Welcome to iFAST Corporation Tech Quarter 2025 and 9 Months 2025 Results Presentation. I'm JP. I'm from the Corporate Communications team. Together with us today, we have Mr. Lim Chung Chun, our Group CEO, Mr. Terence Lin, our Group CFO, as well as members from our Finance and Investor Relations teams. I'll start with a key summary. In Tech Quarter 2025, the Group's net profit increased by 54.7% year-on-year to $26.01 million. That was supported by a 37% year-on-year increase in our gross revenue to $135.82 million. The increase in Tech Quarter 2025 profitability was driven by growth in the Hong Kong ePension (eMPF) business, continuing growth in the Group's Core Wealth Management platform, as well as the turnaround of iFAST Global Bank. For the Group's Core Wealth Management platform, the Group's AUA, or Assets Under Administration, increased 29.6% year-on-year to a new record high of $30.62 billion.
Growth was seen in all the various markets that the Group operates in, with Singapore continuing to be the main contributor. The Group achieved record high net inflows of $1.49 billion in Tech Quarter 2025. For nine Months 2025, net inflows rose 62% year-on-year to $3.72 billion, which exceeds the FY 2024 level by over 10%. Net inflows for nine Months 2025 were also at a record high level. Overall Hong Kong business, including wealth management and ePension (eMPF) profit before tax, reached $19.39 million in Tech Quarter 2025. This represents growth of 46.4% year-on-year and 23.3% quarter-on-quarter. Following the initial quarter of profitability in the fourth quarter of last year, iFAST Global Bank has achieved four consecutive quarters of profits, with net profit of $0.3 million in Tech Quarter 2025 and $2 million in nine Months 2025.
The Bank's net interest revenue exceeded non-interest commission and fee income for the first time in Tech Quarter 2025, reflecting the growth in its deposit business. It remains on track to deliver full-year profitability in 2025. The Bank's profit in Tech Quarter 2025 declined on a quarter-on-quarter basis as non-interest commission and fee income moderated. Average revenue per transaction at the Remittance Division, called Easy Remit, came down from the higher-than-normal average revenue per transaction that was seen in the second half of last year and the earlier parts of 2025. The Group's vision is to build a seamlessly connected global digital banking and wealth management ecosystem that enables customers around the world to invest their wealth globally and profitably, also allowing our customers to save effortlessly and spend conveniently through one integrated platform.
With stronger payment capabilities, iFAST Group expects to deliver enhanced value in strengthening interoperability through iFAST Bridge, which creates the seamless connectivity between our global digital banking and investment platforms, as well as enabling customers to transfer money swiftly and at no cost. By integrating multiple payment rails, the Group aims to ensure an efficient experience for customers transacting across markets. We have more commentaries on the payment capabilities in the business update later on. Looking forward and barring unforeseen circumstances, the Group expects 2025 as a whole to see robust growth rates in revenues and profits compared to 2024. Improvements are coming from growth in the Hong Kong ePension (eMPF) business, improved growth momentum of our Core Wealth Management platform, as well as a first full year of profitability for iFAST Global Bank.
The Group has a strong balance sheet with cash and cash equivalents amounting to $722.43 million as of end Q3 2025. This reflects the conservative balance sheet strategy adopted by iFAST Global Bank and the strong cash-generative business model that our wealth management business has had over the years. The Group's annualized return on equity in the first nine months of 2025 was a healthy 26.1%, which is a record high since our listing on the SGX mainboard in December 2014. A healthy ROE allows the Group to be able to pursue robust long-term growth strategies while being able to raise our dividend payouts. For the third interim dividend for FY 2025, the Directors proposed a dividend of $0.23 per ordinary share, which is 53% higher than the same period last year. The total interim dividends for nine Months 2025 amounted to $0.59 per ordinary share.
