United Overseas Bank Ord

Good morning everyone and thank you for coming in a little earlier than usual today. Welcome to our second quarter 2025 results media briefing. Today we have with us our Deputy Chairman and Group CEO Mr. Wee Cheong and our Group CFO Mr. Leong Yong Chee. As usual, Mr. Wee will begin by giving a broad overview of how our franchise has done and the operating landscape we are in. And then Mr. Leong will then go into more details on the financials and business performances. After both presentations, we will take questions from the media. I would now like to invite the CEO to get us going, Mr Wee. Thank you.

Good morning. Thank you for joining us today. The microenvironment remains fluid with geopolitical tensions and shift in global trade in a multi-polar world. Amid uncertainties, regional economies are holding firm. ASEAN, while not immune, shows resilient growth. ASEAN fundamentals remain strong with competitive cost structure, improving infrastructures, and deepening trade linkages. This positions the region well to adapt and thrive in a complex global landscape. Amid global uncertainties, our core business and financial performance held steady.

Operating profit for the first half year rose 3% from the same period last year, driven by strong fee growth.

After taking a conservative approach to increase our reserve, net profit came in at 2.8 billion, down 3% year-on-year. Net interest income was flat as loan growth offset the impact of declining interest rates. Margin compressed in line with the external environment, but we continue to proactively optimize our cost of funds and rebalance our portfolio. Fee income shows strong momentum, up 11%. led by loan and wealth fees and robust treasury income supported by healthy client flows. This performance reflects the strength of our diversified business model. We continue to pace our costs, keeping it flat year on year. We remain vigilant on asset quality. Our overall loan portfolio remains sound, with NPL steady at 1.6%. Total credit costs were higher at 34 basis points, including the pre-emptive general allowance set aside to ensure healthy provision bubbles. Our balance sheet remains strong with CET1 ratio at 15.3% and robust liquidity ratios. The Board has recommended an interim dividend of $0.85 per share, representing a payout ratio of 50%. We also paid the second tranche of the 50 cents special dividend to mark UOB's 90th anniversary. For the second half of 2025, while the external environment remains challenging, we see pockets of opportunity. Government across the region are also stepping up, support the cushioned businesses through the transition. This includes recently announced 100,000 SME grants in Singapore and fiscal and sector-specific measures in other countries to keep growth on track. As a long-term player, we remain committed to our clients, including SMEs, standing by them through economic cycles, supporting them with working capital cross-border financing and digital tools to help them scale efficiently. Our strategy is clear and consistent, focused on ASEAN long-term potential. The region offers relative political stability, resilient fiscal positions and growing economies. Its competitiveness as an FDI destination is supported by well-connected infrastructure and a young, outwardly mobile population. In a multipolar world order, opportunities arise with regional integration and trade diversification. At the same time, megatrends including digital and green economies will continue to drive investment and generate growth. We are well positioned with our extensive ASEAN footprint, deep connectivity to China and global market, and a diversified client base. On the wholesale front, we are seeing strong traction across multiple revenue drivers. Rising CASA balances, growing regional trade flows and supply chain finance, robust trade and loan fees, strong treasury income from active client flows. We are intensifying our focus on emerging opportunities in digital and green economies. and Infrastructure Investment, aligned with ASEAN integration agenda. Our retail franchise has gained significant scale following the city acquisition, where our customer base has grown to more than 8.4 million. We are well positioned to ride on the region rising affluence and Singapore position as a leading global wealth center. We see robust growth in card billings underpinned by Penn Regional Partnerships, our latest being the principal partner for the Michelin Guide Hotel, reinforcing our leadership in lifestyle privilege across dining, entertainment and travel. Our city integration is complete across all four ASEAN markets with Vietnam customers successfully onboarded last month. The focus now is on deepening customer engagement to unlock further growth. Since the Citi acquisition, our ASEAN 4 franchise has delivered robust growth in customers. CASA, Well AUM, Prime Secure Receivable and Card Billing. The position for sustainable growth. We have been reshaping our business franchise. We see good progress in moving towards a more diversified and resilient revenue mix, including connectivity, fee-based, recurring income, and asset-like businesses. We have been investing to strengthen our capabilities and digital platform that will support our ambitions to scale. Our strong balance sheet enables us to address risks and to seize the right opportunity to grow. This transformation takes time and we are confident that it will reinforce our foundation for long-term growth. We have previously suspended guidance due to heightened volatility and limited visibility. We are now reinstating our this year guidance. Full year name of 1.85 to 1.9%, factoring in three expected net rate cuts, second half of 2015. Low single-digit loan growth, focusing on quality assets. High single-digit fee growth, driven by card, wealth, trade, and investment banks. Flat operating costs. Net credit costs of 25 to 30 basis points, and we expect further top-up to boost General Provision Buffer preemptively. As usual, we remain committed to our $3 billion Capital Distribution Plan. Now, I will hand over to my CFO, Yongqi, to share more. Thank you.

