Hi, everyone. Welcome to iFAST Corporation's second quarter 2026 and first half 2026 results presentation.

Today from the iFAST team, we have Chung Chun, our Group CEO, Terence, our Group CFO, as well as members from our finance and corporate communications team. I am JP, I'm from the corporate comms team at iFAST.

What I'll do today is I'll run through the key summary and the business updates. Terence, our Group CFO, will give more colors and details on the group's financial results before we all proceed to our Q&A.

In our key summary, I think we've seen a strong growth across the board for iFAST in second quarter of 2026. If you look at some of the key numbers we've shared here, total revenue was at $162.04 million, that's 34.8% higher year on year.

Net profit was up 35% year on year to $29.85 million. EBITDA was up 32.7% year on year to $48.89 million.

All these numbers are for second quarter of this year. Group AUA reached a record new high of $36.13 billion, that's 32.8% higher compared to last year.

In terms of the net inflows trend, we've continued to see good momentum. Net inflows for second quarter was at $1.31 billion, that's 2.2% 2.2% year-on-year growth.

Regarding dividend, our second interim dividend for FY2026 is at 3 cents per ordinary share, that's 50% higher compared to last year. We've seen increased profitability driven by growth across various divisions.

Firstly, robust growth in AUA across the wealth management platforms in the group. Secondly, we've also seen record profit before tax at our bank division, iFAST Global Bank in the UK.

We've also seen growth from our Hong Kong ePension division. For the Hong Kong ePension division, an important milestone has been crossed in April of this year.

All 12 trustees and a total of 24 schemes have been successfully onboarded to the Hong Kong pension platform. As mentioned just now, iFAST Global Bank saw higher and record pre-tax profit of $1.9 million in second quarter of this year.

That's a year-on-year growth of 174.5%. The bank has continued to build on its first full year of profitability that we saw last year.

In terms of the customer accounts, they have increased by over 50% year on year to more than 1.5 million accounts as of end of June 2026. As mentioned, for second interim dividend for FY 2020 20 2026, the directors declare a dividend of 3 cents per share, so that's 50% higher compared to last year.

For full year of FY2026, the directors expect to propose a total dividend of 12 cents per share or higher, which represents a 43% increase compared to FY2025. This is actually an increase compared to the previous guidance given, which was at 10.5 cents per share or higher, and we communicated that previously in April.

As the group's overall profitability increases, and the group's shareholder equity continues to grow, the directors are comfortable with increasing the dividend payout ratios gradually. We'll talk a bit more about that in the business update later.

Barring unforeseen circumstances, the group expects 2026 to see healthy growth rates in revenues and profitability. The group is embracing AI to achieve the various objectives while having a lower group headcount.

Overall group headcount has peaked in the middle of 2026 and is expected to be at a lower level at the end of 2028 as we work on achieving the various objectives that we have communicated in iFAST 3-year plan. This will pave the way towards improving profit margins from next year onwards.

Looking at our group AUA trend, we saw record AUA level of $36.13 billion. That's 32.8% higher year on year and also represents a robust 10.7% Q-on-Q growth.

Both the B2B and the B2C divisions have seen strong year-on-year growth in their respective AUA. B2B still continues to contribute about 65% of total group AUA, with the remaining 35% coming from our B2C division.

The other interesting thing to note is that a record-high AUA was observed across all the various geographical segments. In terms of the AUA breakdown by markets and products, we can see that Singapore continues to be the core market with a contribution of about 69%, followed by Malaysia and Hong Kong at about 11-plus percent each, and others, which is made up of China and UK.

In terms of products, unit trust remain the largest product contributor at 55% roughly, followed by stocks and ETFs, and bonds, as well as cash account and deposits. In terms of the various products, they also saw a strong year-on-year growth, whether it's across unit trust, stocks and ETFs, as well as cash account and deposits.

I'll be going through the business updates where we're touching on a couple of key main points before getting Terence to share more on the financial results. I think in April of this year, we talked about iFAST 3-year plan.

There are six strategic pillars in that plan, and management team had given more colors on those six pillars in April of this year. For this quarter, what we wanted to do was to see whether any of the pillars have seen any progress.

On this slide, we wanted to highlight these three points. Starting firstly for Vision 2030 where we're talking about a AUA target of $100 billion by 2030, which represents a CAGR of 25.6% over the next 5 years.

We wanted to also share that as you've noticed, AUA trends remain very strong. We saw the 32.8% year-on-year growth in our group AUA.

We will continue to work towards building a truly global business with our digital banking and wealth management platforms. We intend, of course, to continue delivering value for clients and partners worldwide.

The second pillar that we updated just now as well is the ePension. We've seen that milestone that has been crossed in April of this year.

All trustees as well as their respective schemes have been successfully onboarded. We will continue to focus on improving our service quality and operational efficiency.

On the third point here, we communicated I think last quarter that we expect to see group headcount peaking. We're confirming that group headcount has peaked as of this quarter's update.

We will continue to adopt AI across the various business units and also improving profit margins supported by operating leverage. We will expect that to be observed from 2027 onwards.

