Hi everyone, welcome to the first quarter '26 DBS analyst briefing. As usual, you've heard the media briefing, you've gone through the decks.

We can go straight to Q&A. First question from Jayden from Macquarie.

You can go ahead and unmute yourself, Jayden.

Hi, can you hear me okay?

Yep.

Yep.

Great. Thank you very much.

I just had three points I wanted to ask on. The first is just to clarify on the general allowances.

I think you made it pretty clear during the media briefing that it's unclear if we could have write-backs now, but we've sort of said that the GP allowances is appropriate for the current sort of situation. Just wanted to know, did you change any of the macro assumptions that go into the MEVs, like the view on growth, inflation, any potential impacts on the economies in where you operate?

Obviously, I realize that there's a lot of judgment that goes into that. Would be interested for your thoughts if I could start there.

I can take the sort of the way we think about this part, and then maybe Sok Hui can go through the MEV actual numbers. We've done this quite a few times, right, from COVID to Ukraine to now Iran.

We stress test for oil at $120, going all the way up to $200. We stress test for some of the markets that we work in, currencies depreciating by 20%, 30%.

We stress test for demand destruction as well, or we stress test also for inflation on the cost of goods, be it fuel, oil, or chemicals, or fertilizers, etc. All that stress test goes into all our modeling, and then we identify companies that are at risk, and then we put them into the watchlist depending on how bad they look.

That's the rigor and discipline that we do it, do it both top-down and bottom-up. As I said, when we did that again for this war, for Iran, the numbers were actually pretty okay.

We realize we have more than sufficient buffer, ample coverage for the worst-case scenarios that we factored and stress tested. That's why we don't feel that we need to do any more.

You want Sok Hui?

Yeah. Jayden, I think I would say that we can put in the sort of macroeconomic variables, we can make assumptions, but I think the more important point is the transmission mechanism, which is much harder to get right, on how sort of these oil prices, how the transmission will work, whether there's a lag effect.

I think we do the best with the models that we have, but we want to be prudent. While our stress testing numbers are coming in lower than the stack of general provisions that we have, we want to be watchful and see how it will pan out in the subsequent quarters before we talk about GP release.

Thank you. That's very helpful.

I realize that there's a fair amount of uncertainty, but I think the bottom-up process is very helpful. Thanks for that.

Jayden, we talk to all the big clients, right? Obviously, you talk to airlines, you talk to oil and gas players, you talk to fertilizer players, food and agri players, you talk to everyone and find out, "Hey, when are you going to run out of inventory?

Hey, how much are you pricing up? Hey, have you got force majeure on this?

Are you allowed to have force majeure on this based on your documentation and all that?" Once it's FOB, technically the seller sold it, right?

The buyer can't do FM once the goods are FOB. The truth is, it's very nuanced, and it's very bottom-up, because you might have someone that just declared force majeure, and then guess what?

They jack up their prices so much, actually they have record profits, right? Or you might have someone who says, "Oh my god, I'm long spot, short the forward, but I can't get my spot out of the Straits of Hormuz."

You think, "Okay, discount that," but then suddenly they make tons of money in their trading room, right? It's very single-client dependent.

You have to talk to everyone. You've got to get input from everyone, and you have to stress test for oil at very large gaps.

That's what we're doing.

Thanks, Su Shan.

Talking to the big clients and getting input on the industry is crucial, and that's what we're doing. No,

that's really helpful. Then speaking of hedging, you've obviously done a good job in the first quarter, and obviously maintain the fixed and the hedging portfolio at similar levels.

I remember in prior quarters you said that it'd be about a 50 basis points gap if you were to roll those off and then move to floating. Any sort of updated thoughts on where that is now and what you've been able to achieve?

Because you sound a lot more sort of confident on the net interest income side.

I can kick off and then I'll get Phil to amplify. We are a little bit more confident now because the market volatility has given us opportunities to do this better.

When I last spoke to you, we said we'll probably have to renew our hedges at 50 bps below. It's now looking like 40 bps below the last price.

We're better now. Phil?

Su Shan's basically summarized it quite well. We had a good first quarter.

