Welcome to our Second Quarter 2023, and the First Half 2023 Results Briefing. On our panel this morning, we have our Group CEO, Ms. Helen Wong, our Group CFO, Ms. Goh Chin Yee, our Head of Global Wholesale Banking, Mr. Tan Teck Long, our Head of Global Consumer Financial Services, Mr. Sunny Quek, the CEO of Bank of Singapore, Mr. Jason Moo, and last but not least, is our Head of Global Treasury, Mr. Kenneth Lai. We will have Chin Yee taking us through our results. You will have the deck with you, and thereafter, we will take questions. Chin Yee to you. Okay. Good morning, everyone. Welcome to OCBC's first half results presentation. We announce our results this morning, and we are pleased to report a record half year net profit for both the Group and our banking operations. We are pleased to declare an interim dividend of 40 cents per share, an increase of 43%, or 12 cents from the previous year. Moving on to our financial highlights on slide 4. For first half 2023, our Group net profit rose 38% to a new high of SGD 3.59 billion, up from SGD 2.59 billion a year ago. H1 2023, Group annualized return on equity improved 3.9 percentage points to 14.3%. Total income was at a record SGD 6.8 billion. Net interest income was at a new high of SGD 4.73 billion, which rose 48% from a year ago, underpinned by asset growth and strong net interest margin expansion. Our net interest margin, or NIM for short, rose 65 basis points to 2.28%. Non-interest income was also higher, mainly attributable to increase in trading, investment, and insurance income. Our continued cost management discipline has driven positive operating jaws. Expenses were up 5% to support business growth, while cost to income ratio, in short, CIR, improved to 37.8%. We proactively monitored our loan portfolio with credit costs for impaired loans at 6 basis points, and total credit cost was 21 basis points, mainly because our group has taken a prudent approach to raise allowances for non-impaired loans. Loan portfolio remain resilient, with NPL ratio at 1.1%. Our balance sheet and capital position remain strong, with CET1 ratio at 15.4%. Our interim dividend of SGD 0.40 represents a 50% payout ratio, which is in line with our... To slide 5. Our 3 key business pillars continue to deliver resilient performance. Banking operations net profit for the first half rose 33% from a year ago to a new high of SGD 3.23 billion, driven by record net interest income. Our wealth management franchise remains strong. Group wealth management income increased 36% to SGD 2.24 billion. Assets under management continued to grow and was SGD 274 billion as at 30th June 2023, up 10% from a year ago and 2% from the previous quarter. The increase was driven by sustained net new money inflows. Net new money fresh funds from the second quarter were about SGD 6 billion, and adding the SGD 10 billion that we garnered in the first quarter, total net new money fresh funds for the first half of 2023 amounted to SGD 16 billion. For insurance, total weighted new sales and new business embedded value, or NBEV for short, were lower year on year. While we saw better sales performance from higher margin regular premium products, this was offset by slower sales of single premium products. NBEV margin improved to 48.4% from favorable product mix, i.e., the regular premium protection pro- plan products. Okay, moving on to slide 6. Our funding, liquidity, and capital positions remain strong. All regulatory ratios were well above requirements. Now, before I move into the details of our results, I would like to highlight that our insurance subsidiary, Great Eastern Holdings, has adopted the new accounting standard, SFRS 17, from January 1, 2023. Yesterday, GEH announced the results and financials for the comparative periods have been restated for the adoption of SFRS 17. Accordingly, OCBC's results for the respective comparative periods have also been restated, unless we otherwise mention. Now, GEH has also disclosed the impact from the adoption of SFRS 17 in greater details in their results announcements, which you can refer to separately. Nonetheless, for better understanding of the financials, I would like to briefly explain the three key changes from the adoption of SFRS 17. Firstly, on insurance profit recognition. Instead of recognizing new business profit from insurance contracts upfront in the income statement at the start date, new business profile are now deferred on the balance sheet. Sorry, new business profits are now deferred on the balance sheet and released over the life of the insurance contracts. With this change, insurance profit is expected to be less affected by new business volatility. Secondly, insurance-related expenses are now reclassified from expenses to income line, to be presented on a net income basis. Thirdly, there is better matching of insurance assets and liabilities, and a reduction in profit volatilities from mark-to-market movements, as the greater proportion of assets and liabilities are now classified as fair value through other comprehensive income, in short, FVOCI. The movements in market valuations are recognized in equity line instead of income statement. All right, moving on to the details of our group results, starting with slide 8. First half 2023 net profit from both the group and banking operations were at record high, with both crossing the SGD 3 billion mark for the first time. Turning to next page. Group net profit of SGD 3.69 billion in first half of 2023, was 38% higher than a year ago. Mainly attributable to a record total income of SGD 6.8 billion, partly offset by higher operating expenses and increase in general allowances. Next page. For 2Q 2023, our group net profit rose 34% year-on-year to SGD 1.71 billion, driven largely by a record quarterly net interest income and partly offset by higher allowances. Against the previous quarter, net profit was 9% lower, as our 1% growth in operating profit was offset by higher allowances for non-impaired assets. I will next go through our performance, performance trends, starting with slide 12 on net interest income. first half net interest income rose 48% to a new high of SGD 4.73 billion, underpinned by a 6% asset growth and 65 basis points expansion in net interest margin to 2.28%. For second quarter of 2023, net interest income was SGD 2.39 billion. This was 40% higher than a year ago, driven by higher asset volume and 55 basis points increase in net interest margin. Compared to a quarter ago, net interest income was 2% higher. The increase was attributable to a 3% asset growth and a longer second quarter. Net interest margin, however, declined 4 basis points to 2.26% in second quarter 2023, as the increase in funding costs outpaced the rise in our loan use. Our exit NIM for the quarter was 2.26%. Next slide. Non-interest income for first half 2023 was SGD 2.08 billion, up 3% from prior year. The increase was driven by improved trading income, net realized gains from sale of investment securities, and increased profit contribution from insurance. Fee income was lower, which I will go through in the next slide. Total fee income for first half 2023 was SGD 883 billion, 12% lower than a year ago. Wealth management, brokerage, and fund management fees were lower, partly compensated by higher credit card fees and fees from loans and investment banking activities. For the second quarter, fee income was 10% lower year-on-year and 3% below a quarter ago, led by lower wealth fees. While our overall wealth fees remain soft this year as a result of continued resolve investment sentiments, there were some upticks in fees from customer activities such as bancassurance. As I have mentioned earlier, our wealth management