United Overseas Bank Ord

Hi, good morning, everyone. Welcome to our full year 2025 results media briefing. Today we have with us our Deputy Chairman, Group CEO, Mr. Wee Cheong, and our Group CFO, Mr. Leong Yong Chee. As usual, Mr. Wee will begin first by giving a broad overview of how our franchise has performed, the operating landscape we are operating in, and then Mr. Leong will then go into more details on the financials and business performances. After both presentations, we'll be taking questions from the media. So I would now like to invite CEO to get us going. Mr. Wee, please. Good morning.

Happy Year of the Horse. Thank you for joining us today. Well, as we enter 2026, the global environment continues to remain very fluid. No political tensions, ongoing shift in supply chains, and evolving trade However, operating conditions in our core markets have remained broadly supportive. Across ASEAN, momentum towards deeper regional integration is building up. We look at trade, capital flows, and cross-border investment continue to expand. reinforcing the region role as a key growth engine. This creates opportunities, well-positioned regional banks like UOB to support clients across Asia. Now, again, this backdrop, we deliver a resilient full-year operating profit of $7.7 billion in 2025, 4% down. Our diversified business model remains of all strength. Net interest margins moderated as rates declined, but strong fee momentum across wholesale and retail businesses helped to offset the impact, lifting our full-year fee income to a record high. On a quarter-on-quarter basis, trends were positive. Net interest income increased 4%. Margin rose to 1.84% as we lowered funding costs. Net free income was up 2% while expenses remained flat. On the asset quality front, following our portfolio review in the third quarter, we proactively strengthened our provision partner. credit trends improved in the fourth quarter and are moving in the right direction, with NPR ratio low at 1.5% and total credit costs at 19 basis points. Our balance sheet remains strong with higher CET1 ratio at 15.1% and robust liquidity ratio. the board has recommended a final dividend of 71 cents per original share, bringing our full-year dividend to 1.56 per share. This represents a payout ratio of around 50%. In determining the final dividend, we excluded the three empty provisions of $615 recognized in the third quarter last year. In addition to our regular dividends, we also return excess capital to shareholders through a special dividend of $0.50 per share paid over two tranches during 2025. We remain committed to our capital return plan announced last year ongoing till 2027. Our diversified income stream helps ensure earnings stay resilient even in uncertain conditions. And we see promising momentum in our ASEAN strategy. We see increasing contribution from our ASEAN 4 markets across both wholesale and retail business. In fact, just for your information, if you add the ASEAN 4 total income is up 5% versus the group total income down 3%. So the ASEAN is actually positively trending upward.

Now let me talk a little bit about the wholesale banking.

It's also delivered a solid growth in trade. Transaction related activities and deposit flow. For trade, I think In 2024, we generated $36 billion. In 2025, 45 billion. Actually, a growth of 26% year-on-year. Global markets also benefited from active client hedging amid market volatility. Customer-related treasury income hit a record high. Retail banking delivered healthy growth across card billings, up 6% year on year. CASA, up 12%. And high net worth AUM, up 6%, as we deepen customer relationship across the region. Our wealth business, our wealth franchise continue to scale. We net new money inflow, lifting AUM too. and the invested AUM mix continues to steadily increase. Our digital wealth momentum, this is dealing with the massive growing market, actually remains very, very strong. We sell more than double year on year. That is actually applied through our Tomorrow apps. Just to tell you the volume, I think for 2021, 2024, we generated $1.57 billion. For last year, we generated $3.84 billion, up by 144%. That is through our digital platform. Now, looking ahead, we expect the region growth to continue to be powered by structural trends, including digitalization, infrastructure, investments, and deepening regional health. We are confident that our enlarged regional scale, stronger platform and capabilities, we are well-placed to grow in tandem with the region. At UOB, our strategy is clear and consistent. We are deepening our strength in connectivity, enhancing our expertise and digital capabilities to support the flow of trade.

Capital and Investment across ASEAN and Greater China and with the rest of the world.

We are also unlocking synergies such as through our One Bank program across wholesale and retail customer base, strengthening our digital wealth platform to enhance our services. With our strong balance sheet, network and franchise, we are well placed to support our customers through cycles and capture emerging opportunities. Our guidance for this year is low single-digit loan growth, full-year NIM of 1.75% to 1.8%, high single-digit fee growth, low single-digit operating costs growth, total credit costs of 25 to 30 basis points. Thank you for continuing to support us. Now I invite my CFO Yong Chi to share more.

