United Overseas Bank Ord

Good morning, everyone. Welcome to the first results media briefing of this financial year. Today we have with us our Deputy Chairman and Group CEO, Mr. Wee Cheong, and our Group CFO, Mr. Leong Yung Chee. As usual, Mr. Wee will begin by giving a broad overview of how our franchise has performed and the operating landscape that we are all in. Mr. Leong will then go into more details on the financials and business performance from this quarter. After both presentations, we'll be taking questions from the media. I would now like to invite a CEO to get us started. Mr. Wee, please. Good morning. Thank you for joining us today.

Happy to see all the usual faces. As all of you know, I don't have to say it, we are operating in a period of heightened global uncertainty. Energy prices are volatile. Supply chains remain under pressure. The inflation rate is have resurfaced. These are real challenges, and we are watching development closely. In times like this, customers look for stability. At UOB, we continue to work alongside our customers as they manage higher costs and volatility, and as they seize opportunities across the region. That is our priority. To be right by our customers. So we enter this period of uncertainty from a position of strength. Our balance sheet remains strong. Our capital and liquidity position are robust. And our reserve buffers give us the capacity to support customers as they navigate an uncertain As you know, our CET1 ratio first quarter is 15.3%. MPA coverage, 100%. GP versus performance loans is 1%. And this is consistent with how we have operated over 90 years. How we will continue seven times. Now, moving to our results. POV delivered a resilient performance in the first quarter. Net profit was $1.4 billion, moderating 4% year-on-year and up 2% quarter-on-quarter, driven by our core franchise. Compared with the fourth quarter, net interest margin held up at 1.82%, wealth and loan-related fees normalized from fourth quarter seasonal levels. Trading and investment income rebounded. Expenses were well controlled. Asset quality was resilient with NPL ratio stable at 1.5% and total credit costs within expectations. Our balance sheets remained strong with high CET1 ratio of 15.3% and robust liquidity ratio. This outcome reflect the quality of our earnings Underpinned by our diversified business model and our regional franchise. Now, let me go through the business aspect of the bank. Retail banking, we saw steady growth in CASA, up 10% year-on-year. On wealth, up 6% year-on-year. And card billings, up 7%. In wealth, we are making progress, supported by growth in AUM and higher conversion of customer assets into investment. In wholesale banking, momentum was positive with healthy loan growth. We continue to expand our RWA-like revenue stream through regional connectivity flows with double-digit growth in CASA and trade loans. Our trade loans, first of all, quarter of this year up 19% year-on-year. CASA up 10% year-on-year. Global markets deliver record high income in a more volatile environment. We have never been more confident. Our foundations are in place across ASEAN and we are now focused on harnessing its potential. As a long-term operator, what drives us is achieving steady, sustainable returns over the long haul. We are executing according to our plans and not chasing quick, short-term results, especially given the volatile market we are in.

Now, let me further elaborate.

Today, we serve 8.5 million customers across our ASEAN footprint and it continues to grow organically. This skill give us a stronger base to deepen relationship, build ecosystem partnerships and deliver tangible value to customers. Over the past three years, our focus has been on integrating the Citi portfolio and bringing everything into a single unified platform. That work is largely complicated. It positioned us as one of the most connected banking franchises in ASEAN with strong capabilities across retail, SME, and wholesale banking. We are moving into the next phase now, unlocking the value of our enlarged customer base to reshape the group towards a more diversified, fee-driven mix anchored on connectivity, trade and cash, lifestyle solutions like credit cards, and wealth. In retail, we see significant opportunities, including in wealth, underpinned by a large and increasingly affluent customer base that is under-penetrated. This gives us a long runway for sustainable organic growth. Our immediate focus is to grow AUM and improve invested AUM penetration Execution over the next few quarters will be focused on this key initiative. One bank approach. Tapping our strengths in retail, SME and wholesale. Strengthening advisory with more personalized solutions. Continuing to invest in talent, including in private banking and advancing digital and cross-border wealth capabilities, particularly within ASEAN and with North Asia. Over time, our ambition is clear to double wealth income by 2030 through disciplined organic execution in platforms, people and solutions. Beyond retail, a strong regional franchise allows us to play a meaningful role in supporting foreign direct investment and cross-border growth. One example, Johor Singapore Special Economic Zone. Through our Green Lane arrangement with Invest Johor, we have helped facilitate more than S$5.8 billion in FDI into the zone. This reflects our role as a regional connector across ASEAN and our commitment to supporting long-term growth. Our integrated platforms for payment, trade, and cash, and deep sector expertise are Power Risk Rate and Transaction Banking Group. We are deepening coverage in high growth sectors such as technology, sustainable energy, EVs, consumer goods, and infrastructure. We are also penetrating our customer supply chain ecosystems to support their regional growth. Across retail and wholesale, we are reshaping the group towards capitalized, higher ROE growth, supported by a more disciplined approach to balance sheet management. We are confident of achieving sustainable growth with stability in the coming years. Let me close with a few thoughts on the road. is uncertain and we stay vigilant. EOB has weathered many cycles before to continue to work closely with our customers, partners and stakeholders to capture opportunities for long-term growth and manage risk. We are also investing in our people, building AI-ready skills and embedding AI across the bank works smarter and more efficiently. As you know, we recently moved our tech and innovation teams to the Bongo Digital District, as you can see from street time today, in the heart of Singapore innovation ecosystem. Now, to guide you for this year, we expect 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 To good times and difficult ones, we will continue to be the steady end our customers can count on. Thank you. And now I invite Yongqi to share more in terms of financial details. Thank you.

