Oversea-Chinese Banking Corporation Limited (O39) Earnings Call Transcript & Summary

[Audio Gap] Full year 2024, group net profit was SGD 7.59 billion, up 8%. This was driven by robust income growth across our 3 key pillars of banking, wealth management and insurance. Total income surged above SGD 14 billion for the first time to a new high from broad-based income growth. Net interest income rose to a record of SGD 9.76 billion, supported by 5% asset growth. Noninterest income grew 22% to SGD 4.72 billion, wealth-related fees and insurance income delivered strong growth, while our trading income rose to a record high. Cost-to-income ratio was below 40% at 39.7%. We achieved high single-digit loan growth and deposit growth this year. Loan growth of 8% was above our guidance level. Portfolio quality remain healthy with our NPL ratio lower at 0.9% year-on-year. Total credit costs were also lower at 19 basis points. Our capital position remains strong. Transitional CET1 ratio was 17.1% and fully phased-in CET1 ratio at 15.3%. With our resilient results and strong capital position, we are pleased to announce a new 2-year capital return plan to enhance shareholders' return. SGD 2.5 billion capital distribution over 2 years through special dividends and share buybacks. We will initiate our capital return to start early with a special dividend for FY '24 and another one for FY '25, set at 10% of our group net profit. The balance of around SGD 1 billion will be via share buybacks over 2 years at management discretion and barring any unforeseen circumstances. The shares will be acquired from open market and will be canceled. This means that total dividend payout of 60% annually for FY '24 and FY '25, i.e., 50% target payout ratio for ordinary dividend and an additional 10% in special dividend. For FY '24, we proposed final ordinary dividend of SGD 0.41 per share, bringing our total ordinary dividends to SGD 0.85 or 50% of our group profit. We further proposed special dividend at SGD 0.16 per share or 10% of our group profit. That comes to a total of SGD 0.101 per share, 23% higher than SGD 0.82 that we paid in FY '23. We will repeat the 60% dividend payout for FY '25. Now our capital return plan is set after a comprehensive review of capital -- of our capital position, taking into consideration the capital required to support our business growth investment options available to us and based on our target 14% fully phased-in CET1 ratio. Now let's move back to our financial results on Slide 5. For full year of '24, we reported record profits for both group and banking operations for the third consecutive year. For the fourth quarter, group net profit was 4% higher year-on-year. Quarter-on-quarter, group net profit declined 15%. This was partly due to the decline in insurance income from Great Eastern, arising from changes in medical insurance business in its core markets of both Singapore and Malaysia. These changes were explained in Great Eastern results, which was released yesterday. At Banking operations level, net profit declined by a smaller degree of 9%, due primarily to seasonal slowdown in trading and investment activities. Earlier on, I mentioned that our record profit was driven by strong contribution and performance across 3 key business pillars of banking, wealth management and insurance. These reflected the power of our diversified franchise and collective strength as 1 OCBC group to deliver continuous sustainable growth and improve shareholders' returns. Banking operations reported a third year of record profit driven by strong income growth. Wealth management businesses continue to grow from strength to strength. Both wealth management income and assets under management delivered double-digit growth to new record levels. Our wealth management income rose 13% to SGD 4.89 billion. Assets under management rose 14% to SGD 299 billion, led by continuous net new money inflows. For insurance, profit contribution from Great Eastern rose 39% year-on-year to SGD 882 million, driven by strong underlying insurance business as well as improved investment performance in its shareholders' funds. Moving on to net interest income in Slide 11. Our full year net interest income of SGD 9.76 billion was a new high, supported by 5% average asset growth from both customer loans and lower-yielding, high-quality assets such as government securities and interbank lending. In 2024, we deployed assessed liquidity into these high-quality assets as part of our ongoing balance sheet management to sustain net interest income in a declining interest rate environment. Net interest margin was down 8 basis points to 2.20%, as funding costs rose faster than asset yields over the year on average for FY '24 compared to FY '23. NIM was also partly impacted by the increase in high-quality assets, which are income accretive, but lower yielding compared to our customer loans. Looking into 2025, we expect full year NIM to trend lower to around 2.0%. This takes into consideration the lagged effect from flat rate cuts of a total of 50 basis points in late November as well as in December of last year. And our house view of 3 rate cuts of up to 75 basis points in 2025. At the end December 2024, NIM sensitivity based on 1 basis point drop in rates across our 4 major currencies of Singapore dollars, US dollars, Hong Kong dollars and Malaysian ringgit was about SGD 4 billion to SGD 5 billion -- SGD 4 million to SGD 5 million or 1 basis point of drop. Now this is lower than the SGD 7 million a year ago as we continuously took steps to reduce NIM sensitivity, including growing fixed rate loans and putting on more cash flow hedges. Touching on noninterest income now. Noninterest income rose 22% to SGD 4.72 billion driven by broad-based growth, wealth related and insurance income rose higher. Trading income rose to a record high. For the fourth quarter, noninterest income was up 18% year-on-year, but down 30% Q-on-Q. As I've highlighted earlier, this was partly impacted by lower insurance income from great extent in the fourth quarter. Wealth and trading income were also seasonally lower in the fourth quarter. However, we see strong momentum coming back in January. Full year fee income rose 9% year-on-year, led by higher wealth-related investment banking and loan-related fees. Wealth management fees rose 22%. We saw higher fees across all our wealth channels. This was driven by a rise in customer activities from improved investment sentiment. Our higher AUM base of SGD 299 billion also contributed to fee income growth as these higher percentage of AUM was placed in investment products compared to a year ago, contributing to our fee income growth. Now on average, we have around 60% of our AUM invested in investment products across all our wealth segments. In the fourth quarter, it's notable that fee income was actually slightly higher despite a seasonally quiet third quarter in 4Q. Trading income. Our trading income for the full year was at a new high of SGD 1.54 billion. The 53% increase from a year ago was driven by record customer flow treasury income. We also saw some growth in noncustomer flow trading income coming from improved investment performance from both our global markets as well as Great Eastern. The robust growth in customer flow treasury income was contributed by both our consumer and corporate segments. For the fourth quarter, trading income declined from the high base that we achieved in the third quarter and in part also due to the seasonality that I mentioned earlier. Full year operating expenses were up 9% as we continue to invest in strategic initiatives and pursue business growth. The increase was led by staff costs, mainly from a combination of higher variable compensation in line with our income growth and business activities growth. We also saw head count increase and annual salary increments. The consolidation of PT Bank Commonwealth from May onwards -- sorry, from May 2024 onwards also added to expense growth this year. Cost-to-income ratio for FY '24, was still maintained at below 40%. Our loan portfolio remained healthy, and we are currently not seeing any mix stress in any particular sectors. NPL ratio was 0.9% lower than a year ago. Total NPAs as at end December were lower year-on-year at SGD 2.87 billion. In the fourth quarter, our new corporate NPA formation was mainly from a downgrade of 1 Hong Kong CRE account. We did not observe any significant stress in Hong Kong CRE sector, and we remain watchful and are closely monitoring the portfolio for any signs of early indicators of fitness, if any. Our full year '24 total allowances were SGD 690 million, down 6% year-on-year. allowances set aside in the fourth quarter was mainly related to the Hong Kong CRE account that I mentioned earlier. Total credit costs for the full year were 19 basis points, lower than the credit cost guidance of 50 basis points. Now turning on to NPA coverage. Our group's NPA coverage ratio was higher at 159% compared to a year ago. As we can see, NPL has been declining, and we have been progressively building up our allowances, resulting in NPA coverage of exceeding 150%. Moving on to loans. Loan portfolio continues to be well diversified across geographies and industries. Group loans grew 8% year-on-year to SGD 319 billion, driven by broad-based growth across geographies and industries. We saw increases in housing loans as well as trade and non-trade loans. Looking at the chart on loans by industry, I want to point out that we saw a notable increase in loans to transport, storage and communications sector. This is in line with our group's strategic focus to capture opportunities in the new economy sectors as well as high-growth industries. Another of our fastest-growing segment is our sustainable financing loans portfolio, which expanded 31% to SGD 50 billion. This portfolio now made up 16% of our group loans. Turning on to deposits. Now our group strong, stable, strong and stable funding position was supported by customer deposits, which represented about 80% of our funding base. Customer deposits was 7% higher at SGD 391 billion from both CASA and fixed deposit growth. Importantly, the increase in CASA was from both corporate operating accounts as well as consumers savings accounts. This reflected the results of our efforts to grow this low lower cost and sticky deposits as part of our proactive balance sheet management to manage funding costs and defend our net interest margin. CASA ratio of 48.8% was higher from the previous quarter as well as from a year ago. Our group strong capital position is reflected in our transitionary CET1 ratio of 17.1% but slightly lower than 17.2% in the last quarter. CET1 ratio would be 15.3% on a fully loaded phase-in basis. After paying the proposed final and special dividend for FY '24, pro forma CET1 ratio will be at 14.3%, that's closer to our target CET1 ratio of 40%. My final slide is on dividends. basically sets out what I shared earlier -- now just to recap, 60% dividend payout for FY '24 and a repeat of dividend payout for FY '25. The balance in the region of around SGD 1 billion will be returned to shareholders via share buybacks. And all in, these translate to SGD 2.5 billion capital written plan. And that's on top of the 50% target ordinary dividend payout for the coming 2 years. With that, I thank you very much for your attention today, and I will now hand the floor over to Helen. Helen, please.