We basically managed to over-replace the maturities, there isn't as much left for the rest of the year, still about $60 billion for the rest of the year, but we're maintaining the duration of that portfolio at fairly healthy levels.

That's really helpful. Then maybe just a final question, I wanted to ask the wealth activity looks really strong in terms of the fee momentum in the first quarter.

Any sort of views on how it's panned out for April, as client activity remained robust? What are your sort of thoughts, what you're seeing now?

Hou Zikun here. On the wealth numbers, it's generally made up of both investments as well as insurance, right?

In April, as we as we know, the market has gotten to be a lot more volatile. Therefore, we did see some volatility in the first two weeks of April.

Then from third weeks third week onwards, we started to see again a good momentum coming back. I think over this this period, again, it's it's anybody's call.

Suffice to say, we've got a strong foundation of customers. We've got customers that have got dry powder.

Therefore, it's one of those things, as we take a portfolio approach to to to advise our customers, we do think that we still stand in a good position. The rest is really the market, which is anybody's guess.

Having said that, we do also have a very robust bancassurance pipeline, and we've seen the momentum very strong in in Q1. We do have a very diversified, I would say, stream of of of revenue in this space.

Thank you very much. Those were all my questions.

I really appreciate it.

Thanks, Jayden. Next question from Melissa from Goldmans.

Melissa, you can unmute yourself.

Thanks so much for taking my questions. Maybe I'll just go back on some of the points you just made, just a bit quickly.

In terms of the hedging, you mentioned that you have done most of it, but you have $60 billion to go for the year. Wasn't it the last quarter you mentioned that only the roll-off, or the ones that roll off this year was only $80 billion?

Have you done all, and then you're doing more, or what's going on there? Also, just in terms of just getting around again, you mentioned that now your SORA assumption is much lower, but yet you're not expecting more impact.

How have you managed that? Because in terms of the SORA sensitivity, you are now seeing it's $11 million, but before, the last quarter, I know it's very small, you were seeing only $10 million.

Just wanted to understand that a little bit better. That's the first question, and I'll just hop onto the next one after you answer that.

Phil, Melissa. I said we over-replaced in the first quarter, I didn't say we'd done most of the book.

We over-replaced what matured, and we have about $60 billion left to do in the rest of the year. We'll look for spikes and we'll look for opportunities to replace that.

As what Su Shan—

I think there's to time I think what she I think there was a misunderstanding on on part, cuz yeah, we over-replace Actually, what happens is the book is $80 billion that matures this year, and it's over the whole course of the year. For first quarter, we did a little bit more than— Is she typing?

Your typing is coming through on our side.

Oh, sorry.

That's right. I think Su Shan summarized it pretty well there.

That's the piece. On the SORA sensitivity, the Sing dollar rate sensitivity, essentially as the CASA comes in, the sensitivity goes up.

It's directly correlated with the deposit growth that we've just talked about. That's really where the sensitivity comes in, minus what we're able to hedge.

That's the net number you see, which has gone up about $1 million per basis point over the quarter.

It's funny, right, because we actually want to have more CASA, haha, but that makes us more NIM sensitive, but it helps our NII, which is why we keep saying look at the NII, don't look at the NIM, because we want to have more CASA. We want to have more low-cost CASA, right?

It's good for us.

Right, we're still of the view—

Melissa, to your point, you're asking why is it that SORA has gone down and how do we manage it? If you think about it, it's the deposit growth.

We say we are changing our guidance for deposit growth. Last quarter we're thinking of mid-single digit.

Now we're really talking about high single digit. With more deposits coming in, and remember we guided that we can make 1, 1.2 percentage point for all the deposits that come in, the additional deposits that are coming in has actually helped to mitigate the effect of the lower SORA.

Okay.

That's why we can guide to fairly resilient numbers despite the down drift in the rates.

Can I just check in terms of when you say resilient numbers and you missed out the guidance that NII slightly down, are we still NII slightly down, or NII flattish now?

NII is still slightly down, but I think it's a big deal to be able to say we are still slightly down despite further in the rates environment that we have seen. That's because we can mitigate it through the sort of deposit that have come in.

Deposits and hedging.

