Oversea-Chinese Banking Corporation

Good morning. Good morning, everyone. Thank you for joining us to our third quarter results briefing. This results briefing will be Ellen's last results briefing. And so, of course, we all wish her all the best. And from the fourth quarter and full year results, we'll see Egg Bum Tong Ming next year. Okay, so without further ado, I'll pass the time to Ginny to take us through our results.

Good morning, everyone. Thank you for joining us in OCBC's 3Q 2025 Results Briefing. Our 3Q 2025 Group Net Profit was S$1.98 billion, up 9% from last quarter and largely unchanged from a year ago. This was our second highest quarterly net profit. ROE was an annualised 13.4%. Total income grew 7% from previous quarter. The growth was driven by record non-interest income, which more than compensated for the decline in net interest income. NII fell 2% to $2.23 billion quarter-on-quarter amid declining benchmark rates. We continue to prioritise asset growth to support NII. Non-interest income rose 24% to $1.57 billion, driven by fee, trading and insurance income. The strong results were supported by a wealth management franchise which continued to scale and delivered record wealth management income. Our insurance business also contributed strongly, reinforcing the benefits of our diversified income streams. Loans and deposits continued to register healthy growth, up 7% and 11% respectively year-on-year. Asset quality remained resilient. NPR ratio stable at 0.9% for the past six quarters. Total credit costs in third Q of 25 were 16 basis points on annualized basis. Total MPA coverage was 160%. Our capital position remained sound. Common equity tier one ratio was 16.9% on a transitional basis and 15% on a fully phase-in basis. With our solid 3rd quarter earnings, our 9 months of 2025 group net profit reached $5.7 billion, 4% below 9 months of 2024. The strength of our one group franchise is reflected in the performance across our banking, wealth management and insurance pillars. Our banking net profit grew 3% from last quarter, demonstrating resilience despite a declining interest rate environment. Double-digit growth in non-interest income more than compensated for the moderation in NII. Wealth management income and AUM were at record highs. Our wealth management income grew 25% to $1.62 billion, contributing 43% to group total income. Banking AUM rose 18% year on year and 8% Q on Q to $336 billion, driven by net new money inflows and positive market valuation. Net new money inflows were 12 billion in third quarter, above the run rate for the past two quarters of about 4 to 5 billion. Year-to-date nine months, net new money inflows were 21 billion. On insurance, corporate contribution from GEH grew 50% Q on Q to 347 million. This was driven by improved investment performance from insurance and shareholders' funds. GEH New Business Embedded Value, or NBEF, rose 9%, and NBEF margin improved to 48.8%, reflecting GE's strategic shift towards higher-margin products. Moving on to details of our group performance trends, starting with NII on slide eight. NII for the quarter came in at 2.23 billion, 2% lower from last quarter. Average assets grew 1%, but this was offset by an eight basis point decline in NIM to 1.84%. Referring to the waterfall chart on NIM, NIM narrowed primarily from lower loan yields, which reduced margin by 21 basis points. This was driven by the fall in benchmark rates, particularly the average rates for Sora and Hibor. The progressive reduction in our funding costs, as well as cash flow hedges, partly mitigated the compression in loan yields. About half of our loan book is denominated in Sing Dollar and Hong Kong Dollar. For these currencies, around 80% of our Sing Dollar loans and almost all Hong Kong Dollar loans are either on floating rates or due for repricing within a year. The exit name for September was 1.84%. At end September, our NIMS sensitivity, based on 100 basis points, dropped in rates across our four major currencies of Singapore dollars, Hong Kong dollars, Malaysian ringgit, and US dollars, was about 11 basis points on an annualized basis. On