Hello, everybody, and warm welcome to all of you for joining iFAST Corporation's Fourth Quarter 2024 and Full Year 2024 Results Presentation. My name is JP. I am from the Corporate Communications team, and together with me today from the iFAST team, we have Chung Chun, our CEO, and we have our Group Finance Directors, Winnie, David, and Terence as well. I will go through the key summary and Section One on the financial results before inviting Chung Chun to present on the Section Two part, which is on the business update. Thereafter, we will have the Q&A segment.
So, starting with the key summary, in fourth quarter 2024, the Group's net profit increased by 46.3% year- on- year to SGD 19.28 million on the back of a 26.7% increase year- on- year in the Group's gross revenue to SGD 104.14 million. The increase in fourth quarter 2024 profitability was driven by continuing growth in the Group's core wealth management platform business and a turnaround of iFAST Global Bank. iFAST Global Bank achieved a net profit of SGD 0.3 million in fourth quarter 2024, compared to a loss of SGD 2.57 million in the fourth quarter of the previous year.
In 2024, Group AUA increased 26.2% year- on- year to a new record high of SGD 25.01 billion, driven by net inflows of SGD 1 billion in fourth quarter 2024 and SGD 3.3 billion for the whole of 2024. iFAST Global Bank's profitability in fourth quarter 2024 was achieved as customer deposits crossed SGD 1.01 billion mark at the end of 2024, which is an increase of 182.6% during the year. The Bank's gross revenue increased by 163% to SGD 17.22 million in fourth quarter of 2024. The Group sees iFAST Global Bank's ability to achieve profitability in less than 3 years after the acquisition, which was in end March 2022, as a major achievement.
It is a testimony to the fact that the innovative, truly global business model that the Group has been sharing with investors is working well. It also demonstrates the Group's ability to deploy new technology solutions rapidly, in a secure manner, and at far lower cost than most banks around the world. Looking forward into 2025, the Group expects to achieve further progress for our various business segments. The Group expects to continue to grow the AUA of its wealth management platform business, which will drive further growth in revenues and profitability.
In addition, the Group expects iFAST Global Bank to build upon its profitable fourth quarter 2024 and achieve a full year of profitability in 2025. With regard to the Hong Kong ePension division, the Group expects further growth as onboarding rates continue to progress and the wholesale business starts to contribute. Barring unforeseen circumstances, the Group expects 2025 to see robust growth rates in revenues and profitability compared to 2024. For the final dividend for full year 2024, the Directors proposed a dividend of SGD 0.06 per ordinary share, which is higher than the final dividend for FY 2023 at SGD 1.4 cents per ordinary share.
The proposed final dividend will be subject to approval by shareholders at the Company's Annual General Meeting, which will be held on April 28, 2025. Moving on to our Group's AUA, so as mentioned, it hit another record high of SGD 25.01 billion as of December 31st, 2024, which is a 26.2% year-on-year growth. Roughly, the split between B2B and B2C, B2C takes about 33%, and B2B is a larger contributor at about 67%. In terms of the AUA breakdown by market and products, so Singapore remains the larger market at 70.3%, followed by Hong Kong and Malaysia at roughly about 12% each, and others, which is made up of China and the U.K.
In terms of the AUA breakdown by products, so the majority comes from unit trusts at 57% contributions, followed by stocks and ETFs at 22%, bonds at 12.6%, and cash account and deposits at 7.8%. We'll move on to Section One on the financial results. So starting with fourth quarter 2024, so gross revenue grew 26.7% year-on-year to SGD 104.14 million in fourth quarter 2024. Net revenue grew 13.6% year-on-year to SGD 64.9 million in fourth quarter 2024. Net profit grew by 46.3% year-on-year to SGD 19.28 million in fourth quarter 2024. For financial results based on full year 2024, so gross revenue grew by 49.3% year-on-year to SGD 382.99 million.
Net revenue grew by 53.6% year-on-year to SGD 248.38 million, and net profit grew by 135.7% year-on-year to SGD 66.63 million for full year 2024. Okay, the results overview for the Group over the last five years, so we'll find that there was a record performance for the Group in net profit, gross revenue, and net revenue for full year 2024. I shall not go into all the details on this slide. We'll move on to the financial indicators for the non-banking operation, so for the non-banking operation in fourth quarter 2024, gross revenue grew by 14.9% year-on-year to SGD 86.92 million.
Net revenue grew by 6.2% year-on-year to SGD 57.18 million, and net profit grew by 20.5% year-on-year to SGD 18.98 million. For non-banking operation again, but for full year 2024 results, so gross revenue grew by 40.3% year-on-year to SGD 330.98 million. Net revenue grew by 51.2% year-on-year to SGD 225.79 million, and net profit grew by 92.5% year-on-year to SGD 71.01 million. We have the usual statistics on the profit before tax margin for the Group, which is based on total net revenue. So that has been trending upwards over the last couple of years. So we ended 2024 at 33.5% for the PBT margin.