Right, okay. Then just lastly, in terms of dividends, given where your new in your new outlook for rates, and your stronger returns, are we still very confident at the end of this year we can still do the 6 cents up in terms of the DPS?

Wow, it's hard to predict what will happen to end of this year just because we can't predict the geopolitics. I think we'll need to have a couple more quarters of clarity before we commit to anything.

This is a board-level discussion, and we'll definitely keep you posted.

Perfect. Thank you.

Great, thanks Melissa. Next question, Yonghong from Citi.

Yonghong, go ahead.

Hi, thanks for the opportunity. Can you hear me?

Yep.

Yeah.

Yep, thanks. I just have three questions, two on wealth and one on NII.

Firstly on wealth, just wondering how much of the net new money was driven by private banking, and any thoughts on the sustainability of this $10 billion? Some color on the net new money prospect by geography would also be helpful.

Yep, this is my first question.

The $10 billion, 6 was for the high-net-worth and 4 was for Treasures. The geography was actually very wide, no single concentration.

I think we should be able to hopefully maintain the momentum. I don't want to over-promise, but what do you think, Zee Zikun?

Yes, so as we've described earlier on, given that our Treasures franchise is actually pretty much onshore, and therefore, four out of 10 was from there, by nature it is already very well diversified, right? Then the six is PB/TPC, which is more a global kind of a business.

It's very, very broad-based. Now, as to whether we are able to sustain, I do believe we can for simple reason that we've talked about it, it's a macro trend that wealth is continually being generated out here in Asia.

We continue to be onboarding new customers. We've got strong pipeline.

If anything, I would say these kind of numbers is what we have consistently seen now over the last four years, four, five years, I don't see a reason why this should not continue.

Yonghong, I think what is pleasing for me is that the OneBank is working. Both IBG and wealth connectivity across all the markets is happening.

We bank the business, we bank the family, we talk about succession planning. They do their keyman risk insurance with us.

We look after their kids, their grandkids. It's very sticky, and it's also focused on the future, not just this generation, but the next one and the next one.

We're building a sticky franchise. The wealth AUM is going to be lumpy, right, especially at the high end, because you get one big client, yeah, it goes up, then if the guy needs to send money out somewhere to do something, it goes up, it goes in, goes out, it's quite lumpy.

The key is we must keep having a cadence of new-to-bank and next-generation, and then engage them and lock them down with trust, estate planning, and banca, and that's exactly what we're doing.

Okay. Yep, my second question is what is the proportion of AUM in investment products in the first quarter, and where are we in the month of April?

Yep, I'm just wondering what is keeping you from upgrading your commercial non-interest income guidance for the year.

So 58% of the AUM is in investment products. Your second question was what?

Oh, and

how does that compare with the month of April? Because you were saying potentially April we are seeing a little bit less upbeat in terms of equity market sentiments, just wondering what has been the trend in April for this ratio.

Are you talking about the wealth side or—

The proportion of the AUM in investment products, basically just some color on the wealth momentum in April. Nah, okay,

the wealth momentum in April, basically wealth management is made up of I and I, right? Both insurance and investments.

The On the investment side, in April, first two weeks, there was there was, as we can see all in the market, it's it's pretty public, generally quite muted, but the third week third week again, it started to bounce back, it's kind of pretty volatile during this time. Having said that, within the whole investment arena, we have a broad base of different instruments, right?

It's not just about equities, but there are also various structures involved in there, and at the same time, we have a very broad range of funds, both public and private, which customers continue to gain exposure in. It's very, very broad-based.

On the insurance front, the momentum has been exceptionally strong, and that has continued into April.

Got it. Would you say that your wealth or your clients in the wealth segments, they are still basically putting their money into use and basically deploying their deposits into investments, basically no slowdown in that, from what we have been seeing since the first quarter?

I would say in a broad sense, yes, because the advice that we give to our clients has always been to stay invested. We do not believe in timing the market, we always tell our clients time in the market is far better than timing the market.

Therefore,

we take a portfolio approach, and it is in these times that we also would, in some cases where relevant, help our clients or work with them to rebalance their portfolio. There are opportunities actually in these times for them to build a portfolio.

