iFAST Corporation Ltd. (AIY) Earnings Call Transcript & Summary

Hello, everybody. A warm welcome to all of you for joining iFAST Corporation's Fourth Quarter 2024 and Full Year 2024 Results Presentation. My name is JP. I am from the Corporate Communications team. And together with me today from the iFAST team, we have Chung Chun, our CEO; and we have our Group Finance Directors, Winnie, David and Terence as well. I will go through the key summary and Section 1 on the financial results before inviting Chung Chun to present on the Section 2 part, which is on the business update. Thereafter, we will have the Q&A segment. So starting with the key summary. In fourth quarter 2024, the Group's net profit increased by 46.3% year-on-year to $19.28 million on the back of a 26.7% increase year-on-year in the Group's gross revenue to $104.14 million. The increase in fourth quarter 2024 profitability was driven by continuing growth in the Group's core wealth management platform business and a turnaround of iFAST Global Bank. iFAST Global Bank achieved a net profit of $0.3 million in fourth quarter 2024 compared to a loss of $2.57 million in the fourth quarter of the previous year. In 2024, Group AUA increased 26.2% year-on-year, to a new record high of $25.01 billion, driven by net inflows of $1 billion in fourth quarter 2024 and $3.30 billion for the whole of 2024. iFAST Global Bank's profitability in fourth quarter 2024 was achieved as customer deposits crossed $1.01 billion mark at the end of 2024, which is an increase of 182.6% during the year. The bank's gross revenue increased by 163% (sic) [ 163.7% ] to $17.22 million in fourth quarter of 2024. The group sees iFAST Global Bank's ability to achieve profitability in less than 3 years after the acquisition, which was in end March 2022 as a major achievement. It is a testimony to the fact that the innovative truly global business model that the Group has been sharing with investors is working well. It also demonstrates the Group's ability to deploy new technology solutions rapidly in a secure manner and at far lower cost than most banks around the world. Looking forward into 2025, the Group expects to achieve further progress for our various business segments. The Group expects to continue to grow the AUA of its wealth management platform business, which will drive further growth in revenues and profitability. In addition, the Group expects iFAST Global Bank to build upon its profitable fourth quarter 2024, and achieve a full year of profitability in 2025. With regard to the Hong Kong ePension division, the Group expects further growth as onboarding rates continue to progress and the ORSO business starts to contribute. Barring unforeseen circumstances, the Group expects 2025 to see robust growth rates in revenues and profitability compared to 2024. For the final dividend for full year 2024, the directors proposed a dividend of $0.016 per ordinary share, which is higher than the final dividend for FY 2023 at $0.014 per ordinary share. The proposed final dividend will be subject to approval by shareholders at the company's Annual General Meeting, which will be held on 28th of April 2025. Moving on to our group's AUA. So, as mentioned, we hit another record high of $25.01 billion as at 31st December 2024, which is a 26.2% year-on-year growth. Roughly the split between B2B and B2C, B2C takes about 33% and B2B is a larger contributor at about 67%. In terms of the AUA breakdown by markets and products -- so Singapore remains the larger market at 70.3%, followed by Hong Kong and Malaysia at roughly about 12% each, and others, which is made up of China and the U.K. In terms of the AUA breakdown by products, so the majority comes from Unit Trusts at 57% contribution, followed by stocks and ETFs at 22%, bonds at 12.6% and cash account and deposits at 7.8%. We'll move on to Section 1 on the financial results. So starting with fourth quarter 2024. So gross revenue grew 26.7% year-on-year to $104.14 million in fourth quarter 2024. Net revenue grew 13.6% year-on-year to $64.9 million in fourth quarter 2024. Net profit grew by 46.3% year-on-year to $19.28 million in fourth quarter 2024. For financial results based on full year 2024, so gross revenue grew by 49.3% year-on-year to $382.99 million. Net revenue grew by 53.6% year-on-year to $248.38 million, and net profit grew by 135.7% year-on-year to $66.63 million for full year 2024. Looking at the results overview for the Group over the last 5 years. So we'll find that there was a record performance for the Group in net profit, gross revenue and net revenue for full year 2024. I shall not go into all the details on this slide. We'll move on to the financial indicators for the non-banking operation. So for the non-banking operation in fourth quarter 2024, gross revenue grew by 14.9% year-on-year to $86.92 million. Net revenue grew by 6.2% year-on-year to $57.18 million, and net profit grew by 20.5% year-on-year to $18.98 million. For non-banking operation again, but for full year 2024 results. So gross revenue grew by 40.3% year-on-year to $330.98 million. Net revenue grew by 51.2% year-on-year to $225.79 million, and net profit grew by 92.5% year-on-year to $71.01 million. We have the usual statistics on the profit before tax margin for the Group, which is based on total net revenue. So that has been trending upwards over the last couple of years. So we ended 2024 at 33.5% for the PBT margin. Similarly, for return on equity, there's a good upward trend, and we ended the year 2024 at 23.4% for our ROE. In terms of the profit and loss by geographical segment, as highlighted just now, so for fourth quarter 2024, the U.K. banking operation turned profitable with a $0.3 million profit. And across the various market segments in fourth quarter 2024, markets like Singapore and Malaysia had a roughly 40% year-on-year growth in terms of the profit. For full year 2024, I think one thing to highlight is the narrowing of losses for the China operation as well. And of course, the improving of U.K. operation of profitability from the fourth quarter of 2024. I shall now go through the geographical segment breakdown for the last 5 years. The next slide shows the total net revenue by geographical segment. So I think the markets that registered a strong growth rates in net revenue in full year 2024 would be the likes of Hong Kong, U.K. and Singapore. So we'll wrap up Section 1 with the dividend for full year 2024. So as mentioned just now, it's a proposed final dividend of $0.016, which is to be approved by the shareholders at the AGM to be held on 28th of April. That will bring the total dividend, if approved by the shareholders to $0.059 for full year 2024, which is higher than the $0.048 for full year 2023. So with that, I will invite Chung Chun to share more about the business update in Section 2.