Similarly, for return on equity, there's a good upward trend, and we ended the year 2024 at 23.4% for our ROE. In terms of the profit and loss by geographical segment, as highlighted just now, so for fourth quarter 2024, the U.K. banking operation turned profitable with a SGD 0.3 million profit. Across the various market segments in fourth quarter 2024, markets like Singapore and Malaysia had a roughly 40% year-on-year growth in terms of the profit.
For full year 2024, I think one thing to highlight is the narrowing of losses for the China operation as well, and of course, the improving U.K. operation profitability from the fourth quarter 2024. I shall not go through the geographical segment breakdown for the last 5 years. The next slide shows the total net revenue by geographical segment. I think the markets that registered strong growth rates in net revenue in full year 2024 would be the likes of Hong Kong, U.K., and Singapore.
We'll wrap up Section One with the dividend for full year 2024. As mentioned just now, it is a proposed final dividend of SGD 1.6 cents, which is to be approved by the shareholders at the AGM to be held on April 28. That will bring the total dividend, if approved by the shareholders, to SGD 5.9 cents for full year 2024, which is higher than the SGD 4.8 cents for full year 2023. With that, I will invite Chung Chun to share more about the business update in Section Two.
Thank you, JP. On my part, I'll let the CFO give some business update, just zooming in on a couple of points I'd like to highlight. The first point really is about iFAST Global Bank. Recall that iFAST Global Bank was acquired, or we acquired a U.K. bank in 2022, to completion in March 2022, and since then, we've renamed it iFAST Global Bank, and along the way, we launched two new business divisions: one is Digital Transaction Banking, the other is Digital Personal Banking. Both have actually progressed quite well.
As a result of that, the bank has actually improved quite a bit in the operation. And with the latest set of results, you find that the bank has indeed turned profitable, so I've included a few slides here just to share with shareholders some of the journey we've gone through. So this particular slide shows the quarterly losses that the bank has incurred over the last 2 years. And in the last few quarters, the losses start to narrow, and the latest quarter is actually went into the black, in line with what we have targeted, as mentioned 1 year ago. We essentially turned profitable in less than 3 years after we acquired the bank.
I think typically, when it comes to a digital bank or startup bank, I think most investors, shareholders tend to be somewhat skeptical about the ability for a new bank to turn profitable in a short period of time. I think the reason is because if you look at the examples that we see outside in terms of new banks that have created, most of them spent a lot of money in starting a bank in terms of cost of setting up, as well as the ongoing operating cost and so on. In our case, of course, we find that in terms of cost of setting up, we can manage it far better than what most other banks have been able to do.
We attribute this to the fact that as a financial institution who have been building internal IT capability all these years, we're quite experienced in building our new projects, new technology rollouts, so we can control the cost much better. And that's why we have been confident that cost management will be something that we can handle quite well. And that, of course, means that we are able to get into the black at a relatively low level of business compared to most other startup banks. In our case, we crossed the SGD 1 billion deposit at the end of 2024.
And that has been the journey that has brought us into the bank. Going to the next slide, this shows the revenue strength that the bank has been having. Initially, the revenue base that we actually have comes mainly from the EzRemit business, which is really the remittance business, which is the main business that the Group had when we acquired the bank [audio distortion]. But since then, other parts of the revenue have been growing. And if you look at the overall revenue for the bank, you can see a very nice steady upward trend over the last few years.
Next slide shows some breakdown in terms of contribution from the different divisions, so there are three key divisions within the bank. One would be the legacy revenue, which is the original business of the bank. That part is pretty much fee income, transactional income, and some FX income. A bit of volatility sometimes, but by and large, over the last 2 years, there's some growth, not huge, but there's been some growth. The part that has actually grown quite strongly, which is the net interest income.
When we acquired the bank, the bank didn't have a business model of trying to grow their deposit base. At that time, the bank saw deposits as a source of working capital that essentially is a cost factor. That's how the bank was previously run, but we see deposits as a source of revenue. We see that as being something that fits into the wealth management business that we have very well. And as a result of that, we have actually been looking for the DPB and DTB division that actually grows the deposit base as well as the net interest income.
Along with that as well, the DPB and DTB division that we have also generated some fee income for the bank, but the net interest income would be a bigger part that has been driving the growth of the overall revenue of the bank. So by the fourth quarter, that the bank reached a certain size such that we've been able to turn profitable. Next slide, s o this is just a summary of what I was mentioning. Essentially, we had a contribution from three key divisions, [audio distortion].
I would now like to just give a quick summary of our three-year plan. I think you'll recall that in the last few years, we've been talking about our three-year plans. We started off talking about 5 years, and 4 years, and 3 years. We were talking about 5 years because at that time, some of our plans would take several years to materialize, including the ePension project and development for the bank. It's a vision that we had, but I think initially perhaps investors didn't fully understand our vision.
