Oversea-Chinese Banking Corporation

Okay, we are a bit early, but I guess we can start. So, good morning, ladies and gentlemen. Welcome to OCBC's second quarter 2025 results briefing. On our panel this morning, we have our Group CEO, Ms. Helen Wong, and our newly minted Deputy CEO, Mr. Tan Teng Long, our CFO, Ms. Gold Chin-Yi, Mr. Kenneth Lai, our Head of Global Markets, and then to Helen's left, Right, we'll have Mr. Sunny Quek, our Head of Consumer Banking, as well as our Group CEO, Mr. Jason Mu. So I guess today I'm just a bit too excited because we have our CEO and our WCO together. Alright, so I think Chini will take over to go through our results and thereafter we will take a Q&A. Chini, please.

Our first half 2025 group net profit was S$3.7 billion, 6% lower than last year's record high level. Total income was little changed at $7.2 billion The decline in net interest income was mostly compensated by growth in non-interest income reflecting the resilience of our diversified franchise Net interest income was down 5% to $4.63 billion against the backdrop of declining interest rates I will spend more time to talk about net interest income in a later slide. Non-interest income rose 8% to $2.57 billion, lifted by broad-based fee income growth and higher trading income. Expenses were well managed and controlled, even as we increased our strategic spending to invest for growth. Cost-to-income ratio stayed below 40% at 38.9%. We achieved solid year-on-year growth in loans and deposits, up 7% and 10%, respectively. Asset growth remained resilient, with NPR ratio at 0.9%, total credit cost at an annualized of 18 basis points. capital position remained strong. Transitional common equity tier one ratio was 17% and fully phase-in ratio was 15.3%. In line with our target ordinary dividend payout ratio of 50%, interim ordinary dividend of 41 cents was declared. Moving on to second quarter performance. Group and banking operations second quarter net profits were 7% below last year, mainly due to lower net interest income. Against the previous quarter, banking operations net profit was up 2% from higher operating profit and lower allowances. at group level, net profit moderated by 4% as GEH second quarter performance was impacted by lower insurance income. Our three key business pillars of banking, wealth management and insurance provide diversified earning space. Banking business continued to see customer driven growth. reflected by rising loans and deposits volume. Net interest income came off from prior year's peak level, but mostly compensated by double digit growth in our non-interest income. We are seeing results of our focused investment in wealth management business. Our wealth management income was up 4% to new high of $2.66 billion, contributing 37% to our group total income. Banking AUM rose 11% year-on-year to record $310 billion, driven by net new money inflows across all our wealth segments, as well as positive market valuation. Our first half, 25, net new money inflows were $9 billion, with $4 billion in second quarter alone. For insurance, first-half profit contribution from GEH grew 10% to $553 million. GEH's higher contribution was driven by improved investment performance from its shareholders' funds and our increased stake in GEH following our Voluntary General Offer last year. new business embedded value or MBEF was 16% higher and MBEF margin improved to 44.7%. This reflected GEH strategic shift towards higher margin products. Moving on to net interest income in slide 10. Second Q, net interest income decreased 3% Q on Q to 2.28 billion Average assets rose 2% but this was more than offset by 12 basis point decline in NIM We have included additional analysis on this slide to provide more colour on NIM The main factor was the drop in loan use, which impacted group name by 17 basis points. This was largely due to the sharp fall in SING dollar and Hong Kong dollar benchmark rates during second quarter. Reduction in loan use outpaced the drop in deposit costs, which reprised much slower than loans. close to half of our loan book are denominated in Sing Dollar and Hong Kong Dollar. About 80% of our Sing Dollar loans are on floating rates and nearly all our Hong Kong Dollar loans are on floating rates. in the second quarter, one month and three month compounded SORA dropped more than 50 basis points and high bore fall was even sharper. One month and three month high bore rates were down around 300 basis points and 220 basis points respectively. Strategic liquidity deployment into income-accretive, high-quality assets during our first quarter also led to a small drag on NIM about two basis points. Now our June exit NIM was 1.88%. we expect upward inflection from the exit NIM as we see flow through from ongoing deposit rate cuts. As at end June, NIM sensitivity based on 100 basis point drop in rates across our four major currencies of Singapore dollars, Malaysian ringgit, Hong Kong dollar and US dollars was around 12 basis points on an annualized basis. For the remainder of this year, we maintain our assumption of three Fed rate cuts. But with the unexpected sharp drop in SORA and HIBOR that I mentioned earlier, we now expect FY25 NIM to be in the range of 1.9 to 1.95%. Moving on to non-interest income. Our first half non-interest income grew 8% year-on-year to $2.57 billion, lifted by strong growth in fee income, trading income, as well as higher realized gains from sale of fixed income securities. This more than compensated for a 9% decline in insurance income. The lower insurance income was largely due to two factors, mark-to-market impact of decline in interest rates on valuation of insurance contract liabilities and revaluation of private equity holdings in our insurance funds. More details have already been shared in GEH result announcement earlier this week. I will cover more details on fee and trading income in the next two slides. First half fee income grew 19% to $1.13 billion from broad-based growth, underpinned by increased customer activities. From the chart, we can see upward trajectory in fee income over the past few quarters, supported by sustained growth momentum in our wealth management fees. first-half wealth management fees rose 25% to $548 million, the highest level in the past three years. Our strong performance was driven by growth in private banking, bank assurance, unit trusts, as well as structured deposits. Compared to a year ago, customers increased deployment of funds into investments. Now around 60% of our AUM are placed in investments across all our wealth segments. First half 25, trading income was up 6% to $771 million. Customer flow treasury income, which made up almost 80% of our trading income, grew 10% to a record $594 million. The growth was contributed by both wealth and corporate segments. We also saw higher treasury sales across all our key markets. On cost, we continue to be disciplined in cost management. First half operating expenses rose by a modest 3%. Our cost-to-income ratio held below 40%. Second Q operating expenses was 2% lower Q on Q. Our overall loan portfolio quality remains sound. NPR ratio unchanged at 0.9%. We continue to stay highly vigilant, including conducting ongoing reviews of the potential impact of trade tariffs on our loan book. We have assessed that trade tariffs having first order impact on 3% of our loan book and two-thirds of our loan book are in sectors with strong domestic focus. We further stress tested our loan portfolio and assessed that our portfolio remained resilient. First half 25, total allowances were $326 million, up 4%, largely due to higher allowances for non-impaired assets. This included pre-emptive allowances set aside for trade theories and macro uncertainties, as well as adjustments for macroeconomic variables updates attributable to weaker economic outlook. Our first half total credit cost is at an annualized of 18 basis points. Second Q, allowances decline 46% Q on Q from lower allowances for both non-impaired assets as well as impaired assets. The decline in allowances for non-impact assets was mainly due to changes in credit risk profiles and exposures. These are partly offset by additional pre-emptive overlays as well as downward MEV adjustments in second Q. NPA coverage ratio stood at 1.56% as at end June 2025. allowances for non-impact loans were maintained at 0.9% of our total performing loans. Our loan portfolio remains well diversified across geographies and industries. On constant currency basis, loans grew 9% year-on-year and 3% Q1Q to $325 billion. Our robust year-on-year growth was underpinned by increased Singapore housing loans as we continued to build market share as well as higher non-trade corporate loans where we supported customers in sectors covering infrastructure, data centres, as well as transportation. Our sustainable financing loans continued to see high growth, rising 19% year-on-year to $53 billion, now accounting for 16% of total group loans. Our group funding position remained strong. anchored by a stable customer deposit franchise which made up 80% of our funding base. Customer deposits grew 10% year-on-year and 1% Q-on-Q to $407 billion. In particular, CASA deposits grew by 26 billion or 14% year-on-year across both corporate and consumer segments. Our CASA ratio rose to 49.8%. We maintain a strong capital position. transitionary CET1 ratio was 17%, 0.6 percentage points lower Q on Q, mainly due to payment of our FY24 final ordinary and special dividends, which offset profit accretion. On a fully phased-in basis, CET1 ratio would be 15.3%. After paying our first half dividend, pro forma CET1 ratio will be at 14.6%. Our board has declared an interim dividend of $0.41. This is in line with our target 50% ordinary dividend payout ratio. We remain committed to our previously announced $2.5 billion capital return via special dividends and share buybacks over two years. This includes paying 10% of our FY25 Group Net Profit through a special dividend. Together, we have our target ratio of 50% dividend payout for ordinary dividend. This represents a total dividend payout ratio of 60% for FY25. With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Helen.