Thank you, Yichong. And good morning, everyone. Before I go through the financial results, let me start with a few key messages that you should take away. Our first quarter performance reflected the resilience of our diversified franchise. It has been a steady performance that we delivered. I'll go through the financial details of each of those items in a short while, but I wanted to highlight that in terms of the execution of our strategic priorities, All of our businesses, whether it's retail, wholesale, and markets, have continued to show and evidence steady growth. In retail, both the CASA and wealth products, as well as credit cards, demonstrated steady growth, while in wholesale, we saw double-digit growth momentum in trade, as well as CASA. Likewise for global markets. The third message to leave with you is a stable risk profile with a limited Middle East exposure that has been stress tested. Our capital and provision buffers continue to remain resilient and will help us navigate the uncertainties in the market. And lastly, in terms of momentum in the business, we continue to see healthy client engagement and pipeline activity, even with the market volatilities that we are seeing. In terms of the financial highlights, in the first quarter of 2026, we delivered an operating profit of $1.9 billion and a net profit of $1.4 billion. This was 2% up quarter on quarter and 4% down year on year. Net interest margin moderated two basis points to 1.82. We have a page discussing this in more detail later, which I'll go through. The move in terms of the net interest margin is consistent with the prevailing rate environment, but it was also offset by proactive management of our funding cost. In terms of net fee income, we maintain positive trajectory, rising 2% from last quarter. This was driven primarily by strong loan-related fees as well as steady wealth management activity. Trading and investment income increased 88%. quarter-on-quarter to $405 million. This follows a seasonal year-end lull in the fourth quarter of last year. This is alongside more favorable trading and liquidity management performance. Asset quality remains stable at 1.5%, NPL ratio at 1.5%, while our NPA coverage remained at a healthy 100%. and including the collateral taken into account, that's 272%. Again, I have a page that goes into that in more detail. Our capital and funding positions remain strong. CET ratio at 15.3 with NSFR at 115%. Next, I'll just draw your attention to two lines here in terms of operating profit. If you look at the middle of the page there, Quarter on quarter, we grew 8%. And at the net profit line, quarter on quarter, we grew 2%. Next, I'll focus on the group retail performance. In terms of the overall performance, our retail franchise remained consistent and disciplined, focusing on priorities and delivery across the businesses. Although the challenging rate environment led to a moderation of profit at the profit before tax level to $537 million, it was a continued benefit from resilient contributions from our wealth management and cards business. In terms of wealth, invested AUM and wealth income rose 9% and 6% respectively. Card billings also grew a healthy 7% year-on-year. Likewise, for our retail CASA balances, it grew 10% year-on-year, with the CASA mix to deposits improving to 58%. This reinforces the strength and stability of our Group's deposit franchise. Next, I'll cover wholesale banking. Likewise, consistent Execution of our strategies have led to a consistent delivery of results. If you look at our transaction banking line, it continues to remain about half of the wholesale banking income, supported primarily by double-digit growth in CASA balances, as well as trade loans. I think you saw in CEO's presentation earlier, CASA balances grew 10%, while our trade loans grew 19%. From a customer treasury income for wholesale customers, it grew 11%. Investment banking continued to show good momentum. Year on year, you see some moderation because first quarter of last year, we had mentioned that there was an extraordinary slew of items, one-off transactions during that quarter. Overall, loans grew 4% year on year. continued to be led by solid demand in the technology sector in particular. Next, in global markets, client demand for hedging and investment solutions rebounded following the year-end seasonal slowdown, lifting our customer treasury income to $294 million. Also, from the non-customer treasury income, A