franchise continued to expand, with sustained net new money inflows to support fees growth as investment sentiments improved. Next slide, on trading income. For the first half of 2023, trading income was 4% higher at SGD 513 million, driven by increased non-customer flow income, largely from improved performance from our GEH investment portfolio. Moving on to next slide, on operating expenses. For first half 2023, operating expenses rose 5% to $2.57 billion, largely driven by higher staff costs, IT related and business promotion expenses. For the second quarter, expenses were 2% higher than a quarter ago, led by increased staff costs from salary adjustment and headcount growth, higher expenses associated with the rise in business volume. Cost to income ratio improved to 37.8% in first half 2023, compared to 47.1% a year ago. Moving on to allowances, on slide 17. Total allowances for first half, second quarter, for first half 2023, were $362 million, as compared to $116 million a year ago. The increase was driven by higher allowances for non-impaired assets, largely in the second quarter. Allowances for impaired assets remain low, at 6 basis points of loans. Allowances for non-impaired assets in the second quarter rose to SGD 200 million, as the group took a prudent approach to raise allowances to firstly reflect changes in risk profile for the loan portfolio due to macroeconomic environment, updates in macroeconomic variables in our expected credit loss model, and additional management overlays to buffer for uncertainties, including the increasing concerns over commercial real estate, especially the office sector in the Western developed markets. With this, credit costs were 21 basis points for the first half of 2023. Next page on NPA coverage. With increased allowances, coupled with continued decline in our non-performing assets, our NPA coverage ratio improved further to 131% as at 30th June, 2023. Next slide on portfolio quality. Our portfolio quality remained resilient. NPL ratio remained low at 1.1%, as our NPAs continued to decline sequentially since the start of 2022. As of June 30th, NPAs were SGD 3.27 billion, down 17% from a year ago, and 2% lower than the previous quarter. The decrease in NPAs was mainly from recoveries and upgrades in Singapore, Malaysia, and Indonesia. There was quarter-on-quarter increase in NPLs in rest of the world, as you can see from the chart, bar chart. This is largely attributable to the downgrade of a corporate account in the commercial real estate, or CRE for short, office sector in the United States. As there has been an increasing attention on CRE office sector, especially in the United States, I will share more of information in the later slides on our loan portfolio later. Okay, turning to slide 21. Loans grew 2% from a year ago in constant currency terms, to SGD 297 billion, led by increase in housing and corporate loans, mainly in Singapore, Australia, the U.S., and the U.K. Against the previous quarter, loan growth was largely from Singapore. On sustainability front, we maintain our concerted efforts to help our customers to transition to net zero. Sustainable financing portfolio loans grew 29% year-over-year to SGD 34 billion, making up 11% of our group loans as at 30th June, 2023. Our loan portfolio remained well diversified across geographies and industries. Moving on to our CRE office sector exposure on slide 22. Total loans to the CRE office sector made up 14% of our group loans. These loans are largely secured with average LTV between 50%-60%. 2/3 of our CRE office loans are in our key markets of Singapore, Malaysia, Indonesia, and Greater China. Loans to Greater China comprise mostly loans booked in Hong Kong. Mainland China, CRE office sectors were less than 0.5% of our total group loans. The remaining 1/3 are largely to developed markets, including Australia, the U.K., and the U.S. Loans to U.S. accounted for less than 1% of total group loans and are largely secured by Class A office properties. Loans to overseas markets are mostly lending to our network customers with strong sponsors. We will continue to stay vigilant and exercise proactive risk management to ensure our asset quality remains sound. Moving on to deposit on slide 23. Customer deposits were SGD 372 billion as at 30th June 2023, up 7% from a year ago, and 2% from prior quarter, mainly due to continued inflow of fixed deposits. CASA ratio tended lower to 45.3% as at 30th June. Turning to next slide. On capital position, CET1 ratio was 15.4% as at 30th June, lower than 15.9% a quarter ago. The 0.5 percentage points drop was mainly due to payments of our 2022 final dividend in May, and increase in credit risk-weighted assets from loans growth, partly lifted by profit accretion. If we were to adjust for the payment of 2023 interim dividend of SGD 0.40 in August, our pro forma CET1 ratio would be lower at 14.6%. Our capital position remains strong, providing us sufficient headroom to navigate uncertainties and to support business growth and capture opportunities as they arise. Turning to next slide. With our strong capital position and sustained earnings growth, an interim dividend of SGD 0.40 has been declared, which is 43% or SGD 0.12 higher than a year ago. This represent a dividend payout ratio of 50%, which is in line with our stated target level. All right, with this, I end my presentation, and will now pass the floor over to Helen. Thank you, Chin Yee. Good morning, everyone. Welcome again to our headquarters on a Friday. Sunday morning, it seems. Hopefully, you've had to hats on to good weather for the weekend. We're pleased to announce or deliver a good set of performance for the first half of 2023. I think Chin Yee has talked quite a lot about the details, but I would like to cover a few points through the slides that we have prepared and provided to you. We think our diversified business franchise continue to work, and that means banking, wealth management, and insurance. It has demonstrated the resilience of our business as well. As Chin Yee just reported, group net profit has rose to a record high, and this was driven by record total income and also underpinned by our diversified income streams. NII was record high. We see the NIM staying resilient, with 4 basis point for this quarter. Our funding costs creep up, but creep up slower than forecasted and indeed reflects our sound balance sheet management. I'll provide some guidance for the full year later on. In line with industry, we see wealth fees a bit soft for the past few quarters as clients remain to be resolved. But we do see sustainable net flows of net new money inflow for our Wealth segments. In first quarter, we reported an amount of $10 billion new funds, fresh funds, and in the second quarter, it was $6 billion. For the first half 2023, we saw $16 billion of new fresh funds come into our AUM. Wealth management AUM base increasing would prepare us to generate more fee income as the market turns more favorable and investment sentiments recover. For second quarter 2023, I do like to mention that we also saw a record total income. Operating income before allowances in the second quarter 2023 is also a record high that is up 48% year-on-year. We are also watchful of the global headwinds. A few things I want to mention is, global growth slow, as we have seen. This is impact by headwinds since the start of the year, such as developed markets, banking stress, faster than expected rate rise, and likelihood of a U.S. recession. ASEAN economies are resilient, although growth momentum has eased a bit into the second half of the year, but they are still above global average. We also see inflationary pressure and interest rates expected to stay