Thank you, Chini. Good morning, everyone. Again, it's always a pleasure to have you all in so that we can do a review together on our performance and also have some time to reflect and also look ahead. Just would want to send an apology. You may hear that I'm coughing, I have a lingering cough, but I'm okay generally. But if I do have some coughing, so bear with me. Allow me first to just delve a little bit deeper into our first half performance. So if we go to the first page, just want to say we continue to deliver a resilient set of results. This is with wealth balance earnings, even through a rather complicated economic cycle. A few points here, indeed. We benefit from diversified earnings, as we said, with a strong non-interest income cushioning the impact from declining interest rates. Junyi has expressed on how interest rates have shaped the movement of our limb, but if you want to talk about this more, maybe later on we can cover. And indeed, I think why we're resilient also reflects that we have been successful in executing our strategic initiatives to drive revenue growth. I think you all remember we talked about the three-year plan of incremental revenue of $3 billion from the period 23. to 25, and as at the first half of 2025, we have achieved nearly close to 90% of that 3 billion. so it's probably a bit ahead of our schedule. As shared by Chin Yee, our net interest income has also in a way declined, right, from the peak reflecting the significant decline in SING dollars and Hong Kong dollars benchmark rates. But we continue to see volume growth. You can see our loan exposure, our loan expansion, though the pace has indeed moderated in recent quarters. Non-II has shown resilience backed by our efforts in driving our strategic priorities. We talked so much about building the wealth business and building the cross-border business linking up greater China with ASEAN where we are well positioned to serve our customer. So on wealth management, I want to mention this is an important key business pillar under our plan and of course we have been seeing realisation of the strategic efforts in growing our wealth business. We have Sunny and Jason here today as again if You are more interested in the wealth business. I'm sure they're very happy to share some of the things that we have done that enable us to continue to grow and keep the momentum of the growth in our wealth fees across all the product channels. And indeed, this led to a 25% increase in wealth management fees year on year. Wealth management income, as said, we continue to grow that. And AUM has also increased 11% from a year ago. We've continued momentum in net new money. I think that is important. We see that inflows across all wealth segments. And just give you some breakdown. First half, we have net new money of $9 billion. And this is a $4 billion growth in the second quarter, following $5 billion growth. growth in the first quarter. We also saw an increase in demand for diversified investments options. So clients interested in wealth planning advice and also alternatives investment as well. So this is a testament to how we have enhanced our capabilities and also expanded our RM pool. Remember we talked about in particular for private banking, we are growing our RM in our three-year plan. so these have helped to enhance the wealth management business all in all. Trade income improved, largely driven by customer flow, this is the good part, and indeed we have seen increased client activities. It all comes together when you talk about incremental revenue, of course you have to have the initiatives, and with a one group approach. But indeed, it is through a few years of working on serving the customer better across more geography, have volume growing, have more customers, and more customer leading to demand for more and different products. And as we improve our channels, that's also help. Clients continue to also actively hatch their exposures, including long term. rate hatching for infrastructure and also project finance transaction. So wealth is all the way for Sunny and Jason's business, but a lot of our growth is also not just for loans, but anything that related to the loan exposure, as I just mentioned. So for GH, or Great Eastern Insurance Business, right? Profit contribution 10% higher than a year ago. The business performance stayed resilient. I think Greg and Ronnie are in today. If you want to catch up with them, but they did already announce the results and talk about how they have performed and have a bit of a forward-looking talking about strategy as well. So indeed, investment income also improved, right? And this is our growth in the contribution is also in part due to higher shareholdings gained from the VGO. So about the offer for Great Eastern, there's quite a lot of comments in the media, and maybe I'll just take a chance to really reiterate OCBC's position on Great Eastern. So if you ask me, I am happy. We are satisfied because we fulfilled our objective of gaining more economic interest in Great Eastern, right? So our objective which we set, if I bring you back one year, our objective when we set in our 2024 VGO announcement, right, was to increase our stake in Great Eastern with a view to the list. We did say that. We were successful in increasing our stake, so rising from 88.44% to 93.72%. So if the increase was substantial enough to result in a delisting, we welcome it. It did not, but it is also acceptable to us. This year, the listing resolution was proposed by Great Eastern. And Great Eastern's plan, and they have to, we solved the 11-month trading suspension. So OCBC supported the listing proposal with an exit offer. So we are consistent. But if the listing is not achieved, we already have the plan to support GE to resolve the suspension by opting to take only Class C shares. I think you know the whole proposal very well. I don't need to explain it. So the Class C shares is without the voting rights, right? So we maintain our economic interest, but help GE. Of course, we still need to see the result, but this is a plan to help GE to resolve the suspension, right? So, and also our strategy with Great Eastern has not changed. GE has always played an important role in OCBC becoming a leading wealth management player in the region. And over the years, we have increased our stake, we deepened our integration and increased our synergies with Great Eastern. And we will definitely have more to share as Greg continues to work very, very closely with every one of us in considering and planning for more synergies and collaboration working together. And in the past, we already have built a more comprehensive and innovative suite of investment insurance and estate planning solutions to our customers. And Great Eastern likewise have benefited with a very committed retail and commercial customer base for them to deliver their products. And with the increase in our shareholding in GE to 93.72%, we will continue to accelerate the synergistic work with GE as we grow as one integrated financial services group. So I just want to leave that on the comments. on the GEE, what happened recently. So just want to wrap up this page. Of course, cost to income ratio remain below 40%. GEE talk about tight management of costs, but we still want to enhance technology capabilities, especially in AI. So we maintain cost discipline and strong control on discretionary expenses. But for investment we need to put in, we continue to do so. Asset quality, of course, remained resilient. NPR ratio maintained at 0.9% for five quarters in a row, and this is since June 2024. And of course, a lot of people talk about uncertainties due to the trade tariffs, and we haven't seen the end of it yet, but that has been impact, but I think we have always been prepared. we look at tariffs, we don't respond to tariffs changes. We prepare ourselves, we prepare our customers for that. And I think the market was quite prepared as you can see how market has rebound since Liberation Day. But having said all that, Because of the uncertainty and the volatility, we did put aside additional ECL in both first and second quarter as the trade negotiations progressed. And this included overlays for businesses impacted by tariffs or slowdown in global trade, as well as adjustment for our MEV updates mostly. from the change in GDP forecast. And we will continue to view overlay approach as the tariff negotiations progress. Currently, we do not see significant weakness in our portfolio, but do want to highlight that Hong Kong CRE remains a sector that we are closely monitoring and working with our customers to support them. in tightening over this difficult time. So continue to focus on tight underwriting criteria. We do close monitoring, proactively de-risking our portfolio where appropriate. There are some spots that we grow our business better. I'll ask Thich Long to cover those later on. But with resilient results and strong capital, indeed we're keeping to our dividend policy of 50% payout ratio for the interim results. Okay, so turning the page, we did say, I think we do have stronger than anticipated first half results and we expect second half to be more challenging though, right? Because alongside being resilient, first half has benefited from the better than expected GDP growth across the region, right? So regional markets were also supported with front-loading activities ahead of the US tariffs and government policy support. But of course we look into the second quarter, tariffs and heightened geopolitical tensions have created uncertainty and challenges. And there could be further fragmentation of global trade. There could be potential inflationary impact from tariff shocks. This continues to cloud the operating environment in the second half. although we have a more calm first month of the second half. We remain, though, long-term positive on regional growth. Asia, we still say, is the place to be, and trade investment and wealth flows across ASEAN and Greater China region continue. We still see, as I said, pocket of growth opportunity in the region and our key markets. And with that, I now invite Teck Long to share more on this.

