come in, there's more sensitivity to the SORA, which is a good thing. If rates go up, you benefit more.

The deposit's been coming in SING dollars more than US dollars? It's a mix.

It's a mix. You can see the data point. I think we just closed that as well. SING dollar CASA, you can see, grew $28 billion this year. Foreign currency CASA grew $19 billion. These are the chunks of deposits that came in, and FDs grew $17 billion. So very strong growth in the deposits.

One last question on this issue. So does the USD go into US sovereigns and does the same dollar deposits go into Singapore government securities?

No, no, it doesn't work like that. We can, through sort of cross-currency swaps and all that, we'll manage to the overall margin level that is actually the best for the book.

We try to optimise.

And then the other concern was your foreign exchange, with the FX rates.

We don't take FX exposure. It's all hedged up. So just be assured, we have a good machinery to do hedging.

Russell, Asian Bank.

Hi Sushant, Sokhui, congratulations again on the record results. My question is mainly on IBG, with the AI-driven investment upcycle, as well as the electronics rebound, the intra-Asian growth, as well as trades outside the US and export, import, etc. Did you notice or did you see any sort of particular areas that you would like to strengthen your positioning for IBG and outside of the R&B clearance?

Okay, I will start and then Kwee John, if you want to supplement. So yes, I mentioned that for IBG, there's some structural tailwinds in both TMT, which is tech, data centres, the whole AI, growth in AI, CapEx, but also in financial institutions and AI, you know, as people are putting more money to work in capital markets. the capital markets growth, insurance growth, all that's structural, right? And that will continue, and as money flows into the Asian markets, that structural trend will also continue. In terms of trade outside the US, you're right, our economists call it TOTUS, right? T-O-T-U-S. And that figure has grown, certainly since Liberation Day last April. What we are seeing is more intra-regional trade in Asia. We see trade between North Asia and ASEAN, so North and South Asia, North Asia and India, intra-regional trade. We see more trade between the GCC and Asia, GCC and China. That trend seems to be continuing as well. Um, and, um, a lot more corporations, so, you know, whether it's, like, the Queen Bee programs to Singapore, uh, you know, Himchuan's been, been helping leading, you know, Queen Bee's big MNCs, bringing the SME or mid-sized companies as an ecosystem to hunt in a pack in other markets, that continues, uh, and, um, um, As people diversify their supply chains, Kwee Dran calls it international supply chains, I think we will see continued opportunities there in the long term. Kwee Dran, you want to supplement?

Yeah, so I think on the AI piece, a lot of it is around the ecosystem financing. This is short-dated financing of 30 to 60 days for a lot of your suppliers into the ecosystem for AI. So as data centers get built up, you're going to see them stuff up on other equipment. So we do see GPU as a service now becoming an area of interest for a lot of our customers. And also at the same time, with the semiconductor CAPEX now also going up, because each of these servers will require different kinds of semiconductors, and that is something that we are seeing some level of activity. So all of these are driven by the broader climate of data center and AI being the core for capability that people are building out to.

Thank you.

Maybe we have time for one last question if anyone has... Okay, if not, then I think we can draw this time to a close. Thank you, everyone, for your time, and we'll see you next quarter. Thank you.