Thanks, JP. On my part, I'd like to give some business update, just zooming in on a couple of points I'd like to highlight. The first point really is about iFAST Global Bank. Recall that iFAST Global Bank was acquired -- or we acquired a U.K. bank in 2022 with completion in March 2022. And since then, we have renamed it iFAST Global Bank. And along the way, we launched two new business divisions, one is Digital Transaction banking, the other is Digital Personal Banking. Both have actually progressed quite well. And as a result of that, the bank has actually improved quite a bit in the operation. And with the latest set of results, you find that the bank has indeed turned profitable. So I've included a few slides here just to share with shareholders some of the journey that we have gone through. So this particular slide shows the quarterly losses that the bank has incurred over the last 2 years. And in the last few quarters, the losses start to narrow and in the latest quarter, it actually went to the black in line with what we have targeted as mentioned 1 year ago. We essentially turned profitable in less than 3 years, right, after we acquired the bank. I think that typically, when it comes to digital bank or start-up bank, I think most investors, shareholders tend to be somewhat skeptical about the ability for a new bank to turn profitable in a short period of time. And I think the reason is because if you look at the examples that we see outside in terms of new banks that have been created, most of them spend a lot of money in starting a bank in terms of cost of setting up as well as ongoing operating costs. In our case, of course, we find that in terms of cost of setting up, right, we can manage it far better than what most other banks have been able to do. We attribute this to the fact that as a financial institution who has been building internal IT capability all these years, we're quite experienced in bringing out new projects, new technology rollout, so we can control the cost much better. And that's why we have been confident that cost management will be something that we can handle quite well. And that, of course, means that we are able to get into the black at a relatively low level of business compared to most other start-up banks. In our case, we crossed the $1 billion deposit at the end of 2024, and that has been the journey that has brought us into the black. Moving to the next slide. This shows the revenue trends that the bank have been having. Initially, the revenue base that we usually have comes mainly from the EzRemit business, which is really the remittance business, which is the main business that the Group had when we acquired the bank or the bank had when we acquired the bank. But since then, other parts of the revenue have been growing. And if you look at the overall revenue for the bank, you can see a very nice steady up-trend over the last 2 years. Next slide shows some breakdown in terms of contribution from the different divisions. So there are the 3 key divisions within the bank. One would be the EzRemit, which is our original business of the bank. That part is pretty much fee income, transactional income and some FX income, a bit of volatility sometimes, but by and large, over the last 2 years, there's some growth, not huge, but there's been some growth. The part that have actually grown quite strongly [indiscernible] net interest income. When we acquired the bank, the bank didn't have a business model of trying to grow their deposit base. At that time, the bank saw deposits as a source of working capital that essentially is a cost factor. That's how the bank was previously run. But we see deposits as a source of revenue. We see that as being something that fits into the wealth management business that we have very well. And as a result of that, we have actually been booking on the DPB and DTB division that actually grows the deposit base as well as net interest income. Along with that, as well the DPB and DTB division that we have also generated some fee income for the bank, but the net interest income will be a bigger part that has been driving the growth of the overall revenue of the bank. So by the fourth quarter, that the bank reached a certain size such that we'll be able to turn profitable. Next slide. So yes, this is just a summary of what I was mentioning. Essentially, we've had a contribution from 3 key divisions and that had brought the bank into profitability. I would now like to just give a quick summary of our 3-year plan. I think recall that in the last few years, we've been talking about our 3-year plans. We started off talking about 5 years then 4 years then 3 years. We were talking about 5 years because at that time, some of our plans will take several years to materialize, including the ePension project and even for bank, right, it's a vision that we had. But I think initially, perhaps, investors didn't fully understand our vision. So we took the step of talking about something that's further ahead, 5-year plan and then 4-year plan and then 3-year plan. Just so that investors can understand what is it that we're trying to achieve, right? So right now, basically, just a recap of our latest updated 3-year plan. So the first point really is about our core wealth management business. That has been something that has been growing over the last maybe 5 years since we started, and that continues to be something that will be a core business for the growth. And in 2026, we grow the AUA by about 26%. And if we continue at 26% per annum CAGR, then we will hit our $100 