favourable cost of funds environment helped us to capture liquidity deployment and trading opportunities amid the heightened market volatility. Next, I'll talk about net interest income and margins. Net interest income did moderate due to the shorter quarter by 1%. If this was day adjusted, the net interest income would have increased by 1%. Overall, our net interest income remained resilient at $2.3 billion, underpinned by disciplined funding, cost management, balance sheet optimization, as well as modest asset growth. I'll discuss the NIM in more detail on this page. So if you recall, our fourth quarter NIM was at 1.84, and we walked through from left to right. Despite a lower SORA environment in the quarter, our SING dollar book delivered a three basis points uplift. The high ball, however, reduced them by two basis points, reflecting some of the rate dynamics in the Hong Kong dollar book. We did undertake proactive funding cost management, both across retail deposits in the form of our one account. We also did the same for our wholesale banking deposits, and led together offset the asset pricing pressures. Just one more point on the NIMS. The exit NIMS for that quarter was 1.83. So we ended the quarter at 1.83. Gross fee income grew by 1% to $857 million. This continues to be underpinned by momentum in wealth as well as loan-related fees. Card fees dipped in March, but we expect that to normalize in terms of spending for the rest of the year. Next, expenses. Stable expenses, strong management discipline in terms of managing our IT, non-IT and other expenses. Our overall expenses stood at $1.5 billion. But this is balanced with continued investment in three areas. Strategic initiatives that we are deploying across the bank. Technology to support franchise expansion and meet regulatory requirements. And third, our people. The next couple of pages, I'll discuss our asset quality in more detail. Non-performing ratio stood at 1.5% unchanged. If you look at our NPA formation, it's $341 million. The following page discusses some of the credit costs. From 19 basis points total credit costs last quarter, this quarter's total credit cost is at 26 basis points, in line with our guidance, 25 to 30 basis points. The general allowance right back in a quarter reflected certain migration accounts to NPL with a lower write-back versus last quarter, underscoring our continued conservative provisioning stance. Next. In terms of our coverage ratios, we maintain our GP coverage ratio at 1%, NPA coverage at 100%, and the unsecured NPA coverage improved to 272%, as I mentioned earlier on. Gross loans grew 4% year-on-year. This was driven by broad-based expansion across our businesses in wholesale, term funding, trade lending, and also retail mortgages. The quality-focused lending is amidst very strong market competition, even amidst prevailing market conditions. Let's talk about funding next. Our liquidity and funding positions remain solid with LCR at 144% and NSFR at 115%, both comfortably above the minimum regulatory requirements. CASA deposit balances continue to remain strong, underpinning our stable funding profile. In terms of capital, our CET ratio For the quarter, CET ratio of 15.3%, fully loaded 15.2%. With this strong capital base and resilient liquidity position, we are well positioned to support customers through this period of uncertainty. Our return of excess capital to shareholders remain on track. Our $2 billion share buyback program as at March 2026 We have done $706 million, equivalent to roughly 35% of the plan. It is on track. In summary, let me just repeat some of the key messages for you. Our performance reflects the resilience of our franchise. We continue to execute consistently across key segments. Direct exposure to the Middle East remains limited. We do expect uncertainties to prevail, but our capital base is strong and provision buffers are adequate to help us manage through that. Looking ahead, in terms of guidance, loan growth to be in the low single digit range for this year, net interest margin to be within 1.75 to 1.8, continued execution in wealth, Cards and Trade will support fee income growth towards high single-digit levels and we remain disciplined on costs, but we expect some low single-digit growth in terms of our operating costs as we continue to invest in technology and people as well as our strategic priorities. With that, I conclude my presentation and we will open up to questions and answers.