For FY 2025, the Directors expect to propose total dividends of $0.82 per ordinary share or higher, which is at least 39% year-on-year higher than FY 2024, which was at $0.59 per ordinary share. Moving on to our Group's AUA chart, as I mentioned just now, that has increased 29.6% year-on-year to $30.62 billion. This also represents a 12.6% quarter-on-quarter increase. About 65% of our Group's AUA comes from the B2B division, and the remaining 35% comes from our B2C. The next slide shows the breakdown of our AUA by markets and products. For the numbers, as of 30th of September 2025, the markets have all hit record high, as well as the different product categories in terms of their AUA levels. Moving on to Section one for the financial results. In Tech Quarter 2025, gross revenue was up 37% year-on-year to $135.82 million.
Net revenue was up 39.9% year-on-year to $89.53 million. Net profit was up 54.7% year-on-year to $26.01 million. For nine Months 2025, gross revenue was up 30.2% year-on-year to $362.98 million. Net revenue was up 29.3% year-on-year to $233.3 million. Net profit for nine Months 2025 was up 41.8% year-on-year to $67.15 million. The next slide shows our results overview for the last four years and nine months of this year. Moving on to the profit before tax margin for our Group based on total net revenue, for nine Months of 2025, it's at 34.5%. Regarding return on equity, as mentioned just now, the annualized level for nine Months 2025 is at a record high of 26.1%, which is the highest level of ROE since our listing.
In terms of the profit and loss trend at the geographical segment level, for Tech Quarter 2025 for Singapore, that was up 25.7% year-on-year to $11.17 million. Similarly, for Hong Kong and Malaysia as well, strong growth rates year-on-year in Tech Q. For China, losses narrowed to $0.92 million in Tech Quarter 2025. For the Bank, as mentioned just now, profit was at $0.3 million in Tech Quarter 2025, which is a reversal of the losses that the Bank experienced in Tech Quarter of last year, which stood at $0.82 million. For Tech Quarter 2025, net profit after tax for the Group at $26.01 million, which is up 54.7% year-on-year. The next three slides are snapshots of the P&L for the last four years and nine months of 2025, as well as the analysis at the gross revenue and the net revenue levels.
I'll wrap up Section 1 with the third interim dividend details. As mentioned just now, $0.23 per ordinary share, and the payment date on 19th of November 2025. Graphically, as you can see here, $0.82 is the total dividend that the Directors expect to propose for FY 2025, and that is at least 39% year-on-year increase from FY 2024. With that, we'll move on to Section 2 on the business updates. I'll invite Chung Chun to present.
Thank you, JP. Our question is, particularly in Section two, some updates. Key evidence. We're going to the next slide. Here, talk about some of the numbers. Because of the key numbers for our Group, and some breakdown. I'll let them move on to the next slide. Slide 22, here's the net improvement. As you might be aware, all the key measures that we've been using for our business is the overall Group AUA. Group AUA itself generally moves over time, and the growth is a function of two main factors. One is the net improvement within the Group, and the general number that affects the Group AUA would be market performance. In the long run, we believe that the most important measure for us, we look at revenue with the net improvement. The net improvement will help us get through well in the overall, in the long run.
It ensures that as we move on, the platform will become more attractive when we're able to increase the net improvement. This particular chart shows the net improvement over the last 15 years. In the first nine months, we've seen the level of net improvement of 3.7%. In the last quarter, the net improvement was up about 4.9%. A good rate of net improvement, and it will be the record high net improvement that we've seen. With that, we expect that for the current year, 2025, we should be achieving the record net improvement as of this year. This year as well, the stock market has a positive trend. With that, that adds on to overall growth. The next slide shows for the core products that we had, the unit trust subscriptions volume. This is unit trust subscriptions.
As you can see, unit trust itself has actually seen a good sale number for the first nine months as well. We should be looking at unit trust subscription as well. Next, I'd like to talk about the iFAST FinTech ecosystem. We have been showing a chart of our iFAST FinTech ecosystem every quarter in our presentation slide. For this quarter, we have actually made additions to this particular chart. I think in particular, for those who are available, this particular chart is fine. At the top, we have added this part that says payment capability. I think our core business as a Group is wealth management. For us, we need wealth management platform to grow and perform and stay relevant, stay ahead of the market. We always believe that we should be expanding the range and depth of our services all the time.