Regarding group headcount, we expect that to be at a lower level by end of 2028. On the next slide, a reiteration of the various pillars, the six key points of how the management team is looking at the 3-year plan and the longer-term trajectory for the company.

I won't go through that because we have updated three of the pillars already. On the next slide for the individual markets updates, so as mentioned just now, all markets recorded record-high AUA levels across Singapore, Hong Kong, Malaysia, China, and the UK.

In terms of the various business divisions, I think within Singapore, Hong Kong, Malaysia, and China, they've also seen strong and robust AUA growth rates, whether it's B2B, B2C, or our iFAST Global Markets division. For the profit and net revenue trends, robust growth for the key wealth management centers of Singapore, Hong Kong, and Malaysia.

We continue to observe the losses in our China operation narrowing. The UK, as I mentioned just now as well, record quarterly profit in the second quarter of this year.

Regarding net inflows, they stood at $1.31 billion in second quarter of this year, bringing our first half 2026 net inflows to $2.56 billion. That's 15% higher compared to last year.

We also see a very strong momentum regarding our key product, which is unit trust. Subscriptions were very strong in second quarter of this year at $3.67 billion.

That brings our first half 2026 number to $7 billion for UT subscription. That's 52% higher compared to last year.

We will spend a bit of time talking about the bank as well, because we've seen the latest progress from the bank. Record profit in 2Q at $1.92 million, that's 174% higher year on year.

First half profit for the bank is at $2.61 million, that's 53% higher year on year. For the bank, we also saw customer deposits reaching a record-high level of $1.8 billion as of end of second quarter.

That's 25% higher year on year. We wanted to just go back to how the bank has progressed with the deposit-taking business, which was launched in April 2023.

In the last 3 years or so, the deposit amount has reached a record-high level, as I said. Also net interest revenue growth continues to grow strongly.

We saw net interest revenue grow by 37.9% year on year. The other division in the bank that's also seen good growth momentum is actually the B2B business, which we call the business banking division.

I think in recent quarters, we have been seeing stronger business account openings and increased usage of the various services that the bank provides to its customers. The third point here is really to just go back to how with the deposit-taking business, with the growth in customer deposits, the net interest revenue has exceeded the non-interest commission and fee income that comes from the remittance business, which we call EzRemit.

I think for EzRemit, remittance volumes were actually higher in first half of this year year on year. The revenue-per-transaction figures have moderated compared to a year ago, because a year ago, the revenue-per-transaction numbers were actually higher than normal.

I think in previous quarters, our Group CFO had also talked about that. The last point in the business update here is regarding the management team's outlook for the dividend updates.

I think in terms of the approach, as the group's profitability continues to improve and our shareholders' equity grows, the directors are comfortable with gradually increasing the dividend payouts while maintaining flexibility to support future growth opportunities, capital requirements, and also business needs. Regarding the dividend trend, in first half of 2026, the dividend payout ratio was at 28.9% compared to 26.3% in first half of last year.

The directors expect to propose a total dividend of 12 cents per share for this year, which is at least 43% higher year on year. Regarding the long-term payout direction, the directors believe there may be scope to actually gradually increase the dividend payout ratio to 40% as the group's shareholders' equity moves closer to S$1 billion.

The next couple of slides are a repeat of what I've shared, I won't be really going through a lot of the details, but essentially, second interim dividend, 3 cents, so that's 50% higher compared to last year. Regarding the dividend schedule, on the last slide here, the payment date will be 20th of August.

I'll now invite Terence, our Group CFO, to run through some of the key financial results. Yeah.

Thanks, JP. Very good morning to everyone.

For the financial results, I'm not going to run through every line, otherwise, we'll never get to the Q&A. Just want to take you through a couple of key highlights from the latest quarter of results.

I think you heard earlier from JP that I think we've had a very strong growth demonstrated in the wealth management divisions. I think we have record-high AUAs across all the geographies.

Of course, that very strong momentum has continued from the first quarter to the second quarter. We have also recorded very strong growth in net revenue that has also flowed down to the bottom line, also demonstrating, I think, in excess of 30-plus percent year-on-year increases in both revenue as well as in profit.

The other highlight probably on the OPEX side, which is something that we have had a lot of questions on recently. I think on the OPEX, I think we tried to give you some color in terms of what we expect to happen.

I think one of the items mentioned earlier by JP was that headcount has peaked, right? I think we did mention that we expect headcount to peak in the middle of this year.

If you look at the operating expenses line for second quarter, I think you're still seeing quite strong increases on a year-on-year basis, but, of course, that has moderated quite a bit from the first quarter, right? I think some of that base effects are kind of coming off.

More importantly, I think on a Q-on-Q basis, you're actually seeing a bit of a flatlining of expenses as well. I think OPEX across the group was up something like about 2% or 2.2% Q-on-Q, right?

I think that's something that we expect to make more progress on as we talk about headcount related to 2028 being lower as well as some of the margin expansion we expect to see going into 2027. I think related to this is also the other observation on the operating leverage.

I think this is something that we would expect to show or demonstrate as a wealth platform that scales up with AUA. Of course, as net revenue increases, we then expect to see some of that flowing through to the PBT margins.