Yes. Thank you, Chin Yee, and good morning to everyone again. It's always good to see all of you here. I have a few slides to share, but I do want to spend a bit more time maybe on this first one. We talked about record profit for 2024, 2 years in a row. But I just want to dive a bit more into what bring us to where we are today. So allow me to spend a bit more time, as I said on this slide. . A lot of you would remember, we refreshed our corporate strategy back in 2022. And then we talked about different growth pillars and how we actually managed to continue to grow it. We also announced what sort of initiatives will help us to improve our revenues and what's sort of different business that we are investing in. So I'd like to recap that a little bit. I think you will remember when we talked about the corporate strategy, we're talking about 4 growth pillars which is the crypto China, ASEAN investment and trade growth, which is also above about the wealth growth in particular, in Asia, ASEAN and also wealth -- the cross-border growth in wealth. We talked about new economies and fast growth industry. That's the third pillar. And then we talk about sustainability. That's, of course, something that is nonnegotiable, but also a growth pillar for us because of our focus on helping our customer to transition, and we continue to build our sustainable finance book. So a lot has been said on that. And indeed, in 2023, we announced what does all this translate into. We're talking about incremental revenues of SGD 3 billion from 2023 to 2025. And we have reported on that number. So we did say that the first year 1/6 of it, we make SGD 500 million. And then the second year is 1/2 of that. So our target was SGD 1 billion. By the September results, I think I mentioned that we are already close to the target. So I just want to say that of 2 years together, we are a bit closer to SGD 2 billion. So hopefully, if we continue with those, so all this translate to the profit growth. But how do we translate it? It's very much depends on what we call the enablers, which is managing our capital, capital in where we needed, managing our risk -- and you can see the quality of our book, how NPL has also come down. And then it is all about 1 group as well. I think I talked about it so much that some of my colleagues ask Helen, we all know, we all know, and we are doing it. So it is because of this strategy that we're able to put our acts together. And indeed, over the last 2-years plus, we talk a lot about innovative market first products. I don't want to -- we kept them here. But indeed, digital acquisition, this is something very important for the [CFS] business, cross-border regional premier initiatives, these are all progressing well. And we talked about cross-border flow, right, of investment and trade. Indeed, we are supporting a lot of the Chinese commercial banking customers expanding to ASEAN and we have expanded our Greater China non-bank FI portfolio as well, resulting in revenue exceeding our targets in that SGD 3 billion to that extent. So we also see good progress in targeting what we call new economy and also a fast-growing industry. So I want to highlight that we've been capturing electric vehicles, mainly in the battery industry. And also, of course, you know that there's a lot of opportunity in Indonesia, which is a big manufacturer in that. And that's why we're talking about the value chain along this and also about data infrastructure. We are constantly looking for new opportunities. I think a big thing that we are looking at the moment is Singapore Johor, especially economic zone. Actually, we started even before the final agreement was signed in January. So we started more than a year ago are putting together a committee looking at what sort of customer we can help. And I want to say that we have dedicated teams to have, in particular, SME customers across Singapore and Malaysia, providing advisory services to help them start and grow the business as well as connect them with suitable partners in both sides. I just want to mention this in 2024 alone. We have had about 260 midsized enterprise in the region to start in Malaysia, setting up in Malaysia and helping them to set up a account and look at how they are going to expand. And this covered the services sector, construction, manufacturing, wholesale and retail and et cetera, et cetera. So for this sector, in particular, we think we can continue to grow something like 20% in 2025. So just to illustrate how the corporate strategy work supported when we are working together as 1 group. The collaboration has allowed us also to look at how as we set products and new business, more customers to be onboarded. But indeed, together with that, as we say, we work together, we know where to put resources in. And indeed, we did look at 2 investments in 2024, right? And you will recall, we completed acquisition of PT Bank Commonwealth in Indonesia. And we make our promise and our target. We are finished the acquisition since we announced in November '23, we finished the acquisition in May. And then in 4 months' time, we merged the whole bank into OCBC Indonesia. I have to say we actually have a target of integrated expenses and whether we will take in -- the business was loss making, I think, it is a understanding, but we did reduce immediately that amount. And I think we are doing good integrating the people and the customers into OCBC Indonesia. The other investment that I must mention has to be Great Eastern. I think we talked about this so much in the past 6 to 9 months. But this is a major step for us to strengthen our wealth management franchise, right? We're talking about GE. And I will spend -- there was another slide that I will talk about it a bit later on. But indeed, I want to recap that without all this, without the strategy and also another investment, obviously, has to be in bank in Singapore, where we talk about increasing and we're hiring quite a large number of relationship managers over the last 18 months. And if you're interested, Jason can cover that a bit more. And all these results, as we said, in banking operations achieving record profit, right? And wealth management income delivered double-digit growth. And then profit contribution from Great Eastern was also higher as Chin Yee has covered that earlier on. Our loan book also continue to grow. And indeed, for wealth management AUM, we grew double digit with net new money -- net new money fresh funds inflow for the year had about SGD 21 billion, which is, I think, quite a handsome number, I quite like it. Asset quality, we mentioned remained healthy. NPL ratio has been trending down the last few years. It is now at the end of the year, it is 0.9%. And Chin Yee mentioned we have 1 case on CRE in Hong Kong, which is a mid-cap name. One of our core customers. But in a way, for the last 18 months or so, we have been very vigilant on the mid-tier corporate on our Hong Kong sales exposure and we have been bringing it down. So to gain more than 2/3 of Hong Kong CRE, the CRE loan book is to large corporates. The names that you would know very well and that we're very comfortable with. And on the home portfolio, more than about 2/3 is fully secured with LTV still at around 15% and below. So we have also built in the comfortable level of NPL coverage as well as you actually see in our results. So for Hong Kong, there are still growing opportunities, but I do understand the Chinese CRE sector, which I just mentioned, we have been trying to help our clients to deleverage over the last 18 months or so. I think the resilient performance that is why we do talk but we have a comprehensive plan for our capital. I mean, this goes side by side with any growth, any investments et cetera, and we come up with this new 2-year capital return plan to increase shareholders' returns. So I don't need to go into the details. Chin Yee has mentioned all of this, and it is in our results announcement. So if we turn to the next slide, this is a simple one. A lot of people asking me, why GE? Why your banking operations is doing well? You have corporate strategy. But indeed, it is important to see that. We have always talked about a balanced portfolio with 3 important pillars. So we do want to continue to deliver a well-balanced earnings growth across our franchise. So double-digit earnings growth, right, demonstrated solid structural income generating capabilities and include the incremental revenue we talked about, to react the successful execution of our corporate strategy. And this is -- if you look at all the 3 pillars, that is what we're talking about, all have illustrated growth. So indeed, with this, I want to turn to the next slide to talk a bit about Great Eastern. There has been, as I said, quite a lot of question raised. Why do you want to increase your earnings -- increase, sorry, your owning or your shareholdings in Great Eastern? And indeed, though the offer last year, our shareholding in Great Eastern is now 93.72% right? And the offer is indeed, I would say, a natural progression in our strategy. Natural progression because we define where we are, we define our 3-pillar franchise. We know a balanced portfolio can help us to overcome in particular, the uncertainty and the volatility in the market over the decade. And our ambition, as we openly stated is to -- for OCBC to become Asia's leading wealth management player, right, which is part of our leading financial services partner for sustainable agent, that's our ambition. But indeed, we want to become as part of our strategy to be Asia's leading wealth management player, right? So capturing Asia's rising wealth and strengthening our business franchise is pivotal to this ambition. So the offer is the move to integrate GE, right, Great Eastern, closer with our OCBC 1 Group strategy. Imagine, if we manage to delist it and if we own 100% of it or we delist it, we have control and integrate GE to us, then it will help us to realize even more synergy value, right? I give you some data to think about. And indeed, we're saying that we have always have GE to have assessed you, of course, banker channels. But in the typical bank arrangement, the issuer have, of course, assessed to the bank's customer. But it's not the other way around, right? If you think about a typical insurance, which is not part of the banking group, they have a banker arrangement, then the insurance have access to the bank's customer, but the bank do not have access to the insurance companies customer. For us, with Great Eastern, we should