Thank you, Yicheng. Good morning, everybody. Let me take you through the financials update. For the full year 2025, our net profit came in at $4.7 billion on the back of operating profit of $7.7 billion. The fee income for us was at a record high. What you see there is the net fee income number. On a gross basis, that number actually came out to $3.5 billion. On net interest margin, I think this is something that comes up quite often in terms of media and analyst questions. Our full year NIM was $1.89 on the back of Continued pressure on benchmark rates. But actually what's interesting is if you look at on the right side, the fourth quarter NIM for us was at 1.84. If you recall, our third quarter NIM was at 1.82. I can discuss more on the NIM in a subsequent slide. On trading and investment income, we have all-time highs for customer treasury income. But the overall trading and investment income for the full year came in slightly below $1.6 billion compared to the year before because last year was exceptionally well. If I go through some of the numbers on this page, maybe specifically for fourth quarter, if you look at the operating profit line, we generated $1.8 billion of operating profit slightly below quarter-on-quarter, but if you look at the net profit line, it's $1.4 billion. Our expenses remain stable at roughly $1.5 billion, and total credit cost for the quarter was 19 basis points. Next, I'll go through some of the segmental breakdown in terms of the financials. If you look at our group retail operations, profit before tax was at $2 billion. This income was largely supported by double digit growth in wealth amidst some of the pressures from lower rates as well as market competition. Our credit cards business continued to achieve new highs. On the bottom right, you see that the gross card billings grew by 6%. On the left side, the corresponding cards income, this is net, is at 1%. But on a gross basis, that figure is actually 8%. So both wealth as well as cards business is demonstrating strong growth. The credit card business for last quarter of what a year effectively was because of our loyalty rewards alignment in Thailand. But that was a one-time cost. So going forward, we expect that to more closely mirror our gross rate. Asset quality for the retail business remains sound. Maybe I'll move to wholesale banking next. On the wholesale bank, Profit before tax decline amidst lower rates and keen competition. Our transaction bank continues to power about 50% of wholesale bank's income. Driven by largely very encouraging trajectory in our CASA business and our trade business. As CEO mentioned earlier on, our trade loans actually grew by 20 over percent in the year. If you look at the bottom of the total gross loans, I think you will see the trade numbers growing from 35 to 45. That's more than a 25% growth year on year. Elsewhere for the wholesale banking business, if you look at our deposit growth as well, at the bottom you see the deposit growth at 7%, but our CASA portion of the deposits grew double digits. leading to overall CASA ratio for the wholesale banking business now at 60%. Retail's CASA is 57%, wholesale at 60%. Overall, the bank's CASA ratio is now at about 58.5%. Next on global markets. Year on year, our global markets business grew 23%. This is again an all-time high for us for our Global Markets Business. It's largely led by customer treasury activities from hedging as well as wealth demand. The non-customer portion of the business was positioned to capitalize on liquidity and trading conditions. So there is some normalization in the fourth quarter, but year on year, you saw a 23% growth in this line of business. Next, I'll go through some of the Specific financial categories. Let's talk about net interest income. Overall net interest income inched down by about 3% on the back of largely interest rate movements. But it's also negated by the fact that our average interest bearing assets grew. So at the bottom, you will see 477 to 495. That's demonstration of the loan assets that we grew over the year. But it was not enough to mitigate the pressures from benchmark rates. Net interest margin, however, for the year, even though it's at 1.89, if you look at the quarter by quarter trends, third quarter net interest margin we reported at 1.82, fourth quarter we reported at 1.84, the red bar is actually showing the pressures and effects of the asset repricing, both because of rates but also team competition. The green bar is the actions that we've actively taken to mitigate some of the funding costs. And we've also done some changes in MIX in order to balance the requirements of having the right NII versus NIM outcomes. On this page, what's interesting to note as well A natural question would be, although that's a reported fourth quarter, where is exit NIM today? As of the end of January, our exit NIM is at 1.82. So you will see that NIMs are sort of bouncing around that level already, giving us some confidence in terms of where NIM and SORA rates are looking like for 2026. Next page. We mentioned earlier on that our fee income is at a record high. This page shows that year on year, our fee income grew 10% and it's consistently across all categories, whether it's in terms of our loan, our wealth, credit cards, as well as others. Expenses, we continue to maintain very disciplined on our cost while prioritizing some of the technology and regulatory investments. Year on year, our overall cost actually fell 2%. But when you look at it from a cost-to-income ratio, it picks up because income actually fell. On performing assets, our MPL ratio remained broadly stable. It dipped slightly to 1.5%. If you look at the bottom of the chart, you will see that our NPA formation has come off from the 800 over million in third quarter. It is now just shy of 600 million. The trend is for the NPAs to continue downwards for us. We did have some spike in the third quarter, but it's now getting better. Next page on the provisions. So again, our third quarter provisions caused a spike in terms of the specific credit costs as well as total credit costs. But for the fourth quarter, this trend has normalized. Specific credit costs is now at 26 and our total credit costs at 19. And if you recall, our guidance previously on total credit costs was a normalized range of 25 to 30.