Thank you, Yucheng. Good morning, everyone. If you allow me, I'll take you through the financials update. This quarter, we reported a net profit of $1.3 billion. is 10% lower quarter-on-quarter and 6% lower year-on-year. The net interest margin narrowed by 9 basis points for the quarter to 1.91%. This is driven by a sharp reduction in benchmark rates. In terms of the net fee income, it was $636 million, a decrease from last quarter's high, but this is our second highest quarter. Investment banking activities returned to normalised levels while wealth fees were subdued as we took a more cautious approach amid macro uncertainties. In terms of treasury and investment income, it has softened, reflecting lower trading and liquidity management activities, but customer-related treasury income sustained momentum. On asset quality, NPL ratio was stable at 1.6%. Total credit costs on loans were at 32 basis points. We continue to maintain prudent preemptive provision reserves. Our capital and funding positions remain robust with CET ratio at 15.3%, with post-dividend payout included, and NSFR at 118%.

Now, let me share an update on the performance for the first half.

With this set of results, we delivered a positive operating profit rising 3% year-on-year. This was largely driven by double-digit growth in fee income across wealth management, investment banking, and credit cards. The performance underscores the continued strength and diversification of our franchise. Cost-to-income ratio improved to 43.5%. This reflects our continued focus on cost discipline across the bank. As we set aside pre-emptive allowances amid the macroeconomic uncertainties, our net profit after tax moderated 3% year-on-year to $2.8 billion. This translates to a return on equity of 11.7%. In the next section, we have included some new slides focused on our business segment performance. These slides are designed to provide deeper insights into our income drivers and strategic levers that are shaping future growth. These efforts are beginning to bear fruit. Moving forward, our focus continues to unlock value and monetize these investments for sustainable long-term growth. We'll start with Group retail delivered a strong performance for the first half of 2025. It reports a $1.1 billion year-on-year, that's an 11% increase. This was the result of our focus on CASA, wealth and cards, which counted income pressures from lower rates from the market, as well as competition. If you look at the deposits, our retail deposits have exceeded $200 billion for the first time, driven by robust CASA growth and anchored by strong customer value propositions. Our wealth management income recorded double-digit growth, 15%. This was boosted by effective conversion of deposits into invested AUM. While AUM continued to build new momentum, net new money coming into the bank this quarter was about $3 billion. Card billings grew year-on-year, 12%, supported by our ASEAN franchise, partnerships and enhanced rewards offerings to our customers. In terms of the customer base, we have exceeded 8.4 million customers as at the end of June 2025. Again, a testament to the differentiated lifestyle offerings and consistent value delivery to our customers. Asset quality for this segment remains solid with credit costs nearly halved to 22 basis points The operating friction in Thailand we experienced last year as a result of the integration has subsided, further stabilising our retail portfolio quality. I'll next turn you to the wholesale banking business. Our wholesale banking business delivered a profit before tax of $2.2 billion for the first half. This was down about 12% year-on-year. but reflected the impact of lower benchmark rates, intense competition for quality assets, as well as a rise in allowance from a low base. Transaction banking contribution remains a cornerstone of performance. It constitutes about 50% of wholesale banking income. This was supported by an enlarged CASA base and 12% year-on-year growth in our trade loans. This underscores a deeper client engagement because of our integrated cash, trade and supply chain platforms across multiple markets. In terms of investment banking, they achieved a record fee in the first half of 2025. demonstrating strong execution and client confidence in our advisory capabilities. Our diversified growth strategy continues to gain traction, with stable income contribution from our non-real estate sectors at 69% and cross-border income at 26%. Our regional connectivity and franchise development is growing from strength to strength. Expenses rose marginally by about 5%. This is through investments to enhance our product capabilities and deepen market presence across ASEAN. Allowance increased to $167 million, primarily due to a collateral markdown for a few non-systemic borrowers, while overall portfolio quality remained resilient. Global markets sustained strong momentum