NII, sorry, on non-interest income now. Before the quarter, non-interest income was up 24% Q1Q, supported by broad-based growth across fee, trading and insurance income. For the nine-month period, non-interest income grew 10% year-on-year to a new high of $4.14 billion, lifted by the same growth drivers. Fee income was a key contributor, increasing 24% to $1.8 billion. Our fee income reached $683 million in the third Q of 25, up 18% Q on Q and 34% year on year, driven by higher corporate as well as wealth customer activities. As can be seen from the chart, our fee income has maintained an upward trajectory over the past five quarters, contributed mainly by the strong momentum in wealth management. The record third quarter wealth management performance lifted our nine-month fee income to a new high of $1.8 billion, up 24%. Wealth management fees surged 35% to $923 million, contributing more than half of fee income. Compared to last year, customers deployed more funds into investments across all wealth segments, with around 60% of banking AUM invested. Trading income for the quarter was $518 million, up 38% Q on Q. The strong growth was driven by customer flow treasury income, which was at a quarterly high. non-customer flow trading income also improved, reflecting better investment performance across our global markets portfolio as well as GE's shareholders' funds. For the nine-month period, trading income was up 4% to $1.29 billion, underpinned by record customer flow treasury income. The growth was contributed by both wealth and corporate segments. Moving on to expenses. Our operating expenses continue to be well managed, even as we invest strategically for growth. For the nine-month period, operating expenses rose by 3% year-on-year. Cost-to-income ratio was held below 40% at 39.3%. Our loan book remains well diversified across geographies and sectors. Loans grew 7% year-on-year and 1% quarter-on-quarter to $327 billion. Growth over the past year was broad-based across consumer and corporate segments. In particular, the transport, storage and communications sector grew the most in capturing opportunities in the new economy sectors and high-growth industries. Singapore housing loans also grew as we build market share. Sustainable financing continues to gain traction. Loans grew 17% year-on-year to $55 billion and now accounts for 17% of our total group loans. Our overall loan portfolio quality remains sound. NPR ratio stable at 0.9%. NPAs declined by 1% Q on Q, largely due to higher recoveries, upgrades and write-offs, which more than compensated for new NPAs. We remain vigilant and continue to conduct ongoing reviews of our loan portfolio including assessments on the potential impact of trade tariffs. Total allowances for 9 months of 2025 were $466 million, down 4% due to lower allowances for impaired assets. Allowances for non-impaired assets were higher. This included pre-emptive allowances set aside for trade tariffs and macro uncertainties and adjustments of MEB updates mainly to reflect the weaker economic outlook. Credit costs for 9 months were at an annualised 17 basis points. Our third Q25 allowances were higher quarter on quarter as we set aside allowances for impact assets. Our NPA coverage ratio was around 160% over the past five quarters. Allowances for non-impact loans maintained at 0.9% of total performing loans. Moving on to deposits. Customer deposits rose 11% year-on-year and 1% Q-on-Q to $411 billion. NASA deposits grew by $27 billion or 15% year-on-year across both corporate and consumer segments. NASA ratio improved to 50.3%. Our strong deposit franchise contributed to 80% of our funding structure. All funding and liquidity ratios are well above regulatory requirements. Moving on to capital. Our capital position remains strong. CET1 ratio was 16.9%, broadly stable quarter on quarter. On a fully-facing basis, our CET1 ratio was 15%. Our robust balance sheet and capital position enable us to pursue growth opportunities, navigate uncertainties, and enhance shareholders' returns. With this, I end my presentation. Thank you. And I will now hand the floor over to Helen.