Post our listing at the end of 2020, we have actually spent our effort on enhancing the range of our investment product range which we have, including getting to some of the biggest credit cards for the future. That is an ongoing effort for us to continue to expand that. Along the way, in early 2022, before the Bank came along, we added a bank to the overall Group ecosystem. We actually believe that in order for us to continue to grow well as a wealth management platform operating in a number of different markets, we should actually have a bank within the ecosystem. The top left-hand part of this particular chart shows the additional bank capabilities that we have. Before the Bank, it wasn't a digital bank, but we developed the system with added in the digital capability. In 2023, we launched our digital bank capability.
That's something that has actually progressed quite well in helping people look to enhance the ecosystem. With a bank, it would actually mean that the related kind of services would actually need to be there. That in particular would be payment. When we talk about payment, there's a few areas. One is debit card unlike payment capability. Two would really be the needing to help customers move money easily, whether locally or cross-border. Given the thinking that we have as a Group, about increasingly talking about fully global business models, that actually requires that the payment capability that we have as a Group will need to be enhanced as we move on. Payment is something that is relatively new to us in this organization.
Last four years, it's an evolving service for us and sales services that we feel will be important to ensure that our overall platform, overall FinTech ecosystem, can continue to grow in capability. On the right, we talk about the number of customers that we have. Our Group AUA is $3.6 billion at the end of September. Over 1 million customer accounts. We work with over 820 companies, B2B partners. Among them, there are over 14,000 financial advisors in this company. That is actually important parts of our B2B ecosystem. Move on to the next slide. Just to really summarize as well a bit of what I was mentioning earlier on, we started as a unit trust platform, and our belief is that our mission. Would be really to help investors around the world to invest globally.
There's a clear mission that the Group has been working with right from the time when we started our business. We over the years then broadened the range of our product in the unit trust, and with this foundation, we continue to build on the range of services that we actually provide. As I mentioned, along the way, in 2002, we feel that it's important to add a global digital banking capability to the Group. We did that. That part is a, I think a digital bank to the ecosystem is an important part of the thinking because if you look at most wealth management players around the globe, particularly in Asia, you find that the key players are mainly the banks. The reason why it's mainly the banks is because the banks have the advantage of the fact that customers' money is with them.
We have grown for the first 20 years without the benefit of having the banking capability, which is why we decided that we should buy it. With that being added on, we have been in the process of enhancing the overall services. We're talking about a fully global business model. We're talking about being able to serve customers from around the world, but from a few key locations. That is a business model that will be more scalable and enhance the overall chance of success for us much better. That's been more important in the thinking and reasoning. Next slide. We'll talk a bit more about the payment capability that I mentioned.
Once we look at ourselves as a global digital banking and wealth management platform that's able to serve customers from around the world, from a few key locations, the ability to help customers move money across borders, the ability to help customers to be able to use the money they have within our ecosystem becomes important. That's where things like some remittance service, I mean, cross-border movement of money becomes important. Debit card services are so true. One of the things that we mentioned in this particular sales slide is this quarter, iFAST Bridge. That's something that we have not mentioned before, even though it's something that we have introduced within the Group in the last over one year plus. Essentially, iFAST Bridge is a function that allows iFAST customers to be able to move their money from one iFAST entity to another.
For instance, from iFAST Global Bank in the UK to Singapore, iFAST. Financial Hong Kong to iFAST Global Bank, etc., move money instantly and at no cost, basically. If they're moving the same currency as the customer, that's not paid any cost. That is actually a function that our customers are finding to be very attractive and helps us to basically grow our overall business in a manner that we envision. It's really a fully global business model. A lot of the bank customers from around the world are serving customers from 15 locations. That iFAST Bridge has been something that has been growing in importance. That's in addition to all the other remittance capability that we have as a Group, as well as other payment capabilities. This particular quarter, we're talking a bit more about payment capability because we want to share with shareholders our overall thinking and considerations.
