second quarter briefing for the buy and sell sides. You have seen the media briefing, so we can go straight to Q&A. Diana, can you open the floor for questions? We will now start the question and answer session. Audio participants with questions to pose, please press star one one on your telephone keypad, and you will be placed in a queue. To cancel the queue, please press star one one again, and then you will be removed from the queue. Once again, to ask a question, star one one on your telephone keypad now. Our first question is from Jayden Vencatachellum, Macquarie. Please go ahead. Hi, good morning. Can you hear me? Yes. Okay, thanks very much for the opportunity, congratulations on the results. Just have a few questions. I think during the media briefing, Piyush, you mentioned that, you know, the fixed-rate mortgages are around 3.3%-3.5%. We're obviously seeing good banking margins, and we're, we're more bullish on the outlook for the NIM. I'm just wondering, as there's not much growth, do you think there's any potential for further competition that could compress some of the loan margins from here? My second question is just on the provisions. I think last quarter, obviously, you took a general allowance, and you sort of, from memory, almost overruled the models. I'm just wondering if you can sort of share with us the logic around the GP release this quarter. Those are the first, two questions I have, please. All right, Jay. Yeah, I guess there's always potential for some NIM impact on loan pricing, and you know, you deal with that in two ways. Either you just don't do the marginal loans, which is what we did in our trade book in the second quarter, for example. The loan pricing actually for the high-quality book came down to 10 basis points. You know, we didn't feel it was appropriate to put on assets at 10 basis points, and we let them run off. You can see that in our, you know, shrink reduction in the loan book. On the mortgage book, at 3.3%-3.5%, the through-the-door NIM that we're getting is about 50-odd basis points, right, for the through-the-. I don't see prices going much below that because that's already pretty much rock bottom in terms of through-the-door NIM pricing. When we factored in the, you know, our current NIM rates and where we might go, we factored in a little bit of pricing at the high end, if you will get that, but I don't think it's going to be inordinately high. I don't think it impacts overall NIM materially. On provision, so you know, what we do is, as we indicated, indicated before, our GPs are typically driven off a model. That model includes macroeconomic variables, which is the outlook on, you know, GDPs and rates, inflation, et cetera, et cetera. On top of that, the model, on top of the macroeconomic variables, we then factor in our own portfolio. We look at all the names which we are concerned about, which are on our watch list, and we add up incremental general provisions for different kinds of categories, you know, the names, sort of early week or, or, late week, et cetera, and so we come up with something. The models are actually pretty robust. From time to time, what we do, not every time, not time, every quarter, in addition to that, we sit back and figure, is there anything else out there that the model might have missed? If the models could have missed something, then maybe we should take a top on just to say the model might not have factored this adequately. If you look at the first quarter, our models actually came in at a negative SGD 100 million. When we did the review, I was concerned at that time because the overall slowdown seemed to be precipitate. I thought you could get a hard landing, not a soft landing. There's a lot of noise around the commercial real estate all over the world. I thought there could be some spillover impact of that into a different part of our client base. Based on that, we did some stress testing. We added some, and came up with a SGD 200 million number to add on. Net-net, we had a SGD 100 release, we added on SGD 200, we got a net SGD 100 million growth. This quarter, as we look through same thing, our underlying portfolio, by the way, the reason our GPs keep reducing is our underlying portfolio is improving quite materially. If you look at our Pillar 3 disclosures, our probability of default over the years have come down from 1.6 to 1.2, that reflects that the underlying portfolio is just getting much better. You know, the weaker names are either paying down or the tenants are being reduced, or we're getting recoveries from those. The overall ACR risk rating for the portfolio is improving. Therefore, it stands to reason that our, our GP models are actually throwing up lower and lower numbers every quarter. In the second quarter, as we looked around, what else we might have missed or what our models could have missed, we couldn't figure out anything, and we didn't come up with anything. So if you can't come up with a good, credible reason to be able to add on overlay, you know, it's hard to add on an overlay. Which explains why we don't have an overlay this time. Sok Hui, you want to add? No, just to say that a lot of the sort of stress testing and overlay, the... I guess the stress numbers and the how we arrive at these numbers, are actually reviewed by