actually have that assess, we should. I give you some details as I said, in Singapore, 70% of Great Eastern's customer also hold OCBC business products, okay? And 30% of OCBC's customer follow Great Eastern policy. You see there's still room to grow for OCBC customers to hold more Great Eastern's products. But 70% of Great Eastern's customer whole OCBC products, you think about it. This may not be workable if Great Eastern is not part of us. But we still say that there is more room to grow. And in particular, for Malaysia, where GE is truly, truly the leading and recognized as a local insurer for Malaysia, there would be more opportunities for our Malaysia banking business to work closer with GE in Malaysia tapping into that. So the strength, indeed the strength of 1 OCBC group can be amplified if we tightly integrate Great Eastern with us through a better ownership and if we manage to delist it. And we plan to accelerate our synergies further. And you think about if we are so tightly integrated, you can also think about what about the resources in capital right? At the moment, GE, of course, it is a very regulated industry. They do manage our capital on a very safe basis. And you think about that. And even some of our normal day-to-day work, right? And for example, just how we manage our expenses together. How we actually share expertise and building investments together looking together of all together -- sorry, the 2 of us as a group, right? So I think GE's position is very powerful in Singapore and Malaysia. And if our core markets include Singapore and Malaysia, we are a Singapore Headquarters Bank. Why do we want to give up GE in that sense, right? So with this in consideration, we also did express when we launched the offer, but great reason is ROE accretive to OCBC and it contributes long-term strategic value to us, right? And it has been a subsidiary. It has been part of the group since I think 1958. And it has been a subsidiary for past 20 years and has been a strong earnings contributor to the group. Profit contribution to the group over the last decade hit as high as 20% at a certain point. And it's important, thus, we say, it's important for risk diversification, for balance of earnings for longer-term synergy value, it is important to keep GE in the group. And that is why we say for our investment, investing further in GE is one of the things -- one of the natural progression of our corporate strategy. So I have a last -- I have another slide to share about the capital plan. I think Chin Yee talked about it quite a bit, but I want to express the thought that we put through in this. Indeed, we talked about we have 3 key pillars of business banking, wealth management and insurance, right? And that will bring us a well-balanced earnings and also actually further growth opportunities getting into the future. When we look at the investment options we have, right? I mentioned last year, we bought PTBC. We merged it into Indonesia's business. And we are not sure of other people showing us other opportunities. Some of you always ask me Helen, are there something you're looking at. And I can say that we've turned away some of these approaches based on -- obviously based on a few guiding principles, right? We know our core markets, we know our core business. So it has to be something that is related to our corporate strategy. And indeed, if we access this -- and the final synergistic value is not high enough or it has very high integration risk, it's not something we're interested in. We think about buying something, it has to generate the value after you bought it, right, even for PTBC, we did buy at a discount to book. But indeed, we know that once we put it into the bank, we are getting on more customers and also more talent as well to our Indonesia business. So as you recall and we are exploring plans to consider with development of the OCBC center and the clusters as well, right? We take further assessment, and we decided that we can delay that planning for a while. No exact timetable where we visited. But as we said, we explored it and we come to a conclusion. We still have a very iconic rating here. Our buildings, our presence, our use of it is still very important to us, and we now decided that we can delay that for a while. So with all this in mind, and we keep talking about we have a CET1 target of 14%, and that is already good for us to keep a strong credit ratings, have capacity to pursue further growth -- if we grow our loan book, if we grow our AUM, of course, growing our loan book, that means we will continue to build our risk retail assets, et cetera. And I think with all this in mind, we now come to a stage where we say that we have the flexibility to consider deliver enhanced shareholder returns. So we come to this plan. And we already see some feedback this morning after we talk about the results. And why is it 2 years, why your peers talk about 3 years, right? So I thought isn't it better when we say we actually delivered a return faster in 2 years. We talked about SGD 2.5 billion, right? So if you just divide it by 2, we're talking about SGD 1.25 billion a year. And indeed, this is a combination, but with a bit more commitment into the special dividend we are passing the cash back directly to our shareholders. And we said that for 2024, it is a final payout of 60% and this is already higher than the last 2 years of 53%. And I do have a question people say, why you are lowering your ordinary dividend. And hey, this is not lowering our dividend, right? We are paying more dividend. But we always say our ordinary dividend, we have a target of 50%. Yes, we have flexibility to pay more, which was evidenced by last year. But when we are paying 60%, I think it's good always to say that this is not that ordinary, right? And we are paying 50% ordinary. That's we call the 10% special dividend, right? Because it is -- you don't pay a high special dividend every single year. So I think we're sticking to what we promised and what we target, right? I think Chin Yee may not want me to say this, but if you want to say that, it is a 53% ordinary dividend in your own mind as a shareholder and you treat 7% as a personal dividend, in your own mind, you can treat it that way. But it is how we say that we follow our dividend policy, and we're getting out indeed 50% ordinary dividend. I think this is how I want to actually emphasize that because I see -- already see people talking about why you lower your dividend. It's not like that, right? So I think the 2-year capital return plan is expected to reduce our CET1 ratio by about 1 percentage point. I think the last page of Chin Yee's presentation show that, right? And then it will improve ROE by nearly 1 percentage point as well, yes? So -- and indeed, if you say Helen, then what is it about after 2 years? I would want to say that capital plan is an ongoing thing. It's just not like we stop planning on our capital. This is what we said in the past, right? We plan on our capital. And as we said, we will continue to look at. And we think we have options. And this time, we decided it's a combination of special dividends and share buyback, yes, and we will continue to review this as we go along. But the key, again, coming back is if we cannot grow our business, that would not be building up of capital to return to shareholders and the dividends would not be going up, right? So important is we are committed to continue to grow our business, still through the uncertainties, which leads me to the very last page indeed of my presentation. A lot of people ask me outlook tariffs, and I can address that later on if you are more interested. But indeed, we are seeing all this, we are expecting the Trump administration to talk about tariffs right? And we are talking about potential heightened trade tensions, right? And this could impede the group of growth and slowdown in trade activities. We're talking about interest rate potentially coming down. Is that faster, slower? There's a lot of different talks. Yes, we do talk about a view of 3 rate cuts in 2025. And you can say why Helen are you conservative? But if you just look at the overnight numbers, if you want to hear more market views, I can invite Ken to talk a bit more about that. That expectation on the market changed very fast. Indeed, it changed very fast. Indeed, we were talking about a very high rate cut and then it gradually moved down with many people talking about 1 rate cut. Overnight, the view change again, right? So no matter what, we have to plan with a pace and we have a house view of 3 rate cuts. And we expect NIM goes -- to be around 2%. Is there upside? Yes, depending on the market situation. Yes, depending on equity market performance. Yes, depending where customers, as we expect will come back and be more active, right? Yes, it also depends on how group of shares is impacted. And yes, depending on how the China market is revising, right? So is there always upside? Yes, there is always upside. But we want to always follow a prudence in our planning, and there must be a base for us to plan our 2025 numbers. We also plan mid-single-digit loan growth. The high -- I want to express that the very high 8% loan growth in 2024. We see actually a big trade. Some of the things that we have done well. We have some big trade deals coming in, in the last quarter. And somehow make us eventually perform 8% loan growth compared to the mid-single digit we talked about. And so I'm happy about that. But coming into this year, we are focusing on mid-single-digit loan growth. Cost-to-income ratio low 40s and we continue to exercise strict cost discipline. And credit costs remain at similar levels. We always talked about 20 to 25 basis points. Last year, we ended up at 19. As there's no particular indication of any sector having a very high weakness in our portfolio. But of course, we have to do proactive risk management. As we said, I think because so many people talk about Hong Kong CRE, I have to reiterate again. We have started to help our clients to reduce the leverage more than a year ago, yes, and we don't see systemic risk in our book in that sense. We are committed to deliver a 60% dividend payout ratio for 2025, coupled with share buybacks. And we want to use a 60% dividend rather than an absolute amount because we hope that as we grow, that -- hopefully that 60% will be a larger number. So with that, I think I'll end my very long expression on our corporate strategy ,o,n Great Eastern, on how we look at capital and indeed how we look into 2025.