Next on provision coverage.

With the exceptional provision top-up that we did in the third quarter, we brought our coverage up to 1% and it remains at 1%. What's also interesting is NPA coverage at the bottom from 100 to 97, but our unsecured NPA coverage actually went up to 254% once you include the collaterals into consideration. Just to give you a snapshot on where the key hotspots are, we highlighted earlier on that the key hotspots for us in terms of credit costs are in Greater China and in US. We indicate here the size of the loans in those markets as well as the credit costs associated with it. So on the left-hand side, you would see that for Greater China, the credit costs from 2024 to 2025 went from 40 basis points to 72 basis points. Whereas in the US, from 173 to 110, it's still elevated, but directionally, we have taken active steps to restructure, to recover some of the impact assets in that country. On the right side, it shows you what we have actively done to increase the provision coverage. So for Greater China, from 1%, we raised it to 2.1%. And in the US, from 0.8% to 4.7%. What this goes to show you and to assure our investors is that the provisions that we put aside for these two hotspots are more than adequate for us to navigate any potential issues coming from these hotspots. The following page talks about the customer loans going up 4% year on year. It's stable quarter on quarter. I think I can probably move a bit quicker through this page. Funding, from our liquidity and funding positions for our continued CASA growth, it continues to remain strong with our LCR at 147% and NSFR at 116%. These are all comfortably above minimum requirements. Our CASA deposits, as I mentioned earlier on, on an aggregate basis is now at 58.4%. Next on Capital Capital position remains robust with CET at a healthy 15.1% Even on a fully diluted basis with vessel 4 requirements it's 14.9% This allows us the ability to continue to deliver steady and sustainable returns to our shareholders On the last page I have is on Dividends As mentioned earlier on by CEO, our core payout ratio continues to be 50% as we committed. And this includes the adjustment that we did when we did the provision for Q3. We said we would adjust it so that shareholders will not be worse off. Overall, the payout ratio at 50% means a total dividend for us at $1.56. The final dividend component of that is $0.71. I would also mention in terms of the capital return plan that was committed to shareholders in February of last year, $3 billion. Of the $3 billion, we have already done more than 50% executed. $1 billion of which was in the form of special dividends and another $2 billion in the form of share buybacks of which we've completed a third of the plan. So in total, more than 50%. of that capital return plan has been done, and we are well on track to execute on the rest of it across the next two years. That brings me to the end of the presentation. Maybe we open up for questions.

Thank you, CFO. We'll now take questions. For those dialing in on Teams, please use the base hand function if you'd like to ask a question, and those in the room can also raise your hands physically to ask a question.

We go with Bloomberg. I have three questions today. My first is for Mr. CEO. Why did you revise down fee income growth for 2026 to high single digit from a year earlier, a range of double digit and high digit?

So what is your question? The fee income growth, we had revised it down to high single digits. And I think the backdrop of it was Our loan growth for the year for 2026, we expect it to be low, mid single digits. But in terms of fee income, there are multiple components. There's the loan component, there's credit cards, there's wealth. Both credit cards and wealth and customer treasury investment banking, all those are also demonstrating very strong growth. The primary reason for that adjustment was more because of more conservative loan growth outlook.

And where do you see UOB's 2026 growth trajectory from here? And what are some of the biggest risks you're anticipating?

Well, I think, you know, the market is very uncertain. The biggest risk is something that is a little bit beyond our control. But the ASEAN we are talking about, I feel quite confident, as you can see, ASEAN for actually both since. So we we continue to focus on connectivity.