Good morning, everyone. I will start by sharing some thoughts on the terrorist situation. I will use two words to describe the terrorist situation, actually three words. The first word is uncertainty. So the impact we see in the business environment is really customers re-evaluating their investment decision. This is what we see. But in terms of trading flows, it continues on a BAU basis. The second word I will use or the second phrase I will use to describe the tariff is chain reaction. That chain reaction hasn't fully manifest itself yet. So what we saw was that when the tariff charge on China products was very high at triple digit, We find that the merchandise from a major manufacturing country such as China finds its way to other markets. And because of the sudden influx of merchandise products made in China, some of the local businesses suffer from this intense competition. So that was what happened. However, there's also a silver lining. A lot of businesses, especially in Singapore, they are net importers. They import products, they import their raw materials for activities conducted domestically. So, like for example, the construction industry can benefit from a lower cost of raw materials. So, there's a silver lining. So, depending on how the share of the tariff end, there's a chain reaction which currently is still developing. In terms of loan growth, you will have noticed that we actually registered, I would say, pretty healthy loan growth in the first half of the year. And if you focus on the loan growth post-liberation date, it continues to be healthy. The one big contributing reason is that A lot of the loan growth which we have been focusing on, the industry sectors actually derive their demand domestically or regionally. For example, data center project, for example, real estate in Singapore, for example, project financing. So that will continue to angle our loan growth. Outlook-wise, for the next half of the year, we are still optimistic that we can continue our pace of loan growth ending the year at about mid-single digit as per our guidance earlier. Thank you.

Thank you, Thich Nhat Hanh. I just want to re-emphasize that OCBC is well-positioned to capture growth opportunities as we identify. And we will continue to use our deep presence in the region, supported with all our overseas network branches. And indeed, we're able to capture the opportunities because we continue to run a strong balance sheet and also a strong capital position. Over the years, and continue to do so, we have been focusing on enhancing our capabilities, right, deepening our presence in our key growth markets. A lot of you have talked to us over the last few years. You've seen the changes, you've seen the people you've seen how we work together as a group leading to a few good years of good results and also the incremental revenues that we talked about. So we hope all this also working together as one group we position ourselves to whether any challenges are due to uncertainty. And we want to remain and we will remain agile in navigating the challenges and be proactive and we'll pivot accordingly. With this, let me turn to my last page and provide an update. You have all read it, but indeed, just saying that having reviewed the operating environment and outlook, we now expect our net interest income to come in slightly lower than the record levels achieved in 2024, right? And it will be the NIR will be down by a mid-single-digit percentage. So as mentioned by Jin Yu, we are guiding down the lead interest margin, the LIM, to be in a range of 1.9 to 1.95%, in light of the current market conditions. Low yields likely will come down further, but will be mitigated by lower funding costs. So, deposit cost savings expected to fall through from the third quarter, falling from interest rate reductions on our flagship accounts, in Singapore in particular, This is effective in May and we have announced another cut in August as well. Loan growth we want to maintain at mid-single-digit. Cost-to-income ratio maintain at low 40s as we continue to exercise strict cost discipline. But again, it would depend on the income, right? But we will be very disciplined in maintaining our costs. Credit costs, we put it between 20 to 25 basis points, but we will continue to exercise proactive risk management. We will continue to focus on tightening underwriting criteria, a selection of client, close monitoring and proactive de-risking of portfolio where appropriate. and we remain committed to deliver the 60% dividend payout ratio coupled, remember we still have the share buyback plan over a two-year period together delivering a 2.5 billion return of capital to our shareholders. Of course, barring unforeseen circumstances. Before we move on to Q&A, And before you ask, maybe I talk a bit about, this is the first chance I talk about my retirement since the announcement about three weeks ago. Just want to say, people ask me why and all that, and there's only one simple reason, is I need more time to be with my family in Hong Kong. This is one simple reason and a very important reason. I actually advised the board this thinking early last year, early last year. And why you have to start so early? Because the session planning is a very serious thing. You cannot just say I want to retire and I go the next day. Nor can you say I go in six months. Nor even can you say you go in one year. and everything remained normal when we planned on this. And indeed, the board was supportive, of course, after quite some discussion, right? And we began the succession process. and of course with the view only to decide on the retirement date after a successor is chosen and the approvals have been obtained. So you cannot say I want to retire in six months time and then return out with a CEO with a magic wand and that is not the case for CEO succession. So at OCBC, as I said, we take succession planning very seriously. And for key positions, we always have identified internal candidates. And we have also relevant development plans for all our candidates. And indeed, as you said, when I took over as CEO, we also have some changes to the management team. And quite a number of them are internally selected. and this is important because it's ensure continuity, ensure stability and also alignment with our long-term strategic goals, right? And for succession to CEO, we have to look outside as well, right? Because this is only fair we find the best candidate and confirm the best candidate and that's why we did have a comprehensive global search and this was performed and we identify potential external candidates as well. And the board has finally, ultimately, and I want to say, and unanimously consider Thich Long as the most suitable candidate amongst all the candidates we have looked at. and that's why we come on to the approvals and working with the regulators and ultimately announce and I think it is also fine and right to say that between announcement to my retirement we have six months and we have Tick Long who have already started to do more but again to have a very smooth hand over as well. And Thich Nhat Hanh, as most of you have met with him and talked to him, he has been our key member. He joined us for more than three years by now. And he's part of a very significant member in our whole corporate strategy. and we talked about so much about the trade flows linking up ASEAN and Greater China and building the team in the region and Thich Nhat Hanh has really been there anchoring on the success of our one group approach and I have been placing a great emphasis on since I took office back four and a half years ago, less than four and a half years ago, but that's more than four years ago. So take long, as you would expect, we'll refine our strategy. He's very deep in looking at what's happening to the business, to the world, to where we are good in, what we can continue to improve, and I'm sure he will share more details next year. As you read from the announcement, I will step down from my role as the CEO. I will continue to serve as the Chairman of OCBC China and Director of OCBC Hong Kong. that allows me to spend more time with my family in Hong Kong. But indeed, I want to remain linked and connected with OCBC and want to be committed to support OCBC's growth in these capacities. And while I have more time with my family in Hong Kong, I will come back quite often and if you do see me on the street somehow please say hi I would like to catch up and I need to come back as well because I am still a board member of Enterprise Singapore and I will come back because I will have family in Singapore somehow but that's very private. But anyway, I want to, sorry I'm not getting married here. No, no, I'm not getting married in Hong Kong either. I will have family members in Singapore, just what I'm trying to say. I'd like to invite Dick Long to say a few words.