billion by 2030, right? If we grow at 32%, then we can do so by 2029. So we are hopeful that with iFAST Global Bank and fintech Ecosystem that we can actually have a good pace of growth as we move on. Second point really is about the bank. We have achieved the first quarter of profit in 4Q. But certainly, we expect that to be the starting point and certainly 2025, we expect that to be the first full year of profitability. And I think if you understand the nature of the banking business, once we have the right model, the business momentum can continue and the potential for the revenue and profitability will be very substantial. The third part really is about ePension. This is a business that contributed to a big part of the increase in 2024 revenue and profitability. As we go into 2025, we expect further growth because the onboarding continues to increase. It is a business whereby in terms of the revenue stream is there. But the challenges in practice will be in ensuring that we're able to deliver the services well without too much operational hiccup and the managing resources, costs. So these are essentially the key points for us to manage. In 2025 as well, we expect the ORSO business which we include under pension to start contributing. The current timetable is that we're expecting that to start by the end of second quarter. Fourth point that I've included here is really to mention the fact that as a Group, we continue to push forward with our overall innovation. Now that we're in the banking business, global banking, it's actually important that we're able to develop certain part of payment-related services so that it fits into overall global banking business better, the overall global wealth management business better. There's also the bonds and wealth fund part of the business where, in Malaysia, we have gotten the RMO license for trading bond. RMO is recognized market operator. And yes, so we will be going live with that part of our business sometime this year. That is something that we expect will steadily allow our overall bond business to continue to grow as we move on. So these are some of the new services that we will continue to develop to ensure that as a group, we continue to progress and remain at the forefront of innovation. Next slide really is about the Fintech Ecosystem that we have built. So there is a chart that we show every quarter and that we update some of the numbers along the way. So the way to look at this chart is that iFAST itself as a platform offering a whole range of services. On the one side will be all the different product providers that we are working with the business partner, including the different exchanges that we connect to and now that we have a bank, we have central bank that we indicated there. On the right side will be the different distribution channels, all right? You have the B2C channel, the direct channel, but we also work with various companies, over 700 companies. Among them, there are more than 13,000 advisers within this over 700 companies, and that forms part of the overall distribution network that we actually have, that continue to expand. So as a platform, we started off with platform offering capability in the Unit Trust space, but that capability has been broadening. And 3 years ago that includes the addition of the bank. So that's a way to look at this Fintech Ecosystem. So increasingly, you will have noticed in the last 2 years, 3 years, we have been talking about a truly global business model, whereby you're talking about operating from a few countries, but you're able to tap into customers from around the world. And we are very keen on having a bank because we feel that a bank will allow us to do that much better. And our experience over the last 1.5 years, certainly, has shown that this truly global business model that we've been talking about is actually working well, and it has a lot of potential [indiscernible]. Next slide. So next couple of slides basically included some charts showing the net inflow and subscription numbers for our core business. So net inflow for the -- our overall wealth management platform in 2023 -- 2024 as a whole, it was $3.3 billion. In the fourth quarter itself, it was $1 billion in terms of net inflow. So that, of course, is the key driver for the increase in AUA for us as an overall wealth management platform. Next slide will be the chart showing the subscription volume for our Unit Trust business, which is our core business still and that has been on a healthy trend. Recall that because -- in 2022 and 2023 because of very poor market conditions, there was some decline, some dip in the volume, but certainly, things have actually been improving as our overall services have been ramping up. So that's why we are seeing some healthy growth trend right now. It is on the fixed income. And yes, this is for our business in the different countries combined. We have our Bondsupermart going live this year. We expect that, that will form a base for us to be able to continue to grow overall. This slide here really is just pinning down the targets that we gave previously for the overall Hong Kong business. We last updated that in February 2024. So we basically just reproduced that set of targets. And then on the right side, we show the actual numbers that we have achieved in 2023 and 2024. So as you can see, 2023, 2024, we have managed to exceed the target that we originally shared. And with that, that will be the end of this Section 2. And yes, I'll stop here, and we'll be happy to take any questions that you may have. Yes.