in our customer treasury income, supported by continued client demand for hedging and investment products. Non-customer treasury income also improved from lower cost of funds, capturing market opportunities across bonds, equities, FX and rates amid financial market volatility. Net interest income eased by about 3% quarter-on-quarter to $2.3 billion as asset growth helped to cushion the impact of lower net interest margin. Net interest margin declined 9 basis points to 1.91% this quarter. Again, I mentioned earlier that this was primarily driven by sharp reductions in benchmark interest rates. To give a breakdown of how the impact came from different areas, the SORA, which is the Singapore Overnight Rate, fell by 50 basis points, reflecting abundant domestic liquidity, partly driven by safe haven inflows, while the Hong Kong Interbank Offered Rate, or HIBOR, was at its lowest since 2022. These movements affected our asset pricing, contributing about 23 basis points declined to the NIM this quarter. Although there was pressure on asset yields, this was mitigated by our ongoing proactive efforts in managing our own cost of funds, and this includes repricing of fixed deposit and savings account rates, and also a mix of our asset liability. In terms of fee income, gross fee income reached $829 million this quarter, marking the second highest quarter on record. Again, this underscores the strength and diversification of our retail and wholesale banking franchise. Loan-related and credit card fees remain resilient. Investment banking fees return to normalised levels after an extraordinary first quarter. Wealth management fees were impacted as we took a more cautious, preservation-focused approach, supporting our customers amid uncertainties in the market. Expenses declined 2% quarter-on-quarter to $1.5 billion. This reflects the group's disciplined cost management initiatives. Cost-to-income ratio rose to 44.3% due to the lower income discount. We will continue to exercise this in how we manage costs and spends, but continue our targeted investments in talent and technology to support our franchise growth and regulatory requirements. Turning now to asset quality. New NPA formation edged up this quarter. And this stemmed from one large corporate account in the US. This was within expectations And with higher write-offs and recoveries during the quarter, our NPL ratio remained at 1.6%. The higher specific allowance this quarter resulted from one new US NPL account. As mentioned, this was within our expectation and preemptive allowance had already been set aside earlier. And net credit costs were at 32 basis points this quarter. While preemptive general allowance would usually be written back and reclassified to specific allowance upon an account downgrading to NPL, we continued the same level of general provisions this quarter as a prudent measure to strengthen the coverage in view of near-term macro uncertainties. As of June 2025, our total allowance was $4.8 billion. of which $2.8 billion relates to allowance for non-impaired assets. Our general allowance coverage was maintained at 0.8% while NPA coverage remained adequate at 88% or 209% after taking collateral into account. Gross Loans grew a healthy 4% year-on-year and 1% quarter-on-quarter. This was mainly from corporate and mortgages in Singapore. Our liquidity and funding positions remain sound with LCR at 141% and NSFR at 118%, both well above the minimum regulatory requirements. CASA deposits continue to grow steadily, leading to an improved CASA total deposit mix of 56.5%. Capital position stayed robust, CET ratio at 15.3%, even after accounting for the FY2024 final dividend and special dividends as part of the capital distribution strategy we announced earlier. In appreciation of our shareholder support, the Board has declared an interim dividend of $0.85 per ordinary share, reflecting our commitment to a consistent dividend payout ratio of 50%. We are also pleased to report that as at the end of June 2025, about 13% of the $2 billion share buyback programme that we had announced has been completed. We are on track to fulfill our commitment on the capital distribution to shareholders by 2027. With that, I conclude my presentation. Thank you.

Thank you, Yongqi. We'll now begin the Q&A segment. For those dialing in on Teams, please use the raise hand function if you'd like to ask a question. Maybe we'll start from those in the group. Any questions?

Yes, please. Congratulations on the numbers. And please, could you talk a little bit about the tariffs that have been slapped on many countries in Southeast Asia in the past few weeks? And second question to Yongxi, who mentioned safe haven flows. Could you give more colors on this and whether such flows were more extraordinary than previously?

Based on our detailed analysis of our portfolio, I think the first order impact is manageable.

The what?