Need to focus on. Less capital intensive activity.

Trade you still need to trade. Cash management. So these are all the initiative we want to make sure that. Are able to weather. whether they're just purely based on the loan group. It is very uncertain. Nobody is sure.

And lastly, how is UOB using AI to boost productivity?

I think he's on top of this. I think definitely we train our 20,000 people. We tied up with an industry expert, essential, see how we can steer him AI initiative. I think it's a tool. I think it's important. It's an important tool. I want to train my people to make sure that they are taking full advantage of the tool to increase productivity.

Have there been or do you anticipate any changes to headcount due to automation in the workforce?

I think certain jobs maybe you can't avoid it. I think our challenges. We do have a child initiative program. To make sure that we are able to convert some of these. I think bottom is this. Environment we the last thing we want is to check fear. Well, stop to give them the opportunity to learn as much If they learn, I think that will be, to me, I think that is most important. Learn as much as possible, take full advantage of AI, and we have a dedicated unit to look at AI to see how we can transform that. And then if we hit a certain optimum scale, then we know how to reallocate our people, make better use. So end of the day, the ownership is the person.

If I could add to that, of our 30 over thousand staff, most of them have all been given AI tools at their fingertips already today. And the only countries that have not been rolled out to is because of regulatory considerations. So any country that allows us, we have already rolled those tools out to our staff. And about 20,000 of our staff have already gotten some of the basic training in terms of AI. We have set up an innovation academy to roll out training programs for our staff. Now we see these tools as enablers to enhance productivity, to help us gain insights into customer behavior, to improve service quality for customers, etc. It's not a tool for cutting headcount. So the focus continues to be enhancing client outcomes. It's about enhancing our banking relationships with customers. It's also helping our staff with advice-driven solutions so that we can enhance their productivity.

Any other questions? Maybe Asian Banker, Russell.

Hi, Russell from the Asian Bank. Firstly, congratulations each of you on the resilience set of results. I mean, your strategy on driving fee income on the retail side, the wealth side has really paid off. My question is on the trade loads. So recently, during last year's ASEAN Conference, there's been talk about the global supply chains and how businesses are moving from cost and efficiency to more resilience and responsiveness. Trade loans has been a huge part of your growth. How has that allocation shifted between trade on the intra-ASEAN side and Asia and Greater China? How has that shift changed over the past year? And how has your biggest scale of the region contributed to FuelBee having a greater advantage in this space?

Well, actually, the trade loan constitute of 13% of our total. It's not that big. So we are actually working on that because it's more capital-friendly and also short-term. Even the volatility, this is why we are emphasizing on that. The growth is actually double-digit. But in terms of percentage of our total loan is about 30%.

That's right. So to give you a deeper sense on that, our overall loan portfolio grew 5%. but the trade loans component of it, that 13%, grew at 26%. So the speed at which trade loans are growing, again, this reflects our connectivity, the whole ASEAN trading economy, that growth remains very resilient. So despite what you hear about the geopolitical tariff situations and so on, I think there's active realignment of supply chains and the trade loans actually demonstrate that. Why we concentrate on trade loans even though the margins are slimmer is that trade actually encourages a lot of other activities that are cross-selling in nature. For example, if you do trade, they tend to be cross-border. Cross-border requires FX. If you are doing the FX, then you could pretty much package together interest rate hedging, cash management. So the broader wallet associated with trade isn't because of trade alone, but it actually has implications on how we shape the business. So trade continues to be a very active, very important focus for us, driving our ASEAN footprint.

And then another question, if I could add. On the S&P banking side of things, I mean, you're anticipating single-digit low growth for this coming year. How is that impacting how you're conducting banking with S&P clients? Are you SME Customer Market Uncertainty

latest tariff from Singapore 10% to 15%. That is an overnight tip. So they also have to wait and see. It's something that they cannot plan. So this is where you will be, we are right by our customers. We have to help them to how to restructure, how to prolong the tenure, how to help them to grow. This is where our franchise values rather than just focus on ourselves.

We'll take a question from Renald from BT.

Good morning, Renald from BT. Happy New Year to everybody. My question is on the tariffs that you mentioned. I know something in January, we sort of saw the Venezuela crisis fairly short-lived, but how does all this sort of impact your ASEAN outlook for 2026 and the opportunities you sort of see there?