Thank you, Chung Chun. We'll move on to the Q&A segment. [Operator Instructions] So perhaps for the attendees who are in the board room, anyone wants to ask a question? Andrea?

A few questions from me. I think firstly, I'll touch on the path to profitability for the iFAST Global Bank. I see that most of your more recent revenue streams that's coming from the NII portion of things. Do you expect this to still be the driver for growth going forward? Or are we looking at any new segments that you're looking to grow? And are there associated expenses related to this? I have a couple more, but I'll go after this.

Yes. For the bank, we do expect that the NII, net interest income will be the biggest driver going forward. That is, of course, you're aware there's a recurring stream and that will grow as we grow our deposit base. And if we grow the deposit base and even by adopting a very conservative stance on the balance sheet, we're able to grow the NII quite well. And of course, as we grow the deposit base and the NII, we find that some corresponding growth in the fee income as well, right? So in the case of the Digital Personal Banking division as well as the Digital Transaction Banking, then we find that there's some FX margins that we have been able to grow as that happens because customers do need to make some conversion of the currency into a different currency. And there is that proportional growth in the fee income as we grow our overall deposit base and our overall NII. So yes, essentially, in summary, we expect both fee income as well as NII to continue to grow, but we think that NII will be a bigger driver as we go forward.

My next question is on the ORSO. I think previously, the previous guidance or the expectation was that contributions were slated to come in the first quarter. So I saw in your slides that this has been delayed and even to the end of 2Q 2025. Wondering if you could give some updates on what's happening here, why the delay and perhaps you did mention that there is talks going on with the partner. What's going on there? What kind of trustee size is this and potential size of actually the whole ORSO project that you are looking at?

In terms of the slight delay from first Q to second Q, the main reason is because our partner and ourselves decided to ensure that the operations will roll out very smoothly when it goes live, we just wanted to make sure that the extra time period is put in into testing on the various parts of the system and operational part of the work. So that is essentially the key reason for some delay. As far as, yes, going forward and so on, I think at this point in time, yes, the detailed discussion we're not able to share, but certainly, we see the potential for further growth. That's why there's been that ongoing discussion.

Okay. My next question is on the collaboration with the partner for the Macau pension project. I think Macau this is the first time you have mentioned Macau as the potential for growing this ePension segment. if you could give us any color on any more progress there? Are we looking at a partner already? What structure would this be? Would like this be more like the MPF structure or more like the ORSO structure where AUA will be funded in your AUA?

You mean by the ORSO structure? Something similar in structure? I don't get. . .

Progress-wise, are talks as advanced as in ORSO such that we are looking that this could potentially contribute to numbers perhaps in 2025?

Yes. I suppose on a very short-term basis, I wouldn't want to assume. Too much business or too much revenue on that, but that's something that sort of opens up in terms of growth potential. But if you take 2025 on its own, I wouldn't want to assume too much revenue coming from.

Okay. Got it. So just putting this together, I mean, the ePension, we're going to see a step-up as per your guidance as more trustees get onboarded. We also have that ORSO project coming in likely in 3Q, 4Q and with the potential of Macau pension project coming on board, is there any potential for upside revision to those Hong Kong targets that you're looking for?

We previously had our target being updated in February 2024. I will say that I will stick to the same at this point.

Okay. And then just one more question from me on the OpEx for fourth quarter. I didn't realize that the other OpEx line, it was quite a bit lower in the fourth quarter, about $8 million versus your run rate of about $12 million to $13 million in the first 3 quarters of the year. Was there anything in particular that will cause that OpEx to be lower? I would assume that some of the ePension or perhaps projected expenses for your ePension system goes into this line. Is that accurate to say? And is it that in this quarter, you just didn't have to expense as much anymore?

I think one of the key reason really is that, yes, some of the expenses we made estimates and provision during the year through the different quarters. But towards the end of the year, we find certain estimates that were put in for expenses in the earlier quarters were higher than we actually were incurring. So with that then, you find that there was some adjustment that's part of the reason. And it looks like [indiscernible].

Would this be a reasonable run rate going forward? Or would you expect this to be more of -- or should I look at it on an annual basis.

I think for 2025, we expect that there will be further increase in the operating expenses simply because we have been increasing the resources to make sure that we can cope with greater onboarding that's happening. So operating expenses will increase basically.

Permit me to just add on to that comment. I think in the fourth quarter of 2023, we did take some amount of impairment on the FPOCI investments. And I think there was also some changes in the FX impact on -- in total receivables. So we -- yes, I think that also contributed to that.

And I believe we have someone who has raised hand in the Zoom call. So Benjamin?