I feel very excited about my in-panning appointment to lead OCBC. It's a huge privilege for me to be given this opportunity because OCBC is a really very historic bank with a very very long history. I have joined OCBC for more than three years and even before that I got an opportunity to meet Helen and we had a lot of long and numerous conversations and I find that we see a lot of things you know we share a lot of common perspective and she's a indisputable expert in China matters. And because of my stint in China, there were a lot of things which we discussed and ideas which we had changed. So the end result, I joined OCBC. So while we are in sync with many things, there's however one thing which is not in sync with Helen. And that is a very hot topic between the two of us. She don't take spicy food very well. So I'm always concerned when I choose restaurants to dine with her. In terms of my thoughts about the OCBC franchise, I think we have a great platform. I think OCBC has one of the best platforms in Southeast Asia and Greater China. While we are all concerned about the economic headwinds and we worry about tariffs, but structurally, if you think about it, this is the place to be. One, our GDP growth rate in this region is still one of the fastest in the world. When we talk about China's slowdown, it's slowdown at the rate of 5% growth. 5%, you translate a number, roughly it's about $900 billion. To give you a perspective, every four or five years, the value added by China at 5%, so-called slower growth, equals to the whole ASEAN growth, which is at $3.8 trillion today. So I think it's a good place to be in, and ASEAN is also growing in a slow year, 4%, 5%, in a fast year, maybe 6%, 7%. So it's still a very good region to be in. I am a banker who started my career in Singapore. So I understand the ASEAN region very well. I also was based in China and helped to build the China franchise. So it was a very wonderful experience. Broadly speaking, for myself, I spent about one-third of my career in risk, two-thirds of my career in the front line. So I think in today's environment, I think I do have a very good insight on how to stay nimble and tap the right risk-reward relationship. So with every economic headwind we face, there will be opportunities for us and we need to stay nimble. Finally, I want to say one more thing which is I think pretty unique about OCBC Group as a huge strength. We are actually an integrated financial services group. So there are still a lot of synergies which can be reaped from working together and closer collaboration. I think Helen has put us on the right track with the one-group strategy of which I am part of the management team. And this will serve a strong foundation for us to chart the next chapter of growth alongside with the rest of the management team in OCBC. Thank you.

Congratulations on the big bid and I would like to ask about Red Eastern. Are you still considering charging bank assurance fee on Red Eastern?

This was mentioned some time before. And second question would like to ask whether the tariff imposed today, the rates imposed today, and also given that China's rate is still under negotiations, are you still giving review on your book? And do you think the current preparations, including ECL, is it adequate? Are you going to increase that? and third one, I would like to hear TechLong's view on the growth, inorganic growth of OCBC and in which areas and regions that you want.

Thank you. On Great Eastern, charging bank insurance fee is only one of the things that we keep our options open discussing with Great Eastern. But the emphasis is definitely on how we work closer together and realize some of the synergies that we can do together. and I think through this one whole year, and don't forget I have been a board member on GE for a while, so also with Greg Hinson having joined in, time passed so fast, it's almost coming up to a year soon, so that I assure you there's so much discussion and working together that remain very positive about how we can deliver better results in the future together. On the tariffs, yes, you mentioned that there is still China coming up and last night we see a few more concretion. If you say, how do we look at tariffs? It's again, we look at it all the time. When we look at our portfolio, it's not a one-stop to say that, oh, even if the tariff situation of China has been announced, it doesn't mean that we won't stop looking at the impact, right? So it is an ongoing process. We mentioned first half of the year already have some overlay. Will we consider some more? It depends. It depends on the results on how we see the book. and how we see market conditions. So nothing to share at the moment, but what we have done in the first half of the year, we're quite happy with. So I'll pass on to Thich Long to address the other question.

I think the question is about how interested we are in inorganic growth. I would say that we are very interested in growing organically as well as inorganically. For organic growth, we want to continue to strengthen our competitive positioning in the market to serve our customers better. For inorganic growth, we are also looking at opportunities, but inorganic growth is opportunistic. For any organic growth, my view is that it must fit two main criteria. One, it must fit our strategy. And two, it must be a reasonable cost. So we certainly don't want to overpay. I hope that kind of gives you some insights at this juncture.

Can we take a question from the sales side? Maybe Akesh first? Then I'll move on to you guys. I saw your hands.

Great, thank you. This is Akash from UBS. Thanks for the opportunity. Wish you a very happy retirement, Helen, and congratulations, TechLong, and all the best. The first question is just on asset quality. So this quarter, while generally the NPL ratio was flat, but there was a bit of pickup in NPLs in the consumer private banking space, roughly $150 million. So if you could share some more color on that. And then related to this, the Hong Kong banks that have reported showed some renewed stress in the CRE space. So I just wanted to get your thoughts on why do you think this happened? Is there a chance this could happen to you in the coming quarters? That's the first question, and then I have a few follow-up questions.

I think Jason will cover the first one. I think commenting on Hong Kong CRE, I'll stick around to do that.