higher, potentially for longer.... To buffer for these uncertainties, we took a prudent approach to raise our general allowances. Goh Chin Yee has gone into the details of that, so I'm not going to repeat that. It does see our allowance coverage increase to 131%. For our full year outlook, I'd like to mention a few points. We do expect this year's ROE to be around 14%. NIM guidance remain unchanged. First quarter, we said that it would be above 2.2%. That stay. I do see the exit NIM of 2.26 remaining perhaps quite stable into the second quarter. Cost income ratio should be at lower end of 40%-45% range. We continue to maintain cost discipline, cost management, and we continue to invest in talent and technology to support our strategic priorities. We continue to hire in the first half of the year and into the second half of the year. Our loan book remain resilient. Credit costs around 20 basis points for the full year, as we have set aside allowances in view of the potentially more challenging operating conditions. We see low to mid-single digit loan growth, potentially at the lower end. Global economic conditions to be softer indeed, we expect loan momentum to stay slow, but we've seen loan growth on our portfolio indeed. We still see areas of opportunities for the loan book to advance energy, power and utilities, inflation resistance, ROE segments, for example, purpose-built student accommodation and hospitality, et cetera. Also in technology and digital infrastructure that we see potential for growth. RCN is also expected to benefit from the reconfigurations of supply chains. We have maintained in the first half of the year, a dividend payout of 50% of our profits, and we will be committed to it. I think turning to the next page, just want to mention, this slide is a recap, the refreshed corporate strategy we announced in 2022. This is... we talk about four growth pillars on the left, and also four fundamental, you know, the support pillars, as we call it internally. We need to continue to build on this and deliver growth for the group. It's one important pillar in reforcing strength, is to drive growth through our one group approach. It is extremely important for us to work as one group, enhancing collaborations across the group, and to strengthen our franchise value and drive cost efficiencies as well. While you look at growth pillars, on the right-hand side, if we say we manage our risk and capital and our people while in invest, we also are realizing or some transformative changes in the, the way we work, and saving monies in some of the cost synergy as well. I also want to mention, you probably have seen that just a month ago, we are, we have launched our new United brand. This is OCBC. We have a refreshed OCBC logo to solidify our one group approach. We also have a new tagline, For now and beyond, and in Chinese is, "..." There's a lot of interest about, where are you growing? Indeed, where is OCBC having to. Our refresh strategy aims to deliver an incremental SGD 3 billion revenues over the next three years, I think, including 2023. Some people say, "Helen, is that aggressive?" I said, "Well, we do have initiatives, and we have embarked on the journey to deliver the growth." Questions on the how and what are these growth? I, I just want to give a little bit of clarity on that. In terms of timeline, SGD 3 billion, we're talking potentially a bit below 1/6 of the SGD 3 billion, and then next year will be 1/3, and then the last year will be 1/2. If your math is fast enough, that add up to 1, okay? And the reason of that moving up, of course, you know, as you start on the initiatives, it takes a bit of time to add on more customers, to increase the wallet share of the customers, to improve and continue to invest in products, in digitalization, in the way we work, in how we identify opportunities, in building new customer base, leading to further customer base, for example, along the supply chain, and also about supporting continuously our network customers as they continue to venture into different things. If you ask them, what about the four growth pillars? I would want to mention that wealth and investment and trade flows would be according to our growth plans, would be about 70% of the revenue, sustainability and new economy, about 30% of the revenues. This will be, of course, the efforts by the business teams. That's why we have our four business head here. Together as one group, we should be able to address questions on how we are going to deliver that. Of course, with the support, our CFO is here, our COO is here, I think HR- I mean, COO, together, we're going to deliver this. Just want to, again, just mention, how do we, how do we achieve all this? Just to give some examples. For the first pillar, for deepening private banking franchise this year, we have already started to hire more RMs, and in Greater China and ASEAN, we have added 20 already. We are incepted more trust and family office account, and we expand product offerings, for example, alternatives and fixed income mandates. We-- for the consumer side, we are growing our regional premier banking franchise, and we also collaborated, collaborating with Great Eastern to enhance our banker sales model. We're also scaling our offshore franchise regionally, and launch our digi- digital acquisition channels in Hong Kong, China, Malaysia, and Indonesia. We see good uptick recently since we launched. On the pillar two, trade and investment, we see steady increase in trade and investment flows in ASEAN, Greater China, and we have expanded our China business office by adding new highs in Malaysia, Indonesia, and Vietnam. We see a lot of interested parties traveling to ASEAN, and we have also increased our coverage, bringing our team into China, and recently organized some of the interested parties to visit Indonesia, identifying opportunities for investments for our Chinese clients. We see continued flow in Vietnam as an example as well. We also are enhancing our transaction banking capabilities, and on our core product and platform capabilities in Hong Kong. In particular, we won about in the first half of the year, we won about 14 new regional mandates on cash management. We are growing cash balances from our financial institutions as well. Our third pillar, people ask me, what's new economy? It's obviously using, again, digitalization partnership to capture further growth, and also potentially new ways to access to our customer and the new customers that are growing in this in the new economy. Through our digital SME model, we have onboarded quite a large number of new-to-bank customers regionally, including Singapore, Malaysia. We have also improved and increased our SME lending model using data analytics. We're also launching new products. I think some of you read on ADDX. We have launched new products on that Exchange platform. We launched a digital Islamic business current account in Malaysia, also in the first half of the year. We are indeed, as I mentioned earlier, growing SME and better financing. On sustainability, I think I talked quite a lot about it, and Chin Yee also mentioned, we're delivering our commitment to advance a sustainable, inclusive economy, helping our customers. Our sustainable financing commitments is up 29% to SGD 47 billion. We'll be beating our SGD 50 billion by 2025, I think probably well in advance, potentially end of year. We also announced in May the decarbonization targets for six sectors: Power, Oil & Gas, Real Estate, Steel, Aviation, and Shipping, and the key actions to meet these targets. In short, we are seeing good progress in driving growth in 2024 and 2025. Moving on to what we expect our ROE for 2025 as we embark