I have a few questions. I'll ask them one by one. I think the first one is on your Hong Kong guidance for 2025. You are guiding for HKD 500 million on the PBT line. How should we think about the quarterly split? Will you be even across the 4 quarters or first 2 quarters will be slightly lower, then we see a step-up in Q3, Q4 as also comes in? Because if you look at 2024, the quarterly PBT for the Hong Kong business was pretty stable across all 4 quarters. So how should we think about quarterly split for 2025?

I would say that we expect second half to be higher than first half. Yes. So you won't be equal split across the 4 quarters in 2025. I think the initial part won't be as high as the second half.

Okay. But will you -- would it be fair to assume that first half on a quarterly basis would be higher than what we saw in, let's say, entire '24 on the quarterly basis?

We -- yes, we don't really give a guidance on a quarterly basis to that detail. So I'll say that overall, the trend should be healthy. I wouldn't want to be making very exact statement about the exact profitability each quarter because it is possible sometimes that during certain quarter, there will be some additional expense or some reduced expense and so on. But on an overall basis, we would say that there will be a higher number in the second half than the first half.

Okay. Understood. Okay. My second question is on the guidance again. I think in 2024, your PBT for Hong Kong was -- you delivered 25% higher than what you guided. Now 1 year ago, this question was posed to the iFAST team as well. I think back then, the reasoning why iFAST didn't raise the guidance was that management cited that there were uncertainties in China and Hong Kong for the core wealth management business. Therefore, they are not raising the entire Hong Kong business guidance. But if you look at recently over the last few months, sentiment has improved in Hong Kong and China. Your AUA growth in these 2 markets were around 20% year-on-year in 2024, strong growth in Q4 as well. What is holding us back from raising the 2025 guidance? Is it just that we are trying to stay conservative here?

I think the business that we have in Hong Kong, yes, we have the two parts, the wealth management part of the business, and there's also the ePension part of the business. There is a higher contribution from the ePension part of the business in terms of profitability than the wealth management part of the business. So as we enter 2025, the recent momentum on the wealth management part of the business seems to be more positive. I think that's true. But at the same time, we also are ramping up on our manpower and resources for the ePension business because we are making sure that we can deliver our services well. So -- but bear in mind, there are increases in costs and so on. So on an overall basis, we feel that at this point in time, we will maintain -- we will not be amending any target that we issued 1 year ago.

Okay. Understood. Okay. My two last questions. The third question here is that for the Macau pension, how big is -- how big do you think you'll be compared to, let's say, also and compared to MPF? And when -- let's say, some timeline on when the contribution could realistically start contributing, let's say, in probably 2026, 2027 or...

I think in Macau, there is the new requirement on the pension schemes for a company that is actually being introduced, being rolled out. So that essentially opens up a new opportunity for our business partner and for ourselves. And we find that, yes, because of that, the potential opens up. But at the same time, we are new to Macau. We haven't done business in Macau before, but we are doing so with our business partner. So at this point in time, I wouldn't want to assume too high contribution from this part.

Okay. Understood. My last one is just on the recent news article that you are looking for more banking licenses in Europe. Which markets are these? And what is the rationale behind it?

Yes. So I had an interview with a journalist from The Business Times. And so the question that was posed to me was, are we looking for more banking licenses in other countries, including those that we're operating in such as Hong Kong, Malaysia. So my answer was that we have no plans to apply for banking license in Hong Kong or Malaysia at this point in time. But we do feel that there are some opportunities that we would like to explore. Our business model for banking is iFAST Global Bank model. So we're looking at the ability to do banking cross-border rather than just being limited to the market that you are in. So that, of course, is a far more scalable business model. So with that in mind then we don't need to have licenses in all the country. We don't need to have licenses in too many countries. But we identified that in a place like European Union, for instance, it will be helpful if we do have a license there. And -- because European Union, you can get a license in one country and that gives you the ability to more directly market to the whole continent or the whole European Union. So that is an interesting kind of opportunity for us to explore. So that's why I was saying that, that is an area that we are looking into. And so the other country that I mentioned is something that is still in our mind is Singapore, because Singapore is our HQ. And we feel that at some point along the way, we will so like to look at an opportunity in Singapore. But as of now, no exact plan.

Okay. Just one last follow-up on that. Does it mean more acquisitions in EU? Or are you just planning to just apply for a banking license?

The current plan is to apply because now we are already a Group, we have a bank within our Group, and we are experienced in running a digital bank, so we can directly apply to bank acquisition.

Thank you, Benjamin. Yes, we have Benjamin as well here.

Ben from the Business Times. I was just wondering about the iFAST Global Bank projections, right? All local banks here are sort of projecting that NII's going to fall with interest rates, but how do you sort of see that [ IGD ] is [indiscernible] the fee-generating segments more to sort of make up for any fall in interest rates?