I think you will see a slide on the PBT margins where that number at least on a headline side doesn't really show up, but it's also because we have this very sizeable business in the Hong Kong side of things on the ePension division. Of course, on the PBT margins, if you were to look at the individual geographies, I think you will then very clearly see that for the likes of Singapore, Malaysia, even for the UK, right, which is actually a deposit-taking business, you will see that actually we have made quite good progress on the PBT margins in those markets.

Of course, Hong Kong has its own specific nuances because of that ePension project. Of course, we've talked about the headcount just very briefly earlier on, right?

I think these are some of the key highlights from the financial results. Not wanting to go through all the key numbers from each slide.

Just want to point to perhaps on the ROE slide as well. Right, this is on slide 24.

I think we continue to generate or demonstrate very high levels of ROE, 27.2%, even for a business that has a bank within the ecosystem. Just as a reminder, we make in excess of 95% or rather almost 95% of our net revenue coming from a fee-based income sources.

The net interest income at the bank is still currently just over 5% of our overall group net revenue. Right.

Moving on to the geographical segments on slide 25, right? I think you can clearly see the strength in the wealth management divisions, Singapore, Malaysia, even Hong Kong also continuing to demonstrate very good growth year on year.

The kind of an unusual number there for Malaysia, I think Malaysia has demonstrated really strong growth in the second quarter. I just wanted to highlight also that there was a bit of a benefit from some IT development revenue that has come in in Malaysia, but even if you take that out, then I think Malaysia wealth management standalone also demonstrated very good growth.

Just want to point you to the tax expense line, just as a reminder that since the bank became profitable, I think we have started recognizing a deferred tax asset at the UK bank entity. We have continued to recognize that, and therefore, you can see that the tax expenses have not grown as quickly, right, as the growth in PBT.

All right, this is really that deferred tax asset that we have started to recognize actually since the fourth quarter of 2025. Just moving on very quickly to the last slide in this section on slide 28, right?

Again, this is the different geographies demonstrating very good progress. Just want to point you to the UK line, right, so that the UK line has a bit of a lower rate of growth there.

You can see on the net revenue side, so that plus 3.8% actually, this is a combination of very good growth on the deposit-taking business. We saw over 36% growth in net interest income at the bank.

Of course, on the EzRemit division, which was actually the largest business within the bank, but it's now a smaller part of the bank's net revenue contributor. This business actually experienced higher-than-normal margins in the year-ago period, right?

I think you will see some of that coming off in the third quarter and beyond. Based on the second quarter's number, if you compare that on a year-on-year basis, you're still seeing a bit of a decrease, even though transaction volumes were actually higher.

Right. You put that together, you're actually looking at not a very strong growth number for net revenue, but actually, it's not a true representation of the underlying business trend.

Right, I just wanted to make those points before we move on to the Q&A. Yeah.

Yes. Thanks, Terence.

We'll now move on to the Q&A segment. As always, we have attendees here at the boardroom, as well as those who have joined us virtually.

For those virtual attendees, feel free to raise hand or type your questions in the chat box, and we will cover your questions in this section. Does anyone want to maybe kick-start the Q&A session?

Yes, Roger.

I'm Roger

from C.

I would like to ask about the Hong Kong this ORSO sector. How are you going to recognize the revenue?

Is it AUA or administrator-fee based?

For the ORSO business, we are at this point in time targeting for it to take effect end of this year, end of the year. You'll see a contribution more of next year, hopefully it gets onboarded end of this year.

In terms of the revenue, it will be sort of AUA based. We will be earning the revenue in terms of as a percentage of the AUA, similar to wealth management platform.

Because

I saw the projection in 20 2030, right, that the Hong Kong AUA is only 11-plus billion. Does that mean the market share will be very low in Hong Kong?

I think you're referring to, yeah, the projection that we ruled. For the scenario, you see, that we printed previous quarter, we have put in assumptions that are quite conservative in a way for that.

We essentially look at our existing wealth management platform, and then we have the ORSO business coming up, and we basically assume some growth, but generally speaking, we didn't assume big growth on the ORSO side. As we mentioned, this is a scenario analysis that we put up.

It's not actually a projection nor is it a target, but we basically paint a possible scenario of how those numbers could actually be arrived at assuming we get $100 billion by end of 2030.

On the payment side, right, I remember you received the payment license in Malaysia last year. It's almost a year, but you haven't launched.

When are you going to launch it?

Yeah. We expect to launch it in the fourth quarter of this year.

We have been preparing, and we have been working internally, and so on. An official launch on this will likely be in fourth quarter.

And 99 Speedmart, he's also the owner of iFAST. Are you going to collaborate with this 99 Speedmart in the offline space?

Sorry?

99 Speedmart.

99 Speedmart, no, it's not related to iFAST. The 99 Speedmart partnered with iFAST when we put in an application for the digital bank license in Malaysia.

That's the main relationship that we actually have, but Oh, they do own a small stake in iFAST as a shareholder. Operationally, yeah, not actually involved.

When do you expect to receive payment license in Singapore or Hong Kong?

Singapore, yeah, we have been applying, and we are hoping to yeah, make a lot more progress quite soon. We're currently awaiting that.

Hong Kong, we don't have a immediate, concrete timeline as of today.