Thank you, Yongqi. We will now begin the Q&A segment. For those dialing in on Teams, please use the raise hand function if you have a question. We'll take the first question from the...

Hi, congrats on the numbers, Sophie. I have three questions. The first one, could you talk a little bit more? I think at the beginning you mentioned UOB is looking to double wealth income by 2030. What kind of number we will see by then? I'm not sure which phase you are looking at. Second question, many analysts pointed out to NPA formation in Greater China, which expanded 15% on quarter. Which sector is that? Is it still CRE? And could you share whether it's Hong Kong or mainland? The third question is that whether UOB is looking to seek access to Mithos, the anthropic AI model. What are you doing about that? Thank you.

I anticipated all this well. But I think over the last few years, our focus has been on integrating the city consumer, even though we took over Citibank since four years ago. But the whole integration effort is very critical for me. And everything is over now. As you listen to my speech, I think we will position us to be one of the most connected, because we took over We have the most comprehensive RCL 2 points. That takes a lot of time and effort to connect. Now, without all this infrastructure, it's going to be very difficult. And also, I don't want to take in the customer if I cannot deliver. So I think all this is way ahead of what we anticipated. I think for this year, the next few quarters, we'll start to see the wealth business will be We are focusing on doubling our wealth, as you said. We will continue to double our wealth management RM. Infrastructure is ready. And we are also focusing on one bank approach because the wholesale and retail, we all work together to generate. And also we are strong in foreign direct investment. These are all the foreign people coming in to operate in this region. Overseas Bank Ord Overseas Bank Ord Overseas Bank Ord Overseas Bank Ord

Any number that we can see, we may see at the end of 2030?

The number will be great. I cannot tell you the number, but I think definitely it's a big potential, looking at our customer base that we have.

And this is the whole bank, not just private bank? No, the whole bank. Thank you, Mr Lee.

So the private bank will be, again, it's a whole collective.

You're welcome. I could supplement a few of that. Chania, if you're looking for a reference point, 2025 is when we communicated. So use the 2025 as reference point. That's all right. All right, for doubling of wealth to 2030. Now, you had another question on the Greater China NPA formation. That is specific to real estate. But it If you look from a MPL ratio, it is a heightened MPL ratio with low MPA coverage, but unsecured coverage continues to remain high. Right, and I think you had a question on Anthropic and its announcement I think was on 7th of April regarding my thoughts. I think this is something we are all taking very seriously, but although to date, many of our vendors and key partners in the technology space are still assessing and reviewing actions to be taken. In the meantime, from our own perspective, A lot of things are being done in terms of strengthening our surveillance, hardening our infrastructure, making sure we are working jointly with the agencies in Singapore and also in the industry peer group as well. Everybody is keeping each other abreast in terms of developments on how to navigate as that evolves. It will not be the first and probably not be the last of such capabilities that could lead to attacks.

But will you have access to it?

I think this is exactly what I'm trying to add.

These are the kind of infrastructure where we want to bring in customers that feel safe.

You look at our tech line right by you. Very important. Rather than I just take a short-term profit, it's easy. You look at even our deposit growth. is quite muted. Why? Because market is uncertain. If I take the money in, where do I have to place up? If the loan growth is not as good, unless I want to enlarge my balance sheets, is it the right time to do this? So I think TNL is one thing, balance sheet is one thing. The world is still very uncertain. And even across Asia, you look at Thailand, Oil crisis, maybe Malaysia, Indonesia is good, but for us it's the portfolio that we are looking at.

Thank you.

Yeah, Renu. Morning, Renu from the Business Times. Congratulations on the results. Two broad questions. First on wealth talent, right? You mentioned you'll be boosting hiring. Is it mostly in the SM4 market? So can we expect some hiring in Singapore as well? And there's quite a bit of competition for the wealth talent among all the banks. How are you going to navigate that? The second broad question is on the house view on US Fed and the re-expectations. Has that changed from three months ago? And what's your net interest income sensitivity to that? Thank you.