the auditors and at the audit committee. That is, that's not like we can, kind of just come up with numbers. It's quite rigorous, stress testing that's conducted. Yeah, that's, that's really helpful color. I, I was just wondering, you indicated, Piyush, that the, obviously, you look at the watch list and any sort of early, early warning signs. Is it fair to say that the watch list has gotten better as well, or is it more sort of- Yeah a macro backdrop that you're more comfortable with? No, no, the watch list has got better. Our watch list in the last year. You know, we put a lot of names in the watch list in the COVID period. Since then, it's continuing to shrink. In the last year, the watch list itself has come down by about another 10%, and the bulk of the watch list is in what we call amber. It's very early, you know, just sort of keeping an eye on it kind of stuff. The names that we're more concerned about have actually shrunk quite materially. Okay, that's very interesting. If I may just ask one more question before I'll hand back to the queue. I noticed that there was obviously the S$60 million one-off charge for the Taiwan integration, and you said that you'd added a 1,000 employees temporarily. Just want to make sure that this is, the only quarter we should see it, and if you can update us on the operational or legal day one for the business? Sok Hui? Yeah. I, so the way we sort of calibrate it, we look at sort of what are the charges that being incurred, and we expect to take roughly another SGD 60 million in the second half. So the people- Ongoing. Yeah, the work is ongoing. The actual, twelfth August, next weekend, is the actual cutover. As you can imagine, that for the first two, three months after the cutover, I expect to get millions of, you know, calls from customers, you know, XYZ. We're going to stay staffed up in our contact centers, call centers, et cetera. The second half of this year, you should expect to see another SGD 60 million of integration costs before that winds down. In terms of the other question. Okay. We've-- we are actually in, I think we're in very good shape, in terms of the actual integration. You know, un- unlike most of the other banks who did the Citi deals, where they did a servicing agreement where Citi continues to service the portfolio, for a period of time before the banks integrated, we did it exactly the opposite. We decided that we would, put in all the investment and, figure how we can integrate and bring the book on before we bring the business on. Next on, the weekend of 11th, 12th is our cut-over date. We've done 4 desk rehearsals so far. The last desk rehearsal was a couple of weeks ago, and it was almost flawless. I'm fairly confident that we won't have a problem bringing the, the book on, seamlessly. We actually were able to second some people from Citi to DBS a few weeks ahead of time, so they understand what needs to be done and, and, you know, how it should function. The underlying book at Citi is also holding up. It's consistent with all our projections. We've worked with them, we haven't seen any loss of business momentum or revenue consistent with what we modeled. I'm actually quite bullish. I think we should expect to see, like we said, for somewhere between SGD 200 million-SGD 250 million bottom-line impact from next year. Even this year, we'll probably see somewhere in the region of SGD 50 million bottom-line impact for the full year. Okay, that's really helpful. I appreciate your comments. Thanks very much. Thank you. Our next question is from Nick Lord, Morgan Stanley. Can you, can you hear me? Nick, please go ahead. Yes, we can. You, you can. Okay, perfect. Thank you. couple of questions, actually. First of all, just on dividend, I mean, a nice, sort of extra sort of SGD 0.06 in the second quarter. Can I just clarify with you what is now the baseline? Is the baseline SGD 186, for, for the 2023 dividend we should be thinking of for, for 2024, or is it SGD 48 times 4, which is SGD 192? Depends on how you count it. If you count it from the first quarter at SGD 42, then you should expect, at the minimum, to get SGD 48 times 3, and then you get the SGD 42. It depends on how you count it. Yeah, I'm just thinking of the baseline for FY2024. For FY2024. Oh, the baseline for FY2024? Yeah. Uh- Is it 186 or 192? Minimum. Minimum is SGD 192. Minimum. Minimum SGD 1.92. Okay, perfect. Then, and then linked to that, I mean, I know you gave some explanation in the media briefing, so I'd be interested to just think about how we think about this, because I guess clearly moving up that dividend in second quarter tells us that you have a lot of confidence about the earnings prospects or more confidence about the earnings prospects for the full year, which I guess is obvious from the Q2 numbers. I'd just be interested how you think about, you know, confidence in future years. When rates eventually turn, can you just talk us through some of the levers that you think you can pull, sort of over the next two or three years, to defend that ROE so that you minimize the impact of those of rates falling when that eventually happens? I guess there are two different questions there, Nick. First is the ROE question: Can we defend a 19% ROE? The short answer is probably not. Therefore, if you look