For the China side, are we still targeting breakeven next year?

We are internally targeting, yeah, that's what we are targeting.

For the Foshan, this iFAST pension, is that more like cost center or you expect any revenue from there?

It is an internal segment of the business that provides support to Hong Kong eMPF business. I think we better give a chance to other people.

Yes, I think yeah.

Yeah. No more questions.

Devanand? No.

Okay. Rui Wen?

Okay. For the ORSO part,

I think previously, you mentioned that you're already working with one trustee for the onboarding. Any update on that and whether the action is coming up from other trustees?

That part haven't officially started to contribute, and as I mentioned earlier, we are targeting to onboard them by end of

this year as the first phase. For now, it's still just one?

Basically, preparing behind the scenes. This whole thing has been delayed because of the onboarding of eMPF project, that's sort of a big priority for everyone.

That's why there is that decision to delay somewhat, but now the whole onboarding has happened for the eMPF, and then we're targeting for that to happen.

Maybe on iFAST Global Bank, there's a lot of news about Chinese offshore wealth coming down, and direct is new show last Friday, and the banks are really high Chinese-speaking please. I think we are hearing feedback from some clients that they see iFAST Global Bank being featured on Xiaohongshu quite aggressively.

Any comments on that and how it will impact some of the group projections of 2030?

Sorry, can you repeat your question? The growth

iFAST Global Bank, given that there's a lot of Chinese offshore wealth coming down, and that I guess it's also a part of your business given that, yeah, there's been seen on Xiaohongshu and things like that. Also and how it will affect that $15 billion target and your EPB, please, and targeting the segments.

Firstly, in terms of the contribution from the Chinese resident to our overall deposit at the bank is actually quite small percentage currently. I think online, you probably see some of this comment and activities, and so on, because it is a service that a lot of Chinese resident wants, sort of offshore banking services.

It's something that they would like to actually have. Because of that, there's actually quite a bit of discussions, and so on.

I think in terms of the actual contribution to us, as of today, is actually a small percentage. More importantly, on an ongoing basis is about doing a business that doesn't violate regulations, and so on.

I think the iFAST Global Bank caters to yeah, consumers who actually want to manage their money offshore, and there are some actually official regulations that officially allow some deposits to be sent from Chinese banks overseas, and that's within the remit of $50,000 per person per year. We don't go beyond any official limits, and so on.

That being the case, then we don't foresee that being a problem.

Another question on trade receivables. It has been higher than what has been observed last year.

Has any of this got to do with cash received from the eMPF projects being delayed?

No. People are asking this question because we, yeah, we typically have a lot of discussions on trade receivables.

I think previously, the main item inside there, as you will see from our financials, which we've already split out in the first quarter, was actually the margin financing receivables bit, right? I think once you take that out, you can really see that impact from the what is essentially a new business to us.

I think we're one of the last few brokers to get into margin financing, but, of course, yeah, that line has grown quite strongly. I think the rest of the trade receivables, other than the BAU that we have from the traditional wealth business, I think of course, the Hong Kong project that we have done or we are still working on does have an element of a receivables position.

That, of course, as the business has scaled up, of course, with revenue growing as well, that has also grown. I just want to mention earlier I think this is a division we also talked about, which is the EzRemit division.

This division is actually a remittance business. It is also a prefunded business because that's the nature of how remittance works, right?

I think on this part, earlier, I think we made the comment that while we have seen some declines in the margins on that business, we are actually executing more remittance transaction volumes. Right.

With that, I think you can also see there's been some addition of working capital. On the working capital side, that actually adds to the receivables position by nature of how remittances are accounted for.

Actually, that has also been a contributor to that increase. I think it's a combination of all these different businesses, and yeah.

I just wanted to give some color on the trade receivables number.

I gather that the AUA is up by 33%. To what degree is the increase in AUA due to the evaluation versus organic new customer money?

The changes in AUA is essentially a function of the net inflow and the market impact.

Okay?

These are essentially the two components. If you look at the net inflow, which is a number that we release every quarter, and then you yeah, you just do the sums, and you'll find that the rest are essentially changes in market impact.

Okay? On

the guidance on headcount decrease till 2028, can you give us a sense in terms of percentage of the total current workforce, and also the nature of the headcount decrease, how much do you need to pay out so-called termination, rationalization-related expenses versus natural rolling off of contracts, and so on?

Yeah. I think firstly, we are not looking at a huge percentage in terms of reduction.

I think we're making the point really is that last yeah, 5, 10 years, we have been growing, last 5 years particularly, headcount growing quite significantly. As we grow, then the expenses continue to grow.

That growth was very sharp in the last 2 years as we preparing for the eMPF. As that happened, then wealth management side also, we have a more liberal hiring policy, and so on.

Given that the most difficult part in growth process in terms of execution has happened, then we feel that there's room for us to essentially yeah, gradually reduce the number. While we say that yeah, we're peaked, we are not looking at a very sharp reduction in the state of [unclear].

That's the first point. Second point is actually we're not doing any retrenchment.

I think the group that I've personally mentioned on multiple occasions that we generally have a no-retrenchment policy. We expect that the headcount reduction will happen solely through the fact that some firstly, some of the position were on contract basis.

