Oversea-Chinese Banking Corporation

Good morning, everyone. Welcome to OCBC's first half and second quarter results briefing. This morning, we have on our panel our Group CEO, Ms Helen Wong, our CFO, Ms Gou-Chin Lee, Mr Tan Teck Long heads our Global Wholesale Bank, Mr Kenneth Lai heads our Global Markets, And then to Helen's right, you have Mr. Sunny Quek, which is head of Global Consumer Financial Services. And last but not least, our CEO of Bank of Singapore, Mr. Jason Mu. So Chini will take us through the slides and thereafter, Helen will share her thoughts on our results, as well as provide an update on their offer for Great Eastern. So I'll pass the time now to Chini. Chini, please.

A very good morning to all. Thank you for joining us at OCBC's first half 2024 results briefing. We are pleased to report a record first-half net profit. This lifted return on equity to 14.5% on annualized basis. Our first-half profit was underpinned by three factors, broad-based income growth, cost discipline, and benign credit costs. Total income for the first half crossed S$7 billion for the first time Net interest income was up 3% to S$4.87 billion This was underpinned by assets growth Customer loans grew 3% on constant currency basis and other financial assets grew 12% The asset's growth more than compensated for the moderation in net interest margin, down 5 basis points to 2.23%. Non-interest income grew 15% to $2.39 billion, led by higher fees, trading and insurance income. Expenses were well controlled. Even as we increased our strategic spending to invest for growth, Cost-to-income ratio improved to 37.5%. Assets quality remained robust. Credit costs were 15 basis points on an annualized basis, six basis points lower than a year ago. ratio improved to 0.9%. With our robust results and strong capital, we are pleased to raise our interim dividend by 10% to $0.44 per share. This represents a payout ratio of 50%, in line with our dividend policy. Our group and banking operations net profit for the first half were record highs. Bringing your attention to the second quarter, group net profit was $1.94 billion, up 14% from a year ago. Compared to first quarter 2024, where Sorry, compared to first quarter of last year where we, sorry, sorry, compared to first quarter of 2024 where we achieved a record quarterly net profit, this quarter was 2% lower but still the second highest on record. I will elaborate more on our financial performance in the following slides. Our three main businesses continued to deliver strong performance. Banking operations' first half net profit rose 6% to $3.42 billion. This was lifted by higher net interest income and fee income. Our wealth management franchise performed very well. group wealth management income expanded 14% to reach a record $2.54 billion. It now contributes more than a third or 35% of the group's total income. Assets under management reached a new high of $279 billion. Quarter on quarter, the increase was contributed by sustained net new money inflows and positive market valuation. Moving on to insurance. Profit contribution from GEH increased 40% to $504 million from strong underlying performance of insurance business and favorable investment performance in shareholders' funds. Total weighted new sales and new business embedded value were higher year on year, boosted by sales momentum in both the regular and single premium plans. This slide shows the breakdown of our operating profit by business and by geography. With a diversified franchise, we are able to harness our comprehensive network presence to deliver balanced earnings growth through economic cycles. We continue to maintain our strong capital, funding and liquidity positions as you can see in the charts on this slide. This puts us in good state to pursue growth opportunities, buffer for uncertainties, and increase shareholders' returns. Moving on to details of our Group Performance Trends from Slide 9. Net interest income for the first half reached an all-time high of $4.87 billion, lifted by a 5% asset growth. We strategically deployed our liquidity to high-quality assets, which resulted in a rise in total interest income. However, these assets were lower yielding as compared to customer loans. This largely contributed to the moderation in NIM to 2.23% for the first half. In the second quarter, NII was sustained at a similar level compared to a quarter ago. Our assets grew by 3%. This largely offset a 7 basis point decline in NIM. The increase in lower-yielding, high-quality assets that I mentioned earlier and the tightening of loan yields resulted in a narrower NIM. NIM was 2.2% for the quarter and underlying exit NIM in June was 2.19%. Our house will is two rate cuts this year. We are maintaining our NIM guidance of 2.2 to 2.25%. At this stage, we are looking to come in at the lower end of the range by year-end. Non-interest income grew 15% in the first half to $2.4 billion. The strong growth was driven by a broad-based expansion across our various businesses and reflected in higher fees, trading and insurance income. I will go into more details of our fees and trading income in the next few slides. Net fees and commission rose 7% to S$945 million in the first half. This was primarily led by wealth management fees, which grew by 19%. Our wealth management franchise has continued to expand. Sustained increase in customer activity drove both fee and AUM growth. There was higher demand for wealth management products such as structured products, structured deposits, unit trusts, and bank assurance. During the first half, net trading income climbed 28% to $726 million. Customer flow, treasury income, reached an all-time high. The increase in customer flow income was across both corporate and consumer segments. We continued to invest to support business growth and create franchise value. For the first half, the increase in operating expenses were largely driven by higher staff costs from annual salary adjustments as well as continued investments to support our franchise growth. IT-related and business promotion expenses also rose. Integration costs related to the acquisition of PT Bank Commonwealth Indonesia of 12 million were also recognized during the second quarter. Our first half cost-to-income ratio improved to 37.5% despite our ongoing investment in business growth. This reflects our strict cost discipline on discretionary expenditure. Asset quality remained resilient. NPR ratio continued to trend lower at 0.9%. This was lower than a year ago and against the first quarter. NPAs in all key industries have declined year on year. Total credit costs for the first half and second quarter were lower at an annualised 15 basis points. During the second quarter, total allowances of $144 million were 14% lower quarter-on-quarter. Specific allowances for the quarter were largely for the few corporate accounts in Asia across various sectors. These were idiosyncratic in nature with no specific sector stress observed. Our group's MPA coverage ratio was 155%, the highest across the past five quarters. Our loan portfolio remained well diversified across geographies and industries. Customer loans of $304 billion at end June were the highest level booked so far. Year on year, loans grew by $7 billion, led by higher non-trade corporate and consumer loans. From a geographical perspective, the expansion in loans was from Singapore, Malaysia, and our global network in the United Kingdom and Australia. As part of our corporate strategy, we remain focused on supporting our customers' sustainable financing needs. Sustainable financing loans grew 33% year-on-year to $44.6 billion. This accounted for 15% of group loans at the end of June 2024. Customer deposits were $370 billion as at June stable from the previous quarter. Compared to a year ago, customer deposits were 1% lower. During the period, we released excess liquidity in the form of higher-cost fixed deposits which declined $7 billion year-on-year. CASA balances rose $8 billion and CASA ratio increased to 47.9%. Group loans to deposits ratio was higher at 81.1%. We will continue to proactively manage our balance sheet and liquidity. Moving on to dividends. The Board has declared an interim dividend of 44 cents, 10% higher than a year ago. This represents a dividend payout ratio of 50% in line with our target payout level. Moving on to my final slide. Our capital position remained robust. CET1 ratio of 15.5% was lower compared to a quarter ago. While our CET1 ratio was raised by profit accretion during the quarter, this was firstly reduced by the payment of our 2023 final dividend in May this year, and secondly from an increase in risk-weighted assets, which was partly attributed to loan growth. With the payment of our first half interim dividend on 23rd August 2024, The pro forma CET1 ratio will be lowered by 0.8 percentage points to 14.7%. This will be further lowered by about 0.2 percentage points to 14.5% after accounting for the period from the end of second quarter to the close of Great Eastern Holdings voluntary unconditional general offer on 12th July. Helen will be providing more update on the offer in her presentation. With this, I end my presentation and will now pass the floor over to Helen.

Thank you.