You know, the wealth space is something that, yes, competition is there. Everyone is competing. But if you want to join an organisation, you have to see the customer base. Because you as an individual, your connection is limited. You want to join an organisation that can help to support you over and above your own connection. You look at us, we have the ASEAN properties. We also have the North Asia that we want to double down. So we have two engines that we are running. Plus, as I emphasize, it's a one bank approach. My wholesale, I cannot share with you the statistic, but I have the statistic, the wholesale bankers supporting a lot of our readings. So what we're doing now is to make sure the infrastructure is ready from, from the user-friendly standpoint, also to protect the customer. That, to me, is important. Then, if we are ready, we are. In fact, we are ready. The next few quarters, you will start to see it coming. I don't want to have a short-term, and then customers are not happy, then they leave to somebody else. Because strategically, I think Singapore, you've got to look at it in the medium to long term with the Middle East crisis. Singapore increasingly will be different. We are one of the local banks. So I don't see our wealth figure is so much different given our setup, given our ASEAN footprint. Bear that in mind.

On the interest rate question, maybe I can take that. Our house view on US rates is that we expect there's still one more rate cut this year. But the translation... Between US rates to SORA, I think has significantly decoupled compared to history. We are obviously a lot more sensitive to SORA as opposed to US rates. As far as SORA is concerned, we expect limited more downside on SORA. I think it has already moved significantly over the course of last year. If you look at names from our last two quarters. In fact, it's been bouncing around and quite stabilised, looking quite stabilised. So even if there is downside, it is fairly limited. So I point you again to our NIM guidance for the full year. We think at 1.75 to 1.8 should be comfortably within that range.

Hi, Ray from Reuters. Thanks for the presentation and congrats on your results. I have a follow-up on the wealth angle. In terms of flows, where are you seeing the greatest opportunities from flows?

I would say ASEAN is one of them.

North Asia. Even though we are not so strong in North Asia. But increasingly, we are also paying a lot of attention from China. And the Middle East is not so obvious at this point in time. Long term, it may swing some of the activity back to ASEAN, but it's yet to be seen. But I think our immediate is the customer base that we have. Not so much, yes, new customer will come. We will engage relationship manager, they will target new customer. but my existing customer base of 8 over million. This is where the low hanging fruit is. And this is why we are very, very confident. The next few quarters, I cannot tell you the number. And we will definitely increase the AUM. We also improve the investment. Because the invested AUM is the customer base that you have. If we are conservative, we want to protect our customers. You don't just ask them to take money. Because today the environment is very uncertain. I'd rather they be safe. We can earn less fee, but I want them to be safe. When opportunity comes, this is where the potential is.

Thank you. And another question on the war itself. I know you have limited exposure in the Middle East, but then the higher oil prices are hitting pretty hard the ASEAN economy. So,

Where do you see kind of the impact from that, especially given your focus on... Yeah, I think the first order impact, I think for the Middle East, I think our exposure is quite insignificant. Second order impact is that may affect the SME customer. But so far, we are going through a stress analysis. It's too early to tell at this point in time, because everything is so fluid. The worst is if it's prolonged, then you may get a stag phase kind of thing, inflation and no growth. This is where I keep emphasizing balance sheet is important. You will be, the capital is strong. We want to make sure we're ready to serve the customer. P&L, yes, it's important. All of you looking at P&L. I was looking at P&L, but at the end of the day, we have to have a balance. I had to be strong first, then P&L. If I'm weak, I just continue to drive P&L. My capital is lost. Then I'm chasing after too many things. At this point, market is uncertain. We want to make sure our staff is well-trained to combat AI. You can see the government is also paying a lot of attention of the people and all these things. We need to be responsible We need to be socially responsible.

If I could add to that, your question around our wealth, where it comes from, more than roughly 58% of our wealth comes from overseas customers. And your question around Middle East, I think as CEO mentioned, our first order, meaning companies with direct geographical exposure in Middle East, that's less than 2% of our loan exposures. The focus now is on second order, third order. But second order is more looking at energy vulnerable industries. So sectors such as Transportation, basic materials, utilities, agriculture, etc. We're looking and assessing how much of these industries and clients who are in these industries may be affected as a result. Third order is a little bit harder because it's a lot of assumptions around how prolonged this will be. There is potential impact on overall Asia's economic growth environment, inflationary pressures and so on. So that actually requires much further stress scenarios.

Thank you. Mr. Wee, I took your point on strong balance sheet and you are making sure that your staff is well taken care of. I mean, I have seen some filing this morning about disposal of minor assets and there's an ongoing rationalization. Can I take it that you meant there won't be any job cuts at UOB?