As they expire, then, yeah, we won't renew as many. Secondly, natural attrition.

I think every year, there's a certain level of resignations, natural attrition. Each time that happens, then we take the chance to reduce the number.

Over time, then that will allow us to achieve a certain reduction that we're aiming for. I know that in today's world, businesses generally look at retrenchment as something that is part and parcel of business or even a good thing quite often, because shareholders tend to reward management when they announce that they are retrenching, but at iFAST, we believe that management of headcount should be done properly, and that is a part of required things that ensure that we have a certain corporate culture that allow us to really grow well in the long run.

Also, I guess did you get update on the US the US link that's launching by end of May? I saw it's on the line, I guess is is there.

I guess what's the update on this? That's launched,

yeah? Yeah.

That is something that Yeah, first couple of years, we were waiting for the licensing, and so on, and the end of last year, it was approved, and then in the last 9 months, we have been basically getting ready to do testing, and so on. Internally, we have started to route some of our transactions to our own iFAST US Securities directly.

That has started to happen, yeah, this month in a gradual basis, but it's not something that we are yeah, trying to rush in a big way. We want to make sure that everything is fully tested and very well before the bulk of the transactions go through.

Essentially, yes, it's we're starting to actually route transactions through that, and we do expect that activity, going forward, will happen a lot more. Having said that, I also want to remind shareholders that we are not actually directly trying to target US customers.

This is more a link that allow us to directly access US exchanges without having to go through another broker. That will put us in a position that will allow us to be more competitive over time because we don't have the additional layer.

That will also sort of open up the possibility of having different kind of business models for us at

a [unclear]. Devanand?

Okay. Rui Wen.

Couple of questions on the Hong Kong side. As you were mentioning, ORSO onboarding will happen towards the end of the year.

Then the AUA of roughly $3 billion or so that we're expecting, would that come into the second half or would that be pushed into

If the timetable is as per the latest target and expectation, then we expect that the AUA will add on to the number at the end of the year. All right, you add on to the group AUA at the end of year, even though the actual revenue contribution, we don't expect to see too much of it [unclear].

Then

next, on Hong Kong, in terms of the PBT, given the first half performance, and second half, even if we assume it to be flat year on year, still on a full-year basis would be about 11% growth, which is in line with the guidance that has been given about a double-digit growth. Is that how we should be thinking about Hong Kong side, that kind of assumptions of 11% growth year on year PBT?

I suppose that's, yeah, a possible way of looking at it. We have indicated that we expect or we target for Hong Kong to see double-digit yeah, growth this year compared to last year in terms of revenue and profitability.

That target remains the yeah, target that we have indicated.

Thanks, Rui Wen. Devanand, do you have a question?

Mr. Lim, what is the biggest risk facing the business at the moment?

I would say that yeah, we have gone through quite a bit, and we have gone through quite a bit of a difficult time last 1, 2 years especially as we're onboarding the eMPF project. I think for a while, the eMPF project onboarding was seen by the industry player as something that and things could be a breeze, but I think we have gone through the most difficult part, and going forward is about helping to continue to improve their service level, and so on.

From where we are, I suppose some of the normal risk in terms of operational risk, IT risk, etc., remains, and so on. That's something that, of course, we continue to work on strengthening, and so on.

The other risk that typically is something that most people would think about would be the fact that we now operate as a bank. Previously, we, as a group, have a business model that doesn't require a big balance sheet, that is so cash-generative.

Given that now we own a bank within the group, you start to see that profile of the group start to shift somewhat. Is a business whereby the balance sheet starts to expand, and then bank level that required capital start to move up, and so on.

I think there are some banks that are not managed well in terms of the balance sheet, and when that happens, then that introduce an element of risk to the group. For us, we're very mindful that for a bank, if you take the bank in the wrong direction, then that will itself introduce quite a bit of risk to the group itself, which is why right from day one, we have always emphasized that we take a business model for the bank that actually tries to minimize the balance sheet risk.

We don't lend to risky customers, and so on. We basically have a business model for the bank that ensures that our balance sheet remains very liquid and the assets that we own actually very high quality, essentially mainly sovereign bond, Bank of England deposits, as well as investment-grade bond, of which the bank investment-grade bond would be the main one.

The risks are there if we go off track from what would be the right path. I think it's something that we're always mindful about.

We continue to manage it in a very prudent manner, then I think the risk will be something that will be manageable. Yeah.

We will take one last question from our physical attendees before we move to our online attendees because the questions are piling up, please. Thank you.

Just a question on the operation in China. Can you share a bit with us, what is the momentum currently, maybe in terms of number of accounts, where should we be at the end of this year in terms of number of accounts, and what type of customers in terms of segmentation should be in the business?

I think the China business is a business where, yeah, if you look at the numbers in recent quarters, the growth is actually in percentage terms are growing quite well, quite nicely. Having said that, it remains a small percentage of the group's business.

It is a business that we expect to continue to grow, and yeah, we hope to get to a point not too far away where we actually start to hit the breakeven level, and so on. The exact number of accounts, and so on, we don't separately break it down, but it is a significant percentage of the overall accounts that we actually have, and yeah, so that's something that We believe will continue to track in the right direction.