I've always said, right, Yonghong, that I think the role of capital as a source of passive or active income is going to rise for young people and for retirees, because the velocity of money in Main Street's going down, but the velocity of money in Wall Street's going up, right, if you want to use an analogy. Therefore, we want to start them young.

Zee Zikun is not just building the high-net-worth, right? We're going down the chain to do digital wealth, DigiVault, our DigiPortfolios is doing really well.

The AUM has doubled or something like that, right, over the last few months. We want to promulgate concept of regular savings plans, POSB Save As You Earn, and easy sort of risk-adjusted portfolios to suit retail wealth lifecycle needs for longevity and for retirement and for active income if you're in a gig economy, right?

Don't just focus on that top-end sliver. Look at it holistically, look at wealth starting from retail wealth all the way up to wealth continuum, especially in some of our key markets like Singapore, Taiwan.

Then for other fee, recurring fee, look also at GTS, look also at loan fees, because we're trying to build the snowballing effect of more flow, more sticky transactions, more operating accounts, and more fees. The loan fees is being hard-fought, but won.

You can see it's consistently strong, because we're winning key mandates now. We're the lead for a lot of the syndicated loan structures that we do, because of our industry focus.

Then for GTS, we're winning more and more cash operating mandates, right? We're winning because we are a dependable bank, we're digital, we know how to tokenize deposits, we are safe.

We are also a diversifier bank for many of these MNCs that hitherto only bank with global banks, but now they want to diversify risk, they come to us. We're winning operating mandates as well.

What we're trying to build is a nice cadence of recurring fee income across the board. Wealth is one, GTS is one, loan fees is one, payments fees is one.

Using AI, using smart models, using customer engagement, etc., to build that sort of fee engine.

Got it. Thanks for the color.

Maybe just one final questions on NII. You sounded a little bit more optimistic from deposits.

Just wondering, given the April bond yield trends, does that even give you more opportunity to do more hedging, and that potentially also is another driver why you sound more optimistic on NII?

I guess, in a word, yes. Phil, you want to say any more?

Yeah.

In a word, yes, but I don't want to over-promise and under-deliver, right? We're using 1% on SORA and we're expecting no US rate cuts now.

We're ready for if times are bad and the war turns out to be even worse than we anticipate and then it drags on and we have stagflation, then we are building a fortress balance sheet just to prepare for the worst. If it's really bad, we're ready for it, right?

If things all go to pot, we're ready for it. We've got enough reserves, we fight for deposits, we invest in HQLA, we play safe, we take off risk on SMEs and CCUL.

I think from a risk and a CASA perspective, we're good. Then if the markets pick up, the war ends early, hey, then we can go forth and conquer more fee.

Got it. These are all my questions.

Hopefully, less volatility on the downside and more alpha on the upside.

Great. Thanks, Yonghong.

Thank you.

All right. Let's move on to Akash from UBS.

I think there's quite a few questions in queue, we could limit you to two questions.

Thanks. Congrats on a pretty solid quarter.

If I can just start off the first question with understanding the net interest margin a bit better. Can you break it down how much was the impact of rates on the net interest margin, SORA coming down, SOFR coming down, HIBOR coming down, and how much was the HQLA deployment impact separately?

You want to take that? How do we unpack the impact So you wanted us to unpack the impact of of SORA, HIBOR We can give you the sensitivity, which I thought we did.

Su Shan, sorry, not by rate separately. I'm just saying what was the rates impact and what was the HQLA impact?

If I look at the slide where you break down the commercial book NIM and the group NIM, commercial book was down 5 basis points, group was down 4. Is it fair to say that HQLA impact was plus 1 basis points on the NIM?

That's the only number that I'm looking for.

Yeah. Akash, this is Phil.

Maybe I'll try and give a bit of color there, right? Bear in mind that the average group NIM is in the 1.80s, right?

When we deploy surplus deposits, we typically get 1% to 1.2% depending on which currency you're talking about. There's a dilutive impact on NIM, but as we've always said, our guidance is on NII, right?

Because NII in dollar terms is what we're targeting. Su Shan was talking about the 17% ROE and so on.

Really, the ROE and the NII are what we are focused on. It's not easy to tear apart exactly how much was created by this particular slice of deposits versus that.