We took the step of talking about something that's further ahead, five-year plan and then four-year plan and three-year plan, just so that investors can understand [audio distortion] achieve. Right now, basically, just a recap of our latest updated three-year plan. The first point really is about our core wealth management business. That has been something that has been growing over the last 25 years since we started, and that continues to be something that will be a core business for the Group.
And in 2026, we grew the AUA by about 26%. And if we continue at 26% for annual CAGR, then we will hit our SGD 100 billion by 2030. If we grow at 32%, then we can do so by 2029. So we are hopeful that with iFAST Global Bank in the ecosystem, then we can actually have a good pace of growth as we move on. Second point really is about the bank. We have achieved the first quarter of profit and profitability, but certainly, we expect that to be the starting point. And so 2025, we expect that to be the first full year of profitability.
I think if you understand the nature of the banking business, once we have the right model, the business momentum can continue, and the potential for the revenue of profitability will be very substantial. The third part really is about ePension. This is a business that contributed to a big part of the increase in 2024 revenue and profitability. As we go into 2025, we expect further growth because the onboarding continues to increase. It is a business whereby, in terms of the revenue stream, it is there.
The challenges in practice would be in ensuring that we're able to deliver services well without too much operational income [audio distortion] . In 2025 as well, we expect the wholesale business, which includes the pension, to start contributing. The current timetable is that we're expecting that to start by the end of the second quarter. Four points that I've included here is really to mention the fact that, as a Group, we continue to push forward with our overall innovation.
Now that we're in the banking business, global banking, it's actually important that we're able to develop certain parts of payment-related services so that it fits into the overall global banking business pattern, the overall global wealth management business pattern. There's also the bonds of wealth fund part of the business, where in Malaysia, we have gotten the RMO license for trading in bond. RMO is Registered Market Operator, a nd so we will be going live with that part of the business. And sometimes you see that is something that we expect will steadily allow our overall bond business to continue to grow as we move on.
So these are some of the new services that we continue to develop and to ensure that, as a Group, we continue to progress and remain at the forefront of innovation. Next slide really is about the fintech ecosystem that we have built. So this is a chart that we show every quarter, and we outline some of the numbers along the way. So the way to look at this chart is that iFAST itself, as a platform, offers a whole range of services.
On the one side would be all the different product providers that we are working with, all the business partners, including the different exchanges that we connect to, and now that we're a bank, the central bank that we're located at. On the right side would be the different distribution channels. B2C channel, the direct channel, but we also work with various companies, over 700 companies, with among them, there are more than 13,000 devices.
Within this, there are over 700 companies, and that forms part of the overall distribution network that we actually have, and that continues to expand. So as a platform, we started off with platform offering capability in the unit trust space, but that capability has been broadening. And 3 years ago, that includes the addition of the bank. So that's the way to look at this fintech ecosystem. So increasingly, you will have noticed in the last 2 years, 3 years, we've been talking about a truly global business model, whereby we're talking about operating from a few countries, but you're able to tap into customers from around the world.
We're very keen on having a bank because we feel that a bank will allow us to do that much better. Our experience of the last one and a half years certainly has shown that this truly global business model that we've been talking about is actually working well, and it has a lot of potential [audio distortion] . Next slide, n ext couple of slides, I basically included some charts showing the net inflow and subscription numbers for our core business. Net inflow for our wealth management platform in 2023-2024 as a whole was SGD 3.3 billion.
In the fourth quarter itself, it was SGD 1 billion in terms of net inflow. That, of course, is the key driver for the increase in AUA for us as an overall wealth management platform. Next slide would be the chart showing the subscription volume for our unit trust business, which is our core business still, and that has been on a healthy trend. Recall that in 2022 and 2023, because of very poor market conditions, there was some decline in the volume, but certainly, things have actually been improving.
Our overall services have been ramping up, so that's why we're seeing some healthy growth trend right now. This is on the fixed income, and this is for our business in different countries combined. We have our bonds ETF, sovereign, going live this year. We expect that that will form a base for us to be able to continue to grow overall. This slide here really is just pinning down the targets that we gave previously for the overall Hong Kong business.
We last updated that in February 2024, so we basically just reproduced that set of targets. And then on the right side, we show the actual numbers that we have achieved in 2023 and 2024. So as you can see, 2023 and 2024, we have managed to exceed the target that we originally did. And with that, that goes to the end of this successful. And I'll stop here, and we'll be happy to take any questions that you may have.
Yeah. Thank you, Chung Chun. We'll move on to the Q&A segment. So if you have any questions, please raise your hand and introduce yourself. And for those who have joined us on Zoom, you can also type your question in the Q&A box, or you can raise hands, and we will unmute you so we can hear your question as well. So perhaps for the attendees who are in the boardroom, anyone wants to ask a question? Andrea?