Thank you, Xinyi. Good morning, everyone. As usual, very happy to see faces. I always say that because when I started, we can't see faces. It was COVID. So it's always good to have you at the office. Just want to start with some comments on the third quarter results. Of course, it is our strongest quarter this year. and it's the second highest on record. I think we lost out, this quarter lost out to first quarter 24 by like 4 million. Yeah, so, and it's all in all a very good quarter. Of course, net profits up queue on queue by 9% and 1.98 billion, of course, and it's closest, as we said, closest to first quarter 24. I think we achieved this despite a declining general environment. through a few things. I think the first thing has to mention is the ability of our diversified business pillars, right? And producing or generating balanced earnings through economic cycles. And as covered by Xinyi, NII and NIM moderated, but our non-interest income rose 24% quarter on quarter to a new high, with double-digit growth across on fees, on training and insurance income as well. So to sustain our NII, we are focused on asset growth. I did mention before in some of the other briefings, interest rate cycles, they're always interest rate cycles, they're always up and down. You cannot rely on high interest rate to generate a wider margin. So the crux of the matter is always to focus on growth. And asset growth is important to defend the NII. But equally important is to manage the funding costs. so growing deposits in the right manner especially lower cost deposits is key as well so I think we have been able to and we continue to focus on driving regional account openings for corporates and also for commercial banking customers and capturing a lot more cash management mandates cash management mandates are important as they bring in the money and the operating account are normally not fixed deposits because they work on it. And indeed, as you gather the cash management mandate, that means the remittances, the ethics, everything comes in as well. So this is what is important. So our robust non-interest income also reflected results of our strategic actions to strengthen our franchise, be it in wealth and be it in our cross-border capital flow. Our sustainability, as Chin Ye has mentioned, our sustainable finance keep going well. And also some of the newer economy customers that we're able to start to bank with more and more. Wealth management strategy, of course, continue to play out positively. We are well positioned for long-term growth. As shared by Chin Yee, net yield money for the third quarter is Singapore dollars 12 billion. And this is quite good, well spread across and contributed by all segments. By that, we mean the private banking side, our Premier, private and our premier customer wealth segments. Quarterly, wealth management fees and income grew to record levels with sustained momentum across all segments as well and product channels. We do talk about investing in more relationship managers, but our wealth platform has been very effective for our customers. And indeed, whenever we come up with new products, we will be able to apply across our wealth platform for different segments. Of course, we check the suitability, right? But that means whenever we invest in anything, we can consider to launch on the same platform, which makes our channels very effective. We continue to deepen our regional private banking and premier banking franchise. RM Bank Strength, we talk about private banking and also our PPC segment having more RMs. But I think importantly is the products that we develop and the advisory capabilities across the wealth spectrum, including insurance. I think productivity also is another key. Recently, we did announce using AI to have our RMs to do KYC, which significantly shortened the time spent, meaning they have more time facing their clients, but will continue to be effective and productive. Trading income, we're happy with it as well, rose 38% kill on kill. It's now above 500 million in the third quarter. As customer flow, our treasury income hits are all time high. This is again both for wealth and also for corporate customers as we build on cross-selling as one group. And this is not just in Singapore but across geographies as well. For insurance, a profit contribution from GE was up 50% Q1Q. GE indeed is working on increasing collaboration with the whole group. and I would say insurance plays an essential role in our wealth management business. We have also seen more insurance policy working together with the trust side as a way to protect the wealth of our customer. So we always talk about a wealth continuum. This is what we have been working on and it is important that we continue to have that. So cost-to-income ratio is around 40%. Of course, we exercise quite a good cost discipline as well. And important to continue to invest in our business, in our people, and also in technology. This is indeed for future growth. Asset quality is some. NPL ratio held steadily. at 0.9% since June 2024. And we are closely watching with rising from trade tariffs, but we talked about it for the last three quarters already. So I think there is of course potential impact, but I think we have been tracking well, our customers have been managing quite well as well. One sector we remain particularly cautious, of course, Hong Kong CRE. It's a question that some of you will raise, but indeed we have been quite cautious. We're comfortable with current level of allowance coverage. I think 160% as a NPL coverage is quite satisfactory. And then coverage on performing loans is at 0.9%. Our loans will also grow, I think 7% and 4% on a constant currency basis. We have gained a market share in Singapore mortgages. For one example, we have a partner care program, which we work very closely with property agents to encourage them to bank with us more. and also through their referral customers and mortgages to us as well. For corporates, we continue to expand, deepen relationships with new to bank customers, as well as supporting customers across our international network. So that is not limited to ASEAN and Greater China, but through our major international branches as well. I'll pass to Teck Long later to talk a bit about that. Stripping the page, of course, we always say there is uncertainty. Uncertainty becomes more complex as well. But happy to say that global trade and most major economies have shown signs of resilience. And of course, this year in particular, supported by some front-loading for trade and also technology upcycling, particularly for Asia. For this year, we are keeping to our previous guidance on our financial numbers, except for LIM we want to, and we are changing it to around 1.9% from the previous 1.9 to 1.95%. Looking ahead, I think as we said, operating conditions continue to be complex and 2026 may see slower economic growth across various countries and geographies. and of course trade policies can continue to shift. Geopolitical tensions are still there and that could have an implication on the demand and supply chains of our key markets. But we do feel that the fundamentals remain resilient and we are positive on the mid to longer term growth prospects as well. Also want to report on our strategy I think we refreshed our corporate strategy in 2022. We talked about a three-year plan of incremental revenues of 3 billion Singapore dollars. Glad to report by end of September, we have already surpassed that goal of 3 billion. So hopefully we'll add the three-year plan quite ahead. is ahead of schedule, but also above plan. That means the initiatives we all put together and how we work as one group has bear fruit. And I think this will shape up well as a firm foundation to capture growth opportunities going ahead as well. We talk about growth pillars, but also fundamentally what is important is a running group approach. And this is an important enabler. Today, we work much more closer as one group. That means not just collaboration, but synergy. And synergy is both in business volumes, more customer, and also synergy in terms of cost savings as well. So this is important because it is as we have more customers and they bank with us on more products and more and more countries and more effectively because we also make digital a very important offering. So I think we are managed to work as one group together. We're well-placed for the future and because we still have a very strong partnership position and a business franchise. for 2025. We stick to our commitment to deliver to 60% of dividend payout ratio and we will complete the share buyback plans by end of 2026. That is still there. So we stay committed. So may I now head over to Tick Long to talk a bit more about the business and the business environment.