Sure. So the increases in the NPLs relates to some of the loans that we've done in the private bank. To be fair, we're actually in line with our risk appetite. We've taken a prudent approach to these loans. We are still working through them. We're actually making very good progress. So we hope at some point in time that we will be able to write back. but it is just a few loans that sits within our book that we're being quite prudent in our approach and working them through and we hope to be able to write that back pretty quickly.

Can you say which market it is and is it like margin loans or and is it a large number of clients or maybe just few clients?

No, they're actually spread across a few. I'd rather not talk about the region just yet but we are pretty confident on being able to to recover a lot of this. So again, to be very clear, it's just us being prudent. It's not a lost cause, for lack of a better term.

On the Hong Kong CEI situation, actually it's not a new one to us. We have been tracking that market for quite a while. I think if you recall in the past sessions, I did talk a little bit more about Hong Kong. So it's been very prudent. Firstly, we have improved activity managing our exposure. The overall CEI exposure actually came down for us in the more vulnerable segment. Secondly, through the proactive management, we have been downgrading our cases, which means the outcome of which is that ECL2 or ECL3 get increased. So it has been put into the system as we speak today. So as long as the Hong Kong situation do not deteriorate in terms of the CIE valuation, I think we are quite comfortable. To give you another pointer is that our provisioning policy has been quite conservative and based on some of the recovery action we had done in the past is more or less in the ballpark.

Thank you. And the second question is on the dividends. So based on the current payout policy that you have committed to 60% for this year, I think the way earnings are trending, it's a good chance that your earnings would be down 5%, 7%, 9% year on year. There's a good chance that the absolute DPS might be lower. So last year, it was 101. This year, it might be 95, 96. I just want to get a sense, are you OK with the absolute DPS going down, despite the fact that you still have a lot of excess capital and buffer to be able to keep it flat year on year?

Okay I want to reiterate that we have a dividend policy and we want to be very transparent with our investors right. In the past we have considered paying above our dividend policy and do not forget we do have a commitment of a share buyback plan as well. whether we would consider a different level of dividend depends a lot on how we see our balance sheet and capital position. And so I can't tell you will we pay more, right? But a dividend policy is a dividend policy, meaning it is very clear. So if you have the percentage, that means we are paying at least that amount out from our profit. But will we pay more? Then it will depend on how we look at our capital position.

Do you have anything to add? It should not be ruled out, the possibility of a flat DPS here on here.

should not rule out. I wouldn't say that, but I would just say that in the past we have experience of paying above. It doesn't mean that we necessarily will repeat it, but it's all the time we will consider our capital position before we decide our final dividend.

Adding on to what Helen has mentioned, since we announced our dividend policy in early 2023, for interim dividend is always 50% and we say there's a target 50% dividend payout barring unforeseen circumstances and we have delivered that three years in a row for interim dividend. Now your question about whether our I mentioned we have mentioned 60% right overall dividend payout ratio for FY 2025 as part of our capital return plan and that makes up 10% that comprise 10% of our which are in special dividend form. Now, at the end of the year, when we look at our final dividend, that is when we will really take into account various sort of factors to decide whether we want to go beyond you know like 50% ordinary dividend and as you can see in the past two years FY23 and 24 we did go beyond right we pay 53% and this is an exercise that we will continue to do and what we look out for are really you know What are the capital needs to support our business growth, to support strategic initiatives in our corporate strategy? Are there any market headwinds whereby we need to set aside more buffer to navigate uncertainties? And of course, there was a question to take long ride on inorganic opportunities. There were also I'm also very aware that we should set aside some dry powder for new CEO who may want to go shopping. Although I'm very glad that he said that valuation matters a lot. Okay so these are really a lot of factors that we take into consideration in our comprehensive sort of capital return plan as I mentioned before as well as going forward position on dividend payout.

Thank you, Shanique. So just the first question is on the cost. There was a bit of a reduction in staff costs here. Sorry, quarter on quarter. There was a bit of reduction in staff costs quarter on quarter. So I just want to understand, is it part of some initiative, or is it just accruing bonuses in different quarters of the year? What drove that staff cost reduction, if you want to?

Partly is because of economic activity right because if you you know some some staff are enumerated with performance and so if your results number is lower so potentially that's lower too and partly also we haven't really grown our headcount much yeah which is part of our tight cost control and

It can stay at that level, right, the staff cost?

I hope so.

And then finally, what's the plan with GE? If the relisting does not happen, are we back to square one in trying to figure out what's the next step here?

There is no back to square one. We increase our stake in GE as we have planned. And as I said, the discussion of GE continues. It's not a discussion so simply put. It is really working together. I think Greg can testify to that. We talk about so much more different opportunities and how we can actually pool resources together, realize better synergies as well. So I don't think we are going back to square one, but we did say that we have achieved what we want to set out to do. I mean, we won't guarantee that you can achieve the listing because it is up to the Maori shareholders. so but the whole point is we did increase so that means GE's contribution to OCBC group will be bigger going forward I like that fact and then we'll see I mean why don't we wait for the results of this bonus issue, and then we talk. But we also said that the listing offer, exit offer, is to help GE, to support GE. I don't like the word help as well. It's to support GE to resolve the suspension. So that is why, if you look at the EGM, the resolutions are all out there. we're not waiting for anything to say that if the listing does not happen then we then come back and think about it because we want to have them to resolve this. We thought the proposal of the bonus share and the classy share is a very valid resolution to support GE to resolve the suspension, right? So let's see how that is like. Meaning that we don't really have any imminent plan to launch yet another offer.

Minority shareholders also opt for the Class C share? If they do, if they opt for the Class C share. Then we'll see the result first. What's the deadline for this? Could you remind us? What is the deadline? When do we find out?

7th of August. But just remember, if they are not picking Class C, they don't need to do anything. That means they will receive the bonus share.

Thank you. Maybe at the front, Jayden from Macquarie.

Thank you. Congratulations, Teck Long, on the appointment. And Helen, it's hard to believe four and a half years, time flies. So you're wishing you all the best as well. So I had a couple of questions just on more on the NIM and the deposit side. So I think, Jinyi, you said that we had an exit NIM of 1.88%, and we are expecting some good momentum from some of the deposit rate cuts. Can you help us to sort of quantify this? And maybe also to think about what the quantum would be from the reductions in the 360 account, because I think that was one of the important factors that you mentioned. If you can sort of help us to size this up, that would be wonderful. Thanks.

we are not so much going right into the quantum but what we are expecting is I also give you the rates assumption for the benchmark rates from 1.88 we expect a little bit of inflection upwards rather than stay at 1.88 and the assumptions are really firstly on the deposit cards that Helen has already mentioned and secondly we expect the Sora and Hibor to stay steady at current levels and I mentioned about three rate cuts right looking increasingly possibly to more three rate cuts you know now we using the three rate cuts assumption we assume historical sort of transmission rate to the two Q rates of Hibor as well as Sora. So for Hibor, 100% transmission from the three rate cuts and for Sora, it is like 50-60% transmission, so lesser degree. Now, based on this, we expect our third Q and fourth Q NIM to be above the SZ NIM. So that's why we still give 1.9 to 1.95. It is likely to come closer to the higher end if all my assumptions come true. of course you know depending on why we give a range right it is also barring you know a sharp drop again you know and then with that we also look at volume growth to make up for some of the possible drop further in the grades and as a result which this time round we also give some guidance in terms of NII

right sort of mid single digit percentage drop yeah just to put into some perspective of what sort of assumptions that we have put through and then the NIM guidance as well yeah okay but I think all of the factors that you just described are actually like negative for the NIM right because if we're saying there's going to be more rate cuts so then are we sort of saying that there'll be some management of the overall deposit portfolio like the LDR has come down are we saying that we're going to let some expensive funding go Maybe if you could elaborate a bit more.