I'd encourage you to look at the NII line, and that's where the sensitivity sets, as Su Shan mentioned.

Yes, totally understand that. I understand it's positive for NII.

It's a good business to do. I'm just thinking from a NIM perspective, because it makes the calculation a bit easier.

Out of the 4 basis points, can you say minus 2 with HQLA impact, minus 2 was rates impact, or what was that? Because some of the other banks do give us this breakdown.

I think we'll come back to you after.

Okay.

It's quite hard, because depends on how much we get, how much we can do.

Yeah.

We'll come back to you later.

Yeah.

Yeah. Cool.

That would be great. Thank you.

The second question is just on wealth management. If you think about your guidance last year, right, it was kind of implying a $800 million per quarter revenue for wealth management.

This quarter we obviously did $900 million-plus, which was very strong, but you're still not changing the guidance for the full year. I'm just trying to understand what drove this strength in Q1?

Was there anything exceptional which you're looking at and saying we shouldn't change the guidance for now? What would also be very helpful here is if you can break down this 900 by months, like how was Jan and Feb, and how was March?

I'm guessing March was slower than Jan and Feb, but please correct me if I'm wrong.

Yeah. I think what we are seeing is, as Zee Zikun said, right, banca did very well, and banca tends to be countercyclical.

Investments tend to be cyclical. If the markets are up, investments are up.

Markets are down, investments are down. Because that part is hard to predict, we're not raising or changing any of our guidance on wealth.

We obviously don't hold ourselves to our budget, right? If the markets are good, we do our best.

If the markets are bad, we hunker down. I think what has been a pleasant surprise is the banca side has been really outstanding.

That's because, as I said, right, I think customers are seeing us as a long-term wealth manager of choice for their next generation. That's why they're coming to us to do these long-term plans.

These long-term plans take time to hatch. They don't happen overnight.

It takes months, right? You got to get the guy in, the wife, the children.

You got to do health checks. You got to discuss estate planning, all very sensitive things.

These take months, if not years, to hatch. It's hatching now, right?

That's based on our years of investments in the team, the family office team, even in the SME team. What's pleasing for me on banca is we're starting to see also my SME teams, my corporate bankers discussing keyman risk with their keyman clients, the family-owned businesses, because they should, and they have to.

It's a great solution for our clients. That's also pleasing for me.

I think Zee Zikun already gave some guidance on April. Just expect that when the markets are down, the fee for investments will be down, and we hope to mitigate that with banca fees, and we hope to mitigate that with new-to-bank customers.

Yeah. At the same time, as I've also guided, also mitigate that with actually the approach we have taken to wealth management, which is not one of just trading in and out, but really taking the opportunity to build a portfolio.

I've also mentioned that it's not just about equities. Just for discussion's sake, we have also onboarded a whole series of funds, including hedge funds.

In some volatile times, actually hedge funds can do really, really well, and we have seen customers also starting to put their money to work through hedge funds. There is a full suite of solutions that we have to kind of navigate through these volatile times, right?

The first primary impact, of course, overnight things happen, you might see the market move, but along the way, we have, I do believe, what it takes from a strong customer base to a full suite of solutions.

Akash, where you're coming from, I think the words we guided to high single digits for the commercial book non-interest income. High single digits is a range, I would say it's gone up a bit lah, it's not just high single digits, if that satisfies your kind of curiosity on why we did a $900 million-plus, very strong, and you're still not changing your guidance.

Yep. Just bear in mind, Akash, because seasonality, you usually can't take 1Q times

four,

but—

Right.

Okay. Thanks, Akash.

1Q is strong.

Sorry, that's very helpful color, thank you so much. The last question is just on Hong Kong CRE.

You also mentioned that how property market seems to be bottoming out, recovering. Residential property prices have been up for 11 months in a row.

Are you starting to expect recoveries from this book, or are you still expecting NPLs this year?

I am more constructive on Hong Kong CRE now, but it is very much location-specific. Central, Grade A office properties, it's like the US, right, New York, Grade A, Manhattan, Grade A, London, Grade A, it's all doing well.