First order impact. First order impact. People directly affected by the tariff. Thank you. I would say 1.3% of our total loans to exporter with 25% of sales exported to U.S., So I think it's quite minimum and trade loans make up of about 10% So the first order impact I think is generally quite manageable We are a little bit more concerned about the second order impact Both affect consumer spending People stop investment, consumers stop spending So that is something that is still quite fluid. We are monitoring closely. But I would say generally, we are here to support our customers. I think it's important, especially. And you can see the government also setting up committee to look at proactively how to manage this. And we are on top of it. If any customer that require any assistance, any help, We are here, especially in volatile environment. We're always here to help our customer to restructure.

Thank you. On the second question, the safe haven flows question, I think I mentioned earlier that our net new money for the quarter was $3 billion. So we are still seeing flows in terms of wealth and deposit flows into our franchise. I think this reflects the fact that Singapore is very well positioned against all the uncertainties happening around the world.

I see. The flows of $3 billion Singapore dollars in the second quarter.

Yes.

Did it help with the Singapore dollar strength as well?

I think the Singapore dollar FX rate has other factors affecting it, given how open we are as an economy.

I see. Okay. You see, as you asked the question, given the tariff situation, we see it's very volatile. The AOM debt would say 60%. stay as a fixed deposit. Partly because we are conservative, we are more cautious. I don't want my customer to lose money. So as a result, rather sacrifice on some of the wealthy. I would rather let them stay conservative. There's always a better opportunity out there. Because These are all businesses. They are already taking the front-end risk of declining the business. The last thing I want is whatever capital they have put with us. They also encounter the risk. So we are quite conservative in that sense.

Mr Wee, just to clarify, you said about 60% stay as deposits. You refer to 60% of the net new money?

Yeah.

So net 60% of...

Overall, 60% is in deposits, 40% in vested AUM. This increase in liquidity does help to support the SING dollar strength, but it actually lowers SORA rates as a result.

Good for mortgage.

Good if you are a mortgage broker. We have a question from Zhao Bao.

Hi, good morning. Thank you for the sharing and congratulations on the numbers. So actually, the book already asked my first question, but could you help me clarify, like many ASEAN countries will face tariffs, and you also mentioned that you are concerned about the second order's impact from the tariffs. So could you help me clarify, is that part of the reasons for trimming your loan growth rate? forecast this year?

We are financial intermediary, right? It's not whether I want to trim, I will trim. At the end of the day, it's also customer demand. If customers don't feel comfortable given the outlook of the market, they will slow down. So it's the end result of demand and supply. And we continue to chase after the quality loan to start off with.

That affects both corporate as well as individual customer outlook. So if these create worries for whether businesses or individuals, you see some of these actually tapering off in terms of demand. And then from our perspective, the competition for quality assets become more intense as us and our competitors chase after growth from the quality portfolios.

My second question is about the competition from Europe. Here Bank, we have been seeing more and more severe competition, especially in credit card sector. I'm just wondering how will you manage to compete with us? And what is the main strategy?

Credit card.

Yeah, credit.

Well, credit card, I think we do have some benefits because during the COVID, we or buy over Citibank before. That will give us a strong customer base. And if you have a strong customer base, the ability for you to do things in a more competitive way, to deal with your partners, to deal with your merchant, because you have the sale, you can bargain better, and you also can offer better quality product. This is what exactly we are doing. We have about 8.4, 8.5 million customer base across the whole ASEAN region. We will continue to deepen our lifestyle products. So hopefully people will start to see a UB is a card that you must have for you to enjoy the lifestyle, for you to enjoy the Taylor Swift, for you to enjoy Different kind of, this is where, because end of the day, consumer business is .

We are trying to take advantage.

We are the big elephant in the room now in ASEAN, okay? So we should be able to capitalize on that. Hopefully that take time. And also given a customer base, we are cross-selling a lot of product, okay? Not only just credit card, the well product, make them open account, improve our CASA, boost our cost of cloud. So these are multi-pronged approach that hopefully, it's not every quarter you can see. We are moving towards that direction. Obviously, the execution is important and we like to see more of that because otherwise, what's the point of having quite a big customer base if you are not taking advantage of that?