The growth is still there.

The growth is still there, yes.

Thank you.

Sure. I think Jayden from Macquarie raised hand.

Jayden, can you hear us?

I can. Can you hear me okay?

Yes, we can hear you.

Great. Thank you so much for the opportunity.

I have a few follow-up questions. Just on the Hong Kong revenues, I know that you report it on a combined basis, but if you look at page 19, I think the total revenue for this quarter was lower than last quarter.

Now we noted obviously that AUA in Hong Kong has gone up, but can you be sort of clear on what the driver was as to why revenues were sequentially lower? Was it from wealth or was it from the contract or was it from something else?

That was my first question.

I'll take this question. Jayden, as I think the wealth numbers you can see are I think they're quite strong across the board, so that includes Hong Kong and the growth of AUA, and so on.

I think you can clearly see that it's not related to the Hong Kong wealth business. I think in terms of how we think about the ePension business, the revenue recognition, I think we did see some uplift from the very high onboarding rates, right, when we went from sort of a lower rate to a higher rate.

I think in the fourth quarter and also in the first quarter. I think that has come off a bit in the second quarter because now we're operating at a more steady-state type of revenue recognition process.

Of course, as what we have been trying to communicate, it is still a very high level of revenue that we recognize, right? I think we're not seeing any material change in that revenue recognition.

I think overall, put together with the wealth business, there is a bit of a flatlining that you can see on a Q-on-Q basis on that measure. Hopefully that

That's very clear.

Yep. Thanks.

Thanks, Terence. I had a couple more questions.

I think before you mentioned about the desire to have the contract labor sort of rolling off naturally, right, as the terms come to an end. Would you be able to share with us roughly what the terms are for the typical contracts where you do have staff helping you out with the project?

I'm just trying to get a sense of how soon we'd start to see things materially roll off or if it's going to take still some time. Thanks.

For us, the majority of our staff are essentially still permanent staff, but there is a certain percentage that's on contract. It could be 1-year, 2-year contract.

The exact number and percentage is something that we manage on an ongoing basis. We expect that the way the terms are, and we will be able to gradually manage the overall group headcount over next couple of years.

As I mentioned, we're not looking at a big, sudden reduction, and so on. It's something that in line with normal good practice, we always ensure that things are managed in a manner that allows us to control all the processes very well.

Okay. Thank you for that.

My final question is just on the bank. You made some comments before talking about how the liquidity is managed prudently.

I just wanted to get a sense on sort of how you manage the liquid assets. If I look in the annual report for the bank, about a third of the investments, if you like, are in instruments that are B1 to Baa3.

Can I just confirm these are to corporates and not to the Bank of England or other central banks? How do you sort of manage the credit risk for this, given that you're sort of not really set up to do lending, right, and you just sort of look at managing the liquidity as such?

Just wanted to understand on this particular point as it's come up as a question with some investors recently. Thanks.

Maybe I'll answer this part. If it's on the investment side of things, then it will be on the bond side, these are all liquid.

I think in terms of liquidity, it's a T+1, T+2 type of instrument. It's not lending to any sub investments with individuals or companies on the bilateral basis.

These are all securities. Yeah.

Okay. Thank you so much, Terence.

Thanks very much.

Okay. Thanks, Jayden.

We'll go to some of the questions we have in the chat box. I think we'll take these two questions from Mano.

Quite high level. First, which segment of your business do you see offering the fastest rate of growth going forward?

If I broadly look at the group business in three different segments, one is our core wealth management business as an investment platform for all these years. Two would be the bank.

Three will be the ePension part of the business. If I look at all three segments, I will expect all three segments to grow further.

If I were to rank in terms of the order in terms of a percentage growth rate, I would say that probably the bank will grow at a faster percentage mainly because firstly, it starts from a low base. If you look at the current level of the bank for us at a deposit level of S$1.8 billion, in a banking context, it's actually still a very small number relative to the opportunity that we're looking at, relative to the potential that we can see given our overall ecosystem and business model.

We are expecting that can have the highest potential percentage growth rate for us. I would say that the wealth management platform itself will continue to have a pretty robust growth rate.

That's why the two parts together, we are continuing to essentially say that we are targeting to achieve $100 billion AUA by 2030.

Yeah. Mano's other question, I think you talked about risks just now, but his other question is which segment or geography worries you the most in terms of possible setbacks?

I think every segment has its own consideration, and every segment has its own level of risk, and the risks are a bit different in nature in different segments. As I noted earlier, I think that the banking business is something that is relatively new to the group, and we are mindful that we need to manage it in a way where we don't take too much of balance sheet risk.

As long as we go down that path, then I'll say that we are quite comfortable with the risk of the business. Other than that will be the operational risk, IT risk, and so on that it's a ongoing thing, ongoing process.

It's something that internally, we have to keep improving. We have to keep strengthening our overall management of the risk.

These are things that may not keep me awake every night, but there are some people in the group that have been kept awake every night because of all these different considerations. Okay.

Thanks, Chung Chun. We have a few questions related to the net inflows trends.

I think we had this one from King Trao prior to the results call, he sent these questions. The iFAST Global Bank deposits are up by about $200 million to $1.8 billion Singapore dollars.