at our Investor Day guidance, we said 15%-17% is what we think we can do long term, not 19%. The 19% does benefit from the extraordinarily high interest rates. If the question is, can we defend a 15%-17% ROE? That we're pretty confident based on the overall nature of our business. You know, the, the various non-interest income streams, the, I've talked about in the media, cash management, wealth management, cards, you know, all of those are kicking in quite nicely. Our ability to defend that number is good. The top line is solid. I think our credit and risk management has also improved quite materially over the years. You can see, even through this cycle, we are at the low end of the comparator set in terms of our NPAs, in terms of our credit profile, in terms of our SP. I think that structurally, we should be able to manage on a better SP and better cost of credit than we had historically. Our, you know, high return businesses, cash management, wealth, et cetera, they're already today 40% of the bank, right? They used to be 20% of the bank. All of these collectively means I think we can defend the 15-17%. Our projection, assuming rates start coming off next year, FY2024 and 2025, suggests that we can still hold that 15-17% ROE. The second part of your question is more dividend specific, and, you know, as Sok Hui pointed it out, I think, a lot of people, reflected in our Investor Day on the first part of our statement, which says that we're pretty confident that we can increase FY2024 cents a year, for sure. That we've modeled with all kinds of stresses that we can do that. On top of that, we do think we have another SGD 3 billion of excess capital that we can return to shareholders over the next, two, three years. We've indicated that we could do it in many ways, either through buybacks or specials or just stepping up the dividend more and faster. The board, recognizing that we do have that, and, you know, Sok Hui sort of said that, $3 billion is about $1.20 per share. If we want to give back $1.20 per share in the next two, three years, it's going to come back in one of these three forms, and the payout in the second quarter reflects that already. Okay, perfect. The fact that the payout in the second quarter has gone up, I mean, does that give you mean that you are even more confident on that 15%-17% range, or are confident that you could be higher in that 15%-17% range when you thought previously? No, I think we're confident about the 15%-17%. I don't know about much higher, but I think one of the reasons I've been cautious is the economic outlook. It goes back to the question of GP, right? The economic outlook and the likelihood of a, you know, softer landing and our ability to be able to negotiate through the next several quarters without credit mishaps, that confidence is continuing to increase, and so that gives us more confidence to sort of step up the dividend sooner rather than later. Okay, perfect. Thanks very much. It's very clear. Thank you, Nick. Our next question is from Harsh Modi, J.P. Morgan. Hi, thank you. Go ahead. Yep, a couple of questions. One, for the 23% of the commercial book, 23%, which is to be repriced, is it fair to say about half of it gets repriced this year? In that case, how much is the spread pick up for that portion of the book as it gets repriced? I'll get to the second question in a minute. First, now, half of it gets repriced in 18 months, so between the rest of this year and FY2024, and the other half of it spills over in 2025, 2026, by and large. The yield pickup is about 2% when it reprices. 200. Okay, thanks. Second one, the RWA increased meaningfully quarter-over-quarter across all the three credit market and operational. What drove that, and how do we see that risk density going forward? Sok Hui? Harsh, you're asking about the RWA growth. For this quarter, remember, MAS had imposed an operational risk charge on 5th of May, so the multiplier on op risk was increased from 1.5 times to 1.8 times. We indicated then that that would be an impact of 0.3 percentage points. For the CAR ratio, last quarter was 14.4, it has come down to 14.1, right? The cap, then the organic growth in MPAM, which added to the capital, we paid out part of that in dividend, and the rest was due to the normal RWA growth in credit and market RWA. Market RWA is up because we've been increasing the size of our risk-taking positions in the last. Quarter. quarter. We think, it's appropriate. As rates are topping out, we think it's been appropriate to start adding position. We're not going very long on the curve because I still think that the long end, the 10-30, might have, you know, scope to move up well as the yield curve will move up there. In the belly of the curve, we found opportunities, we've been putting on some more positions in the belly of the curve. That reflects, in the, market RWA. Right. From here, basically, should we expect further increase in more limits or basically market risk rates? Because it seems credit risk rate may not go up too much or are kind of, yeah, kind of done in terms of meaningful increases in risk rates from here. If you look forward, I think the, there will be an impact that will come from the Taiwan integration. I think the, impact will be about 0.5 percentage points, but that will