I think definitely I don't have a final number yet because it doesn't really matter. But the whole intra-regional trade is also irregardless of US Look at China trade with ASEAN I think the number seems to be quite encouraging within ASEAN So we have no choice We have to support each other I still think that is quite robust You can see from the trade volume Last year we started this and this year In fact, the tariff is even higher. Today, we try to equalize. The fact is, if we equalize everybody, then there is no competitive advantage or disadvantage. You understand? Because now, US Supreme Court say everybody is 15% of them. Back to square one.

There is no advantage to you or disadvantage to you. If I dial back a little bit in history as well, all We sat here in April last year, reporting on first quarter results, two weeks after Liberation Day, and we were like, oh no, all this tariff being announced, what's going to happen? And if you look, what happened in the subsequent quarters was, yes, there was some dampening effect in terms of loan growth because Customers in general, corporates took a step back. We have to reassess and realign our supply chains and where do we position our capital and where do we place our factories and so on. So, loan growth did dampen, but by and large, the activities continued. Trade continued. The supply chain shifted, which is why you see year on year, our trade loans, our growth in those activities continue to be double-digit. So fast forward to now, you see realignment in tariffs again. I think there will be some time required for the system to absorb, comprehend, and react to it. But we are confident those activities will come. As in the company's business activities, we'll find a way to navigate through that activity. The important thing is for us to stay focused on helping our customers navigate that.

Ola?

Can we look at slide 14 again? Of the Greater China hotspots, what is Hong Kong CRE? Is it all CRE? for both those buckets and also for the US buckets, were you lending directly, were they mortgages or was they like loans to funds? Because you had a financial institution group, customers.

Okay, a couple of questions and maybe I deal with the US one. Potsports have been commercial real estate. Not all of that is commercial real estate. That's our loan book.

Okay, the $45 billion and $17 billion is the loan book.

That's the loan book of our business there. That's not the problem loans. If that was problem loans, we would be in trouble. No, no, that's the size of our loan book there. But in terms of the problem that we've been facing, specifically in the asset class of commercial real estate, and that's only a small fraction of that.

A small fraction? Yes. as in 1%, 2%?

Was it one ping? One?

Yeah.

One percent.

Both of them.

Approximately. So it's specifically commercial real estate and your other part of the question was are these to clients, are these to funds? It's a good mix. Some of it are to our clients whom we support, network clients from Asia who have decided to operate in the US. There are some who are our global financial institution sponsor clients as well. So there's a good mix of that. Coming back to Hong Kong, I think there's a similar question. You mentioned about mortgages and so on. We actually do not have a significant mortgage book out of Hong Kong. The problem assets, again, are commercial real estate related. We don't give the breakdown on how much of that is Hong Kong versus China.

Okay, so in the What is your outlook for the asset quality this year?

Given some of the macro conditions, I think there are still some potential challenges to be navigated. But that's it. I think we have preemptively already anticipated many of these. So what we see in our pipeline, what we see are the potential hotspots. We have in the last quarter put aside that $615 billion of provisions because we were anticipating some of these. So what I would say is that our buffers that we put aside today allow us to navigate These potential hotspots for us and stay within our guidance of credit costs between 25 to 30 basis points.

Okay, so can I ask one more question? I don't know how many I'm allowed. You had a small write-back in 4Q of 59 million. What was that? I mean, was that a recovery or was that a... I'll check that. In the fourth quarter. And also, you know, DBS...

Yes, there was a write-back.

Also on the other parts, you know, your peer has been very open about how much it has in management overlay. And I think at one point you also, one peer, I know, but you have also talked about your overlays in the past, which were, I mean, you don't have to give the exact number, 1.358 billion, but it used to be above a billion towards the one point. 4 billion area. So could you just give us an idea of whether it is around there, below, above, just a bit of a...

I think we'll stick with not giving that information as we have not given it before. But again, I'll emphasize that the GP buffer that we put aside is 1%.

Okay, all right.

And if you look between Q3 and Q4, even though we raised it to 1% at Q3, it's still 1% at Q4.

Okay, so does that give me enough to calculate? Oh my god.

Yeah, it's still 1% at Q4, and you know, it's enough to support our guidance.

Also, the unsecured portion is about $200.