What are the drivers behind the increase in iFAST Global Bank's AUA? Is it one-off?

Do you think it's sustainable?

Yeah. I'll say that if you look at iFAST Global Bank's deposit trend, you'll find that 2 years ago, between 1 to 2 years ago, the growth rate was actually quite robust.

Sometimes second half last year, it did enter into a period where the deposit growth actually slowed down somewhat. Recently, that momentum start to improve again.

I suppose the part of the reason why the deposit growth slowed during the second half of last year was firstly because there are some changes in interest rate environment, meaning interest rates were generally declining last year. At a point when we are trying to build the overall size of the bank, and then you have a environment of generally declining interest rate, and then we along the way were also adjusting the interest rate downwards as well, that actually led to the some slowdown in momentum.

That was one reason. The other reason was the fact that, yeah, as the markets were doing well, and so on, we did see some money moving to wealth management platform side of the business.

That was a reason why the momentum slowed down somewhat in the second half of last year and maybe early this year. In recent times, we're starting to see some improvements in the momentum again.

That momentum is being seen in both the personal banking business, as well as the business banking business segment that we used to call digital transaction banking. That momentum on the business banking has picked up as more of our corporate customers start to use us for payment services, and so on.

Improved momentum that we saw in recent times, we expect that should continue as we move into the second half and beyond. That's where things stand currently.

In fact, we will probably be targeting for a faster pace of growth than what we have seen the first half of this year going forward for the second half.

The other question is, are you seeing a noticeable increase in net inflow in the Singapore market? Maybe I'll just link it up to the other question from Kelvin, has iFAST net inflows been affected by the recent regulatory penalties on Futu and Tiger?

The yeah, net inflow for for us has been, yeah, quite robust, yeah, so far this year. I think in recent months as well, it continues to to be robust.

I think after the some announcement from the China side in June, I think, I would say that for us, overall momentum has continued to be strong. In fact, July so far has been very strong month in terms of net inflow.

The yeah, the overall business for us, yeah, continues to to see that a good momentum. The net inflow, I think the question about net inflow into Singapore, I think the Singapore platform has seen pretty strong net inflow.

Some of that does move into Singapore equity. If that's the question, Singapore equity generally have seen some of the good momentum in the last, few quarters.

The the the net inflow that we're getting actually goes into all the various asset classes, not just into Singapore.

Just a couple more questions online. One question from Reggie, which is there's been a significant increase in customer accounts.

Can you give some information where these new customers are coming from? Are they from the bank, the wealth side, and why the huge increase year on year?

The customer accounts, the biggest increase come from the wealth management platform. I think the bank side, we have seen some improving momentum as well, but I think, in terms of that overall increase, the bigger proportion still come from the overall wealth management side of the business.

That includes from the B2B side of the platform business, for both B2B and B2C. I think on the B2B side of the platform business in recent times, we have certain of our business partners that have seen very strong growth in account opening, and that has accelerated the increase in the customer account number for us in the last 6 months particularly.

Yeah.

Just two questions from Mr. Chung.

The first one is regarding the incorporation of iFAST Corporate EU Holdings in Ireland. Any significance or strategic plans to highlight here?

We announced that because we need to announce. I suppose as a group, when it comes to our business, one of the question that I've been asked about in the past is do we see ourselves expanding to other market when it comes to the banking business?

Today, our bank license is in UK. My answer has been that, yeah, given that we operate our business increasingly on what we call truly global business model, we don't think that we need to have too many banking licenses.

Having said that, we feel that there's still certain jurisdiction where we want to at some point in time in the future work towards being able to have a banking license. The two that we mentioned was one is actually somewhere in European Union.

Given that EU and UK are just next to each other, there's quite a good level of synergy, especially when it comes to the business banking part of things. Given that, if we have a banking license in one country in European Union, then there's a potential to look at it for the whole Europe.

That's the reason why we start to take the step of starting the possibility of getting some banking license somewhere in EU in the future. The process has started, that's why we incorporate the entity.

Would like to say that we expect this to be a process that takes some time. Getting a banking license doesn't get acquired in a very short time.

It is a long process in terms of the path towards getting there. It's a process that we have started, but you should have the expectation that it's going to take a couple of years before we get to something tangible.

The other jurisdiction that we talk about in terms of potentially trying to have a banking license some point in the future will be back in our headquarter, Singapore. Again, that is something that we're not sure how long it will take.

We haven't formally started this, but at the back of our overall long-term planning, next 5 years, and so on, then we feel that that's something that we should try to at some point work towards as well. Okay.

Just one last question before we go back to our attendees here. Congrats on the results.

Higher DPS guidance is good news to shareholders. What prompted this big revision upwards in DPS guidance so quickly after the initial guidance?

Wonder if this has to do with fundamental earnings strength and visibility tracking stronger than we had expected at the time of the prior guidance or any other reasons regarding this change?

If you look at what we have been doing in terms of dividend payout ratio in the last couple of years, you'll notice that we've been paying out about 25% of our earnings as dividends. That has been a ratio that we have been using, and that's the ratio that we continue to use when we were recommending the first quarter dividend.