Maybe I can clarify that there was a problem today because we set up a company. It's actually part of our BAU activity because under our venture management business, we do occasionally set up a GP for managing funds for investors. So that was actually something that's being set up specifically for a digital fund that we're managing for a family office. A client.

Of course. You know, with AI, it's a certain job.

As a responsible employer, we want to train our people. Spend money to train our people. Make sure that they are able to navigate.

That is our job to do. Ultimately, I mean, it's up to our employees. Give them the confidence. Give them the secure environment. We also provide them the job on the job exposure. That is important. No point to train GPR. At the end of the day, you train them, you have to put them on the job to experiment. This is what we are trying to do.

AI for us is not artificial intelligence. It's actually augmented intelligence. The priority is to roll out tools that augment our staff's capabilities, how to improve productivity, efficiency, customer service, risk management, etc. So a lot of the things we're doing is actually supporting our people. As a number or statistic to you, about 30,000 of our staff today have CoPilot at their fingertips. So we are actively promoting the use of these tools and training and re-skilling our startups.

You know, our process is quite heavy. So we have streamlined a lot of processes that cut across. Singapore may be better, but cut across the whole region. So I also want our staff to be happy, work-life balance. We are giving them the tools to make sure that they work hard, but

So you see the emphasis with Punggol Digital District, us moving 3,000 staff, they are all very focused in terms of our tech, digital. We've also started an innovation academy, Overseas Bank Ord Overseas Bank Ord Overseas Bank Ord Overseas Bank Ord

Three questions. One is sort of the what do you see in this in the opportunity around RWA like wholesale banking? Is it mainly wealth or is it something? Okay.

And also transaction banking stuff. Cash management.

Okay.

Because liability management is very important. Okay, okay.

But you're doing that a lot of it anyway, but you intend to accelerate more of that.

Well, you can see our deposit growth is not at high.

You want to have more deposits. Okay, so the question on deposit. Cheap deposit. Okay, so your peer, I may have to bring them in. They said they brought a lot of deposits and they are are putting them in HQLA while loan growth has sort of moderated them. So what's your view on that? Are you doing the same thing?

I think there are two parts to the question and I shouldn't be commenting on what others...

I mean, I'm asking what you think.

Okay. So there are two parts to it. One is, just bear in mind that our deposit growth overall is in line with system. Overseas Bank Ord Lower cost of deposits Better stickiness in terms of customer franchise Better opportunities to cross-sell So those are things that we have articulated as strategic intent and we're executing well to that intent As for HQLA, I think that relates more to look if you've got excess deposits and you're not deploying it to higher return users loans and so on, then do you deploy this to HQLA to maintain your NII versus managing NIM, right? Our perspective on that is you need to strike a fine balance between NIM as well as NII. Of course, you want to make sure you continue to bring in NII deploy excess deposits into HQLE as long as they are U-positive. But at the same time, you cannot lose sight of your NIM as well because that's the overall margin in terms of your books. And it's how your cost of funds and your yields, your funding mix, it all comes together.

The other thing also that we had from the previous briefing was that they had de-risked their SME and consumer franchise a bit in places like India, which you don't have, and Indonesia. You don't separate out the Indonesian market on your first quarter, but could you give us an idea of how that has changed?

is still very small for us. I think maybe it's 3% of our loan base. I would say, well, it's easy to talk about Dewey's. At the end of the day, it's the origination. You look at the customer, you look at the employers, you look at the employment track record and things like that. We are still growing. You look at the consumer, you look at the mortgages.

This is in Indonesia. Yeah.

And in fact, this is a time, especially the SME. You have to stand by them. This is not the time to de-waste.

Okay, so who are your customers in Indonesia in terms of the consumer?

Are they the... And the SMEs are the...

We do have more big corporates, I would say, because we have a limited distribution point.

Retail is mid-high affluent customer base. Likewise, for the wholesale banking, when you're out in countries outside of Singapore, whether it's for large customers, I think it's guided by our strategic strategy. Solutions Group. We've identified seven specific industries and we're guided by those industries. Singapore, because it's home market, we are more broad-based. We provide services across the whole spectrum of customers, but outside of Singapore, it's more targeted because there's information asymmetry when you're operating in somebody else's backyard.

Just one final question. The 231 million ECLC worked with SAC. And have you sort of changed your NED model at all? Or is it because of the Middle East? From the tariffs to the Middle East, I would imagine there'd be a lot of changes. And then the 341 million of MPA formation, where was that from? Yes.