Thank you. Thank you, Helen. Thank you. Thank you, Helen. I will share two key factors which we are monitoring. from a different angle because of trade tariffs where materials come from, for example, a large market, a large manufacturer market like China, the input cost could be lower for some of these corporates in these industries. The second big factor is interest rate. Interest rate helps in the sense that

What does this mean for OCBC moving forward and what's the outlook for the next quarter and the

Reflect on some of the investments and the commitment we have made in the past. we do talk about the corporate strategy where we are focusing on and indeed improving for the wealth segment in particular we said we are hiring more RMs I remember last quarter we did talk about we achieved the number in particular for the private bank we achieved the number earlier than we expected meaning we hire faster than we hold the use of AI has generated a lot more some cost saving, meaning we become all more productive in a sense. So we hope that this is a good foundation going forward. Fourth quarter, since we're going to only announce by next year and we're only one month into the fourth quarter, of course, we hope momentum is still there. But generally, the last quarter is a more quiet time for wealth. Normally, it is the case. and we have changed our, we keep some of our guidance, meaning we think loan growth can still be single-digit. We continue to try to defend our NII, but again, I think the interest income sees most results from what we have invested in the past. So we hope this is laying a good foundation for 2026. Thank you.

What is the impact on jobs for OCBC?

If we have RMS that's great right because they have more time to talk to customer so be able to generate business volume. I think I also mentioned in the past with the use of technology, you have not actually seen any need for us to say that we have to release people. First thing is because we continue to train our people so that they will be able to take on more complicated jobs. But the second thing is you invest in technology, it brings on more volume. You also need the people to do the job. and there's always natural attrition. So I wouldn't say that because of AI and suddenly there will be a loss of job. We haven't seen that and I do not expect it in the foreseeable future.

Anyone else?

Thank you. So one question I had was how critical is wealth management to Singapore's growth strategy right now, especially as lending margins compress. And then my second question is, you know, how do you balance the growth opportunity from ultra-wealthy clients with heightened regulatory scrutiny around money laundering and sanctions compliance?

The first one, you're also referring to wealth. And you asked about loan margins?

No, mostly just how critical is wealth management to Singapore banks right now as a strategy.