Hi, morning. Thank you for the presentation, a few questions from me. I think firstly, I'll touch on the cost of profitability for the iFAST Global Bank. I see that most of your more recent revenue streams, that's coming from the NII portion of things. Do you expect this to still be the driver for growth going forward, or are we looking at any new segments that you're looking to grow, and are there associated expenses related to this? I have a couple more, but maybe I'll go after this.
Yeah. For the bank, we do expect that the NII, financial income, will be the biggest driver going forward. That is, of course, you're aware there's a recurring stream, and that will grow as we grow our deposit base. And we grow the deposit base as given by adopting a very conservative stance on the balance sheet. We're able to grow the NII quite well. And of course, as we grow the deposit base and the NII, we find there is some corresponding growth in the fee income as well.
So in the case of the Digital Personal Banking division, as well as the Digital Transaction Banking, then we find that there's some FX margins that we have been able to grow. And that happens because customers do need to make some conversion of a currency into a different currency, and there is that proportional growth in the fee income as we grow our overall deposit base and our overall NII. So yeah, essentially, in summary, we expect both fee income as well as the NII to continue to grow, but we think that NII will be a bigger driver as well.
My next question is on the wholesale. I think previously, the previous guidance or the expectation was that contributions were slated to come in the first quarter, so I saw in your slides that this has been delayed and even to the end of Q2 2025. I'm wondering if you could get some updates on what's happening here, why the delay, and perhaps you did mention that there is talks going on with a partner. What's going on there? What kind of trustee size is this and potential size of actually the whole wholesale project that we are looking at?
In terms of the slight delay from first Q to second Q, the main reason is because our partner and ourselves decided to ensure that the operations will roll out very smoothly when it goes live. We just wanted to make sure that an extra time period is put into testing on the various parts of the system and operational part of the work. So that is essentially the key reason for some delay. As far as going forward and so on, I think at this point in time, the detailed discussion we're not able to share, but certainly, we see the potential for the growth. That's why there's been that ongoing discussion.
Okay. Thank you. My next question is on the collaboration with a partner for the Macau Pension Project. I think, Macau, this is the first time you have mentioned Macau as a potential for growing this ePension segment. If you could give us any color on progress there, are we looking at a partner or what structure would this be like? Would this be more like the MPF structure or more like the ORSO structure where AUA will be started in your AUA?
What do you mean by the ORSO structure? Yeah, essentially. Something similar in structure along those lines.
Progress-wise, are our talks as advanced as the ORSO in such that you are looking that this could potentially contribute to revenue perhaps in 2025?
Yeah. Of course, on a very short-term basis, I wouldn't want to assume too much business or too much revenue on that. But there's something that sort of opens up in terms of growth potential. But you take 2025 on its own, I wouldn't want to assume too much revenue coming from it.
Okay. Got it. So in just putting this together, I mean, the ePension, we're going to see a step-up as per your guidance, as more trustees get onboarded. We also have that ORSO project coming in likely in 3Q, 4Q, and with the potential of Macau Pension Project coming on board. Is there any potential for upside revision to those Hong Kong targets that you're looking for here?
We previously had our target being updated in February 2024. I would say that we stick to the same target at this point.
Okay. And then just one more question from me on OpEx for fourth quarter. I didn't realize that the other OpEx line, it was quite a bit lower in the fourth quarter, about SGD 8 million versus your run rate of about SGD 12 million-SGD 13 million in the first three quarters of the year. Was there anything particular that caused that OpEx to be lower? I would assume that some of the ePension or perhaps projected expenses for your ePension system goes into this line. Is that accurate? And is it that in this quarter, you just didn't have to expend as much as anyone else?
I think one of the key reasons really is that some of the expenses we would meet estimates and provision during the year through the different quarters. But towards the end of the year, we find a certain estimate that we're putting for expenses in the earlier quarters were higher than we actually were incurring. With that, then you find that there was some adjustment. That's part of the reason, t hat's why it looks like it was.
Would this be a reasonable run rate going forward, or would you expect this to be more of a too offline, look at it on an annual basis a bit more?
I think for 2025, we expect that it will be further increased in the operating expenses simply because we have been increasing the resources to ensure that we can go through some greater onboarding as it should happen. Operating expenses will increase. Thank you.
For me, just to add on to that comment, I think in the fourth quarter of 2023, we did take some amount of impairment on the FVOCI investments and the FVTPLs. And I think there were also some changes in the FX impact on intercompany receivables. I think that also contributed to the downfall.
Thank you. I believe we have someone who has raised hand in the Zoom call. Benjamin?