Okay. Any questions from maybe the media first. We have Benedict from Bloomberg.

I have 3 questions that I would like to ask. The first question is the share price reaction seems to suggest that OCBC might need to do more, Helen, what will you have to say to that? The second question is what are your thoughts on OCBC's retail operations on China Mainland, are you considering exiting it following UOB's example? And my last question is, as OCBC is among the banks that adopt AI, what are your thoughts on job creation and on the workforce?

The first one, I almost missed it, but you're saying that share buyback, right? Are we going -- share price reaction, sorry, repeat your question or Ching Ching can repeat it.

What Benedict is asking that our share price reaction reflects that more needs to be done in addition to our currently announced capital plan, right? Is that what you're saying?

Okay. I don't comment on share price. Share price is something sensitive, right? I am not in a position and we should not be talking about things that would impact share price. Share price is something that our investors will decide for us to an extent, right? So we -- as I said just earlier, we decided to actually have a 2-year plan, which is to return in the way we turn capital faster, right? Would we do something more? Yes, of course, we always say we review, we review. And if we can continue to grow the bank and accumulate more capital, what stop us in doing more, right? So -- and if you ask me, Helen, do you have a plan to grow, yes, we have a plan to grow. I gave you examples and that we have delivered over the last 3 years. So I think, hopefully, that address your question. The second one is about our mainland retail operations. We didn't follow any peers whatever they do. We look at what is good for us and what is good for our business and what is good for our shareholders. We actually have already transformed our Mainland retail operations. We completed that already, and we pivot that more to the higher net worth side. And Jason is very much involved in looking in building the onshore private banking business. So we already completed that. We don't need to sell our retail operations in that sense in China. The third thing, I love the topic, AI is -- so many people talk about it. And if you look at us, I think, in some of my gatherings with the media, and we do talk about the use of AI. And over the last couple of years, a lot of our investments actually into technology. When we talk about Helen, what have you been doing in your investments? Yes, a lot is into technology. And we have been applying AI internally. I think we are the first one to talk about. We have our own GPT system that is used in coding, that is used in a lot of our writings, but it is developed internally by ourselves, right? And actually, we track that the use of OCBC-GPT allow our coders to be actually 20% faster when they first started using it. So these are all very important. But -- we also said that we mentioned before, in particular, I think that is beginning of last year, we are putting SGD 30 million to train our people, to upskill our people. We talked about it much, much earlier on. And indeed, we have been upskilling our people. And it is important. That's why when AI creates some new jobs, when we are still continuing to hire more people, and some of you remember, we said we are building up an engineering hub in China, in Shenzhen and Shanghai. And we are also starting in Indonesia, building a bigger engineering hub. So if we upskill our people, we continue to be able to make our processes better. So if you later on look at headcount, last year, we have not increased headcount, but we have increased headcount because we have bought the bank and Indonesia has increased headcount. And in that Jason has increased his headcount in relationship managers, right? So this upskilling our people has been ongoing for quite a long while. And so in a way, I think, AI has been creating more jobs, but you don't need to be an engineer to be able to say, I'm involved in applying AI to make our processes better. We are involved in using AI in digitalization to reach out to our customer. Earlier on, I talked about digital acquisition of customer become very big for us. For example, if you talk to Sunny, I think when we started to have facial recognition on our ATM, right? This is something new to market. It is applying AI. But that means Sunny's people have to be able to work with their engineers to have that launch on our ATM. So I want to say AI does create more jobs. But in particular, it is important. We make sure that we continue to upskill our people so that they will be able either to be part of it or to use AI and to use AI to apply to how we do our business and how do we improve our product offering.