No, you see, we always welcome deposits in the sense that, remember we were also deploying liquidity into the treasury market's assets. This is where if we have more deposits, we can let go of some of the wholesale funding as well. And deposits to us is franchise. so it's all around managing funding costs as well as being able to still keep the volume to grow NII but that could be at the extent of the expense of NIM right because our interest earning assets base would grow as well yeah so it's a delicate balance of NII as well as NIM okay thank you very much

Jaden, it may be easier if you pass the mic back to Harsh. Thanks. Harsh from J.P. Morgan. Thanks.

A couple of questions. One, if I look at the guidance, $190.95, and Chinyu said probably higher end of the range, but even at higher end, it is flat NIM mathematically. Mid single digit loan growth kind of in line with YTD maybe slightly lower. Cost income ratio of low 40 means slightly higher than first half. Credit cost 2025 again higher than first half. So it looks like half on half metrics are worsening or weakening on half and half basis, is that a fair read? Or all of these guidance lines are very conservative and hence most likely, as in I'm unable to reconcile that. A bit of a positive commentary overall, but if I look at the numbers, it seems like half and half would be deteriorating.

Thank you for that comment. I thought in the very beginning the first question is how is the tariff situation, right? The uncertainty is still there. I think even beginning of the year, probably not a lot of people expected even further escalation in the Middle East situation. So I want to say, whether you say this is prudent or not, it is uncertain. We hope that it will be better. but it is uncertain and Thich Nhat Hanh also said that there were some the first half we also see that there's a little bit of pre-selling right doing more export first before the tariff comes in so now that some of the tariffs rates have been affirmed what exactly will happen and what exactly will happen to the customer Yeah, we do see our momentum because you can look at your loan growth. eventually would even be tighter priced because people do rush to the better quality loans, right? So that means the margin could be tighter. And I'm not saying that this would certainly happen, I don't really have a crystal ball. This is really how we actually see the situation. We don't want to, we're never overly aggressive anyway in looking at our numbers. I thought, and when we feel that we need to revise it, we revise it, like the Lim situation. where you also don't want to over-promise. So just hope that, I mean there is no straight answer to your question because it is still uncertain. And as said, till today we don't know the situation with China as yet.

No, thanks for that Helen. And then the second question coming back to Nim, because some of the assumptions if you think about Hibor, Sora, have not really held yet today. , we are down 200 basis points almost year-on-year. So the normal has passed through from Fed rates to Sing dollar rates has not exactly happened. So over the next, let's say, three, six months, first, what is your exit name in second quarter? And next three to six months, if some of the similar trends continue and we have a meaningful gap between Fed rates or so far and HIBOR and SORA, then Can we get to the lower end of your margin range? Is that where that margin of safety you have built in your guidance?

Yeah, that's possible. I mean, if you work out mathematically, I'm sure all of you have done that, you know, at 1.9, the remaining two quarters will be below that, right? 1.82 or something like that, right? So that sort of could possibly happen if my assumptions on Steady, Sora and Highball, only the historical transmission from the fabric cards did not hold right and you can see how much and you yourself mentioned how much Sora has fallen and how much high ball has fallen in the first half yeah so if they continue to fall in this sort of range 1.9 is a possibility and that is where how do we how are we able to bring in volume to be able to at least bring you know stabilize our NII will lead to NIMH coming off straight away. So we really have to balance this. And to us, NII is important.

And exit NIMH, Chini? Sorry? Exit NIMH in second quarter, what was that?

Yeah, I mentioned just now 1.88%.

And so in the final question on this weakness in SORA, this departure from SOFR, any broad thoughts why that is happening and any reason why that could change and go back to historical assumptions, relationships?

I think for high bar, that's clear, right? There was, you know, the Hong Kong government defending the PEC, as a result of which there were really flush liquidity. For SORA, it's again really a lot of liquidity coming in.

Okay, thanks. Sheena, pass the mic to Nick in front of you.

Thanks very much, and again, good luck in your retirement and congratulations. Take long. Just coming back on this NIM point, and I've got a question on wealth management. Can you maybe help us a little bit by giving us, I mean, effectively your banking NIM, I guess, came down 10 basis points or whatever, and then you've got the two basis point impact from the deployment to HQLA, or even just on a loan basis. Can you give us a breakdown percentage-wise between the importance of a move in Hibor and the importance of a move in Sora in driving that shift down in asset yields or banking NIM. And then maybe you can help us just in terms of our sensitivity. I mean, as Harsh points out, obviously, the relationship between Asian rates and US rates has completely broken down in the last few months. Yeah, that's likely to persist. So is it possible for you to give us that sensitivity by currency? So how much of it, not precisely on basis points, but a third of it's US, a third of it's Singapore dollar rates, a third Hong Kong rates, whatever. because there's, I mean, a very important point here is that if Hibor is a big driver of what's happened, I mean, obviously the future is expecting that Hibor doubles in the next three months or six months. So it's very difficult for us to sort of work out what could happen to your NIM unless we know the currency sensitivity. And I have a second question.

Yeah we did give name sensitivity but across the four major currencies right yeah and then I also did give a breakdown of our or sort of like 50 about 50 percent of our loan book in in you know in Sing Dollar as well as Hong Kong Dollar and also the repricing profile 80% of Sing Dollar assets repriced sorry 80% are on floating rates and then for Hong Kong Dollar almost the full are on floating rates and usually the repricing for Hong Kong Dollar is very quick Right one month you know majority of that and then some on three months basis and having said that you know usually when we look at NIMS sensitivity is over one year that also assumed that the reprise of the deposits kicked in why we are seeing such a high impact on our name due to the sharp drop in sovereign high borders in second quarter alone also is a reflection of the lagging effect of some of the deposit repricing kicking in. For Hong Kong dollar, the deposits are actually also quite sensitive to rates. but they repriced you know longer compared to the repricing of the asset side for hong kong dollar so you know so put it in a way of your 14 basis point and then decline queue on queue

Yeah, two basis points was, I think it was 14, was it 12? Sorry, 12 basis points.