on if we deliver the SGD 3 billion increase in incremental revenues. Our base case ROE is around 12%-13% in 2025. This reflects assumptions that include we maintain current growth trajectory, and we expectation that interest rate will have started to trend down by next year. Current mark-to-market loss in FVOCI will gradually reverse over time as well. The SGD 3 billion incremental revenue, of course, together with some expenses on investment, of course, is expected to add 1 percentage point to our 2025 ROE. By establishing the structured earnings growth, as outlined in our strategy, we target to achieve 13%-14% ROE in 2025. In the longer run, we are targeting to achieve a 14% for CET1, in that sense, over the medium term, by upholding our 50% dividend payout ratio. With this, I end my presentation. Let's now move on to take any questions. We have our panelists, but also we're supported by some of our colleagues on the floor as well. Okay, we'll start with Chanya, the first hand up. Chanya from Bloomberg. Congratulations. Please wait for the mic. Yeah. Okay. This is Chanyaporn Chanjaroen from Bloomberg. Congratulations on the numbers. I have a few questions. First, can I ask for wealth management fee outlook? Because we have seen contraction on quarters for quite a while. Do you expect better performance in the second half? You mentioned, Chin, Goh Chin Yee mentioned exit fee at 2.26%. Do you see the total number for 2023 around that number, or what do you see? Also, given that Great Eastern has contributed significantly to the bank's performance, when will you see 90% ownership, and what is holding you back? Okay, there are a few question here. I think, Chin Yee, why don't you take the part on NIM, and then I'll invite Sunny and Jason to talk a bit about wealth fees. Then I'd talk about Great Eastern. Okay, Chin Yee? Okay, as I mentioned, second quarter NIM, 2.26%. Exit NIM is also 2.26%. Yeah, when we were in the first Q results announcement, our guidance is in the region of 2.2%, so it's panning out according to our guidance. We do see that, at 2.26%, it will stay stable at this level, yeah, with the prospect of, like, maybe 1 rate hike happen. You know, our, our house view is that rates will stay longer at this current level. Yeah. Based on that, we think that it's stable, could be stable at about this level, 2.26. Yeah. Overall, for the year, will be around, you know, higher than 2.2. Yeah. China, maybe I'll share a little bit on the wealth management piece. I think as Chin Yee had shared earlier, that we are getting net new money coming in, and right from last year as well, in fact, and quite a fair few of them do come in the form of a fixed deposit. Also generally, as the fixed deposit are maturing, and we do see customers now coming into the market as well. We do see a uptick in our treasury and our insurance take up from those customers. Generally, I think the outlook is, we are quite positive that second half will be much better than our first half. Treasury activities are also up, going up, up, uptick as well. Generally, I think this will probably give us some comfort that our wealth fee will be much better for second half compared to the first half for the consumer side. Maybe I'll let Jason share on the private bank side. Sure. Thanks very much, Sunny. Thanks, Chanya, for the question. As Helen had mentioned as well, we've also done quite a bit of RM hiring in both the GC and the ASEAN area. We anticipate with that, some NNM growth that will that will benefit our fee income later on in the second half. Markets have been volatile, as you, as you well know. We talked about how last year and this year are challenging environments for transactions. I think the second half of this year will, I mean, I don't have a crystal ball to tell you how that's gonna look like, but we are optimistic that with the growth in RMs, NNM, and AUM, we will see an improvement in our fee income as overall on an overall basis. Thanks. Okay. Thank you. Thank you for the question on Great Eastern. We're happy, like, again, Great Eastern is an integral part of our business, and we're happy to see increased contribution from Great Eastern. As regarding share purchase, you may refer to a recent announcement that we have purchased about 2.345 million shares of Great Eastern. I just want to mention that that is brought to us by a broker, so we did not actively pursue that shares. As to our intention, that's not something I can comment, since any intention of OCBC on Great Eastern is price-sensitive for a listed company. Aakash, UBS? Great. Thank you. Hi, this is Aakash from UBS. A few questions from me. The first one, Helen and Chin Yee, you've reiterated a few times the 50% payout policy in your comments. Does this mean that any investors should rule out any possible upside to this from a special dividend or excess capital distribution? Maybe I'll take the questions one by one, if that's okay. Thank you for that. We did say it is a policy. Last year, we did pay more than 50%, so I'm not saying that there is no potential. How we pay our dividends, of course, we have to evaluate every time we come to, we come to that discussion and decision. Indeed, of course, based on how we want to use our capital and the level of our capital. It is not a simple question that we will pay more or less, but we want to say that we're committed to paying 50. That is, that is something that you can look for. But whether we will pay more, it depends on our capital positioning. At this moment, you're not able to say anything about your excess capital distribution plans, is that correct? Sorry again? At this moment, you, you're not able to say or give more clarity on your excess capital distribution plans? Yes. This morning, we don't have any particular plan to announce. Yeah. Okay, great. Thank you. The second question I have is, on the funding costs. It did seem a bit odd that your funding costs increased quite a bit this quarter when, for the peers, they were seeing, you know, less pressure on that. Is this because, mainly because of the wealth management funds that are coming in, they're probably going to fixed deposits? Or was it that you were being more aggressive on the deposit campaigns? What is the outlook for Q3, Q4? Are you easing off that, you know, deposit campaign pressure? I think it's mainly really from new money coming in, which gets into fixed deposit. If you look at... I think there's a page, the slide by, Chin Yee, that shows how the fixed deposits has grown, versus CASA. With, with the new money and also investors staying a bit on the, on the sideline. That is one reason why funding costs have creeped up a bit. We are already seeing fixed rate dip, fixed deposit rates, not coming, also trending a bit down as well. Hopefully, that that will continue, with less pressure on the funding costs. I think that is the reason why Chin Yee is expecting that we could be quite stable with the NIM going forward into the second half, and stay above 2.2%. Great. Just on the net new money, I think last year was a strong year as well for you, and this year, of course, has been SGD 16 billion, pretty strong. Are you able to give us some rough split between, you know, how much of this money went into deposits, how much went to investments? Then within deposits as well, how much is CASA versus time deposits? Just rough, broad splits would be very helpful. It would be quite difficult to split it as they move, as they move from investments into fixed deposits. I would say that more this year, more net new money is into deposits because the investment sentiment stays low. In a way, AUM could be impacted because the new money coming in, creating new AUM, you can