The fringes are less so. Hong Kong CRE, our exposures are really just to the top-quality, blue-chip names.

They're actually seeing a nice recoveries. Some of the CEOs have told me their rentals in Central have gone from HK$90 to HK$130 per square foot.

That's real recovery. You see the big hedge funds, and II, and even the big tech companies have come back to Hong Kong Central, taken up floors, right?

Some taken up buildings. I am constructive.

I'm pleased to see also that on the West Kowloon side is seeing quite a lot of movement, people taking more space, helped by the strong capital markets in Hong Kong, helped by the growth of wealth management in Hong Kong, and helped by the strong support that Hong Kong is seeing from the mainland for both its capital markets and its investments in new manufacturing and biotech, etc., and tech, etc. I'm more constructive on Hong Kong.

Can this result in any GP write-backs, or any overlays that you have earmarked for the Hong Kong portfolio freeing up?

We'll continue to assess. Let's just put it that way.

Thanks, Akash. Move on to Harsh from JPMorgan.

Hi, Harsh.

Harsh, you can unmute yourself.

Hi. Am I audible?

Yep, yep.

Great. Just to understand the NII guidance, if Sing dollar appreciates and your constant-currency balances go down, is that the main risk between flat NII and slightly lower NII year-on-year?

If the Sing goes up, normally— Because

your constant-currency deposits have been pretty strong, right?

Yeah. This is Phil here.

It's a fairly second-order effect, probably low tens of millions. That's just the translation impact of the US dollar NII stacked back into the Sing dollar functional reporting currency.

That's what you're asking, right?

I'm trying to understand what are the moving parts, because it seems like your language has become more positive on NII between fourth quarter and first quarter. I am guessing one is the $60 billion of hedging, and second is Sing dollar.

Is there anything else which would be a—

Harsh, we might sound more positive, but honestly, it was tough, right? Q1, SORA went down how much year-on-year?

150 bps.

150

basis points. SORA was down 150 basis points.

Remember what I said about our sensitivity, right?

It was

$11 million per basis point. It's not easy, right?

It's tough. You see that.

The big driver for NIM is still SORA, still beats everything else hands down. The team did a great job in getting more deposit growth, the team did a great job in hedging.

The market is offering more opportunities for hedging because the market is so volatile, right? From that perspective, because we're seeing the volume growth, we're seeing the hedging opportunities, we're seeing the fee growth, we're seeing the new-to-bank, that's mitigating the massive SORA headwinds that was upon us when we looked at the markets last year, right?

At the end of last year, the SORA headwinds were real, and they still are real, right? Fortress balance sheet, right, and then keep growing, keep your NTBs, keep your CASA grab, and keep your focus on all the growth cylinders that we're doing and all the credit sort of stress testing that we're doing.

We're standing firmer. I think we're on terra firma and terra's firmer.

All right. If I could just understand that hedging bit, Su Shan, thanks for that.

It's incredible how well NII is despite all of these. Kudos to your team.

What exactly are you hedging? I'm just trying to understand the mechanics of it, because if it is consensus that this is how, let's say, the Sing dollar rates are going to be, or US dollar rates are going to be, some peek into your secret sauce, what exactly are you doing to get to this outcome?

Harsh, Phil here again. We use a variety of hedging strategies.

They'll be funded, unfunded, some deployment to HQLA.

Also

the loan book itself, right, also gives us certain opportunities to put on hedges. Some of those can be single currency, some can be cross currency, some can be basis swaps.

There's a variety of hedging strategies that we employ. That's probably what I would say on the matter.

There's nothing one big thing which we can point to that, okay, this worked very well because the cross-currency swap spreads went down. It's nothing like it's across the board.

There's nothing that we can monitor, is what I'm trying to get to.

We are very opportunistic, and on particular periods we will see opportunities in one market, in particular in other periods we will see opportunities in other markets. Overall, look at the outcome of the hedging strategies.

Look at the margin we're able to get on deposits. Those are the numbers you can kind of look at and get a sense of how we're doing to mitigate that very, very large SORA headwind that Su Shan just mentioned.

Perfect. No, thanks for that.

Final question is on capital. Under what conditions will the bank not increase the dividend by 6 cents in fourth quarter?