Hi, Chung Chun. Hi, JP. Thanks for this opportunity. I have a few questions. I'll ask them one by one. I think the first one is on your Hong Kong guidance for 2025. You're guiding for HKD 500 million on the PBT line. How should we think about the quarterly split? Will it be even across the four quarters, or first two quarters will be slightly lower, then we see a step-up in Q2, Q4 as also comes in? Because if you look at 2024, the quarterly PBT for the Hong Kong business was pretty stable across all four quarters. How should we think about quarterly split for 2025?
I would say that we expect the second half to be higher than the first half. So you won't be an equal split across the four quarters in 2025. I think the initial part won't be as high as the second half.
Okay. But would it be fair to assume the first half on a quarterly basis would be higher than what we saw in, let's say, entire 2024 on the quarterly basis?
Yeah. We don't really give the guidance on a quarterly basis to that detail. So I would say that overall, the trend should be healthy. I wouldn't want to be making a very exact statement about the exact profitability each quarter because it is possible sometimes that during certain quarters, there will be some additional expense or some reduced expense and so on. But on an overall basis, we would say that there will be a higher number in the second half.
Okay. Understood. Okay. My second question is on the guidance again. I think in 2024, your PBT for Hong Kong was you delivered 25% higher than what you guided. Now, 1 year ago, this question was posed to the iFAST team as well. I think back then, the reasoning why iFAST didn't raise the guidance was that management cited that there were uncertainties in China and Hong Kong for the core wealth management business.
Therefore, they're not raising the entire Hong Kong business guidance. But if you look at recently, over the last few months, sentiment has improved in Hong Kong and China. Your AUA growth in these two markets was around 20% year-on-year in 2024, strong growth in Q4 as well. What is holding us back from raising the 2025 guidance? Is it just that we are trying to stay conservative here?
I think the business that we have in Hong Kong, we have the two parts, the wealth management part of the business, and there's also the ePension part of the business. There is a high contribution from the ePension part of the business in terms of profitability than the wealth management part of the business. So as we enter 2025, the recent momentum on the wealth management part of the business seems to be more positive.
I think that's true. But at the same time, we're also ramping up on our manpower and resources for the ePension business because we want to make sure that we can deliver our services well. So with that in mind, then there are increases in costs and so on. So on an overall basis, we feel that at this point in time, we will maintain we will not be amending any [audio distortion] .
Okay, u nderstood. My two last questions, t he third question here is that for the Macau pension, how big do you think you'll be compared to, let's say, ORSO and compared to MPF? And when, let's say, some timeline on when the contribution could realistically start contributing, let's say, probably in 2026, 2027?
I think in Macau, there is the new requirement on the pension schemes for the company that's actually being introduced, being rolled out. So that essentially opens up a new opportunity for our business partner and for ourselves. And we find that, yeah, because of that, the potential opens up. But at the same time, we are new to Macau. We haven't done business in Macau before, but we are doing so with our business partner, so at this point in time, I wouldn't want to assume too high a contribution [audio distortion] .
Okay, u nderstood. My last one is just on the recent news article that you are looking for more banking licenses in Europe. Which markets are these, and what is the rationale behind it? Thank you.
Yeah, so I had an interview with a journalist from Business Times. And so the question that was posed to me was, are we looking for more banking licenses in other countries, including those that we're operating in, such as Hong Kong, Malaysia, so my answer was that we have no plans to apply for a banking license in Hong Kong or Malaysia at this point in time. But we do feel that there are some opportunities that we'd like to explore. Our business model for banking is iFAST Global Bank model.
So we're looking at the ability to do banking cross-border rather than just being limited to the market that you are in. So that, of course, is a far more scalable business model. So with that in mind, then we don't need to have licenses in all the countries. We don't need to have licenses in too many countries. But we identify that in a place like European Union, for instance, it would be helpful if we do have a license there. And because European Union, you can get a license in one country, and that gives you the ability to more directly market to the whole continent or the whole European Union.
So that is an interesting kind of opportunity for us to explore. So that's why I was saying that that is an area that we are looking into. And so the other country that I mentioned is something that is still in our mind is Singapore because Singapore is our HQ. And we feel that at some point along the way, we would so like to look at an opportunity in Singapore. But as of now, no exact banking.
Okay, t hank you. Just one last follow-up on that. Does it mean more acquisitions in Europe, EU, or are you just planning to just apply for a banking license?
The current plan is to apply because now we are already a group with a bank within our group, and we are experienced in running a digital bank. So we can directly apply instead of having to make acquisitions .
Understood, thank you, t hanks for your time.
Thank you, Benjamin. Yes, we have Benjamin as well here.
I have a question from the same time. This question was iFAST Global Bank for the ventures, right? All local banks here are sort of collecting their NII to the fall interest rates. But how do you sort of see that for iGB? Is it any bank that's going to see the fee-bearing segments more to sort of make up for any fall interest rates?