also see that if our customers is using deposits to repay loans as well, then you actually see the AUM coming down as well. I would say that hopefully the market... I mean, we're expecting, yes, there's uncertainty, we are very resilient in our wealth business. Whenever there is interestingly, or shouldn't probably use that word, but when the market is more volatile and there is any liquidity concern, actually we do see money flowing in because there's a flight for quality. How we manage it and how we do the business, we welcome the new money because it's, it's always good to have more business coming in and new customers as well. Hopefully, investment sentiment increase and interest rates stabilize, no more, no more hike, then customers are beginning to put money into action. On the wealth management, continuing on that, I think the second quarter income, the 17% quarter-on-quarter decline, it looked a bit steep compared to the peers. The DBS was flattish, UOB was down 8%-9%. What, what happened there? Any, any color? Mm. Maybe our colleagues may want to respond to that. Yeah, I'll share with you color. I think, as Chin Yee had shared earlier, that our insurance, between the single premium and the regular premium, there's a little change in the mix. Our single premium, because of the high interest rates, customer are, are not taking as much loans to fund for the single premium, right? Tend to do in the smaller ticket now, or they're just deferring that. However, on our regular premium side, I think is, we're going to see a record year this year with the fund. However, the drop in the single premium just can't quite compensate for the rather, the increase in the regular premium can't quite compensate for the increase in the single premium. We are also coming out with a special premium loans with a special rate to help to bump that up, so we do see positive upside in the second half. Great. Thank you very much for that. A couple more questions, just quick ones. On the provisions, you did mention that it was across several categories, right? The GP provisions that you provided. You said it was for CRE, it was for MEV. Could you give us a rough split of how much it is for each of those categories? How do you split the general provision, SGD 200 million this quarter? Yeah. We... I, I gave the reasons for the increase in general provision, general allowances, the three categories, right? I, I won't be able to give you the split. Yeah, suffice to say that, you know, this, this take into consideration our forward-looking view of the macroeconomic environment, you know, and then we adjust accordingly. Yeah, it's, it's based on a prudent forward-looking view, yeah. Is it fair to say a lot of it is for the CRE space, and you're comfortably provided for the developed market CRE space now, and you won't need any more in the future? Yeah. Yeah, we, we did that in the first Q, and then we also upped that a little in the second Q. Yeah. All the time, barring unforeseen circumstances. Understood. Thank you. Just the very last question. The 13%, underlying ROE target that you have for 2025, aside from the SGD 3 billion incremental on top of it, you said it's assuming some decline in rates, right? Could you be able to say, like, what sort of rates are you thinking about by 2025? For this, what is the assumption behind this ROE target? Is it 3%, 4%, 2%? We are assuming interest rates to start to fall next year, but not substantially, to pre pre-cycle. We are assuming about 1.5% drop, but it's on a gradual basis. Basically going down to like a 4%- One point five to two. 4% level. Huh? 3.5%-4% level by 2025. Yeah, around, around 3.something. Yeah. Great. Thank you. That's all my questions. Thank you. We will take, next question, Prisca from Straits Times. Hi. Congrats on the results. I have two questions. One on the fee income as a whole, do you have any specific guidance on this? Do you expect like a mid-single digit for the whole year, or? Sorry, wealth? For fee income as a whole. For fee income. What's your specific guidance for this? Is it like a mid-single digit or a high single digit for the whole year? How has this changed from before? Second question on changes in the risk profiles for the loan book. Are there any specific sectors that you think, might come under stress besides the CRE sector? We don't provide guidance on the fee income, that would be the answer to the question. On risk profile on the loan book, I think it is still resilient, as we explained that we are not seeing any systemic risk, but we are according to global economic situation. We prepare for some, some of our potential weakening of the credit due to the economic situation. Really don't see any particular sector being too weak. Yeah. Harsh? Sorry. Hi, thanks for, for the briefing. A few questions. I would just want to focus on the commercial real estate book. Especially in U.S., U.K., Europe, could you give a sense of what is the loan-to-value, what is the vacancy rates in these properties that you have lent against? Because the deck says Grade A properties, but with the office occupancy collapsing in most of the markets in the Western Hemisphere, Grade A doesn't mean what it used to mean a few years ago. What I'm trying to understand is, how much worse can it get in terms of provisions? In your 20 basis point guidance for full year, how much more have you factored in? I'll come to the Greater China and Hong Kong real estate in a minute. I'll invite Teck Long to talk a bit about it, but in general, developed markets, CRE, especially on office, the LTVs is about 50%-60%. When we say Grade A, it's generally Grade A in good location. Not just saying Grade A is the same Grade A, but generally in very good location. Again, we are mainly supporting our network customers who have very long-standing relationship with us. I'll let Teck Long to comment a bit further. Yeah, I, firstly, our franchise in U.S., U.K., for office, commercial real estate, particularly office, is actually smallish. We think in terms of the number of customers and not, like, the whole portfolio. That's the first point I want to point out. Secondly, majority of which it relates to network customers. The third, because of the, I would say, by number, small number of cases in these markets, it tends to be leases by major tenants. We don't really think of it as a vacancy rate, like in the Asian market, where the leases are three years. When you have a major tenant moving out at this juncture for a second-tier building, then in which case you will have problems, and that's what you kind of see in the marketplace at the moment. We are look at our portfolio, we are actually very comfortable. We have one idiosyncratic risk. Why I call it idiosyncratic as opposed to systematic, is because there are multiple parties involved and, you know, negotiations still happening. For prudence, we decided to, kind of like set aside some provisions for it. Other than that, we don't see a real systematic port... portfolio risk in this sector. Right. For the 20 basis point credit cost guidance for full year, how much more are you factoring in in terms of Western Hemisphere CRE exposure getting weaker? We'll continue to watch the portfolio, but again, we also want to note what is the interest rate environment is going to be like. And in a way, we are holding constant discussion, but because most of them are network customers, we do know their intention of what they want to see there. As again, we are making general provisions more than specific provisions. So you have to say that as if interest rates continue to stay high, we look at that. Higher inflation, potential recession in the U.S., this all can lead to