SO, I suppose if some of the banks say NII is going to fall, I think mostly is in the context of them earning, what, 2-point-something percent in NII, right? It's also in the context of them passing on very little on your savings account or current account deposits, for instance. And then -- but in a high interest rate environment, they can actually make a good margin, good spread. So if interest rates generally fall, then what they are able to receive will be reduced. And in terms of what they pass on to the client, then there's not as much room to pass on to the client. So I suppose that's why there's the expectation that as we have entered into a lower interest rate environment a couple of years ago, then there might be something to it. But iFAST Global Bank is coming from a different starting point. We start off with a situation whereby we are passing on decent rates on the savings account, current account. So our margins on that are not as high as what the local banks are enjoying today. It's also not as high as what the other mainstream banks in U.K. are enjoying. And we have -- we pass on more also because at the initial stage services are not as fully developed, right? But as our services are better developed then we do aim to be able to make a slightly better margin than what we have done. Plus, of course, as interest rate gets cut by Bank of England, by Fed, and so on, then we are able to also correspondingly lower the deposit rates and pass on to the client. So in our case, we expect that in terms of net interest margin for ourselves, we should be okay as we move on. In fact, we aim to have a slightly better margin as we become more established as our services are better developed, and as we grow our services.

Just a small question. China Desk in Singapore, how they sort - how they're unofficially for the group. I say you opened it -- you launched this business in a quite a short period of time. I'm just trying to understand what is it.

Yes. So we launched the China Desk because we -- I think we all know that there's a lot of Chinese money that they are already outside China. And a lot of this money want to be in Singapore. So while iFAST has actually been a platform in Singapore all this while, we find that our share of the Chinese money that is in Singapore or they want to come to Singapore isn't as high as it can be or it should be going forward. And we feel that that's because the services that we are providing probably isn't as well set up as it can be. And that's an important part of the reason why we launched the China Desk, including having Chinese colleagues based here in Singapore and that will allow us to better serve the Chinese client. So that really is the overall [ banking ]...

Thank you. We have a few questions in the Q&A box. So maybe I'll go through some of them now. So I think for -- to Royston and Kelvin, I think most of the questions I think you've raised or perhaps even most of the issues you've raised have been answered by the -- by Chung Chun. So we'll move on to maybe a bit more on the bank. So I think from Lee Keng, "so what makes iFAST Global Bank's offerings unique and superior to competitors? What are iFAST Global Bank's plans for geographic expansion and market penetration? And can you share what is the growth potential over the next 3 to 5 years, for example, in terms of customer deposits or other relevant metrics?"

On the first question, what makes our offering unique. I'll say that the most obvious point for a start really is our positioning as iFAST Global Bank. So I've actually been mentioning that in the last 10 years, 20 years, Internet has transformed the business world in a major way, starting with media. I think technically SPH and Mediacorp are still monopolies in some way, but we know that the media scene has changed completely. We have also seen that changes happening in various other industry, e-commerce. We have seen that happen in the movie streaming and music industry. The likes of Netflix, Spotify are major giants in the world right now. You operate from one or a couple of countries, but you have customers from around the world. And the business model from what can see are the most scalable and they are the most competitive. So, these are major giants right now. So Internet has changed the world in a big way. But interestingly, in the banking world, you actually find that actually hasn't changed in a big way. Banking, especially retail banking is still very much a localized business. If you look at what most retail banks do, they are essentially just trying to cater to local resident. But for a business where there's no physical movement of goods, why would that have to be sold, right? For banking, in our view, will eventually become a business that is far more globalized than it is today. We know for a fact that many people from around the world do want to have a bank account outside their home country. Maybe among the Singaporeans, not that many, but put Singaporeans aside, I think you actually find that people in many different countries, they do want to have a bank account outside their home country. That gives them some advantages. One will be some personal diversification for personal reason. Two will be the currency. Some of them will want to have an account for U.S. dollar that pay decent rates. But I think most banks -- I think they pay sort of better rate in the local currency, but when it comes to some global currency, including the major hard currencies, they actually pay very little for the deposit base. So in our mind, this is really a very clear opportunity that is actually advantage. And that's why after we bought the bank, we started talking about truly global business model where we go out to try to tap into this opportunity. And the last 1.5 years, last 20 months, since we launched the Digital Personal Banking that has told us that our vision for that is, in fact, well-founded. I think today, we have customers from close to 100 countries open account with us. And I think 65% of our deposits for iFAST Global Bank are coming from non-U.K. residents. So for this nonresident segment of the market, we are actually very good. It's actually not easy to open a bank account outside your home country unless you have millions of dollars. Singapore, of course, is a very successful wealth management center, very successful private banking center and lots of private banks operate here and it's really operating a global business model because customers from around the world, they put lots of money in private banks in Singapore. But private banks limit themselves to just a high net worth space. So private banks want customers with millions of dollars in the account. But if you just want to open account where you put in $20,000, $50,000, $100,000, then you actually find that it is difficult to find a bank that is happy to let you open. And that is an interesting opportunity that's actually in the banking world. And that's the part of the opportunity that we seek to tap into and the initial 1.5 years of our progress have told us that I think we are on the right track. Yes. So in terms of uniqueness, I would say that the business model, that is, I think, the most unique point of our business. We cater to the retail and mass affluent clients. And yes, we just provide, I would call it, simple service, simple because you're talking about daily deposits and current account, some payment services without selling complicated products. So for the simple service, I think we are meeting the demand that's actually out there, and there's a long way to go for us on this.