Sorry, what was the question on the NPA formation?

What sector or what geography was that?

I think if you step back and look at our BAU runway, usually NPA formation should be normalized around 300 to 400 million. So I think it's in that range. I mean, you can't run a business with zero NPA formation. I think with respect to the MEV, I think we are starting to take some of the uncertainties around Middle East into account. But also bear in mind that the first two months of this year was pre-Middle East, right? In fact, the tensions flat up February 28th. and that continues to be the case and we will continue to monitor and adjust accordingly. So you should probably expect MEV refresh to be adjusted in the following quarters.

The tariff thing is gone, the tariff concerns. Are they over or what? I mean, how do you do this and how do you build it into your second and your stress test?

It has not gone away, but it has morphed.

into a war.

That's not for us to comment, but I think the tariff numbers, I think, still factors into consideration when we talk to clients and clients need to take that into account when they make their capex and investment decisions. That has not gone away, but it's been, I guess, superseded by the war.

Yeah.

logistical issues, fuel costs, lack of access to materials, and potential impact on demand. There are other implications now for them to take into account.

In terms of your stress test, does it change? I mean, it has to change a lot within the last year. It must have changed a few times.

Yeah, you look at his hair, all grey. At the end of the day, I think there is no right and wrong. At the end of the day, Very difficult for us to predict what's going to happen. It's a very unpredictable world. We have to make sure that we take care of ourselves first. That is the first ground. If we can't even take care of ourselves, how are we going to take care of our customers? That is the very basic part. We have to be strong. We take care of customers responsibly. That is important. Not every customer will take Make sure that customer with a good track record has been with us for a long time. We will continue to support because they will have to go through a hump. This is not something that is a business failure. This is an external factor.

So just to be clear also with what Yongqi mentioned about NPA, you said that within range, in each quarter, 300, 400, that's also applicable to the Greater China Formation, right? And you said that it's all well covered.

It's a whole book. Our GP coverage, I'll point back again. Q3, when we raised the provision coverage, it brought our GP coverage to 1%. And for the last three quarters, Q3, Q4, and now 1Q, you've seen that our GP coverage remains at 1%. In fact, we were getting questions this morning from other people, you know, why don't you raise it more, right? Yeah, given Middle East. And I think that blends with what Yicheng was mentioning. The situation started end of February. We are monitoring. There's still a lot of uncertainties and the impact is still yet to be fully transmitted through our economies. So I don't think we are saying that there will not be any more. I'm saying that we need to be watchful and adjust accordingly if things deteriorate.

But specifically, I'm being painful here. I'm sorry about that. But Greater China, is there a concern? Because the spike of 15% on quarter, is it from real estate? And is it Hong Kong or Greater China? And do you see that coming down soon?

It's Greater China. It is real estate. I think that was raised earlier on. I also highlighted that even though our NPL ratio and NPA coverage had moderated slightly because of that, but our unsecured ratio Coverage for Greater China Portfolio continues to be comfortable.

Thank you. We have a question from online, Sheila from The Straits Times. Sheila, could you unmute yourself and ask your question, please?

If we can, then open back to the floor here.

Okay, or any other questions from the floor? Yeah, business times.

So I have two questions. Thank you for your presentation earlier. I have two questions, again on wealth and the other on manpower. So the first on wealth. Wealth has become increasingly important for all the banks, including UOB. UOB is thinking of pursuing further MAA to grow its market share in wealth in the region. And are there opportunities in this area that you are looking at? The second on manpower, you've talked about AI. UOB's workforce shrank in 2025 compared with a year ago. What is your outlook on headcount this year, considering what AI can do, as you've pointed out earlier as well?

You know, well, everybody's focusing on well, right? If there's opportunity, I believe the price will be very high, right? End of the day, you've got to make sense. You've got to make sense, right? What makes sense to me at this point, right? I'm not ruling out inorganic growth. Organically, we can grow. This is our strong point. Other people don't have the customer base. I have the customer base. That is a key, key difference. So the next quarter or so, we will start to see that happen.

So the second question is around headcount.