So I suppose if some of the banks say NII is going to fall, I think especially in the context of them earning two point something percent in NII, right? It's also in the context of them passing on very little on your savings account or current account deposits, for instance. And then in a high-interest rate environment, they can actually make a good margin for spread. So if interest rates generally fall, then what they are able to receive will be reduced. And in terms of what they pass on to the client, then there's not as much room to pass on to the client.
So I suppose that's why there's the expectation that we have entered into a lower interest rate environment a couple of years ago, and there might be some income. But iFAST Global Bank is coming from a different starting point. We start off with a situation whereby we are passing on decent rates on the savings account, current account. So our margins on that are not as high as what the local banks are enjoying today. It's also not as high as what the other mainstream banks in the U.K. are enjoying. And we pass on more also because at the initial stage, our services are not as fully developed.
By ourselves, services are better developed, then we do aim to be able to make slightly better money than what we have done. Plus, of course, as interest rates get cut by Bank of England, by Fed, and so on, then we are able to also correspondingly lower the deposit rates that we pass on to the client. So in our case, we expect that in terms of net interest margin for ourselves, we should be okay as we move on. In fact, we aim to have a slightly better margin as we become more established, as our services are better developed, and as we roll out more services.
Just a small question also. The China Desk in Singapore, how is it sort of the contribution for the group now? I'm saying you opened it, you launched it in December, so it's quite a short period of time. So I understand what you're saying.
Yeah. Yeah. So we launched the China Desk because I think we all know that there's a lot of Chinese money that they are already outside China, and a lot of this money wants to be in Singapore. So while iFAST has actually been a platform in Singapore all this long, we find that our share of the Chinese money that's in Singapore or that want to come to Singapore isn't as high as it can be, or it should be going forward.
And we feel that that's because the services that we are providing probably isn't as well set up as it can be. And that's an important part of the reason why we launched the China Desk, including having Chinese colleagues based here in Singapore, and they will allow us to better serve the Chinese client. So that really is an overall thank you.
Okay. Thank you. We have a few questions in the Q&A box, so maybe I'll go through some of them now. I think for Royston and Kelvin, most of the questions you've raised, or perhaps even also issues you've raised, have been answered by Chung Chun. We'll move on to maybe a bit more on the bank. I think from Lee King, "what makes iFAST Global Bank's offerings unique and superior to competitors? What are iFAST Global Bank's plans for geographic expansion and market penetration? And can you share what is the growth potential over the next 3-5 years, for example, in terms of customer deposits or other relevant metrics?"
Yeah. The first question, what makes our offering unique? I'll say that the most obvious point for a start really is our positioning as the iFAST Global Bank. I've actually been mentioning that in the last 10 years, 20 years, internet has transformed the business world in a major way. Started with media. I think technically, SPH and MediaCorp are still one of the pillars in some way, but we know that the media scene has changed completely. We have also seen that changes happening in various other industry e-commerce.
We have seen that happen in the movie streaming and music industry, the likes of Netflix, Spotify, major giants in the world right now. You operate from one or a couple of countries, but you have customers from around the world. And the business model from what I can see are the most scalable, and they are the most competitive players. That's why these are major giants right now. Internet has changed the world in a big way. But interestingly, in the banking world, you actually find that it actually hasn't changed in a major way. Banking, especially retail banking, is still very much a localized business.
If you look at what most retail banks do, they are essentially just trying to cater to local residents. But for a business where there's no physical movement of goods, why would that have to be so? Right? So banking in our view will eventually become a business that is far more globalized than it is today. We know for a fact that many people from around the world do want to have a bank account outside their home country. Maybe among the Singaporeans, not that many. But put Singaporeans aside, I think you actually find that people in many different countries, they do want to have a bank account outside their home country. That gives them some advantages.
One would be some personal diversification or personal reason. Two would be the currency. Some of them would want to have an account for U.S. dollar that pays decent rates. But I think most banks, I think they pay sort of better rate in the local currency. But when it comes to some global currency, including the major currencies, they actually pay very little for the deposit fees. So in our mind, it is really a very clear opportunity that is actually there. And that's why after we bought the bank, we started talking about truly a global business model where we go out to try to tap into this opportunity.
And the last one and a half years, last 20 months since we launched digital personal banking, that has told us that our vision for that is, in fact, well founded. I think today we have customers from close to 100 countries have opened account with us, and I think 65% of our deposits for iFAST Global Bank are coming from non-U.K. residents. So for this non-resident segment of the market, we are actually very good. But it's actually not easy to open a bank account outside your home country unless you have millions of dollars.
Singapore, of course, is a very successful wealth management center, very successful private banking center, and lots of private banks operate here and is really operating a global business model because customers from around the world, they put lots of money in private banks in Singapore. But private banks limit themselves to just a high net worth space. So private banks want customers with millions of dollars in their account.