I think Lee Keng and Alan as well, one question is, do you have a target for the bank deposits for 2025 and beyond?

I think we're still at the initial stage of growth for iFAST Global Bank. So we believe that having -- it is possible for us to shoot for a doubling of our deposit base, for instance, for iFAST Global Bank in 2025. I think that is a -- yes, 100% growth in deposit base is a possible target for us to shoot for.

Okay. Thank you. We'll go to Ryan's questions. So here's a few questions. So the first one, if I strip out changes in deposits, cash flows from operations have been depressed over the last few years. How do you think about the cash generative abilities of the core company and the cash requirements of the banking operation?

I think if you strip out the deposits from the bank, yes, the cash flow will actually be from the wealth management platform as well as our ePension business. I think the nature of this business is clearly very cash generative. It clearly is something that will be giving us a very good cash flow as we move on. But in the very short-term, sometimes on a quarterly basis and so on, you actually find that for the ePension part of the business, yes, there are times where cash flow doesn't come in equally on a quarterly basis because we are still in the ramp-up stage. We're still at the stage where we are ramping up the resources, the manpower. We are still at the stage where the services that we are providing are still new and so on. So for various operational reasons, I think there's some short-term mismatch in terms of actual cash flow from this part of the business. I would say that would be the main reason. Are there other reasons?

I think that's quite accurate.

Yes, that will be the main reason. But on overall business perspective, you will find that cash flow will be there.

Yes. And Ryan's next question, are there any talks surrounding additional pension administration or similar contracts in addition to the collaboration in Macau?

I think for the ORSO business, is a business that we will be having discussions with various potential partners on an ongoing basis. Yes. But I think on an immediate basis, we don't have further updates to give at this point of time.

A couple more questions from Ryan. So this one on what percentage of total net revenue is NII now? And how do you think about interest rate risk? What rates are you most exposed to?

Yes. Maybe I'll answer this one. I think at the moment, if you look at the way we've been generating income, it's mainly fee-based, right? So I think the NII is a new part of business. And I think it's approximately just, I think, for less than 5% of total revenue for -- total net revenue for 2024, right? So I guess the thinking on -- the Group would still continue to generate very healthy fee-based income. I think NII will grow. I think we had earlier discussion about the growth potential of the bank. And of course, NII would be part of that. But I think over time, you start to see the NII make a larger contribution. But at the same time, our starting point as a wealth platform has been quite different compared to where most banks start, which is NII and then moving to fee income. I think we are at the sweet spot where NII will make quite a good difference to the revenues going forward, but we still enjoy the core wealth management fee-based income that forms the foundation of our net revenues.

So I think if you look at many banks, NII contributes 60, 70% of the net revenue. In our case, as Terence just mentioned, we start out with 100% fee income without the NII before we bought the bank. Now that we have a bank and as that grow, then the contribution from NII will increase. But we expect that on an overall Group basis, the majority of our net revenue will still be fee income, which will be quite cash generative as we go on.

And Ryan's next question was, do you require M&A to achieve or reach the $100 billion AUA target?

Our target doesn't assume M&A. Of course, we are always open to opportunities that come along. But when we bring down the target, we believe that to be a number that is achievable if we execute well, without M&A.

Thank you. Any questions from those who are present here? If not, I'll go back to the Q&A box. Oh sorry, yes.

[indiscernible] Phillip. Just two questions. The first is just on the -- on opening of bank accounts for nonresidents, was there any technology or compliance pain point that you managed to resolve and that's why you're getting this flows? And the second one is just on -- in Singapore itself, just are you facing any pressure on the trailer fees or even platform fees with competition?