uncertainty. And that's why when we say we want to maintain the 20 basis points, is to cater for that. All right. Okay. Thanks for that, Helen. Moving to the to our part of the world, Hong Kong CRE, there seems to be some smaller players in particular are starting to get impacted. I know your exposure is probably more bigger landlords, but still, what is the risk that you see? Do you have 100% large landlord exposure, and even within that, how do you assess the probability of some weakness or NPL formation in Hong Kong CRE? In Hong Kong, we are actually quite selective. We bank with most of the top developers or real estate owners. Again, the LTV ratio is quite low, so I wouldn't say there is a, there is pocket of weaknesses. If you look at the NPL number for Greater China, it has not really risen. To an extent, whenever you look at potential NPL is when, when there is some... For example, Teck Long mentioned, if you have a case where you're refinancing, it needs a longer time to discuss different parties, investors, they want to negotiate and all that, then yes, sometimes we say that it may impact the quality when you defined it, then it may be a NPL, but we don't even need to make provision. Because the the chance of this being resolved and all the value of the property and the sure- the sureness that this property will be taken up by another buyer, and even if we have to sell it. It does impact on the the provisions we make. As you see, our special provisions is actually quite stable, and it's not at a high level. In general, we do want to make general provisions, as we said. I'm quite comfortable with the Hong Kong CRE portfolio as well. Right. Just one final question on, especially the U.S., Europe CRE. Are these syndicated loans? Do you have other Singapore banks, who are with you on, in these loans? As in, is, is that as Teck Long said, there could be some, you know, multiple parties involved. Is that part of the reason why it is taking is becoming an issue to resolve that problem? I think what, Teck Long cited is just a... Sorry. Yeah, I was citing the specific case, specifically one case. We look at our portfolio, we are quite comfortable with what we see at the moment. I don't think of it as a system, systematic risk happening to our portfolio for the Western Hemisphere. You are right. For larger ticket items, we generally work with partners we know very well, even in the syndication. Thank you. Goh Chin Yee. Yeah. Is this on? Yes. Yes. It's on. Okay, great. Thanks. Yeah, thanks, thanks. Congratulations on the good results and, of course, on the SGD 0.40 interim dividend. Okay, I've got two questions and one point. Okay, the first question is on Great Eastern, of course. Does your SGD 3 billion additional income include Great Eastern for the next three years? That's one. The second one is, you know, this FRS 17 and the profit recognition from the new policies, does it impact your NBEV? Also, I wonder if Great Eastern CEO, who's here, could give us an idea of the interim embedded value of Great Eastern. That's the Great Eastern question. The third one on Great Eastern. Would Great Eastern be, willing to I mean, it raises interim dividends, so is it likely to raise its final dividend? Okay. That's the Great, that's the Great Eastern question. I think the, I'll take the first question first, whether that is included in the SGD 3 billion. It is included to the extent what Great Eastern can bring to us in, in the business development, right? Improve our banker fees, for as an example, and some of the things that we work with Great Eastern on, for example, general insurance. These, these are the things that would be in the incremental revenue, but not what they produce, meaning not the bottom line contribution to the group. I'm not sure whether Hock Seng you want to take the IFRS 17 question on NBEV. No, I think, the question is whether we, we have any interim, embedded value. Actually, we don't publish, interim embedded value. We only publish embedded value on a yearly basis, so we, we won't be able to share that. What is the other question? On dividend. On dividend, again, I don't think I can really comment on that at this point, yeah. Yeah, the impact of the FRS 17 on the profit recognition, does that affect your NBEV, your new business embedded value? Not quite, because the way the NBEV is calculated is based on the slightly different, is on RBC 2. NBEV and the CRM and the profits generated through IFRS seventeens are two different standards. The trending is the same. If you see a good positive NBEV, then it should generate back into the positive profit generation in the future. I think that gets into a little bit technical. Okay, we won't go into that. Okay, the second question is on, still on the $3 billion. Is there a split between the, your income from assets that require more risk weights and and your income, like, fee income, which is, you know, the, like, the holy grail of, of banking, this fee income, because they don't require, you know, they don't require additional risk weights in that? That is definitely our RWA requirement as we bank new customers, as we improve our wallet share on the network customer, for example. It's equally, if you look at wealth, of course, there will be more fee base than the, than RWA base. I did mention that the top two pillar would be 70%, so wealth would be quite a important part of it. Hopefully, we see fees increase as well. It is, it's, it's, it's not like you can... We have targets, but it's not like you can just easily just split into it. It depends also about what one needs to another, another. Yeah. Okay, thanks. The third point, of course, is that, your mangrove swamps are the best things for carbon, whatever, sequestration or whatever they call it. I hope you build more somewhere all around Singapore and Malaysia. Thank you for that. I'm very excited. Good. We just went to Palawan to plant some mangroves trees, just two weeks ago. Looks like Chin Yee want to take that. No, just on point, we do have mangrove trees in Malaysia, too. Yeah. ... Yes, yes, I think they should be everywhere. Yeah. I mean, as many as possible, because that, that will help with, with, with this, you know, setting the earth. That will help preventing. Yes. Setting the earth on fire. It's definitely, in, in our strategic plan. Thank you. Maybe Chin Yee, maybe our next trip to plant trees, mango trees, we can invite our friends? Eh? All right. I think we- next to the analyst, right? Yong Ong. Nick, I'll come to you. Hi, good morning. Thanks for the presentation. This is Yong Ong from Citi. Just two questions. On NIMs, you obviously talk about NIMs, the rates coming down over the next two years, and your peers have been talking about hedging their floating rate loan portfolio. Just wondering if you are doing the same, and if there's any extension on your, of your own, on your securities duration, and if this can cushion your NIMs downside when the Fed pivot? Chin Yee? Answer to both question is yes. Okay. Is there any color from- Full answer. You know, maybe from, Mr. Kenneth Lim, maybe you can share more colors on how that's been ongoing since last year. Yeah, that, that has... I mean, these are the measures that we are taking in our rebalancing of our portfolios, you know, in, in terms of the interest rate environment, and also taking some of these actions, like, what you mentioned, cash flow hedge, right, or loan portfolio, and extending the duration of our assets. These are the areas that we are constantly looking at. [Anson], to add more color? Hi. Thanks for making me work this morning. I'm, I'm glad I'm not forgotten. But, not really much to add to Goh Chin Yee's comments. We are looking