Under what circumstances?

Unforeseen circumstances.

If the war continues, the markets meltdown, there's stagflation, demand destruction, it depends on the macros, Harsh. I don't want to over-commit now because we still have three quarters ahead of us, and it's a very difficult environment to predict, which is why the team and I just focus on fortress balance sheet, focus on growth, focus on credit, and build a strong foundation.

Then by Q2, Q3, we should have more visibility. Sorry, I can't give you any guidance because I really don't know, is the honest answer.

I understand that. Is it fair to say unless there is a reasonably bleak outcome, we should probably get that 6 cents pick up?

Hope so.

No, no, no, that is all. That is all.

I understand you can't commit and I understand world is a difficult place. Final question is on buyback.

The capital set aside for buyback, what are the uses of that capital? How long will you wait for the stock to come down?

If it continues to go up, if it is up 5 or 10 bucks 12 months from now, what do we do with that capital set aside for buyback?

We've done 12%, right?

We $400 million.

We've done $400 million, got $2.6 billion left. We said that we have up to 2027, we've still got a year and a half more to decide.

We will definitely keep you posted. As of now, because we can't predict whether the markets will crash or not, don't want to commit either way.

We will be prudent with the use of it, and we will keep to our promises.

Okay.

Sorry, no, just sorry, Nick, I know I'm overstepping here, but just final thing. If we do not use this capital, is there a possibility that some of it can be paid back by end of '26, or will you wait till end of '27 to pay back that $2.6 billion, in whatever form and shape?

We said it's 2027 for the buyback. We would still wait till 2027.

If we don't actually do the buyback quantum in what we have committed, we will do it in the form of some kind of dividend. At least it's there, right?

It's there to support. At least you have that sort of comfort that if all hell breaks loose and the markets tank, you've got that support there potentially.

All right. Thank you.

Thanks, Harsh. Next question from Nick from Morgan Stanley.

Nick, go ahead.

Hi. First, just on coming back to balance sheet growth actually.

I wonder if you could just make any comment on sort of appetite to borrow from your customers. Is it sort of that we're seeing working capital-driven lending because prices are going up, or is it that there is sort of still appetite for capex and any view you have on how that continues?

Just linked to that, I know you've mentioned lots of reasons why you are getting deposits, but was there anything particular in Q1 that drove that deposit growth? I've got a couple of other questions afterwards.

Nick, I'll take that balance sheet growth question first, and you are asking about loan growth. I'm actually quite happy to see that the non-trade corporate loan growth pipeline is quite decent.

First Q was driven by all the growth industries, right? Tech, TMT, data centers, tech platforms, metals and mining, some real estate in Singapore for the government land sales, although Hong Kong surprisingly—I guess that speaks to the recovery in the Hong Kong property market.

Hong Kong, we saw quite a lot of repayments in the real estate sector because they managed to sell a lot more and they could repay us. For second quarter, we continue to see decent growth.

We've got a couple of big deals in the pipeline that I hope will go through, and it's in energy and renewables, some real estate, and some acquisition financing, and again TMT as well. Fairly decent in terms of—these are mostly large corporates.

We're not really growing in the mid-sized or SMEs right now, neither are we growing in the consumer unsecured side. Then it depends, right?

The couple of deals that I mentioned, I hope to see them through, it's almost at the last stages, but anything can happen, right? Don't want to jinx it.

Then trade loans as well, that tends to be quite end-of-quarter type of trade loans, but again, a lot of it around the AI server value chain, working capital for energy and renewables, and supply chain for chips. Again, that comes in normally at the third month of each quarter.

Your second question was around deposits. What was the question on deposits?

You've given obviously lots of [unclear] in Q1 that had driven that deposit flow?

Sorry, you were breaking up. Sorry.

I lost you for a bit.

Yeah. No, my question was you obviously saw good deposit flow in the first quarter and you've mentioned lots of reasons why deposits are coming in generally, but I just wondered if there was any one factor that had driven deposit flows in the first quarter.

It's broad-based. It's NTB growth, and first quarter there was some retail seasonal bonus inflows, there was corporate operating balances, we had a couple of successful FD campaigns as well.