be offset. As best as we can estimate, that we expect CAR to be stable at about the 14% level. Great. Thanks a lot. Thank you, Harsh. Our next question is from Melissa Kuang, Goldman Sachs. Melissa, please go ahead. Hi, thank you for taking my questions. Just on the first question, you on NIM. You know, previously, you said NIM peaked in one, two, now you're saying NIM upside. Do we think it's 3Q peak, 4Q peak, or do you think we can actually go further since you have some more repricing to go on next year? I'll just stop, maybe I'll ask a second question later. I think, It's only this year. It also goes back to how far they are. My current thing is you might get one more Fed hike. If it turns out the Fed pauses and then goes to the 6% handle, of course, there'll be upside, which comes from that. Right now, at 5.5, I think there's an even chance they do one more hike and probably no more, but there'll be some impact of that. There's obviously some impact of the repricing we just talked about, the book repricing. There continues to be impact on the deposit side. Even though the deposit, CASA outflow has slowed down, it's not zero, and there is a continued some pressure on the fixed deposit and deposit pricing. When you put it together, I think we have some upside, 2 basis points, which you might see in the next quarter and maybe between now and year-end, but I doubt you'll see this continue to increase next year. Do you think fourth Q will peak or, sorry, three Q or four Q? Maybe four Q then. Yeah, I think, it might even peak in the third quarter. It's hard to say. Mm, mm. Okay, thank you. The second question is on dividends. You mentioned at length previously about the dividends and about the SGD 3 billion. Would we think then at the final, usually during the final, you consider maybe perhaps raising the interim at the final? Do you think maybe a special would be more a preferred way, which would, you would do it to release the SGD 3 billion? Well, I think it, you know, something the board evaluates every time. Like I said, the board evaluates all the options. Buybacks, you know, it's a little harder for us to go down the buyback route, but we do look at it. It's really between special and a step up in our ordinary dividend. Our preference is to go down the ordinary dividend route, as long as we're pretty confident that we can sustain it and maintain it, we won't have to cut back. As long as right now, the degree of confidence that we can do that, in this case, we might continue down, stepping up the ordinary dividend. It's something the board will evaluate, you know, the board looks at it every quarter, the board will evaluate what's the best way to do this. Okay. Then just in terms of thinking about long route, because you said 5 years of this FY2024 cents basic step up. By the time you reach there, are we looking at a payout ratio roughly in the range of 65%-70%, and that's when you will reach a capital neutral point? Is that what you're trying to achieve in the next five years? It could be. You know, unless we go and, you know, find some dramatic new opportunity, if we just project the numbers and assuming we don't find any attractive new opportunities to go in organically, and you work with our operating range of how much capital we want to keep, you can quite easily work yourself to a payout ratio in the 60s, yes. Okay. Okay, then last, just housekeeping question? Just I noticed in terms of the balance sheet, you have quite high interbank deposits, this quarter, quite a big jump. Is that for your treasury business? Also in terms of the off-balance sheet, you know, derivatives, it seems to be, pretty a big jump half year on half year. Is that all down to treasury business? Yeah, it's all treasury business. It's all treasury. Okay, thank you. Thank you, Melissa. Our next question is from Aakash Rawat, UBS. Great. Can you hear me? Akash, please go ahead. Thank you for taking my questions. The first one I have is just to touch upon the NIM, Piyush. I think just to clarify what you said earlier, you said there's possible 2 basis points upside from the exit NIM in June, right, which was 2.2%? Is that correct? No, average. I meant the upside is from the average NIM for the second quarter. Oh, which is 2.16, but you said your exit NIM is already 2.2 in June, July. Do you think- It will come down in August and September, right? That's why I said, I think the NIM will probably peak sometime and start coming off. I see. Okay. Your assumption, like you said, is one rate hike, one more rate hike, from the Fed at the moment. Actually, the assumption on a couple of basis points assumes no more Fed rate hikes. Okay, I see. Very clear. Thank you. Just a related question on that is so on the deposit repricing pressure, like you did say that, you know, CASA is still outflowing, it's not gone down to zero. What are the chances that this deposit repricing pressure accelerates, into the second half of this year, as, you know, rates go up further and stay higher for longer in that sort of scenario? If you look at that deposit pricing, you know, the different segments, they can see the impact differently. The institutional money, the deposit pricing is already 100%. Whatever hike happens, we pay out 100% on the institutional money. If you look at