Harsh from JPMorgan.

Three questions. First on the CET1 target of 14%. By when do you think you will hit that? Is it a 2-, 3-year target? Or is it more medium-term 5-year target? And I'll have other questions by and by.

You want to take that?

In fact, already as I showed earlier, as I mentioned earlier, if we have 60% dividend payout for FY '24, we are already almost there on a pro forma basis, 14.3% on a fully phased-in basis.

Yes. But that doesn't take in account in 2025, you're going to generate a lot of profits, right? So that pro forma number is kind of double counting the deductions. So let's say, if we have to, on a year-end basis, hit 14% number, is there a timeline to it? Or is it a fluid number and just an indication?

That is in our comprehensive capital plan that I mentioned earlier, we do have a forecast out for 3 years. I always talk about the 3-year rolling plan that we have which is used for our capital planning. And over the next 2 years, as we roll out and return capital to this $2.5 billion, we do see CET1 moving towards the 14% target in '26.

Right. Because that would suggest significantly higher ability unless you grow much faster organically or inorganically or you end up doing much faster buyback or increase payout? That's the reason why I'm trying to understand the time frame.

We do have growth strategy, as Helen has highlighted. And based on the growth strategy, we do have forecast in RWA growth as well, which will use up the capital. And we have also some investment options that we are looking at. So all this has been factored into -- taken into consideration.

Right. Because even a mid-single-digit loan growth doesn't -- or RWA growth doesn't get you to 14% by '26 at this space. So the second question is on margins, the guidance of about 2% sounds conservative given your 4Q NIM of 2.15%. Is it fair to say it's a super conservative guidance and the likelihood is going to be a bit higher? Or how do we think about the range around the 2% NIM guidance?

Yes. This also is a question that Helen has addressed even before you asked, right? We do take into consideration the house view of 3 rate cuts of up to 75 basis points. And there are quite a lot of uncertainties relating to the rate cuts prospects. As we can see initially, market was pricing in just one rate cut. And after last night's news, it's like another probably 2.5 rate cuts. So there are just so many of these uncertainties. We plan on the basis of a more prudence in taking into consideration our house view of 3 rate cuts. And we will look at revising that probably in March, the next FOMC to see where the direction is. And I recall also Helen mentioned a few factors that could contribute to the potential upside in that.

So the way to think about the sensitivity is, as you said, $4 million to $5 million per basis point, so 75 window, let's say, $4 million to $5 million, about $300 million is the kind of excess -- in case we do not get, let's say, rate cut, that is the potential upside to the guidance. Is that how we should think about the range?

Yes. You can look at -- use the sensitivity to sort of project what happened to the rate cuts and impact in terms of...

Yes, I want to add one more point is that rate cut is not a direct translation into your loan margin or your NIM, right? Because it depends on the competitiveness of the market and whether -- how much you need to actually pass on to your customer.

Yes. And the final question is on cost-income ratio. Again, low 40s seems a bit high. Is it flowing through from a conservative NIM expectation? Or do you expect a significant yet another year of reasonably high top line growth and operating costs?

We continue to invest. I talked about investment. So what we call the BAU expenses, we're controlling very well in that sense. But I think low 40s is a good number. We always talk about 40% to 45%. You think about it because of the corporate strategy because of the high-interest environment, that substantially bring down it to below 40%. And we say that is uncertainty. Of course, we said we have something to plan on, right? To talk about loan growth, to talk about expenses, to talk about the rate cuts, et cetera, we come up with this guidance. Would that be better? Yes, if we do grow our income better, if we say that interest rate have a positive impact on our revenues and if our wealth management growing faster than what we planned, we're already obviously planning double-digit growth. And yes, potentially the income higher, then the CR will be lower. But this is where we are in the beginning of the year, where we start off to plan our numbers. So these are the guidance we are putting out at this point of time.

Okay. Next is [indiscernible].

Capital management, the special dividends are very welcome. Could I just ask another question based on this dividend and relating to Great Eastern? At one point, some of the minority investors in Great Eastern were asking whether you have any plans to pay out OCBC's Great Eastern shares as a dividend in species. So I just wondered whether you would ever consider that, so that's one question. Second question is actually on Johor. Do you plan to invest more in Johor? Could you give us a figure if you did? And do you plan on opening more branches or plan for a digital bank in Malaysia? I mean what are the -- to reach out to more retail and SME customers? And if you could give us some idea of what you plan to do in terms of percentage or...

Okay. Very good questions, actually interesting one as well. Regarding some shareholders saying that why don't we distribute GE shares out to OCBC shareholders, right? I think the ask was to distribute it all out. And it's an interesting thing to suggest, but -- and they talk about whether I will table a resolution to do this. I have to say that tabling any resolution on our AGM has to be of interest to our OCBC shareholders and also beneficial to the OCBC Group, right? And if you think about -- what does it mean by distributing, I think when we say distributing it for free, right? So we are not charging anyone in getting the shares. So if you're distributing all the GE shares out, you think about it, it's equal to dividend our profits in species, right, because it is our asset and I give you something of value. We sort of -- you can almost work out depending how you actually value GE. We are saying that, that is about SGD 10 billion. How do we distribute SGD 10 billion of our retained earnings to our shareholders in that sort of magnitude without any consideration, meaning we're distributing out for free. And in particular, as we look at our capital, how we use our capital, I said so much about why we want GE to be part of us. There's no reason why we don't own it anymore, yes. And indeed, if you -- so 2 points, right? The first thing is if we distribute GE all out, we would not be -- we will be capturing the profit contribution from GE to us, right, which eventually leading to future dividend streams to our shareholder. And we will not be realizing the synergy that we are planning on, right? So that's one important thing, and we will substantially reduce the scale of the OCBC Group in that sense as well. So that is not beneficial to OCBC nor is it beneficial to the shareholder. And as I said, we focus on how we manage our capital. So that leads to our capital return plan in 2 years. And so the GE to actually give out GE shares to our shareholders does not make sense, both in future growth prospect and also in terms of the amount we pay out to our shareholders. Yes. So I think that's GE. The second question is on Johor, something very dear to my heart. I think a lot of people and particularly aware, we actually have been in Johor for many, many, many years. And indeed, we have 7 branches in Johor already out of our Malaysian -- OCBC Malaysia presence. And we can do both what we call traditional commercial banking, but also we can do the -- sorry, I must to say we can also do focusing on Bumiputra to do our -- sorry, our business [ Lumin ], OCBC [ Lumin, ] right? So we have a big presence there. And indeed, I earlier said that we started looking in this potential of the special economic zone more than a year ago. And we have been seeing interest of our customer base looking at potential in Johor. And if you have a chance to talk to our CEO, Malaysia in Southern time, maybe we can arrange that. You can see that he was talking about the amount of business we have already starting to build for the last years. And I did say that there are more interest and in both not just on the commercial banking side, but also on the retail side. So we are focusing -- going to focus on the cross-border convenience for our customers. When they want to have an account with us and also an account in Johor, we are looking and planning to have a KYC process that can actually help customers open account faster. So this is one of the things. But all in all, we're putting resources. We have a lot of experience in Johor. We've been there for 100 years, actually. And then indeed, we have the presence and we have the people. So I think by putting our act together, we should be able to do it very well. You talked about whether we will build a digital bank. OCBC is already have a digital bank in that sense. I think Sandy can talk a lot more about how we digitally acquire customers and how much transaction is now done these days digitally. Lynas is here. I think, you know Lynas. And we have been so focused on our SME book, how we use digitalization to allow account opening on a very fast speed and also how we use data analytics and also to have preapproved loans for some of our SME customers. So a lot of digital investments has gone into the business, which is actually adopted by our Malaysian colleagues.

