Oversea-Chinese Banking Corporation

All right. Good morning, everyone. Welcome to OCBC's second quarter, first half, 2026 results briefing. On our panel this morning, we have our Group CEO, Mr Tan Teck Long, and our Group CFO, Ms Goh Chini. To their left and right, I shall start from Jason. Jason Moo, our CEO of Bank of Singapore. Mr Sunny Quek, the head of Global Consumer Financial Services. And then right to the other end, we have Mr Greg Hinston joining us from Great Eastern. the CEO of Great Eastern. And last but not least, we have Mr. Kenneth Lai, our Head of Global Markets. Ginny will start the presentation and thereafter we will have Teck Long sharing with us some of his thoughts before we take Q&A. Ginny, please.

Good morning to all. Welcome and thank you for joining OCBC's first half 2026 results briefing. OCBC delivered a record group net profit of S$2.2 billion for the second quarter of 2026, up 22% year-on-year. This is the first time that our quarterly profit crossed S$2 billion. ROE was 14.4% on an annualised basis. total income grew 18% year-on-year to a new high of $4.17 billion. Net interest income was 1% lower year-on-year amid lower interest rates environment, but this was largely cushioned by our strong growth in average assets. Robust growth in non-interest income more than compensated for the lower NII. Non-interest income grew 51% year on year, driven by broad-based growth across fees, trading and investment income, and insurance income. up 28% for fees, trading and investment income up 85%, and insurance income up 68%. In particular, strong momentum in wealth management drove the increase in fees, while customer flow treasury income was contributed by both wealth and corporate segments. Non-customer flow income was also higher for the quarter, largely from $191 million of investment income from Great Eastern, led by strong equity markets. We continued to maintain cost discipline, with cost-to-income ratio lower at 37.8%. Loans and deposits grew strongly, up 11% and 13% year-on-year respectively. Asset quality remained sound. NPR ratio was stable at 0.9%. Credit cost at annualised 14 basis points. We maintain healthy liquidity, funding and capital positions. Common equity tier one ratio at 14% on fully phase-in basis or 15.7% on transitional basis. For the first half, group net profit rose 13% year on year to a record 4.19 billion. total income grew 11% to $8 billion, underpinned by record non-interest income, which more than compensated for the decline in net interest income. Annualized ROE increased 1.1 percentage points to 13.7%. Moving on to our performance by key business pillars in slide five. We delivered broad-based growth across our banking, wealth management and insurance franchise in the first half of 2026, as can be seen from the positive variances in all three charts on this slide. Higher fees, trading and investment income drove stronger banking net profit, which grew 8% year-on-year. Wealth management income reached a new high of $3.29 billion, up 27% year-on-year, and now comprising 41% of the group's total income. All wealth segments and channels delivered growth. Net New Money inflows were $6 billion for the second quarter, bringing the first-half inflows to $11 billion. Banking AUM grew 13% year-on-year and 2% Q-on-Q to $350 billion. Profit contribution from GE rose 44% to $794 million, underpinned by strong insurance and investment performance. Total weighted new sales and new business embedded value grew 15% and 28% year-on-year respectively, led by strong sales from Singapore across agency as well as banka channels. NBF margin improved to 49.8% from 44.7% a year ago, as GE continued to progress well in shifting to higher margin products. Moving on to our group performance trends, I will start with net interest income on slide 8. Second Q26 NII was $2.26 billion, down 1% year-on-year and up 2% Q1Q, despite a lower SORA environment. As shown in the chart on the bottom left, the Q1Q increase in net interest income was driven by asset growth across both commercial and non-commercial books, which more than compensated for lower loan yields and higher wholesale funding costs. Average assets grew 5% Q-on-Q, driven by loan growth and a 5% or $10 billion increase in average balances of high-quality Treasury assets. Moving to the chart on the bottom right, 2Q and NIM declined six basis points Q on Q to 1.70%, reflecting compression in loan use and higher wholesale funding costs. During the quarter, we increased wholesale funding to support our strong 5% Q-on-Q loan growth and our continued investments in high-quality treasury assets, which are NII accretive. These assets remain an important lever in helping us to sustain net interest income in a declining interest rate environment. Excluding the growth of non-commercial book, the overall decline in name