basically to hedging more in terms of our loan portfolio. That's one way of locking NIM. Your, your question on whether we're looking at, extending duration of some of the securities that we have, particular are HQLA securities. We have done that, I mean, as and when the opportunities are there, we will consider to see if we would, put more on the books, right? Obviously, the, the market, the day-to-day market fluctuations remain quite fluid. You know, every day there's a headline news, you see rates move up, up and down. I think the longer term or the medium term trajectory for rates will probably be lower. We need to look past the near, the medium, the nearer term market impacts and see what's, what's longer term. Longer term, we feel that maybe rates have peaked and, therefore, we are looking in terms of seeing how we can put on hedges or extending our securities to lock in the, the NIM. Yeah, thanks for that. Since you're on that, maybe do you have some color on how second half trading income can trend? If, you know, and if the strength in the first half can be sustained into the second half? I, I think, early on, Chin Yee alluded to the improvement in our trading income was one of the factors was really the, the turnaround in our GE mark-to-market in the portfolio. Overall, I think in the second half, the trend will continue both on the customer and the non-customer flow. I, I think one thing that in the non-customer flow, that was one-off last year, we, we aren't seeing this year, right? The one-off last year was really the, the mark-to-market gains that we had from our hedges, because of the volatility and the sharp increase in interest rates. This year, the mark-to-market gains were not there, but however, the overall trending, trading income is higher. That, that's basically showing that the underlying core business is actually... The momentum is actually quite good, and we expect that to continue in the second half. Yeah. Thanks for the color. Okay. Just maybe one quick follow-up, if I can. Just maybe quickly on your cost income ratio of 40%-50%, is that on a group level? Maybe you can share some color on whether that's driven by income level or the cost level? Of course, we always try to target positive draws on income versus expenses. In the next three years, in particular, we have to think about when we start talk about incremental revenues, and we're also investing more as well. I think guidance on expenses this year would be single, high single digit for this year. But for the next three years, it also depends on the space of how we invest and also on whether market conditions changes as well. But the point is, of course, we are talking about positive draws, that's the plan, and eventually leading to increase in our OE. Thank you. Okay, next will be [Dexter] from Bloomberg. Hi, good morning. I know that your inflows actually was more than DBS and UOB, both using SGD 60 million. I was curious, how does that break down in terms of geography? Like, where are you getting the inflows? Where do you see the inflows coming from? My second question is on China. You guys obviously are very... expanding quite a lot. You mentioned RMs and just now, like, do you see more inflows coming in more from there? Are you concerned about the kind of slowdown or the general, more pessimistic Chinese pic- economy picture that you have now? Thanks. Actually, our inflows are quite even, but Sunny, Sunny and Jason can add on to that. Around ASEAN and also Greater China, and even from Dubai. Maybe I'll ask them to add some color. Whether it's slowed down, I, I think wealth flow, intra-Asia in particular, is a trend to continue. If you look at a lot of the studies, Singapore and Hong Kong will remain as the two main wealth management centers, like, going into 2025. We're quite positive about money flowing in, and of course, we have a very good brand in our private bank, Bank of Singapore. Plus that, as I said again, we are a very solid bank, very good credit rating. That counters some of the uncertainties, as I said, when the market liquidity becomes a bit tight. If there is a uncertainty, money tends to flow into a flight to quality, right? Tends to flow in. In a more liquid market, there's more money around and more AUM to get. We are also well positioned to get that. I just wonder whether our colleagues would want to add some color. Yeah. From the consumer side, I think the inflows are pretty well diversified. We don't see any particularly concentration on that side. I think it's more generally a flight to safety, and so generally are quite well diversified. DBS said that about half of it comes from nowhere. Is this something you see as well, most of it coming from Greater China as well? Not a full concentration. We do get slightly more from Greater China, but we do see inflow from other regions as well. I don't know, maybe Jason can share a bit as well. Sure. On the Bank of Singapore side, we've actually got quite a lot of outflows from ASEAN as well. It's actually to the points made earlier, Greater China may be a good source of the funds, but we haven't we haven't seen any particular large concentration coming from there. But we've also had in the first half of this year, also a good growth coming from family office setups that really are starting in Singapore. We've started seeing some shoots of that in Hong Kong with their, with their, with their introduction of their family office rules. Family office growth is also a big focus for the bank, and we've seen the fruits of that labor come through this year. Thank you. Okay, thank you. Nick, I promise to come back to you. Thank you very much. It's Nick Lord from Morgan Stanley. Just a question about your strategic plan to 25 and the $3 billion of incremental revenues. I just wonder if you could tell us from an outsider point of view, how you would like us to measure success or failure on that? Is it purely the ROE? I mean, in, in two years time, do we judge you on 14% ROE, or is there other things we can look at? Because clearly, we don't know what the base revenue is to work out whether you've delivered $3 billion extra. I just wonder if you could give us some points as to how you think we should be measuring it from the outside. I think I will use a good pointer. Yeah, good pointer, because it's how you accumulate your profits and then the return to the equity. Of course, when you measure, you look at the equity change as well. For example, if we do increase our payout in, in dividend, if we're reducing our major subsidiaries, you know, performing better, that's-- I mean, there are a variety to that. I can only tell you there's a plan, so you can measure us on the ROE, but you can also measure us on the growth of revenues as well, whether these three years is in general, above the average in the past. The peer group comparison. Average in the past or peer group? Average in the past. I think average in the past, I, I hope to perform above our peers. Okay. I, I can't rule out that they have plans to do much better as well. Okay. How do we just-- Because obviously, you've benefited a lot from interest rate rise in the last year or so? Mm-hmm. I'm just trying to think how we normalize for all of this to, to be able to work out whether you've delivered SGD 3 billion extra, because there's lots of moving parts in that. We will talk more about it as we pass the first year. Okay. We'll constantly discuss that as we. Maybe- go along the three years. Maybe give us disclosure at the full year or so on that. Yeah. For example, I probably can tell you whether I meet the 16... Yeah. of SGD 2 billion. Yeah. I can tell you that by the year finish. At the moment, after half a year, I'm