Helen, if I can add in. On the Johor side, I think many of you may be aware, we are also the merchant acquirer for the RTS. That means the train between Singapore and Malaysia, and we have exclusive 5-year period. And they give us a lot of opportunities to do a lot of acquisition opportunities. And also in line with our One Group strategy, the consumer bank and the commercial bank are also working together to see how we can jointly acquire customers together, especially serving the needs of the small business owner in the Johor area. And we work out a whole sleeve of activities to help customers in purchasing especially Singapore's properties in Malaysia and for the Malaysians to open account in Singapore and vice versa. On the digital bank, I think today -- as of today, there's 90% of our customers' financial transactions are done digitally as well. I'm sure the corporate side are equally high amount -- around 98%, right, Lynas. So I think if you think about a digital bank, that is for somebody who doesn't have a banking license. We have a banking license. We have all the physical branches. If you talk about the product suites and all this, we have a lot more product suite, everything inside there. In fact, I would say if you take a look at our digital bank mobile app, it's your Apple phone, there are many features inside there that you're not aware. Same thing for our mobile app. There's a lot of features there that you do not know because we all feature pack service pack inside there. So I think that is something which is I think we already have won technically. And the fact that we have a physical branch do help today in terms of needs, you want to talk to somebody face-to-face, I think that's where there is advantage that we have that comes in readily. Thank you.

If I can add really the very last point on this exciting opportunity is our Malaysian bank, as you said, is as old as us in Singapore. It's been part of us -- part and parcel of us for many, many years. And in Malaysia, other than the full banking license on retail, on the corporate commercial, investment banking, et cetera, we also have 100% owned leasing company in Malaysia, and it is also part and parcel within the one group. So there has been a lot of business collaboration of referrals between the commercial bank and this company called [indiscernible]. And Bank of Singapore also have an entity in Malaysia. So in a way, in Malaysia, we have full scale and full capability that would be able to work very closely. As we said, we have a team looking at this together to capture this exciting opportunity.

Okay. I'll move to Nick and then Aakash.

Can I just come back to capital? And I'm just trying to sort of picture your capital plan, if you like, and everything you've said. So we've got effectively an increase in payout ratio to 60%, but there's a layer above 50%. And at the moment, you're making a high return and risk-weighted asset growth is quite low. So you're in a position to distribute that to effectively stop capital retentions. When we go 2 years out of the road, I accept that you don't know and I don't know what's going to happen. Are you sort of -- is that what you're trying to say to us and then we'll keep the 50% as core, and it depends what the situation is like in '27, '28 as to whether we keep that 10% top-up. And then the share buyback, I should think of as a distribution of the capital that gets you down to 14%. And just linked to that, if you could just talk a little bit about how you're thinking about share buyback in terms of is it something to support the share price? Is it a way of distributing capital? I mean, just intellectually, how are you sort of conceptualizing the share buyback? And Ben linked to that -- 2 other questions linked to that. First of all, just could you talk about how you think about the risk-weighted asset density growth of your business going forward? So how much risk-weighted assets you need to generate returns given that obviously, a lot of your growth areas are less risk-weighted asset intense, so wealth and markets and things like that. And then just finally on Great Eastern, I mean, you gave a pretty passionate defense as to why you should own all of Great Eastern. If you were to buy out the remaining minorities in Great Eastern, would you have to offer the same share price to the people who accepted your offer last year?

Okay. So one at a time. Capital plan. We did say we look at our capital and both returning through special dividend and through share buybacks. I think it's not very difficult to just to calculate how much is special dividend and how much is share buyback, right, in a 2-year time frame out of the $2.5 billion number, okay? So we like that flexibility. And to an extent, if you're saying that in 2 years' time, if we continue to grow as we wish and if we -- because we grow a lot of, as you said, not RWA heavy income, then we accumulate capital faster in that sense, right? And so can we continue to consider a higher dividend? Yes. Yes. Because this has happened in the last 2 years. Since we actually changed our dividend policy to a target of 50% of our net profit, so that was actually announced for the 2022 numbers, if you remember, right? So '22, '23, we paid 53%. But because this year, we're paying a high amount and would we be able to continue to pay a higher amount? Yes, we may be able to, but it depends on how fast we grow, as you said. And whether some of the investments we made earlier actually bear more fruit than we expected. So I can't say that history will tell about the future, but we just have to make sure that we realize the biggest benefit of one group. That's what I say I spent a bit of time to talk about the earlier 3-year plan where we delivered actually ahead of what we have targeted for. So hopefully, we'll be able to do so. And we're not stopping thinking about strategy and what are the other opportunities going into the future. So when I have more to share, I will definitely talk about it. So that is capital plan and regarding to whether we can pay higher dividend. Yes, we can. If we think that match our future plan and that we have accumulated more profits than we need. So you talked about growth assets. I think it's related to the capital plan. So in a way, yes, we do have -- of course, we always have a rolling 3-year plan on how we grow our RWA and whether we have still other ways to rationalize the RWA. And I think Basel III pillars kicks in, we also work on it. We do know that there's only a short-term benefit to the CET1, right? So we take all this into account. And do we want to grow more revenue that is less so RWA base? Yes. And that is why we said we -- wealth is such a big piece that we're focusing on. And I think that we bought card for 2024 for our wealth AUM and for the revenue growth and also for the net new money coming in, I think we are doing quite well. I did say earlier, I quite like it. So -- but I shouldn't be saying it's open in front of my team in that sense. But yes, this is what we are focusing on. So again, if we do better than we expected, yes, then it will ultimately lead to better capital and then better programs for us to continue to return returns -- make better returns to our shareholders. GE, you mentioned that as a defense. I truly don't want to describe it as a defense. I truly just say that I'm passionate about it. It is indeed how GE has contributed to us all these years. And in my position, I do know what sort of synergy we can realize going forward. And he's not here today, but it's like putting Greg Hingston on the -- under everybody's scrutiny. But Greg Hingston is our new CEO of Great Eastern, and he joined in November. And Greg has an experience of knowing exactly how to bring insurance business forward in a banking environment. We already have a lot of discussion on how we can realize better synergy. So I'm quite positive about that as well.

Yes. Sorry, Nick was asking about do we pay the price offer price to the remaining -- to those who are accepted...

I cannot comment on that. Anything that the next phase or whatever you say, I mean, I cannot comment on that. When we're ready to announce, we can tell you, but I cannot say it now. Legality requirement?

You obviously bought shares of people at one price last year...

The [indiscernible] has closed. And even the part regarding the company is allowing us to continue to buy at the same price, that one has closed.