Two basis points was because of the... Yeah, because enlarged base of the, you know, deployment into the high quality assets that I mentioned in first quarter. So there's still a lagging effect of that, you know, average sort of volume effect that come in in the second quarter, yeah.

Okay, and then 10 basis points was because of movements in the loan and deposit spread. Yeah, yeah. Is it fair to say that two-thirds of that was Hibor? I mean, bear in mind that Hibor came down 300 basis points and one-third SingDollar? Is that a fair guess?

Fair guess, because Hibor in second queue alone already dropped 220 and 300 basis points.

Okay, so that's a good range. And then just on your sensitivity on the pass-through rate cuts, everything remains linked. So if we saw three rate cuts in the US, you would assume that highball came down 75 pips as well. That's how we should think about that sensitivity.

Yes, yes.

Thank you. Then, sorry, secondly, just on wealth management, can you give us any split between where the net new money came from between CFS and Bank of Singapore? So you've given us the four billion in the quarter, any indication, nine billion in the half, any indication as to was it 50-50 or 25-75?

We don't normally give that split, but I think I can say that both have registered good growth. Okay, cool.

Thank you.

Hi, thanks for the opportunity. And also maybe just following up on the wealth management, just wanting to check if there's any change in the product offering or changing customer behaviour, or even are you seeing higher lending in wealth driving leverage simply because the rates have come off? I think where I'm coming from, just wondering how sustainable this wealth momentum is and whether is it due to one-off volatility or some structural shift behind the scene?

I ask Jason and maybe Sunny to talk a bit about the trends and behavior of customers in wealth and then take long to cover the SME a bit on that.

Sure. I'll start with the Bank of Singapore. So for our client base, actually, although we were relatively worried about Liberation Day, as you can see from the markets, they continue to show strength and they continue to grow day after day. So we've seen clients actually across the board do a lot of trading and structure products and continue to trade into the volatility of the market. Leverage has actually been relatively, I won't say muted, but it's not as big as we anticipated because I think there is still that fear of drops in the market. So we haven't seen outsides leveraged. In addition, we've also grown, at least in the Bank of Singapore, quite a lot of our fee-based business this year alone. So we've grown quite significantly to create more resilient revenue within the private bank. But it's much more broad-based and not so one-off as you may imagine.

For consumer side, we do see a pretty much broad base in all the assets like treasuries, the bonds and structured products. We also do see our bank assurance growing quarter on quarter and of course we do have some new products together with GE and that's also helping us to grow our bank assurance both in TWP, our embed and also our revenue portion. on the loan side leverage side we're also seeing a pretty much good growth on the consumer side as well and even interest rate environment likely to remain low we do see that there probably could be a sustain on the leverage portion as well yeah thank you

Sorry, I didn't quite catch the part on the SME. You're asking about wealth or only wealth, right? Okay, all right, thanks.

Maybe, and also, growing up on rates, even the rates have came off quite a bit in Hong Kong, Singapore, and I think the last two, three years, Greater China saw lots of repayment. Can we expect loans from Greater China to also pick up from these levels, partly due to lesser repayment?

I presume you are referring to the repayments from China companies because of cheaper RMB? Is that the question?

More competitive highball.

More competitive highball.

Because onshore rates are lower, are you more comfortable to grow with a China loans book?

We haven't seen customers moving from RMB financing to Hibor because Hibor is seen as short-term situation so for some categories they may use Hong Kong dollars but the major trade currency remains US dollars and for Chinese companies to the extent that their home currency is Renminbi they still continue to tap Renminbi that's what we have seen Let's not forget the very intense price competition among the Chinese banks within domestic China, which is the single largest source of RMB. So the tapping Hong Kong dollar, I don't think that is a major, I don't see that as a structural change. At the most, it's a temporary situation.

And final question, maybe something more short-term. One of the assumptions was SORA was a three-month SORA, I assume, would be flat throughout the year. If you look at one-month SORA, it's already behind. Should that also be a risk to the NIMS guidance required?

You know, under current market conditions, predicting interest rate is getting to be something that I've given up doing.

Okay, I pass to Felicia. Felicia from The Edge.

Hi, Felicia from The Edge. I have two questions. One is more of a follow-up. First of all, I note that the ECL, I think you guys said it's estimated to rise by $2.63 billion from $2.16 or $2.7 billion last year. This is, should all Stage 1 exposures migrate to Stage 2? What is the probability of such a scenario occurring? And what indicators are you guys looking out for that might trigger such a migration? And my second question is, are there customer loans in private banking that have been downgraded from ECL 1 to 2? you are talking about ECL on the general book and then private banking yeah the first one is general book this is I think page 10 on your financial statements then the second one is specifically on private banking

You are asking whether we will do more or what are you referring to? I'm sorry.

You guys said that the ECL is estimated to rise but this is in the event if all stage 1 exposures migrate to stage 2. So we were just wondering about the possibility of such a scenario happening and what are you guys looking out for that might trigger that?

I don't think we can provide an answer on what how the migration is going to work because it's... I don't think I can have an answer to that.

You were trying to ask because... We just noted that you guys are looking to your ECLs estimated to rise. As in, so we were just wondering what is your probability or what's the possibility of all of your Stage 1 exposures migrate to Stage 2?

we don't yeah i don't think we can provide an answer on that yeah wait let's let's pick this up i i really want to understand what what exactly you want but we can pick it up after because i think the it's the consumer banking and the private banking loans are in your

MPLs at 148 million. And you said there were just a few accounts of this. Are there any more that you're likely to see in that bucket?

I'll take it from the private bank side. We are always constantly monitoring our loan book exposure. Right now, we don't see anything in the pipeline that causes us any concern, any worry that it would increase and as I said as I mentioned before all of the loans that we are currently classifying this it's part of our prudent approach they're well secured and well securitized so we feel confident about working through them and we don't have anything in the pipeline that causes any concern.

So I will pass it to Sikit from China News Asia.

Hi, I have a question on leadership transition. So when it comes to ensuring a smooth transition, can you give us some details on what has been done so far? For example, take long immediate priorities, key areas that you're already starting to focus on and you will be doing more so in the next months, a few months ahead. Helen, I know we still have a few more months to go, but is it possible for you to do a brief look back on your past four and a half years as CEO and what do you think was the biggest challenge you faced? Thank you.

Shall we do that in January? I think it's too early to say I am reflecting on what has happened, right? Of course, I'm very happy we have Thich Long. I'm actually very proud that I managed to convince him to join OCBC three years ago. So I think reflection is something I will do later on in the year, not now. I still have a job to do. We still have to deliver. We still want to be able to make sure that our year-end results is not at least live up to expectation on our plan.