Okay. That's actually something very important to note. The unsecured number, which when you look at credit costs, there are quite a number of metrics to look at, and it looks at different things. The unsecured number is... After taking collateral into account, what is the portion that is unsecured? How much coverage do you have against unsecured? So at 254, we are actually very well covered in terms of the exposures to unsecured.

Any other questions?

Ray from Reuters.

Hi, thank you for the presentation. I'm Ray from Reuters. Just a question. You mentioned about ASEAN growth. There's also been some headwinds facing the Indonesian market in certain times. How do you see that impacting the business and the outlook for the market there?

I think we have to focus on long term. Every day you talk about short term, very difficult to manage an organisation like But short term, I can tell you, Indonesia, our loan exposure is 3% of the total loans. 8% in Thailand. You know, Thailand also going through all the volatility. End of the day, I think we have to take a look at the whole ASEAN. Indonesia being the biggest country in ASEAN, 300 million population. There is enough opportunity for us Obviously, it's a selective customer choice. And I still think there are opportunities there. And the fact is, today, if you look at most of the foreign banks, they already exceeded the market. Most of them already slowed down. That actually gives us a lot of opportunity, being closer to the ground, being able to navigate a lot more nimble and faster. But having said that, our focus is still basically on trade, right? So that we are a little bit more flexible, right? Unless the customer is good, yeah, we're prepared to give a term of expression. So the overall, if you can see the growth, despite all these tariffs, ASEAN 4 is actually growing quite well, right? We still can continue to grow because we have a very small market share. You look at Indonesia, 300 million, 3%. I can grow to 5%. Thailand, yes, going through the up and down, but I think, I believe things are stabilized. You can see the portfolio quality seems to be sustainable.

And on Vietnam, it's still exhibiting high single digits in terms of GDP growth. And so I think we look at the region as a whole, there are continuing opportunities for us to I think just to address Chania's earlier question on Thailand, not to forget Thailand. I think the stability there actually encourages FDI as well. So it's definitely a country that we're very optimistic about as well. Our operations last year, we had one time Credit costs as well as loyalty rewards Those were behind us We actually believe that the Thailand operations this year will contribute more significantly for us You say Thailand will attract more FDI? Yes, the political stability I think encourages more FDI And it will solidify its position as one of the key nodes in the supply chain in this region ASEAN is still generally quite attractive

You look at the family officers coming in. Talking about six, three. And I think these are the kind of liquidity. And ASEAN being ASEAN, I think it's a little bit more flexible. Yes, there are some political risks, but in terms of structuring, in terms of union, in terms of, I mean, they are pro and con. You tell me which region is better. You tell me. US? Europe? Where? So we are in this region and it's proven and we are just dealing with ASEAN which is within our reach. It's easy for us to manage.

If I can add one question, the net new money has been quite positive. Do you see that much growing in 2026?

No, I think it will continue to grow. It will continue to. And this is something that the bank is making a big effort to see how we can, not only just supporting loans, like how to, because we do have a very strong private banking, our investment advisory unit within the private bank has actually done very well. As I just saw in my speech, the digital platform, these are people like every one of you, the average size is one of, People put money there, they're able to generate good returns. 144% in terms of growth. And this is just the beginning. In terms of number of customers, it's still quite limited. But in terms of volume, so this is where I see the power of distribution and also the trust. that the customer has with us. Not only just Singapore, the whole region.

Their wealth income grew 14% year on year. So that's an area we think continues to be a highlight and bright spot that we want to focus on coming to 2026 as well.

Thank you. Let's ask about coal financing. Do you still finance coal? Do you finance current customers of yours who decided to buy a coal plant?

We have stopped financing new coal plants or new projects involving coal since a few years ago.

Including nickel?

No, I'm thinking of Semcon.

We have stopped financing new coal projects for new clients doing coal projects since a few years ago. However, that said, if existing customers with existing facilities withhold, our priority is to help them transition out of it. So while not doing anything new or more, the existing facilities that we have to clients, we are actively, every time we refinance, we actually put in encouragement, incentives for them to transition.

And then you ask about nickel.

No, no, no, no. I say nickel plants are powered by coal.

Okay, so how far down the, what is it? What are those things?

The problem is the rabbit hole, right? Your value chain.

The value chain, yeah. What happens when she says nickel plants are powered by coal? So do you finance a nickel plant?