I think wealth management has been very important also in our own corporate strategy. is a very important growth pillar. The reason being that Asia is getting more affluent over the years. And so Singapore definitely is the center in particular for ASEAN. And Singapore is a highly rated country. And even you have seen over COVID or some uncertainty in the world, actually there will be net new money coming into the country. so that's why this is a very important growth pillar for Singapore banks and in particular most research will say that the wealth business will continue to grow like a high single digit or even double digit right over the next five years or so so that is why it is important when we say it is important that means we should be able to handle business in a fair manner. Fair manner meaning that you serve your customer well, but of course you stick to your laws and regulations. And also, we uphold to the highest standards, right? Because we are responsible not just to regulators or rules and regulations, it's to our stakeholders as well, right? We defend our reputation, we defend our business franchise. So when you need that issue, the second question, how do you balance that? I wouldn't even call it a balancing act. We strongly adhere to, of course, we have to adhere to rules and regulations, but it is not rules and regulations that seem like keeping us from not doing business. Rules and regulation is there. And if there's no rules and regulations, how do people conduct business? So that's a fundamental. So adhering to rules and regulations as no negotiation. And then it is about how do you use your people use your technology to identify what is not suitable. So KYC is a very important thing. And it doesn't mean that if you do KYC, you cannot then put clients on. But KYC is the way for us to keep away not suitable clients, right? And so I don't think it's a balancing act. It is, we need to continue to invest in how we conduct our KYCs. The world has become a lot more complicated. That's why AI comes in handy. You fit AI information, it can summarize much better than you put in a lot of manual hours to do it, right? But I want to recap that this is not a fundraising act. You just have to do it, but it doesn't stop us from being able to put in more customers and offer our service.

Maybe Thomas first?

So I have a question for them because you just mentioned that digital infrastructure is growing a sector but a significant portion of investment nowadays is related to so do you foresee any possible bubble or overheating and how do you monitor risks?

I think the demand will be sustained digitization in their processes

I have one question on the net new money inflows.

So it's 12 billion and it's above the run rate of about 4 to 5 billion in the past two quarters. So I was just wondering what changed. And in terms of the geographies, where are they coming from?

It's a good number, of course. And it's also a result of... Some of the early work we have done, the hiring of the new RMs are beginning to bear fruit, right? Because we did say that we accelerated the hiring a bit more for the last two years. Sometimes people say, is this the new normal? I think you cannot see it as like what you call a new normal. because a lot depends on the market conditions as well. And when the interest rate coming lower also help because customers may be actually be more active. And if you have good products, and then of course they said, I give money, put money into OCBC Group because you can offer me good products. and give me good investment plans. Generally, fourth quarter is a bit more quiet, as we all always see. So don't take it that 12 billion will repeat in the fourth quarter necessarily. But as to the spread, it's quite well spread among our three segments that we report, meaning the private banking side, and then our premier and also premier private. And it also comes from various places. It's not limited to, not to say that it's particular one country contribute the most.

Yeah, I'll jump.

I think NIEM will provide guidance because we have been providing a guidance on NIEM in the past. In an interest rate cycle, as now interest rate going lower, NIEM will have pressure. So what we have been focusing this year, which we described in the past, is very much protecting our NII. So NIM becomes like a pointer. It's not really like a target. It is a pointer to help us to look at how, in particular, look at how we manage our funding costs and how we defend, of course, our low margin as well. So I think the reason why we do want to show this is because we have been showing before, and we don't want to misguide because we do see NIM dropping in the last quarter, which would mean that the whole year, I mean the last quarter and also the coming quarter because interest rates are coming down. So that's why we want to provide an updated NIM. But it doesn't serve as a target. We say we need to protect that NIM because as I said before, interest rate cycle, I mean, we cannot control how how interest rate turn, but we can control and we can invest what we can do to bring in more volume to counter that loss. And more volume also pointing to more volume on non-interest income as well. So that is it. The second question is on the quality of our portfolio. We are quite comfortable The NPR ratio has been staying at about 9%. Our coverage, I think, is quite comfortable as well. We do not see any systemic risk. There are sectors that we watch are much more closer. Doesn't mean that we foresee something very bad coming up. But of course, nobody can look too far beyond. Everything is about, I think Tick Long just talked about it, we always know that there is geopolitical tension, there is a trade situation, doesn't mean that it's entirely gone. And so, but what we can, what we are more comfortable is we feel that the area we are in still offer a lot of resilience in the economic situation. Next year, the global growth may be slower, but if we are in more resilient regions, we hope that through the opportunities we have identified, through the work and investment we have put in, we will be able to continue to grow our franchise and to grow our business.