the non-institutional money, you know, the cash management related, corporate account, SMEs, consumers, the actual payout on that is far more contained. We're seeing that quarter-on-quarter, the bulk of the money, which is a lot more price sensitive, has been repriced or moved out. I don't see it accelerating. We've already hit levels where the trajectory and trend looks like it's quite contained. Okay, understood. Thanks. Then, the next question is on the wealth management inflows. You did touch upon this in the media briefing about, you know, you don't, nobody wants to get fast money, hot money. How do you determine? I think this is one of the questions that many investors are worrying about, which is, we've seen this very strong inflows last year or this year. How do you determine what part of that is sticky, what part of that is fast money? Well, you know, it actually goes back to how well you can manage the client relationship. You got at the end of the day, so when somebody, you know, from wherever in the world, puts money into a family officer account in Singapore, what are they going to do? Either they put it in a bank deposit and earn the 3.5%-4% return, or they go and buy a property, they'll go buy an apartment or a house, or eventually they actually create a portfolio and put it to work, and most of the portfolio is public markets and some private or alternatives. That's what happens to all the money that comes in. The only reason I expect that none of this will happen, is the thing that they're gonna take the money out and take it back to wherever it came from. That's sort of counterintuitive. You know, if they've brought the money from wherever it was into Singapore, why would they take it out and take it again and take it out of the region? What you will find is the money will slowly start moving out from a. If you think about a typical way, in fact, that's how we market also. We go to investors and say, "Okay, why don't you move the money in deposit form?" Then we start working with you to see how we can actually put the money to work. Over the next, you know, several months, they start building and do a portfolio allocation and decide what goes into equity and what goes into fixed income. Slowly, the money moves and deposit into various other investment categories. This is not new. This is exactly how the business happens. Right. I think based on your assessment at the moment, the part of the fast money portion of this net new money that you've seen is very small, right? If I think, summarize it, that's what you're saying. Yeah, I mean, I, the, the fast way to me is just all of the money that comes in. It's, with the fast money, I'm assuming you're referring the money that will leave Singapore or leave the system. Yeah. Yeah. I don't see any... Yeah. I don't see any of that. It, it will- Okay, got it. Sort of still be anchored. From there, it will get invested into different kinds of assets. Yes. Got it. Just on wealth management, I think another difference in your, you know, trends versus, for example, UOB who reported a few days back, was that the wealth management income actually improved quarter on quarter, whereas we were thinking that it might turn out to be a weaker quarter, on a sequential basis. Do you have any insights into what went on there? Like, what was it? We're up 12% year-on-year. First quarter was -11. If you look at quarter-on-quarter, it's about the same level. I actually assumed we might see an even stronger second quarter, because I thought the China rebound would mean that the Asian markets would do better, and therefore, I expected a lot more people to put the money to work faster. Actually, because China rebound didn't happen until, you know, three weeks ago, the Hang Seng and the Chinese markets weren't doing anything. The actual money which got put to work was also slower than I expected. I do think that in the second half of the year, it's coming through now. Okay, got it. Makes sense. Next question is on asset quality. If you could give us an update on the commercial real estate exposure in the U.S., like, how is that... you know, what's your latest risk assessment on that book? You've already talked about the exposure last quarter. The same thing for the Hong Kong CRE space, because, I think one of the concerns has been the vacancies in the central area have still remained pretty high in the office space. How is that progressing? What's your latest assessment? very much. We obviously stressed that, you know, the commercial real estate is what prompted us to take the overlay in the first quarter. But at the end of the second quarter, we're not seeing any incremental stress. In Hong Kong, as you know, our U.S. book is, is quite small, and then it goes, you know, through the REITs more than anything else. The Hong Kong book is really the big developers, and they're very solid, the large, you know, Hong Kong, Hong. So no, our latest review hasn't shown us any incremental stress in that portfolio. Finally, the dividend policy. I just want to clarify that historically, your core dividend has gone up in this last quarter, right? Q4, it goes up. This time, this step-up happened in Q2, but this should be seen as a one-off step-up. It's not that you're changing your policy of raising dividend