Maybe we move to someone from the media.

Just 2 questions here. So I know OCBC's 1% higher headcount last year. And I think building on Bernadette's question, could you provide an update on your investments into tech? OCBC pledged HKD 1.5 billion last year to upgrade tech and facilities by 2026. And you also mentioned plans to hire some 300 software engineers in China over the next 3 years. So do you have an update on that? And also second question, Helen, just to confirm, you don't see this investment into tech and AI impacting your headcount overall for this year and the next? What about your company's temporary or contract staff?

Thank you. I don't -- I know why that last question come about. But let me address every point you mentioned, right? The 1% higher headcount is actually based on the taking of people from PTBC. If you really take away that, actually, we have reduction in headcount. But it is through natural attrition. The second thing is we're investing in tech definitely. You mentioned we announced for Hong Kong, right, we are upgrading our whole system in Hong Kong, and we are hiring more engineers to invest into Hong Kong. But in a way, those NGOs does not need to sit in Hong Kong. That's why we talk about hiring more engineers in China. I think the past 1 year, we grew about 150 in China. And we started to hire Indonesia, as we said. And our hub in Malaysia is already quite big. So we're quite happy, we continue to be able to find the talent and good engineers to join us in that sense. But why are we hiring rather rapidly in tech, but we don't build headcount because, as we said, we have done pretty well in our processes. So when you continue to do well in your processes, you save headcount in operations, right? And when you save -- and if you can -- and you also generate more productivity, whatever headcount you save, those people can actually put into generating higher productivity as well. So I think we have been managing this very much through natural attrition. And very importantly, I really want to emphasize that it's an early plan to how we upskill our people so that they can be put in different jobs as they grow with the organization. Regarding the last one about contract staff, we don't have a high -- a very high amount of contract staff or temp staff. yes. But in a way, as we said, we have not been saying that we need to make anyone leave the job in any plan, in particular. But we have been managing our headcount, as we say, by putting people into different roles and also through natural attrition.

Aakash from UBS.

This is Aakash from UBS. The first one I have is just on Hong Kong CRE. I think last year, several briefings, similar briefings, the view that was discussed was that as rates come down, we should expect the worst for Hong Kong CRE to be behind us. Now obviously, as that has not played out, market and investors are a lot more worried about the Hong Kong CRE space understandably. So I think the disclosures that you shared earlier were very helpful. 2/3 of Hong Kong CRE is to large developers, 2/3 of the portfolio is secured. I think there is probably more information that the market would love to have. So along those lines, what I wanted to ask you if you could describe in a bit more detail what led to the downgrade of this particular account. And of the CRE book that you have in Hong Kong, how much is what you would call as watch list or special mention? How much of it is impaired? And if you could also share what is the coverage on that book, the Hong Kong CRE book as it stands today?

Okay. I'll address the first part first. If you ask about all the information about watch list and coverage and all that, I need some help from Collins and team. But you know there are always some figures that we would not disclose or we do not disclose in the past, and we do not intend to certainly disclose from this day onwards. But if you look at the Hong Kong CRE book, as we said, we hope that interest rate come down would help some of the customers, right, so that the interest rate -- interest burden is not so high. If you look at this one customer we talk about, it's not deleveraging fast enough. So that is under pressure, as we all know, right? So to an extent we say that means the cash flow is impacted, right? If you do not leverage fast enough, deleverage fast enough, you continue to have to pay high interest. And it also depends on the rental market of CRE as well. So as I said, there is one customer that we decided to put into NPL for that last quarter, yes. So -- but the whole thing is more or less about how you manage the overall portfolio. As we said, we started to have customers to deleverage. And also some of them actually put up with more security. And some of them -- some of the mid-caps, they have -- they continue to want to business to fall. They have their own family wealth. Some of them would say that I actually buy the property from my family wealth so that my company continues to be able to repay its debt. So there are many ways that we talk to our customers, and we also see the efforts of some of them. But given a market like that, it won't be surprised that we will be registering some NPLs. And we put people -- we put our customer on watch list or special mention as we need to. But I think our coverage is quite healthy in that sense. And -- but as again, looking at one part of our book is not overall -- it's not all, it's not all. The whole thing you have to talk to think about is this part of the NPL contributes to our overall NPL. So that means you don't just look after one particular sector. What we want to do is to be able -- Noel is here to be able to -- Noel working with Tong, to able to look at our overall portfolio, right? And some, 2 years back, people were all asking about China CRE. And we did say that we were never very highly involved in China CRE. We cannot say we are not involved in Hong Kong CRE because we have a local entity there which is a very old bank in Hong Kong. But what we're trying to do is we see the issue, we try to overcome that. Actually, it ends up -- it all ends up that our overall NPL and coverage is actually still very well managed. So I have to say that it is part and parcel of the overall risk management that we are actively doing.

Is it possible to give us a rough indication of what the NPL is on that part of the book, Hong Kong CRE?

Yes, Aakash. Perhaps I can give broad numbers. So in terms of the Hong Kong CRE book, right, the bulk of it, as what Helen mentioned, will be in the large cap kind of a range. So within the mid-tier cap, I think it's roughly about 1/4 of the book, right? The bulk of it is still performing. Of course, we do from our own internal purposes, we grade this as watch list or special mention. But in terms of NPLs, broad range, just give you a broad range, perhaps maybe about less than 20% perhaps is in NPL. But again, this will broadly correspond to what you see in our results where we downgraded that one loan. Is that okay?

20% of the mid-cap or...

But that -- roughly it is attributable to that one CRE that we downgraded this quarter.

So the CRE that you downgraded this morning is mid-cap, not a large cap?

Correct. Yes. I mean, having said that, we are still paying very close watch. That's why within the book, we also do segregate this from our own internal purpose as those under watch list as you mentioned that we are paying close attention to, right?

I just have a few follow-up quick questions. The first one is, I think, a repeat question from earlier from Nick. So the $1 billion share buyback you've announced for 2025, what is the criteria for this? If the share price continues to remain this high, are you still going to force and buy those shares at this price? Or is the -- what's your thinking around that?

Okay. For the share buyback, I think Nick also asked a question about mechanism, right? So for what we have announced is for cancellation. So we'll be buying back from open markets and cancel the shares. There is some internal sort of parameters to guide us in terms of at which level do we stop buying, for example, right? Yes. So once we have accumulated some of these treasury shares, we will be canceling them under this program, within the threshold that we have set internally and approved by the Board as well.

Right. Now I understand the cancellation, but I'm just saying the share price, like I think what other banks have said is they're going to be opportunistic about it, which means they're likely not going to buy at this kind of level. Is that similar for your…

Yes, similar. That's what I meant by the internal parameters that we have set, above a certain share price, when it doesn't make sense to pay high to buy back and cancel, we will not do so.

In which case, this buyback can actually spill over into 2026 as well, right? It's possible that it might not finish this year.

It's possible. Yes. In fact, for 2 years means it's '25 and '26. 2 years doesn't mean finish everything in '25.

I see. Okay. I thought 2 years meant '24 and '25.

No, that's for the dividend because we are paying out the special dividend in May this year. So that's counted as part of the $2.5 billion.