That scale of customer base allows us to differentiate some of our offerings. I think your question earlier mentioned about what differentiation. Our lifestyle rewards is really geared towards some of the customer preferences that we see across our base. And that's primarily around travel, entertainment and dining here. So our rewards, if you are a card member of us, you would see that we've been very focused in terms of value propositions to clients along those three lines.

Thank you so much. And the savings account, you have lowered the interest rate account. When can we see the effects from it? Maybe the third quarter?

We announced it in May, so it will flow through and take some time. Yes, we should see it reflect through the financials in the third quarter.

In the third quarter? Yeah. Thank you.

A question from the Business Times. Hello, morning Sarah. I have a few questions. First on the range data guidance, right? I think during Q4, the projection was high single-digit loan growth, double-digit fee growth. Now it's sort of moderated to low single-digit loan growth, high single-digit fee growth. I think NEEM also went from about 2% to 1%. Yeah. Give a bit more colour on this, this lower titan.

I think generally it's a reflection of... If you look at most of the ASEAN regions, despite they are strong, they have a foreign reserve, but then the growth is also quite limited given the territory so we we cannot grow for the sake of growing and right and the loan I mean the GDP growth of the country is not as high so we we this is why the first quarter last year we did not give any a little bit more certain of course it's not it's not magic sign okay we we think Based on our own calculation, we think the loan growth will be quite subdued.

If you look at what has changed in 2024 to now, in each of the countries that we operate in, the GDP growth forecasts have all been turned. In every market we've operated in. The benchmark interest rates for these countries have also been reduced. And there is also the FX movements that Chang Yapon was referring to earlier. The environment has shifted significantly. But for some of these metrics, if you look at the underlying numbers that we are still projecting, it actually shows the strength of the franchise, that the fact that the loan growth, we are still able to grow. The fee income, we are still able to grow. But the income numbers are affected by asset pricing and market volatility. So I think look at the underlying franchise, the strategy that I've said we would execute is paying off in terms of how we are shaping our portfolios.

If you look at the region, it is good. But if you translate it to SING dollars, SING dollars is high. And we are reporting in SING. But if you take Malaysia and all these countries, they are good.

Question on housing loans, right? What's the growth outlook for the whole of the world for the rest of 2025?

I think we projected about single-digit. I know the market seems to be quite hot. But end of the day, I think we are generally to be selective. This is a very uncertain world.

And I think it's sort of thing Customer shift more towards floating rate mortgages and that interest rates have to go down further. I don't know if you have that number on hand now. No, we don't have it on hand at the moment.

But there was good loan momentum. I think we look at our second quarter numbers and this is corporate and retail. Our loan growth was up 4% year-on-year. and 1% quarter on quarter. Even on a constant current basis, you are seeing somewhat similar numbers. So the underlying momentum in loans is intact. I mentioned that loan growth primarily was driven by two portions, corporate and mortgages in Singapore.

That's underpinning some of the loan growth. So the final question for me, you sort of expect hiring to maintain the flat for H2, right? Staff costs went up about 1.3% year-on-year for H1. Do you expect hiring to remain for the rest of the year? Given some of the uncertainties you mentioned. Recruitment. I guess you might hire for natural attrition, but overall headcount, do you expect to go up?

I actually saw 1% drop in the headcount.

1% increase in staff costs. 1% drop. But not headcount. Headcount, yes. Why? The total number for each two years back to I think we're keeping very prudent management in terms of overall expenses across the bank. And I think in this sort of environment, there are certain things that we need to continue to do. Our regulatory compliance requirements amidst all these scams and KYC, AML matters. Making sure IT is not obsolete. So obsolescence replacements are something we need to continue to invest. and technology to enhance productivity efficiency. Those are areas we need to continue to invest. So overall, I think our position on expenses is very prudent. You see that we've actually reduced it over the quarter.

You see, all these expenses is very strategic in Asia. Of course, we can try to make ourselves more efficient. But before you get yourself more efficient, you need some basic tools. Because You look at our ASEAN coverage, we are the most comprehensive in terms of the number of countries we are in. So can you imagine the investment that we have to do? We have to replicate all these countries. So as a result, I think if the income drop, our expenses will be a little high. I think that is an investment that we have to put in. Five, ten years from now, then you start to see this is an investment worth You cannot, based on quarterly, quarterly, very difficult.