Yeah, headcount, I think we are managing it. We will continue to grow certain segments that we need to grow. In terms of wealth, we will continue to increase our headcount on wealth. Certain segments we can de-emphasize, but certain segments we will over-emphasize. So on balance, I would say it's quite stable. It's largely stable. It's natural progression of the headcount and workforce across the year. We continue to invest in areas where there are growth opportunities and hire people.

De-emphasize. which area is less relevant to cross?

Certain jobs, like our call centre, we can make use of AI to automate certain processes. I can use robotics. You can see all this. So we can depend less on humans. So make the service more predictable.

But let me emphasise again, it's about augmenting our staff, not replacing it. So all the AI initiatives that we are pursuing, again, it's about improving productivity, improving efficiency, improving our risk management, right? These sort of things helps our staff. So with the improved productivity, if you have natural attrition, you don't have to replace at the same replacement rate. So we are managing this over time and not replacing staff with AI. I think The notion that accountability and trust can be replaced by an artificial bot, I think that's not the philosophy that we ascribe to.

Understood. Thanks for that clarification.

I think I'll just read out the question from Sheila from The Straits Times. Would you share UOB's acquisition strategy in the region, particularly in light of reports that we had explored acquiring HSBC's Indonesian assets? which was eventually bought by OCBC. How does this shape UOB's inorganic growth plans going forward?

I think CEO mentioned that briefly. We are always on the lookout for opportunities. Whether previously or going forward Now whether the opportunities make sense It has to check quite a few boxes Whether it meets our strategy Does it meet certain capabilities that we want Are they filling certain business gaps that we don't have Or geographical gaps And also ultimately is the price to pay correct It's not just a dollar price. And don't forget, there's also integration cost. And going forward, do you think the cost synergies and revenue synergies are going to make sense for you? So the calculation isn't just about the transaction price, but the cost of the entire project itself has to make sense.

You know, you look at our position of Sipu Bank, the integration is not as straightforward as what

set up back the benefit is we have to eat over million so this is already what are the so we are now trying to monetize the initial part of it is actually Quite stressing. Because we have to use Citibank technology platform while we are building our platform. You know, you cost us arm and leg to make use of Citibank platform. But it's all over. That is a strategic move that we think is important for us to scale, especially the consumer business. Don't underestimate the 8.5 million. And now, in fact, our customer base is bigger than Singapore. And it's growing. And see that. And people are our business partners. They want to deal with us because our customer base. You look at Disney, you look at Taylor Swift. Why are they coming to us? Because of our regional footprints. People from Thailand, people from Vietnam. That is the power of online business. Don't underestimate them. So for me to generate wealth, right? In the digital way, in the cost-effective way, it's easier than including our app. This is what we are doing. Infrastructure. Our Tomorrow app. I can share with you my CIO fund. The growth is 300%. But this is a small number. It's not like I'm dealing with a sovereign wealth fund, suddenly put in $5 million, $10 billion.

No.

But this is sustainable. People can trust us every month, $100, $200, but accumulate. This is where you want.

So you mean that there's been a 300% growth in money coming into you from your Tomorrow app?

From the Tomorrow app, what you call the CIO funds, right?

A few billion dollars.

Two billion?

No, a few billions.

Thank Allah, we'll take that offline. You can take it offline. I can give you the direct number.

These are all curated fund wealth management ideas for our clientele that they can access directly from the Tomorrow app. I think the statistics will take it offline and provide it to you. I think that's all the time we have today.

For the cost and then following your integration. Because your costs were a bit high these last two years, that was because of the integration over and above the one-off. Yeah, of course.

But the cost is high because my revenue has gone up, right? Because when my revenue goes up, if I'm able to get the customer base, it's already there.

So the CIR, the cost-to-income ratio should go up.

There are a few things. The cost relating to Citi, both the acquisition as well as the integration process.

The whole platform tech stuff, all done.

As for cost looking forward, I think it's a balance that you need to strike because we can always manage CIR by turning off the tabs in terms of investments forward. And I think we are keeping a very balanced approach in terms of continued investment in people, technology stack, and forward-looking investments as well, what we need to build. So I think cost-to-income ratio is something we will watch, obviously, very carefully. And it swings with time as well as income numbers as well. So I think we've guided our cost growth this year is likely to be in the low single digits. We need to continue to make investments in our people and platforms.

All right, thank you. That's all the time we have today. Thank you very much. If you have any further questions, do reach out to the team and we'll see you with that. Thank you.