I will approach this question from two perspectives. One is I'm actually part of the senior team. I'm on the management executive committee working very closely with Helen and the rest of my colleagues. So I do not just cover my own department, division. I actually cover it a little bit broader, where I can contribute, I contribute. and having been someone who's actually very familiar with the customer base and having operated across many divisions, I have been working very closely with Helen on many things. So in that sense, it paved a good ground for the succession. Of course, we didn't expect that the succession is, I mean, when I joined two years ago, we have been working together very closely. now the second thing is that recently because the bank is forward-looking we have been uh we have set up a unit called this a task force called the strategic resilience group uh the strategy resilience group took into account what's happening in the world where you know there's a little bit of geopolitical tensions in uh in the north asia in middle east and it affects also for example shooting route routes of our customers etc etc and we also took into account the advent of AI as a fast-moving, fast-developing space. So because of many reasons, we decided to set up the Strategic Resilience Group and I chair that group. So on that group, there are some core members such as the CFO, the CIO, head of global markets and our technology, and also we include some of our business heads. So together we have been charting and making recommendations on how we should position the bank. So that's a much wider mandate than my GWB mandate. I will report to Helen on this Strategic Residence Group recommendations. There is also another forward-looking set of task force looking at certain businesses which we should grow. That is what we call bank of the future task forces. So you look at specific area on how to improve wealth further, how to get synergies from Great Eastern, the insurance arm and our wealth, etc. So I'm actually a co-chairman together with our transformation group head.

Thank you, Melissa from Goldman Sachs.

Thank you very much. Happy retirement, Helen, and congratulations, Teck Long. I just had three questions. Just firstly, back on the NIM. In terms of the NIM, in terms of cash flow hedges, do you still have that on your NIM? And what will it be if you didn't have these hedges? Just wanted to understand, after we've seen the fall in terms of the Fed to cut, Do we anticipate that NIM will continue to roll down after that as the hedges roll off?

The effect of the cash flow hedges which we put in in 2023 and 2024 are still there. So it does help a bit.

So we will see the roll-off happening after the Fed cuts and then after the year ends, we will still see some pressure coming through?

So the effect of cash flow hedges will end when we put on cash flow hedges, it's like for two to three years. So when the two to three years mature, that's where it will taper off.

Okay then I think then into the next question in terms of your ROE targets I guess you know previously you mentioned ROE targets of 14% in the medium term I guess given the environment it might be a bit tough but do you have any thoughts about what this ROE targets in this current environment would be for a medium term?

Yeah so I mean if you look at the mix of our business right we are over the years we have been trying to raise you know the non-interest income right and this is where we do see increasing proportion of our total income shifting towards non-interest income and the integrated financial services group that Teck Long mentioned is really a very key part of moving our you know composition of revenue into more fee-based sort of income right and this is where this is this is sort of a long-term sort of plan to really shift towards higher ROE because as we if we are still very reliant on you know loans and that's where the RWA will creep up and usage of capital will go up as well. This is where we will have to maintain a larger proportion of E to be able to sustain those business, bringing in more and more fee trading income customer treasury flow trading income so on so forth are really part and parcel of a long-term sort of goal to bring our ROE up if you recall in the past you know the interest rate were low ROE was like 11 percent or sometimes even less than 10 percent right but now we you know um Now, even for a second Q, where our NRI were pretty impacted due to the rates that we've mentioned, annualized basis is 12.6%. So this is where we do see a larger proportion of wealth, fees, the momentum that we mentioned, start showing some results of that. Then insurance income making up a bigger proportion of our earnings as well will also help.

So would you say like we won't be at 14, we can be at 13 in the next two years, perhaps?

Yeah, that's certainly a handle that I would want to work towards. 14 at the time was when NII was still quite a big factor. right now that we know NRI is softening you know and then how much we can grow our fee as well as trading income to make up for that will determine how fast we can move you know towards the 13 plus percent over how many years and also we still have our share buyback you know capital return plan which will also help in a way in in terms of the ROE as well. So these are various areas that we are looking at to really be able to sustain a higher level of ROE under a low interest rate environment, let's say. Not the sub 11% anymore.

Okay, thank you. I think lastly, in terms of Great Eastern, we didn't get the full privatisation, but does that change any of the plans that you have with them? What could you have done differently if you had full privatisation versus not, in terms of the forward-looking and synergies working together, capital optimisation? What changes?

I think that's let's clarify we were never talking about privatization in a way I mean of course we use it very loosely with the listing you know GE is a very old company it's probably will never have 100% of GE in that sense right but I thought the there are always two things on on this whole video last year on GE the first one is definitely the use of our capital We want to buy into an entity that we know very well. I mean, you're always going to ask me, Helen, where's your M&A plan? And to an extent, buying into GE, you can see it is more like a M&A because I am increasing stake in investment. but we chose GE because we know them and instead of having to assess whether to go outside and buy something that we do not know we thought that was a very good move and we like GE all the way and so we did that so the listing should help a bit more because of course If they stay as a listed company, there are listed rules to adhere to and may impact some of the related transaction, right? And all that. But it doesn't mean that we cannot work on a lot of things that we want to work together. But I thought this show of our wish to increase in our economic stake in GE is also, alongside that, a very keen ask that together we can actually work better. Because having high economic stakes, means that you will do more to make sure that they also generate more profits, right? Otherwise you earn a more economic state of a worse company. That's not the way. So that's why I would say that it is also a very strong signal to say that we are intensifying all the efforts that we have been doing and identifying new areas that we can work together. So delisting or not does not impact that. But of course delisting is a signal that we're truly intensifying the way we work together.

Okay then maybe just follow up in the 900 million that you set aside for this delisting will happen or the second phase now that that's no longer there what are you considering for it does it go back into the pot for inorganic or will there be considerations of hopefully raising dividends?

It goes back into the pot of the capital and we did say that whether we would have anything we want to do depends on how we evaluate the whole capital situation.

It's already past 11. Golan, quick question. Last one.

I have lots of questions, but I've just asked two and they're to tick now. And I'm just wondering whether he will continue your one group strategy. And also, you know, one of the reasons that I think Helen was very appreciated by shareholders is we should change the dividend strategy to raise the payout to 50%. Now, I just wanted to know what your philosophy is on capital management and dividend payouts and she preferred dividends to you know being pressured by these analysts to do these share buybacks and what's your what's your philosophy on all that that's it

On one group strategy, I have indicated that for us, we are an integrated financial services group, so certainly there are synergies to be built out of that, and therefore certainly we will continue with elements of that. The second question is not so much philosophy. It's professionally, I don't feel pressurized. It's a question of what is the capital, what's the ultimate capital we need to hedge these uncertain times. It's a question of how do we look at value adding to the shares. So there are multiple considerations. What I'm really focused on right now is the strategy of how to continue to grow our franchise. I think that's the most imperative task for me.

Okay, all right, I'm on. Thank you. Thank you, Gula, for the last question, and thank you, Teck Long, for ending that very well. You should hear from Teck Long more on next year, but with that, thank you very much, everyone, for joining us this morning, and have a good day. Thank you.