So in terms of people strategy, I think we adopt a very calibrated approach in terms of managing headcount. In good times, you don't want to overhire. But in bad times, you also want to protect the employment of our people as well. And this is our philosophy. This is how we've been managing our workforce.

Yes, now is the bad time or the good time.

Now is uncertain time. Uncertainty. I think I would say, well, I think if you read my speech, I think the underlying is still quite strong. The volatility is something that we need to If you have a tsunami coming, you know, you have to be strong, otherwise you'll get wiped out, right? So the underlying, you look at Singapore, Malaysia, Thailand, they're generally okay. Even in Thailand, they are Thai, okay? They are facing some headwind, right? But generally, you can see the tourism is not coming, but end of the day, you ask yourself, right? You still, you have 100 million population, talented people, They are always strong in hospitality. One day they will recover.

Now we even heard about a Republican nominee for 2028 presidential election. How long this uncertainty is going to go on? And I mean, like with your strong capital place, are you still seeing any M&A on the cards for UOB?

For what? For M&A? M&A.

You just finished the integration.

Yeah, yeah. Well, I think he is taking care of the M&A. We're always on the lookout, right? We are always on a good opportunity. We look at the Citibank acquisition. We are in a position to acquire, especially outside of Singapore, for us to attract or to improve, to increase our customer base is not easy.

because we are competing with all the big domestic banks in Asia.

So that to me is a good opportunity for us to have a good headline. If there are anything coming along, why not? This is something we're always on the lookout.

Would it be more on the retail side or on corporate side?

I would address it this way. Our franchise in terms of the footprint that we want to be We have the locations, we have the footprint that we want. And we don't need additional licenses in each of these markets. And if we look at how many opportunities, it's opportunities where it fills scale or capabilities.

So more assets rather than branches.

Rather than branches, adding more ATMs, that wouldn't be a priority in today's digitalized environment. However, if you look at our philosophy and approach to M&A, we have been very, very prudent and disciplined because the integration of acquisitions is not easy. Even the city integration took us three years. And it takes away management bandwidth. So we take M&A very seriously and it's not an exercise we take lightly. The last time we did a major M&A acquisition before Citi was almost 15 years ago.

So this is a philosophy that... And also I echo what Yongqi said. Even you look at the integration, the deal from Citibank is welcome. We could have just done it. We make the effort of every country. Why? It's time consuming. The synergy may not be so immediate, but we are doing it in a very calculated approach because we don't want to lose the customer base. We want each country to learn and then we replicate some of the learning to another country. You spend that kind of money, the last thing you want is to make your customer angry and walk out. It's time-consuming. It may not translate into cheaper costs to us. But in the long run, I think that is a good deal. You look at our logo, right by you. You've got to stay on that. Otherwise, everything is right by you, but you do it in time.

I think the results speak. So from that period of time, which is around 2021 to now, I think CEO mentioned in his speech earlier on, whether in terms of actual number of customers, whether it's in terms of AUM, card billings, unsecured lending, all of these have seen compound annual growth for us. That franchise has come together very nicely.

We have a few more minutes. Any last questions?

I have a few, but I may have to send them in later. Okay, so I have a few. The first one is, the large corporate account in the US, can you tell us which sector it is? Then my second question is, what is your exit name? And the third one, I think you mentioned intensifying initiatives in digital and green trends. Can you share more colours?

The first two questions, the US account was real estate related. The exit NIM for the quarter was 1.84. And then the third question was on digital and green issues.

So this is something that I think we invest heavily on digital tomorrow. I think that's important.

Take full advantage of the partnership.

Take full advantage of Accenture being specialized in AI to see how they can help us speak to market. to improve our customer service. End of the day, no point, I always say, no point to have a big customer base and your customer service. And we are still a journey to be. We are not happy with the customer service. We will continue to improve that. If there is any mistake that we make, I apologize to our customer, but I think we are genuinely want to help our customer to improve in a digital way. in a more systematic way so that bidders are more predictable.

Based on the exit, so are you expecting a firmer environment because your forecast is for 1.85 to 1.9? That's one question. And then there was on the non-interest income line, there was an 11% Q&Q decline. I'm just wondering what that was. And also for the Treasury, I mean, was it part of the interest that you named your... Interest Rate Management, was that part of it? Is there an issue there? And then the Treasury Sales, whether it's bank or customer, that's a second. So those are the little questions there. And then there's a 15. Okay, your end, your Basel, your set one at final is 15.1%. Does that also include the dividend payout and capital payout?