in Q2 and then keeping it same for the rest of the year. Yeah. No, we're not changing it in that way, but... Yeah, that's fair. We, we're not changing it as a policy that we'll review in Q2 and, you know, keep it like that. It's not a policy, but this goes back to my earlier comments to Nick, that we will look for every opportunity to pay back what we think is SGD 1.20 over the next two, three years. So if some of that means we'll do step-ups, which are not on a normal annual step-up, so that is a possibility, that we could do step-ups which are not annual. Right. Understood. The very last question that I have is, you talked about this BEPS taxation impact during the Investor Day. Do you have any more details to share on that? What is the potential impact on your P&L? The 15% BEPS tax, when tax goes to minimum 15%. Yes, I think it's, it will be a case where our tax payout will be higher, so we are working- First of all, you got to figure when that policy goes out. Yeah. Right now, half the world is backing off on it from what I can see. The Americans are saying they're not gonna do it and so on, right? Yeah. As, as best as we can, figure out, it's like 2025, and we'll work with IRA to see how we can sort of mitigate some of the impact. Okay, got it. Yeah, average tax rate is about 13.5%. Your worst-case assumption should be that our taxes go up from 13.5%-15%. Then if you look at all the ajibaji going on around the world, with all of the other jurisdictions, everybody is finding a way to not actually get to the 15 level. Again, some countries are just saying, we're not going to do it. I think this is a place to watch and see, you know, what effective tax rate finally winds up at. Right. Can I just check on that, please? I think when I look at your geographies that the business is in, all of them have a tax rate of higher than 15%. How does at a group level, it's come down to below 15, 13.5? Singapore. Yeah. This one affects primarily Singapore. For all the countries that have higher tax rates than Singapore, usually, in fact, most of our locations, frankly, there'll be no change. It's mainly in Singapore, where our tax rate is lower. I see. Okay, great. That's all my questions. Thank you very much. Thank you, Aakash. Our next question is from Neel Sinha, CLSA, Singapore. Neel, go ahead. Yep. Can you hear me? Yes. Yep. Thanks, Piyush, Sok Hui. Thanks for taking questions. A lot of them have been answered by my peers, questions. I, I've got a couple of residual questions. The first is on loan growth. I want to get a sense of the lower guidance over the past couple of quarters that as it has evolved, where are the pressure points? Is part of it largely the Hong Kong book, because of the change in the rate environment that you versus what you initially anticipated? Is part of it, the mortgage market in Singapore, from what we've seen with cooling measures, et cetera. My second question on Citi, most of it has been answered, but what would the NIM impact be going into FY2024, 2025 incremental? The third is, I'd love to get an update on Lakshmi Vilas. Whether you've now decided to take your foot off the pedal or rather press your foot on the pedal and grow the franchise, because a year ago it wasn't really the right environment to do so. Thank you. On loan growth, I think it's all of the above. If you look at the second quarter as a exemplar, our non-trade loan growth was flattish, and the trade book shrank by about SGD 4 billion. The trade loan book reduction, as I mentioned in the briefing, as best as I can see, about half of it is just a general slowdown, and half of it is the loans basically, we let them run off because the pricing was so low, there's a 10 basis points kind of loan, right? On the non-trade book, we got SGD 3 billion-4 billion of loan growth everywhere else, and we lost the SGD 3 billion of loans shifted from Hong Kong to China. You can see that in the reduction in the Hong Kong loan. It's a little bit of both. In the local book, the mortgages will be slower, Singapore mortgages will be slower than we anticipated. I I was hoping even after all of the changes, that we would do north of SGD 1 billion in growth in the balances this year. I think we'll probably wind up at between SGD 500 million-SGD 750 million for the year. It's not huge, but yeah, we'll probably not give up about, you know, a few hundred million SGD of growth from the mortgage book over here. It's a mixed bag. My own estimate right now is that I think we should be able to do in the order of about SGD 5 billion of growth in the second half of the year. If you add that to zero in the first half, you'll get, you know, somewhere between one and two percentage points of loan growth for the year across the book. On your question on Citi NIM, I haven't seen it or model, maybe Sok Hui or... Not much. It's not much. I'm told that we probably see a one basis point uplift, because of the Citi book integration, next year. Your third question was Lakshmi Vilas. Lakshmi Lakshmi Vilas, actually, we do have our foot on the pedal. Actually, Piyush, if I can just check. Like, on Citi, a lot of it is unsecured credit, right? Wouldn't that be higher margins, generally? Of course, it will be, but it's a small portion of our book. Our total loan book is, you know, $400 