Understood. Great. And on the net new money, so $21 billion for FY '24, pretty solid. And I think we've seen $20 billion plus numbers for a few years now. I just wanted to get a sense, do you think there will be some normalization this year? Was there something in these trends that tells you that maybe you might not hit SGD 20 billion this year, it's SGD 18 billion. Do you think that will continue at the same pace?

I think I will invite Jason to comment a bit and maybe Sunny as well to talk about this net new money and the trend.

So net new money last year, I'll talk a little bit about the combined value. So last year, net new money for the group wealth was roughly SGD 21 billion. And in the last quarter itself was about SGD 8.5 billion. And the momentum for the start of the year has been very strong. And a lot of it is at least on the BOS side and on the CFS side has been going to fee-paying assets. So it's been deployed into investments more so than deposits. So it's been very active net new money and actively used net new money. So we're quite hopeful for the momentum to carry on through the course of the year with volatility in the markets continue to create trading opportunities for clients.

And on the consumer bank side, we're seeing very good traction from our Hong Kong, Singapore hub, and I think that is working very well for us.

Just a very last question on the NIM. And I think -- so even if you take 3 rate cut that you have into account for this year, I think it doesn't really explain the 15 basis point decline in NIMs that is being forecasted by you, right? So I'm just thinking maybe there is an expectation that you do see a very intense loan pricing competition or you're expecting to be purchasing a lot more of low-yielding assets, which is resulting in a 2% circa NIM. Just wanted to get your thoughts on that. Is one of those what you're thinking? Because 3 rate cuts only explain like 5 to 7 basis points decline itself. It doesn't explain.

Yes, let me take that. Yes. So I did mention that besides the house view of 3 rate cuts, we also are prioritizing net interest income through deploying liquidity into the lower-yielding but high-quality assets, which are income accretive, but NIM would compress with the addition of such. But as we are prioritizing NII, NIM become -- it is a byproduct of our balance sheet strategy in that sense.

Jayden from Macquarie.

Just some more questions on GE, Helen. I think we've spoken a lot about it today. Good to see you. So first of all, if you look at the performance last year, pretty much all the growth was in agency. The Bancassurance total weighted net sales actually fell. So I was just curious why we were so confident we were seeing the integration playing out because if that was true, we should have seen the banker channel doing so much better. And then the second question is you obviously have the extension, I think, until May in terms of, I guess, they're expecting a refloat or you're looking to delist it. We also have this ongoing stock market review, and they really want to push more liquidity and more listings. So how does that sort of play into the overall Singapore view of a more vibrant stock market? And then my final question is you had sort of a rethink around the redevelopment of OCBC Center. Just curious, was there any sort of overlay from a historic point of view or any reasons that was impeding you from redeveloping that sort of have come up that we should be aware of? Sorry if that's a bit of a tangent.

Very, very diversified question. Okay. The first one on GE, why we are confident. I think banker is part of it. When we talk about synergy, banker also subject to what sort of strategy we have and how we work together and whether this is what is being pushed. And GE has been having a very big agency force we know, right? So if you think about it, if the agency all use us as the banker in handling the sales, the personal use of the bank. That is another way of we talk about synergy, right? So I think banker is part of it, but I can ask Sunny to talk a bit about the banker cooperation. But as I said, the synergy is more than just they're using us as a channel. It's whether we can also tap into their client base or their agency base. And likewise, how do we -- if they are not -- if they are entirely part of us, how do we manage our capital together? How do we manage our investments together? How do we actually share expertise together, right? So they are long-term investors, yes, whereas we have -- we can have longer-term lending and they are investor. I mean these are just examples. I'm not saying that I'm not ready to tell you what exactly are we working on. But that is the reason why we thought there are still many more things that we can do together. And that's why we want to be able to have that ownership and control in that sense. So you talked about the second one, extension into May. So what -- how is it going on? And what about the stock exchange program, the plan, right? I think when we look at GE, you know that actually, over 20 years, we have always been trying to acquire more of the shares. And it's actually accumulated before we launched the VGO, it was already 88.4%. And we never changed that stance of us. We want to -- and we think last year was the right time as we look at our capital, as we look at all our corporate strategy, it is the right time that we launched that VGO last year, yes. So the stock exchange program, the new plan is welcome because I think it's good for the market. It's also good for the liquidity. And what is good to the market should ultimately benefit our wealth business as well. So I like that in that sense, it is totally welcome. But our decision on how we want to pull GE tighter integrate into the whole group, that's not change in that sense. So your last question is about redevelopment. Yes, we explore because there are chances to explore as we look at some of the -- how the city area, how some of the new buildings has been developed and all that. And you do know even when we explore it, we always say we want to preserve OCBC center, and this is a heritage site. So all this is put into our consideration as we think about redevelopment, meaning even if we redevelop, we are not -- we're still keeping the center. So this also comes into consideration when we look at the plan and can we actually consider more as we go into the future. And you also know that we are also talking about -- and we have announced last year that we are purchasing a building in [ Pango ] district, where we are teaming up with [ SIT ]. Also, it is one of the things that we continue to want to invest in technology, right? So we have yet another new building coming up. So we think we have time to think deeper into how we want to look at these clusters of properties. But as a way, it was a very keen interest in exploring and ultimately leading to this stage where we say that, hey, we can actually put it on hold for a while.

We're just going to take 2 last questions, one from [indiscernible] and then one from the analyst, Thomas.

Actually, my question is also about the redevelopment. So do you have an updated timetable for this? Or is it delayed?

That's a simple answer. Yes, we don't.

Weldon from HSBC.

I have two questions. So one is on asset quality. I think if I look at the NPLs by building and construction, the NPLs increased by $700 million. So besides Hong Kong, do you have any other CRE that may be at risk like the U.S.? And what is your LTV in the -- for your -- any U.S. exposure that you have? So that's the first question. And the second question is on -- you talked a bit about the GE and you said there's some capital synergies there. So I'm wondering, like is this -- like what is the synergy? Is it just upstreaming the capital from GE to the group? And is this required for your comprehensive dividend plan?

Helen, do you want to take the first question? So Weldon, in terms of the NPL for the building construction sector, it's largely due to the downgrade of Hong Kong CRE right? I guess in terms of other locations, I think those have already been factored in the past, right? In terms of the overall LTV for the CRE portfolio, on average across -- it's about 50% to 60% of the book.

Okay. You want to follow up on this question?

Yes, because the average is 50%, 60%, right? But there could be specific locations in which the LTV might be -- Yes. So is there any areas that you would flag that we might be -- we should be aware of?

None that we would need to flag. Okay. On GE, I talked about capital, right, but I also would not be able to comment on exactly how we do it. Because at this stage, you know that GE is still a separate listed company with its independent Board. And there's a lot of independent directors that is not -- I mean, the independent directors. So to that extent, I cannot comment even more about if we are successful, what are we going to do. So if we are successful, then, of course, we'll be able to talk a bit more about our plans and how we actually bring GE in and how we realize the synergy a bit more. So there are many examples. I was just talking about business opportunity, right? And in particular, I said Malaysia actually give us even more potential than Singapore. But indeed, only on the capital part, we can't comment, but this is our plan going forward. And in a way, as we said, if we are able to come up with a plan of $2.5 billion, that means we also have a deeper look into the future that we can actually distribute this out now instead of waiting until later on.

Okay. So with that, I shall call the meeting to an end, and thank you for joining us this morning.