would have been three basis points queue on queue instead of six basis points queue on queue. Looking ahead, we expect NCA growth in second half to be significantly lower compared to first half as we continue to balance our NCA growth against commercial lending opportunities and capital deployment. We expect NIM to stabilize in second half on expectations of gradual strengthening of SORA towards year-end. NRI sensitivity based on one basis point increase in rates across the whole book was around 6 million on an annualized basis. Moving on to non-interest income. Our non-interest income reached new highs for both the second quarter and the first half. For the first half, non-interest income rose 36% year-on-year to $3.51 billion, lifted by strong double-digit growth across fees, trading and investment, and insurance income. non-interest income now accounts for 44% of our total income. For the second quarter, non-interest income rose 51% year-on-year and 19% Q-on-Q, driven by higher wealth management fees, trading and investment income. I will cover more details of our fees, trading and investment income in the next two slides. Our second Q fees crossed $700 million for the first time, lifting our first-half fee income to a record $1.41 billion. Growth was broad-based, led by wealth management alongside loans and trade related, as well as investment banking fees. In the first half, wealth management fees grew 39% year on year, supported by a larger AUM base and increased customer activity. Wealth management fees accounted for more than 60% of our total fee income. Invested AUM improved queue on queue to 62%. growth was broad-based across all wealth product channels, including bank assurance, private banking, treasury products, unit trusts, structured deposits, as well as brokerage. Our first half trading and investment income rose 46% year on year to $1.13 billion, driven by record customer flow income. First half customer flow income increased 47% year on year, supported by both wealth-related activity and corporate hedging, including continued demand for precious metals, foreign exchange and structured products. Second Q customer flow income was up 60% year on year across all wealth and corporate segments. Non-customer flow income also increased significantly, mainly from GE's investment income following the recovery in equity markets post our first Q26 results. Moving on to operating expenses. We continue to maintain cost discipline while investing strategically to support business growth and our next frontier strategy. First half operating expenses were $3.08 billion, up 10% year-on-year, mainly due to higher performance-related remuneration and incentives, and continued investment in technology to support business growth. First half, cost-to-income ratio improved year-on-year to 38.5%. Second Q, cost-income ratio also improved year-on-year and Q-on-Q to 37.8%. Customer loans grew 5% Q-on-Q. or $17 billion to $364 billion. Our year-on-year loans were up 11% or $29 billion on constant currency basis. Loan growth was broad-based across corporate and consumer loans. Year-on-year, our corporate loan growth was led by the TMT and digital infrastructure, energy, power and utilities, and transport sectors. By geography, growth was driven by Singapore and Malaysia, as well as our international markets, including the UK, US and Australia. We continue to see strong momentum in the areas of our strategic focus, including Singapore residential mortgages, wealth financing, TMT and digital infrastructure, as well as sustainable financing. Our sustainable financing loans rose 12% year-on-year to $60 billion, accounting for 16% of total group loans. Moving on to portfolio quality. Overall, our loan portfolio quality remains sound. NPL ratio was 0.9%, unchanged since June 2024. Second Q MPAs were $3.13 billion, relatively unchanged Q-on-Q. During the quarter, new corporate MPA formation mainly arose from the downgrade of two Greater China corporate real estate accounts that were previously under special mention and were proactively managed. New MPA formation was partly compensated by net recall risk, which were mostly from Greater China CRE upgrades as well as write-offs. Total allowances for the first half increased 14% to $372 million. Total credit costs were unchanged year-on-year at 18 basis points on an annualised basis. For the second quarter, total allowances were $156 million, down 28% Q1Q and up 36% YoY. Total credit costs were at 14 basis points on an annualised basis. Our second Q allowances for impaired assets were largely from the two accounts I mentioned earlier. Non-impaired allowances included ECL from changes in credit risk rates as well as management overlays for macroeconomic uncertainties in Indonesia. These are partly offset by transfers to allowances for impact assets relating to