It is difficult to answer that precisely. So let me give you an example, right? So if we finance coal mining equipment companies, they are not doing coal-fired power plants, but they're doing equipment. But equipment can jolly well be used to mine other types of products as well. So do you not finance that? So I think you have to be Quite deliberate here. We are very focused on addressing climate considerations, coal-fired power plants, CFPP. So those are areas that we have very specifically, deliberately articulated what we will do, what we will not do. But it's a slippery slope to then start broadening that definition out to the others because You need coal-fired power plants to do power generation for power companies. Then do you stop financing power companies? So it's hard.

Our commitment was made in 2022, about four years ago.

With what's happened in the U.S., are you still committed to that roadmap to whatever net zero?

We are. I think it's the right thing to do. We are pacing it. We are doing it in a more practical way. Environment is for the future. It's not because of the regulation we do it.

Any other questions?

I mean, just to touch back on the AI bit, can you give us some insight as to which parts of the bank are furthest in the AI adoption? You know, is it wholesale, is it retail banking?

We are going, I can give you some examples, but it cuts across the bank in multiple areas. I think what's important for us now to focus on foundation and knowledge layers that we built and we can then use that to quickly replicate across other parts of the bank. But some key areas of use cases, for example, are in customer servicing, contact centers and branches. Maybe one practical example is every time you have trouble and you call a contact center and sometimes you get a run around, right? This person can help you and frustration among customers grow. But part of the problem is because the attrition rate with customer service contact center operators are fairly high, they get yelled at by customers all the time. It's not a pleasant job. Attrition rate is high, they're not well trained, they don't have enough knowledge, and they don't address questions. And with AI tools, can you just imagine that if we are able to curate faster, better responses, Whenever a query comes in, what is the appropriate knowledge and response to deal with that? That helps us address the questions hopefully at one touch rather than multiple touches. Accelerating that knowledge-based accumulation, testing, making sure the models are correct and we're responding correctly, that's important. Part of the challenge for us is unlike the US where it's a homogeneous market, everybody speaks the language in the same tone and the same accents. When we use these tools to help accelerate for our staff, the listening tools sometimes misread what is said because of the different accents and expressions. So the accuracy continues to be refined and we need to make sure that that's done in a speedy manner to address. So the customer servicing is just one aspect of it. AML, KYC, preventing frauds and scams, anticipating, looking at the data analytics to look at where there are new modus operandi. How do we circumvent that? That's where useful cases of our AI team is focusing on as well. So just a couple of examples to share.

For the branches, We have deployed it across all our branches. So when they answer very complex questions like estate accounts, it's all assisted by the AI. So it's always with the right set of terms and conditions. So it's all deployed.

So you still have a human interface, but the human interface is helped by the AI.

One example is people will call up to ask for the latest promotion rate for a certain product, right? and the promotion rates do change because we do have promotions and at different times of the year. So it's important to make sure that the operators who are interfacing with customers have the most up-to-date and most accurate information at every interaction.

Have you those positions that are you know being I know they're like the AI is helping um Have you stopped hiring for new roles in those departments?

Not at the moment. I think given the economic climate, I think we have been very disciplined overall with our headcount, but it's not targeted specifically at job archetypes. So you did see, you know, there's income pressure, definitely, in the macro sort of state. You have seen our slides on cost discipline. So that cost discipline actually extends across the bank. It's not about specific rules.

The human cost you can actually see is coming down. Partly, we want to make sure we are able to contain, able to train all these people, rather than kick As you say, AI, are you going to retrain people? Maybe within ourselves first, we train them so that the damage will be less.

Maybe we'll take one last question. Hi, good morning. Kevin from VH. Just two quick questions. I think one is on what's your interest rate outlook for interest rate cuts from the Federal Reserve in the coming year? and the second one is whether or not there's any comments on the potential sale on UOB asset management that was reposted by Bloomberg a couple of months back.

Wow. House view is interest rate will likely to cut maybe one or two. But if you look at Singapore, interest rate is already overdone. So how much would that... I think it's quite stable at this point. Asset management, I think... is on top of this. Yes, I think the market is aware that we are reviewing our strategic options. We are looking at it. This is not something that we want to see who are the strategic buyers because at the end of the day, we want to have a platform to distribute what is the best product for our customers. On the stand alone, Scale is one thing, but we want to make sure we offer the best product to our customers. Best of choice.

Yeah, thank you.

Alright, that's all. Thank you very much everyone and have a good day, good rest of the week. Thank you. Thank you.