billion. Citi adds about another $15 billion, right? Yeah. Okay. All right. Yeah. Your last question, Lakshmi Vilas. Laxmi Vilas is doing really well. We've the integration's been done. We're very now beginning to put our foot on the pedal. We're getting growth in loans, we're getting growth in deposits, we're getting growth across the board. India, as a franchise, is growing quite nicely at this stage. Yeah, all cylinders firing. Where does the cost to income sit there now? I remember when you bought it, it was close to 100%, right? Now, I mean, are you beginning to see widening jaws from what you just mentioned? Do you have the cost income of just the LBB franchise? I don't think we track it. We stopped tracking the LBB franchise separately, if you will. No, I think it'll be profitable. The LBB franchise by itself will be profitable. I'll get somebody to check out the cost income of the LBB franchise for you. All right. I'll check back with Michael and Denton. Thank you. Thank you, Neel. Our next question is from Tan Yong Hong, Citi. Please go ahead. Good afternoon. Can you hear me? Yes. Hi, thanks to you. Thanks for waiting. Just two questions for me. The first one is a residual capital question. With higher absolute dividends and your SGD 0.34 per year, I believe, would you be confident, or comfortable with maybe say 70% payout ratio or higher when the Fed differs or when asset quality turns? Will you be keeping some of these SGD 3 billion capital for this current event? I didn't follow the question, but you're saying, would we be confident of a 70% payout or higher? I don't know, because we don't look at the payout ratio as our principal driver. It's just that if you do the math backwards and see how much capital we need to pay out, you do get a number in the 60s, right? If we had to, we would be comfortable with that, but that's not our key driver of, you know, what we want. We would stay with our dividend policy, which is to be consistent and in line with the growth of our business. All right. Thank you. My second question would be: Is there any update to how many% of your commercial book being hedged? I think the last update was 6%, that has helped to cushion your interest rate downside risks when the Fed pivot, as you've stated in your Pillar three disclosures. Should we be expecting that to be further reduced as we get to year-end and beyond? We are actually beginning to, you know, as the hedges roll off, for some of our overlay positions, we, we create the hedges. I think we said about 8% or something of the whole, this thing was hedged. What happens is, the hedges come off now, and particularly at these, where the yield curve is and where the pricing is, we are continuing to take some portion of that and hedge it back in that, you know, what I said, middle of the bucket category. Got it. These are helpful. Thank you. These are all my questions. Yeah. Thank you. Thank you, Yong Hong. Our next question is from Weldon Sng, HSBC. Please go ahead. Hi, can you hear me? Yes. Hello. Okay, hi. Thanks. Thank you for taking my questions. Can I just clarify on the dividend, which is if you just take the SGD 0.42 and 3 times SGD 0.48, I think you get to about SGD 1.86. So that when your EPS is about SGD 4 plus, that's less than 50% payout this year. Is that the payout ratio you're looking for this year? We already said that we would review this every quarter. The board reviews this every quarter, right? I have no way of predicting, but it could well be that we pay more than SGD 0.48 in a quarter as well. Right. Right. Just now, you said your preferred way is to raise the ordinary rather than the special, right? That's correct. Yeah. Okay, right. Got it. Can I just make sure I understand it correctly? You had said that you have SGD 1.20 per share of excess capital to pay back. If I just annualize the additional sort of FY2024 cents that you added to this trajectory this time, then I just times 3, that's around SGD 0.60, right? That's like sort of SGD 0.60 out of SGD 1.20 that you have. Oh, no, no, that's not right. Uh- The SGD 1.20 is on top of the FY2024 cents we've already factored in. On top of the sort of regular- Go back to yesterday. We said we factored in that we can definitely pay FY2024 cents increase every year. On top of that, we think we have another SGD 1.20 we need to pay out, right? That's on top of that FY2024 cents increase, which is already factored in. Right. Right. For, from this year compared to last year, because of this 48 adjustment, there's an additional FY2024 cents a year that is paid out in this year. Is, isn't that right? Well, actually, it's not. If you, assuming we don't change the SGD 0.48, you take the calendar year, right? There is an additional SGD 0.18 on top of the FY2024, right? You already increased by SGD 0.06 first. SGD 0.06 over 4 quarters is FY2024 cents. Okay. Now. Yeah. -for the three quarters, we're increasing by another SGD 0.06. That's another SGD 0.18. Right. Right. Okay, got it. Got it. Okay. Got it. Okay, sure. Got it. Thank you. I think that's all the questions I have. Thank you. Thank you, Weldon. The Q&A session. Sorry. Ladies and gentlemen, we have now come to the end of the Q&A session. This concludes today's conference call. Thank you for your participation. You may now disconnect.