the two accounts I mentioned earlier. Our total MPA coverage ratio was unchanged queue-on-queue at 163% and was 7 percentage points higher compared to a year ago. performing loans coverage ratio was lower Q-on-Q at 0.8%, mainly due to our enlarged loan base. Our coverage levels positioned us well to navigate uncertainties. Moving on to deposits. Customer deposits grew 13% year on year to $459 billion, driven by 12% growth in CASA deposits from both wholesale and consumer segments. Against last quarter, deposits were up 3% and group loans to deposit ratio was higher at 78.4%. Our diversified deposit base supports balance sheet resilience and flexibility in supporting loan growth. Our funding base remains diversified with close to 80% from customer deposits. All liquidity and funding ratios remain well above regulatory requirements. Moving on to capital. Transitional CET1 was 15.7% and fully phased-in CET1 was 14.0%. The Q-on-Q decline in CET1 ratio reflected the payment of our full-year 25 final and special dividends as well as growth in RWA, which offset profit accretion. Our target operating level of 14% for Group CET1 capital adequacy ratio on a fully phase-in basis remains unchanged. Our board declared an interim dividend of $0.47, up $0.06 or 15% year-on-year. This is in line with our target 50% ordinary dividend payout ratio. We remain committed to complete the remaining $2.5 billion capital return plan by FY26. With this, I end my presentation. Thank you very much for your attention. I will now hand the floor over to Teck Long. Teck Long, please.

Thank you, Chin Yee. A very good morning to all of you, and thank you for joining us this morning. As I listened to Chin Yee's presentation, I realised that our profit and growth is quite easy to remember. We made $2.2 billion of profit this quarter, Q2 and at a 22% growth rate. Overall, we have delivered a very strong set of financials with income and profit at record high. We saw broad-based growth across all business lines as our next frontier strategy continued to gain momentum and deliver results. Some key highlights. Year-to-date loan growth was strong at 7%. Under our whole wealth strategy, our wealth business continues to gain momentum, achieving 39% year-on-year increase in wealth management fee for first half 26. For trading income, we differentiate customer flow trading income and non-customer flow trading income. For customer flow, we did very well, with income increased 47% year-on-year, underpinned by both wealth and corporate segments. Trading income not related to customer flow also increased by more than $200 million during the quarter. This is largely attributed to recovery in investment held by Great Eastern, in line with the rebound of the equity markets last quarter. Asset quality remained resilient with stable NPL ratio. ROE improved to 13.7% despite need compression. We are declaring interim dividends of $0.47 up $0.06 in line with our 50% payout dividend policy. Next. Looking ahead, a lot will depend on how the energy crises triggered by the US-Iran war pan out. We continue to see K-shaped economic growth across major economies – US, China, Indonesia, and to some extent, Singapore. Our pipeline for loans remains robust, anchored on growth industries, but probably will not grow at the same rate as Q2'26, simply because Q2'26 was really outstanding in terms of loan growth. Equity markets continue to be volatile. We saw a slight moderation of customer investment activity in July, given the cautious market sentiment. Notwithstanding this, we are pleased that our customer acquisition remains healthy and we still see good flows. Long-term demand for wealth solutions continues to be strong. Management Guidance Given the strong first-half loan growth, we are raising our full-year loan growth guidance to the high single-digit, low double-digit range. Full-year income is expected to grow year-on-year, with a slight decline in net interest income. Cost-to-income ratio is guided at low 40% range. Credit costs remain benign at 18 basis points for the first half of 2016. Full-year is likely to be at the lower end of our earlier guidance of 20 to 25 basis points. Our capital position remains strong, and we will complete the remaining of our $2.5 billion capital return plan by FY26. All in all, we had a very busy second quarter. I thought I would take a moment to do a very quick recap. Highlights in the second quarter, we announced acquisition of HSBC Indonesia's wealth business, we launched OCBC while Avatar Banking, which is the first AI native app in Southeast Asia. We minted GoX Point on the back of LGI Fiscal Gold Fund. We launched GenAI-powered skills training for our wealth advisors. And of course, we recently announced Helios, but that's in July. And my personal favorite is this. Okay, so I shall hand it back to Chin Chin.