As we progress and as we look forward, and as we see our overall earnings and shareholders' equity continue to grow, and then we do more detailed projection for the future in terms of what we expect for profitability, cash flow, and balance sheet projection over the next 3 to 5 years, then we feel that we are comfortable gradually raising the dividend payout ratio. It doesn't have to just stay at 25%.

If you look at the first half of this year based on what we are recommending, what we have declared or proposed, it works out to about 30% in terms of dividend payout ratio. It's a number that we're comfortable for this year.

There's a reason why we have decided to declare a higher dividend, and we feel that since that's the position that we have taken, after deeper analysis internally, and so on, then we should be stating our policy for this year in terms of dividend right now, and that's what we've communicated.

Any more questions from our attendees here in the boardroom?

I think there's one question on the talk how side of things. Is it started contributing already?

Is there any news?

Yeah. It has started contributing, it goes into the net inflow for the group in terms of the AUA.

That's a good part of the business that's started, and we expect that to continue to contribute more. Having said that, of course, it's not a huge percentage of the overall business of the group for Hong Kong at this point in time, but it is an area that we expect to, yeah, continue to grow forward.

Can you remind us the AUA number?

Sorry?

The AUA number.

The AUA goes into our group AUA.

We did mention at the end of last year, it was about S$70 million. I think that number, as you can tell, is not very large, and I think we have made some progress since then, but yeah, it's not a number that we would like to come back and update.

I think the ORSO is probably the one that will have a bit more of a material impact. I think that's the one that we've been providing a bit more color on.

Hello.

Just want to remind me again how much of the AUA the iGB deposit contribute? Is there a figure or

Yes, for the iGB, we've disclosed that the amount is $1.81 billion Sing dollars as of Fully recognized under the AUA? Yes.

Just to conclude on the eMPF business, the way we should think about it is revenue is relatively flat, maybe come down a bit because the onboarding-related revenue stream start to decline, but cost is also rolling off, hence, overall PBT should still be growing on the absolute basis? Is that the way we should be thinking about it?

If you look at I think quarter to quarter, sometimes there are some slight fluctuation, yeah, because of certain items, and so on, but on a year-on-year basis, we expect that to continue to grow this year as a whole. Then, going forward, we expect to see some growth as well in revenue.

It's just that on that, yeah, eMPF part is not going to be a huge percentage. Cost is an area that we can look at so that overall, profitability can continue to be, yeah, healthy, there's some growth.

Not again, not huge percentage on the eMPF part on its own, but taken together in terms of all the different measures we are taking for ePension as a whole and the group, then I think the increase efficiency in terms of cost can actually kick in quite strong in the next few years.

Maybe we'll just wrap up there with one last question that we have online.

Oh, okay.

Go ahead. You have one.

Just one last question on the bank, actually. If you look at the past few quarters, we see that, as you've highlighted also in the slides, net interest revenue has been exceeding the non-interest side of the bank.

Is this how you expect it, going forward, as well?

Yes, because when we acquired the bank, the main business of the bank was essentially the EzRemit business. The bank, when we acquired it, didn't have a strategy of trying to build the deposit base.

They see the deposit as a working capital that they require to support the EzRemit business. Since we acquired, the business model have been enhanced to include the personal banking, as well as the business banking, which would attract more deposits and grow the net interest income.

In previous quarters, you see some overall fluctuation in revenue, profitability partly also because the EzRemit business tend to be a bit more volatile on the quarter-on-quarter basis. As we move forward, given that net interest margin is becoming more important than the EzRemit business and even the business banking and personal banking itself will bring across some non-interest income, fee income on its own as well, on the overall basis, then I think you should see a better consistency in terms of the growth as we move on.

That's the way to see it.

Just on the iFAST Global Bank itself, now we are at S$1.8 billion AUA targeting $15 billion by 2030. As we make this progression, we are currently investing the bank's asset in financial products.

Do you expect business banking eventually to make a bigger percentage of the overall bank contribution? Otherwise, the regulator will see that you are a bank, but you are not helping business activities in terms of lending to businesses and mainly collecting deposits and investing in financial products.

Do you have such concerns?

That, yeah, is not something to our understanding that is a concern for the regulator. I think the regulator, primarily as a starting point, they're most concerned about safety.

Safety of the bank, safety of customer deposit, the robustness of our overall business model. Even we're not lending to SMEs, and so on, it doesn't mean that we're not contributing, because quite a bit of the deposit goes into Bank of England, goes into government bond, and it goes into buying investment-grade bond of other banks.

That in itself will bring about its own, yeah, benefit to the UK economy. All in, I would say that we don't think that's too much of concern for regulator, because priority is safety.

Okay. One last question online from Edward.

I think going back to your reply, Chung Chun. What's the business strategy for future banking licenses?

I suppose we are talking about what's our strategy once we get the license, yeah, in the additional jurisdiction that we are aiming for. A bit too early to discuss this topic in detail, but I will say that the overall direction will probably not change in a big way.

We are essentially a wealth management and digital banking platform, even when we do get additional licenses in other jurisdiction, we will focus in those areas.

Okay. There are no more questions.

I think we can conclude this results briefing.

Thank you, everybody.