But if you just want to open an account where you put in 20,000, 50,000, 100,000, then you actually find that it is difficult to find a bank that is happy to let you open. And that is an interesting opportunity that is actually in the banking world. And that is the part of the opportunity that we seek to tap into. And the initial one-half years of our progress have told us that I think we are on the right track.
Yeah. So in terms of uniqueness, I would say that the business model, that is, I think, the most unique point of our business. We cater to the retail and mass affluent clients. And we just provide, I'll call it simple service, simple because you're talking about dealing deposits and current account, some payment services without selling complicated products. So for the simple service, I think we are meeting the demand that's actually out there. And there's a long way more to go for us on this.
I think Lee King and Alan as well. One question is, "do you have a target for the bank deposits for 2025 and beyond?"
I think we're still at the initial stage of our growth for iFAST Global Bank. So we believe that having it is possible for us to shoot for a doubling of our deposit base, for instance, for iFAST Global Bank in 2025. I think that is a 100% growth in deposit base is a possible target for us to push it forward.
Okay. Thank you. We'll go to Ryan's questions. So he has a few questions. So the first one, "if I strip out changes in deposits, cash flows from operations have been depressed over the last few years. How do you think about the cash-generative abilities of the core company and the cash requirements of the banking operation?"
I think if you strip out the deposits from the bank, the cash flow will actually be from the wealth management platform as well as our expansion. I think the nature of this business is clearly very cash-generative. Clearly, it is something that will be giving us a very good cash flow as we move on. But in the very short term, sometimes on a quarterly basis and so on, you actually find that for the expansion part of the business, there are times where the cash flow doesn't come in equally on a quarterly basis because we are still in the ramp-up stage.
We're still at the stage where we're ramping up the resources, the manpower. We're still at the stage where the services that we're providing are still new and so on. So for various operational reasons, I think there's some short-term mismatch in terms of actual cash flow from this part of the business. I would say that would be actually the main reason. Are there other reasons?
I think that's quite accurate.
Yeah. That would be the main reason. But on the overall business perspective, you'll find that cash flow will be there.
Yeah. And Ryan's next question, "are there any talks surrounding additional pension administration or similar contracts in addition to the collaboration account?"
I think for ORSO business is a business that we'll be having discussions with various potential partners on an ongoing basis. Yeah. But I think on an immediate basis, we don't have further updates to give at this point.
A couple more questions from Ryan. So this one, what percentage of total net revenue is NII now? And how do you think about interest rate risk? What rates are you most exposed to?
Yeah. Maybe I'll answer this one. I think at the moment, if you look at the way we've been generating income, it's mainly fee-based, right? So I think the NII is a new part of business. And I think it's approximately just, I think, less than 5% of total revenue for our total net revenue for 2024, right? So I guess the thinking on the group would still continue to generate very healthy fee-based income. I think NII will grow. I think we had an earlier discussion about the growth potential of the bank.
Of course, NII would be part of that. But I think over time, you start to see the NII make a larger contribution. But at the same time, our starting point as a wealth platform has been quite different compared to where most banks start, which is NII and then moving to fee income. I think we are at this spot where NII will make quite a good difference to the revenues going forward. But we still enjoy the core wealth management fee-based income that forms the foundation of our net revenues.
So I think if you look at many banks, NII contributes 60%-70% of their net revenue. In our case, as Terence just mentioned, we start out with 100% fee income without the NII before the bank. Now that we have a bank and as that grows, then the contribution from NII will increase. But we expect that on the overall group basis, the majority of our net revenue will still be fee income, which will be quite cash-generative as we go on.
And Ryan's next question was, "do you require M&A to achieve or reach the SGD 100 billion AUA target?"
Our target doesn't assume M&A. Of course, we are always open to opportunities that come along. But when we drill down to the target, we believe that to be a number that is achievable if we execute well without M&A.
Thank you. Any questions from those who are present here? If not, I'll go back to a few and answer the next ones.
Oh, sorry.
Yes. Yeah.
Thanks for the follow-up from Philip, and thanks for letting me ask a question. Just two questions. The first is just on the opening of bank accounts for non-residents. Was there any technology or compliance pain point that you managed to resolve? And that's why you're getting this flow. And the second one is just In Singapore itself, just are you facing any pressure on the trailer fees or even platform fees with competition? Thanks.
On the bank account, in terms of opening bank account outside the country, the reality is there's no regulation that should prevent that, right? So banks can open bank accounts for residents from various countries, certainly in the U.K. and, in fact, in Singapore, certainly. For some countries, for specific banks, they may have some restrictions. But by and large, there isn't actually a regulatory restriction. So most of the time, it's actually a matter of choice of a business model by the respective bank. I think for historical reasons, most banks prefer to cater mainly to local residents.