quite cautiously optimistic to reach the target. Yeah. Okay. All right. Thank you very much. Rui Wen from DBS? Test, test. Thanks for the opportunity. I have three questions. The first question relates to how should we think about the management overlays level, and what are the current levels? At 130% of NPL coverage, would you say that we are done with the management overlay and GP net adds going forward? Or are you adding on more? Because we do see a lot more risk going forward. My second question relates to NIM. I think two of the other peers have mentioned that from 2Q onwards, they continue to see upside buyers to NIMs on a Q-on-Q basis, as their exit NIMs in June and July were higher than their average second quarter NIM. Is there any reason why OCBC is seeing it at a stable 2.26 level for the second half? I'll come to my third question later. Okay, the first question is on management overlay. you asked about, like, our level. Normally, we will say that, you know, of our overall cumulative allowances, 60% come from, general allowances, of which, 40% is management overlay. All right? Thank you. You can work that out. In terms of whether we will continue to put on more management overlay, as I mentioned earlier, we will be vigilant, you know, in terms of monitoring the dynamics, as well as the macroeconomic environment. Where need to, we will certainly, you know, add on to general allowances, in taking a prudent, forward-looking view, so that we have sufficient buffer to weather uncertainties going forward. Yeah. NIM, right? NIM, in fact, if you read what we said just now, our initial sort of guidance was around the region of 2.2%, in first Q, when we announced our results. Now with interest rate hike, following that, because during that time, our assumption was no further rate hikes, right, for the rest of the year. Now that there was already another rate hike, we do see rates stabilizing at higher than 2.2%, right? It's, we are not saying anything different from our peers. If you recall, in first quarter, the guidance was 2.1%, then guided down, then now they are going back up again. We, we guided 2.2 around there. Now we are saying that it will be more than 2.2. Okay, thank you. My third question is relating to how should we see the trending for GEH contribution to OCBC? I think before the SFRS 17 changes, we used to take the GEH group profit attributable to shareholders number. This number, together with some adjustments, were passed into OCBC's number. Directionally, it's kind of consistent over the quarters, meaning, you know, if this number is up, then the contribution to OCBC should be up. I think this quarter, you know, this number for GEH is actually down. We note that the contribution to OCBC at the non-interest income level is actually up. Is it because we are going to see a more consistent handle at the SGD 200 odd million fee contribution handle to OCBC because of this accounting changes? Could you share more color on it? I think I'm not at the liberty to project, you know, contribution from Great Eastern. Maybe, let me phrase my question a different way. I think for 1Q 2023, the group profit attributable to shareholders for Great Eastern is SGD 244 million. For 2Q 2023, it's SGD 193 million, so it's down quarter-on-quarter. If we look at the GEH numbers that were on your slides, it's actually up quarter-on-quarter, so it's SGD 262 million versus SGD 238 million. Just wanted to understand that, you know, this directional changes, which is not very intuitive, it's because of the accounting changes, and going forward, we do see a more stable contribution at SGD 200 million levels because of the more permanent in the accounting changes. I'll suggest we take this offline because you're comparing numbers that we may not necessarily have on hand. We, we should look at it separately. Again, taking into consideration that is indeed rebase, of how we compare things, so I, I would suggest we take it separately. Thank you. [Julian?] Thank you. A lot of great questions have been asked already, but I just wanted to ask a little bit about the m-management overlays. How much of the commercial real estate book is not network customers? I.e., what would you actually have to provide for? If all of, you know, the sponsors are from Asia, and we know them well, then maybe we don't actually lose very much. It sort of strikes me that this quarter, yeah, we had an NPL, but actually, the overall NPL, you know, asset quality improved. Following from that, under what scenarios would you release some of the general allowances? It feels like we're just sort of working towards 20 basis points, but why? Like, at what point would we say, "We don't need these anymore. We could release them. My second question is just on costs. We're obviously in a very good revenue environment. Cost to income is below 40%. For the medium term, where we have the 12%-13% ROE target, is there any potential for cost out during that process? Because obviously, the revenue environment may normalize, right, as rates come down. Just wanted to get your thoughts on that. There's sort of two broad points there. You're referring to how much is not network customers. It depends on whether your focus is entirely on developed markets or, or elsewhere, right? Developed markets, don't think really we can have a number, but I really think mostly are, are network customers. Yeah. Teck Long can take that. Maybe I, I, take the question to, instead of answering how many percent, because it's really a handful of assets we are talking about. Think of the non-network as very top names, like some of the sovereign wealth fund. Because, you know, it's, it's not a Singapore or Malaysia or Hong Kong customers, but we have some dealings with, a very global kind of, sovereign wealth fund. That's, that's the kind of quality we are talking about. It's not really the mid caps or whatever. Regarding general provisions release, of course, we will adjust if MEV change, market becomes a lot more favorable. We do look at the MEVs, and that in the past, we've experience of releasing some of the general provisions, if market conditions improve. That's our, that's our, taking the second question. The first one is about cost. Leading into the this three years. We, we're definitely investing in people. We're definitely investing in infrastructure, in systems, in making our products better. That's the part of a contribution to the SGD 3 billion increase revenues. As I said, we target a positive jaws, so hopefully, revenues rise, still as a percentage-wise, higher than our cost. You should see some cost uptick, and going into the next three years. Okay, do you have any more questions? Okay. Yes. Harsh. Go to what [Jayden] was also asking. Next year, could you give broad range of provision outcome? Because it's not clear how things will be, and I understand no one has a, a, a, a strong view. Given the different ranges, probabilities that you're working with. Two questions, actually. What are the range that we could expect? Second, what are the places or parts of portfolio where you are a bit more worried about, especially in 2024? I think that would be a later part of the year question, yeah? At this moment, very difficult to say, but I didn't get your first one. As You want- The range, the range of credit costs, you think, for 2024? It's too early. Okay, I, I know what you say, but, we generally, we do talk about it, towards the either the third quarter results or, when we talk about the final results for 2023. Right. Okay, thanks. Okay, I guess we don't have any more questions. With that, thank you very much for attending this morning's session. We wish you have a good weekend and a good Friday.