I think the work that we're doing around our AI models, around our campaigns, whether it's for the multiplier or for bundled products for corporates or SMEs, is working. I think a lot of it is just focus, right?

We told the team, "Hey, focus on growing operating accounts, focus on winning mandates, focus on new-to-bank." Whether it's SME CASA, whether it's large corporate operating balances, whether it's wealth new accounts, whether it's retail CASA bonus, it's just all cylinders firing for cash.

Perfect. Thank you.

Then my second question, just on banca, you've mentioned how it's grown and how it's important as a driver of wealth. Can you give us any disclosure on roughly how much of your wealth management is coming from banca and how that changed Q-on-Q?

It's roughly about 20% of total fee income.

Total fees or total wealth fees?

Total wealth fees.

Okay.

I think it was

on slide 8, right? That's right.

Normally,

so far we don't give details on banca, but it's about 20% of total wealth fees, and that's seen a substantial increase from last year.

It's lumpy, Nick. If you have one big policy, sometimes it's lumpy.

As I mentioned, a lot of it depends on new-to-bank customers, and also we're getting some success around SME keyman policies as well.

Thanks. Sorry, just one final one.

CBG wealth management net new NPA formation in 1Q was 61, which just looks like a bit of an outlier. I know it's small in a group context.

Was there anything that drove that?

It's fully secured, it should be okay. It's a one lumpy situation that's fully secured.

Cool. Thanks very much.

Thank you.

Thanks, Nick. Last question, Sukriti from Bank of America.

Congratulations on a good set of results. Hi, can you hear me?

Yep. Go ahead.

Yeah. Thank you.

Just keeping it short to two questions. One, just wanted to understand, you said loan growth should broadly track GDP, but given the ongoing macro uncertainty, is there a risk that you see that loan growth surprises to the downside in the second half if corporates turn more cautious, and what are some of the pockets where you would be most watchful?

Yeah. I think we're very focused on where we want to grow our loan book.

We're very nuanced on what we're avoiding as well. As I said, the team knows that we want to go where there's growth, and so that's TMT, that's FIG, that's the whole semiconductor supply chain, and avoiding the riskier credits.

I think and also renewables, of course, and then there's quite a lot of M&A deals in the pipeline. I think we're good.

Will it be canceled in the second half? It really depends.

If the war continues, then there is going to be downside risk, I think, on the asset book growth, as deals get canceled. Far from the pipeline that we're seeing, it looks okay.

What has surprised me on the downside is people are repaying also, right, which is not a bad thing, as I said earlier on, I didn't anticipate Hong Kong real estate loans to be repaid so quickly, but they were all repaid quite quicker than I anticipated. In a way it's good for credit, but it's less good for my asset book.

I think there is enough certainly in the TMT pipeline, there's enough around the corporate trade loans for the foreseeable future this year. Let's see.

If the second half looks bad because of Iran, then we might have to shave a couple of billion off our budget, but it's okay. We'll continue to grow deposits, and we'll continue to redeploy the excess deposits.

My NII, hopefully, we will still be in line with our own budget projections.

Thank you so much. Actually a follow-up there on the deposit side, we did mention all deposits are accretive, but at what level do we feel that excess deposits become ROE dilutive, and how do we think about continued deposit growth if there's a risk that loan growth is not as high?

Doesn't matter. You want to go all out for deposit growth, right?

Cash is king. Cash is queen.

Cash is everything. Just go all out for deposit growth.

Your loan growth, you'll be instructed by the creditworthiness and the ROE and the cross-sell and all that, and we are very careful about avoiding the bad credits and being instructive on stress testing, etc. Deposit growth, just go all out and win market share.

Doesn't matter whether your loan growth is muted or not. You just go all out for deposits, cuz you can redeploy them in HQLA.

It's high ROE, it's liquid, it's good credit.

It could be NIM dilutive,

but

it will not be ROE dilutive.

Don't worry about the NIM. Look at the NII, and look at the ROE.

Understood. Great.

Thank you so much for that. That's all.

Thanks, Sukriti. That's all the time we have.

Thanks, everyone, for dialing in. We will speak to you again next quarter.

Thank you.

Thank you.