Yes.

Okay, that's it.

So that question dealt with. So let me go back to the question. So on NIM, our guidance was given at 1.85 to 1.9. There are, and your question around exit was at 1.84. How do you get back to that 1.85? I think there are three major assumptions on why we think it's going to get there. First, SORA fell quite significantly in the second quarter. It fell 50 basis points, even though the rates in the US actually have moved. I think SORA maybe have... Our view is that the three-month SORA will probably end the year at around 1.7%. That's one of the major assumptions underpinning that.

Isn't that lower than now? Is that right?

1.7. We think there's probably a little bit more room because we are expecting three more rate cuts from the Fed through the course of this end of the year. There will still be some impact, but probably magnitude of the transmission will be more moderated. The second impact that I think your colleague mentioned earlier on in terms of one account savings rate. While we've announced it in May, the impact of some of our initiatives in terms of reducing funding costs and so on, you will see in the second half of this year. Now the third is the Although the Hong Kong dollar in terms of our book exposure is small, it's only about 6%, but there is still an impact because of the significant shift in the Hong Kong rate. We do expect that the present circle 1% in terms of the one month high ball rate should recover and stabilize around a 1.6% by the end of the year. The highball rate actually fell almost 200 basis points, just for perspective. So if some of these assumptions pan out, I think that expectation in terms of where we get back to in terms of the NIM,

What about the wholesale funding?

Were you trying to let go of some of the wholesale funding and move it? The interbank and securities margins actually stayed constant. The liquidity in the system is actually quite flush. So the movement was entirely, mostly driven by asset repricing because of the rates movement.

Any final question?

Sorry, there was a second question. The second question around the non-interest system component. So if you recall one of my slides I mentioned earlier on, actually we have the second highest quarter on record. In 2Q? In 2Q. 2Q is our second highest record. Our second highest quarter on record. And the only reason it dropped was because the first quarter was our highest on record. And that was predicated upon a very chunky quarter for investment banking, where they saw extraordinary flows in investment banking fees generated. So I would say it normalized in the second quarter.

It's not a treasury income. I mean, not a treasury income.

So I think it's quite sustainable.

Okay. Okay. Okay. Can I just ask one last question? Because I think in Mr. Wee's speech, which I didn't quite expect, you said there will be, you are looking at sort of asset like business, I mean, more asset like High ROE business. I think DBS also talked about this before. But what sort of, what?

It's a sector that we are looking at. You look at our trade asset, our cash management, it's a lot like, it has to do about 40-50% of the wholesale.

Of wholesale, yes, but of the total loan, portfolio trade loan is about 10%. So you can see...

Turnover That will improve our In terms of Risk management It's slow business So you can't see it on the quarterly But it's accumulated So this is why our people Are spending a lot of time Talking about supply chains Talking about connectivity These are hard work But once you get them Connected to you The business is flowing. Because you look at the number.

Gula, you see the green shoots already. That trade income today is growing at about 12% growth rate. But you look at the customer treasury income that we are able to generate from that. That's actually grown very strongly. If you think about it, trade, if you have trade loans and trade assets with customers, you naturally would lead to helping them with the hedging. Oh, oh, oh. FX, the raise hedging. And with that, naturally, if you're proactive about it, lead to operating CASA accounts. So if you look at our CASA ratio today for Wholesale Bank, that's at 57%. Casa Ratio is at 57%. The same mentality we adopt in our retail business. Our retail Casa Ratio is 56%. So these are very important elements in terms of looking at how to grow stickiness of the franchise and shape it so that you have a better proposition.

So I think this is important. So I hope you as a reporter don't just analyze on a quarterly. Very easy for me to achieve better quarter. I just built my loan base. Easy. This is the one that is shifting the balance. We are a big tanker. One, two years, two, three years from now, you can start to see. Otherwise, in the past, it's all property-based. So we are trying to manage our reason To continue to invest in our technology platform cash management to improve our Casa to improve our cost of one So hopefully the margin also on supply change My story It will be a lot more visible to everyone. At the moment, it's sort of a decimal time. But that is a new job.

You said you spend about 800 million Singapore dollars a year on technology alone? Yeah. Okay, thank you. Yeah, and Chief Kassar's good.