will be some focus on asset growth will this be you know loans and if so what what what sectors and will it also be on your book your securities book and if so what currencies are these likely to be that's one question the second one is of course great eastern you said that there were higher margin products just wondering what sort of products these were that give higher margins versus what they had, I think, last year. Less, well, powerful last year. And then there's one question which I'll ask Chinyi later. It's about the strategy over your you know regulatory loss allowance reserves you have it but one of your peers doesn't and I don't understand but I don't understand the reason for it because you can't use it right you can't it's not like an overlay which you can draw on if you want to boost your I think I start with asset growth but I won't take long to comment on it

It's both our loan boat because we have onboarded more customers, especially the corporate customers as well. Mortgages we mentioned, we gained a bit more market share. And of course, we want to serve customers across geographies, which we have done quite well. When we onboard big customers, we are able to serve them indeed in different countries. and of course we do have a funding growth which we will put into high quality securities asset that would be quite a bit in US dollars but also in of course in Seng dollars which is our home base currency as well so I pass to Dick Long to talk a bit about the loan growth Asseco is certainly one of top banking franchise and we will continue to focus on that

Power. So we look at it from an industry-led aspect to manage the risk. So we have industry specialists who will look at this valuation closely and navigate the environment. So we expect continued growth in the corporate loan book. On the and to some extent the corporation as well. It relates to real estate in Singapore. So real estate in Singapore, the price is holding up

How confident are you about the U.S. dollar? Because you mentioned that you will raise some of the U.S. dollar, you will increase, you will buy U.S. dollar treasuries based on the asset, you know, the securities. So how confident are you of the U.S. dollar remaining, you know, not being decreased, if I'm

U.S. dollar is still a major reserve currency, so its use is still very prevalent. So although people may talk about the debasement trades, that's largely focused in gold, so which also for another perspective I don't think we should speak on behalf of GE. They have their results session.

But I think it's quite normal that you stay focused in doing your business. Funds in volume and margin, right? But I don't think we can speak on behalf of them. I think Qingyu will take the Vila question.

Okay, Vila, that is Regulatory Loss Allowances Reserve. When you look at our MPA coverage, we do have that as part of the total allowances. How ELA came about was in the past, whereby there is a requirement to meet regulatory allowances reserved at a minimum level from a regulatory sort of requirement Now, we have already met all that, but even the uncertainty in the environment, we decided not to release that, but instead to just keep that. That we can actually release that. We don't do that in terms of the regulatory, meeting the minimum regulatory requirements anymore.

Okay, Rado, this is nice.

The question is on the link Q1 you mentioned about some cost optimizations that the bank was looking at. It's already been up six months on here, so give an update.

I think this is part of it, meaning when we talk about cost discipline, we have, in a way, we have growth volume without need to hire a lot more people. I think that is one thing. Synergy, we also save some money on synergy because, for example, Bank of Singapore, a lot of the support functions is we have one actually one support function to serve both it's a separate legal entity but they're also served by the same support functions GE we discussed a lot more and I think in the future that's another opportunity but very much is also because of technology investments as well that as we said you do things faster so you can generate more you can generate more without investing or putting more money okay looks like everyone is happy

I just want to say something.

As Chi-Chi said at the beginning, this will be my last results, communications with the media. It's been a very fruitful and wonderful six years day in Singapore. with a bank that I actually started with. To me, it's always this great feeling, a bank that I started with and I ended my career with. Retirement is just another phase of life. It doesn't mean that I forget about OCBC and all the wonderful people I have met and worked with. including you guys. So thank you all for the support all these years. You always come up with very good questions and sometimes make me think, make me think, hey, are we missing something? You're interested in something that must be a reason. So help us to improve ourselves along the way as well. So I want to thank you all the while of supporting OCBC Group and supporting me very much. I hope that you will continue to provide the support to take long I'm very sure Tick Long has been with us for more than three and a half years now. So it's part of the leadership team. And I'm very happy we have Tick Long to lead the group going forward. And I'm very sure that he will bring OCBC to the next height. So a lot of things have happened over the last six years. But as again, I have nothing but gratitude and pretty few honor to have been the group CO4 OCBC. So thank you very much.