On the bank account, in terms of opening bank account outside the country, the reality is there's no regulation that actually prevents that, right? So banks can open bank accounts for various -- for residents from various countries, certainly in U.K. and in fact, in Singapore, certainly. For some country, for specific banks, they may have some restriction. But by and large, there isn't actually a regulatory restriction. So most of the time, it's actually a matter of choice of a business model by the respective bank. I think for historical reason, most banks prefer to cater mainly to local residents. So that is truly the main reason. Of course, to be able to execute this business model well, there has to be a digital solution. There has to be a digital bank. And most banks are still a combination of digital and brick-and-mortar. So not all banks want to have this business model that we embark on. Secondly, on the trailer fees, the question about whether there's pressure on trailer fee and platform fee. I would say that on the trailer fee as a distributor, we -- we don't think there's a downward pressure on the trailer fee. I think generally, distributors who have the volume, a relatively sizable distributor, then they do have the pricing power. But I suppose the trend that will probably be emerging is more of not a direct pressure on the trailer fee, but it's more of some shift of investor demand from unit trust to ETF. So ETF generally doesn't come with trailer fee or if they do it's quite little, whilst unit trust, mutual fund has a trailer fee. So if there's some shift towards ETF, then on an average basis, there can be some downward pressure. So that will probably be the main point really.

Okay. We have a couple of questions from the Q&A box from a few of the analysts and participants. So we go to this topic on ePension. So from Alan, what will be the next step-up in Hong Kong ePension contribution?

The next step up -- so as I was mentioning, we expect it to be second half in terms of the next step-up.

Okay. And I think you may have answered it a little bit, but Royston has this point. Can management offer any Hong Kong revenue and PBT guidance for 2026 and beyond now that we are in 2025?

Yes. I think generally speaking, we don't really offer exact guidance for the various individual country. In the case of Hong Kong, we did that since about 2 to 3 years ago. And the reason why we did that was because ePension is something so new. And we wanted to give shareholders a better understanding of what roughly to expect. And for that reason, we gave some guidance. Now that things have been ongoing, so it is not our intention to give more specific guidance by country every year. So that's not the overall intention.

The last question on ePension from our Q&A participants is from Ryan. Could you help me understand the cash payment characteristics of the ePension contract? How frequently are you paid in cash? And how does that differ from how you recognize the revenue?

Generally, speaking you could say that we -- the cash flow will be on a monthly and quarterly basis, right? That's how we are supposed to get paid. Having said that, I think in certain months or certain quarter, there can be some differences in timing for some operational reasons. Yes, that's related to the stage of the operational ramp-up or operational [indiscernible]. But by and large, on a general basis, right, it should be there every quarter. But yes, on probably in the initial 1 year, 2 years, then on a short-term quarterly basis, there's some variance in the actual receipt of pension.

From Royston. What is the dividend outlook for the year? And can dividends continue to rise year-on-year in 2025?

So for dividend, yes, some years ago, before we went into the banking business, we -- at one time, we were targeting to pay out about 50% of our net profit as dividend. But now that we're into banking and given our very strong ambition for growth, and given the banking is a business that requires higher capital, then our current thinking really is that we will continue to grow the dividend per share each year as our business grow, as our profitability grow. But in terms of the payout, I don't think we'll be paying 50%. I think for 2024, we paid 26%. I think that probably can be taken as a payout. In terms of the ballpark, payout ratio could be in that kind of ballpark range for 2025 as well. So as you -- as we grow the profitability, then the dividend will grow. But in terms of payout ratio, it may not differ very much from 2024.

Okay. We have a couple of questions still in the Q&A box. So first one, OpEx as a percentage of revenue has been controlled well for FY 2024, how should we expect OpEx to trend going forward? This question is from Alan.

OpEx in absolute number will certainly be increasing in 2025, especially because on the ePension business, we are still in the stage of ramping up our resources so as onboarding continue to progress. So in absolute number, it certainly will go up. As a percentage of revenue, we think that as a Group, there shouldn't be a deterioration, I think.

No, I think maybe the PBT margin chart is probably instructive, right? So I think as JP pointed out earlier, we have been able to grow this margin. I think 2022 was quite a key year for the group where we took on a lot of new costs from the new banking business. And then as you can see that as we have made progress on the overall platform business, we have been able to then not just cover those costs, but also expand that margin. So I guess in relation to where we see this margin, also given what we mentioned earlier about very strong fee-based income from the platform that is highly scalable, doesn't require a lot of new operating costs per se. So I think also to answer that operating question for Chung Chun, we expect an increase. I think the increases will largely be targeted at the new areas of the business, particularly areas like the bank and probably some of the new services. So because I think there's also a question on whether we expect operating leverage. I think we have always been poised for -- to capitalize on any increases on the net revenues by keeping our cost contained.

There's a question from [ Lee Ken ] on the operating leverage possibilities from here. And also very specifically, how much will OpEx grow for 25% AUA growth next year?

A bit difficult to pin down the exact number, but I believe that for 2025, there's room for some expansion in [indiscernible].

Are there any questions from our participants here? We have also heard the questions from our virtual participants. So with that, then we'll end our session.

Thank you, everybody.

Thank you.

We'll see you again soon. Thank you.