So that is truly the main reason. Of course, to be able to execute this business model well, there has to be a digital solution. There has to be a digital bank. And most banks are still a combination of digital and brick and mortar. So not all banks want to have this kind of business model that they embark on. Secondly, on the trailer fees, the question about whether there's pressure on the trailer fee and platform fee. I would say that on the trailer fee, as a distributor, we don't think there's a downward pressure on the trailer fee. I think generally, distributors who have the volume, a relatively sizable distributor, then they do have the pricing power.
But I suppose the trend that will probably be emerging is more of not a direct pressure on the trailer fee, but it's more of some shift of investor demand from unit trusts to, say, ETF. So ETF generally doesn't come with trailer fee. All they do is quite little, whereas unit trust or mutual fund has a trailer fee. So if there's some shift towards ETF, then on an average basis, there can be some downward pressure. So that will probably be the main point.
Okay. Thank you.
Okay. We have a couple of questions from the Q&A box from a few of the analysts and participants. So we go to this topic on ePension. So from Allan, "what will be the next step up in Hong Kong ePension contribution?"
The next step up, so as I was mentioning, we expect it to be second half in terms of the next step up.
Okay. And I think you may have answered it a little bit, but Royston has just a point. "The management offer any Hong Kong revenue and PBT guidance for 2026 and beyond now that we are in 2025?"
Yeah. I think generally speaking, we don't really offer exact guidance for the various individual countries. In the case of Hong Kong, we did that since about 2-3 years ago. And the reason why we did that was because ePension, eMPF is something so new. And we wanted to give shareholders a better understanding of what roughly to expect. And for that reason, we gave some guidance. Now that things have been ongoing, so it is not our intention to give more specific guidance by country every year. So that's not the overall intention.
The last question on ePension from our Q&A participants is from Ryan. "Could you help me understand the cash payment characteristics of the ePension contract? How frequently are you paid in cash, and how does that differ from how you recognize the revenue?"
Generally speaking, you could say that the cash flow will be on a monthly and quarterly basis, right? That's how we are supposed to be paid. Having said that, I think in certain months or certain quarters, there can be some differences in timing for some operational reason. Yeah. That's related to the stage of the operational ramp-up or operational profile. By and large, on a general basis, it should be there every quarter. But yeah, probably in the initial 1 year, 2 years, then on a short-term quarterly basis, there's some variance in the actual receipt of cash flow.
From Royston, "what is the dividend outlook for the year, and can dividends continue to rise year- on- year in 2025?"
So for dividend, yeah, some years ago, before we went into the banking business, at one time, we were targeting to pay out about 15% of our net profit as dividend. But now that we're into banking, and given our very strong ambition for growth, and given that banking is a business that requires a higher capital, then our current thinking really is that we will continue to grow the dividend per share each year as our business grows, as our profitability grows.
But in terms of the payout, I don't think we'll be paying 30%. I think for 2024, we paid 26%. I think that probably can be taken as a payout. In terms of the ballpark payout ratio, it could be that kind of ballpark range for 2025 as well. So as we grow the profitability, then the dividend will grow. And in terms of payout ratio, it may not differ very much from 2024.
Okay. We have a couple of questions still in the Q&A box. So first one, "OpEx as a percentage of revenue has been controlled well for FY 2024. How should we expect OpEx to trend going forward?" This question is from Allan.
OpEx in absolute number will certainly be increasing in 2025, especially because on the ePension business, we are still in a stage of ramping up our resources so that as onboarding continues to progress. So in absolute number, it's certainly ramping up. As a percentage of revenue, we think that as a group, there shouldn't be deterioration, I think.
So I think maybe the PBT margin chart is probably instructive. So I think as JP pointed out earlier, we have been able to grow this margin. I think 2022 was quite a key year for the group where we took on a lot of new costs from the new banking business. And then, as you can see, as we have made progress on the overall platform business, we have been able to then not just cover those costs, but also expand that margin. So I guess in relation to where we see this margin, also given what we mentioned earlier about very strong fee-based income from the platform, that it's highly scalable, doesn't require a lot of new operating costs per se.
So I think also to answer that operating question, for Chung Chun's case, we expect an increase. I think the increases will largely be targeted at the new areas of the business, particularly areas like the bank and probably some of the new services. So because I think there was also a question on whether we expect operating leverage, I think we have always been poised to capitalize on any increases on the net revenues by keeping our costs constant.
And then there's a question from Morgan on the operating leverage possibilities from here. "And also very specifically, how much will OpEx grow for 25% AUA growth next year?"
I think it's a bit difficult to pin down the exact number, but I believe that for 2025, there's room for some extension in EBITDA margin.
Are there any questions from our participants here? Not. We have also heard questions from our remote participants. Thank you. So that will end our session. Thank you, everybody.
Thank you, everybody.
Thank you.
We'll see you again soon. Thank you.