Payment services is not a new service. Obviously, there are a lot of players in the payment space. Banks traditionally are the players. In the last 10 years, I think quite a few of the players have gone into this space. It is a competitive space. For us, we know the importance of this for our Group. At the same time, we also know that given our overall business model of building a global digital banking and wealth management platform, we have certain advantages that will be there compared to other payment players. We have actually, I would say, moved in a relatively cautious manner the last couple of years because it's a new area for us. Given that it's an important part of our business, we have actually been taking steady steps towards including applying for some licenses in certain jurisdictions.
Recently, we got a principal from the Bank of the Caribbean for the Demoney license so that we can provide some services. Those kinds of thinking will be there as well in a number of different jurisdictions so that over time, the overall payment capability will further strengthen our overall Group capability as a global digital banking and wealth management platform that adopts a fully global approach. Moving on, this chart shows some of the licenses we have. This slide here shows the nine months results for our overall Hong Kong business. Actually, the financial accounts business. Recall that in April this year, we updated another PBT. Revenue for overall Hong Kong business is shown in this slide here. This slide here, we also updated the actual nine-month accounts. Our overall guidance in terms of funded accounts for 2025 remains unchanged.
Our overall guidance in terms of double-digit year-on-year growth for Hong Kong business continues to be there for financial resources. Thanks. iFAST Global Bank, the latest quarter that we have seen would actually be the fourth quarter, where the bank has reported a profitable quarter. We have had a bit of quarters of good progress as a bank. I think some of you also have noted that on a quarterly basis, the profitability for the bank actually came down quarter by quarter. The key reason for that is that for our easy remit business, remittance business, which relies mainly on transactional income, transactional income, FX income, that part of the numbers tend to be a bit volatile. In the second half of 2024 and earlier part of 2025, certain corridors that we actually had were having higher than normal margins for the remit transaction.
That actually allowed us to actually with quite good numbers for easy remit. In the recent months, even though the overall transactional volume has remained healthy for us, the overall revenue that we're getting from easy remit business has been lower. Because of that, you see the lower profitability being reported for us. However, we feel that what's important is that the overall bank continues to actually be good. The overall deposits for the bank has continued to grow. Year-on-year deposit in the bank has grown so much, up to 90% for iFAST Global Bank. That would be the key long-term driver for us as a Group. The overall net interest income for the Group has also continued to grow, whether it's year-on-year or quarter on quarter. That will actually be an important trend. Going forward, we expect that the growth momentum for the bank as a whole will continue.
In the long run, we believe that the potential for iFAST Global Bank certainly will be way higher than what we see. Next slide shows in the chart the annual profitability for the bank since we acquired the bank. Position of that was updated in March 2022. For three or four years, we were generating losses. The first nine months of this year, we generated a profit of $2 million. We are expecting that we will be having. A full-year profitability. We expect the fourth-quarter numbers to be healthy in terms of the trend of profitability in the bank. From last year, 2024, to this year, as you can find that there has been a swing in profitability for the bank. We are anticipating that positive upward momentum will continue. 2026. Thanks. That would be the end of Section 2 that I wanted to cover. Section 3 will be a lot of numbers and statistics. We won't go into that. With that, we will move on to the chat.
Okay, thank you, Chung Chun. We'll move on to the Q&A segment. As usual, if you would like to raise your hand and post your question live, you can do so. The other way is, of course, please type your questions in the Q&A box. We also have some attendees and investors here with us today, so feel free to also let us know if you have any questions.
We've got, yeah, yeah, thank you. Just wanted to get a sense to understand the outlook in the context of a declining interest rate environment. As I kind of note that the interest income from the non-banking operations has been kind of declining on a quarter-on-quarter basis, whereas the banking operation side continues to see some form of expansion. I just want to check if this is by nature of the interest rate environment between the different geographies, or how should we look at how iFAST could potentially perform given the expectations of a lower interest rate going forward? I think that's my first question.
Yeah. On the interest margin for us, for the bank, we expect that to remain relatively stable even as interest rates decline. The main reason is because we have been paying a good level of interest rate to customers. I think what many banks do would be that when it comes to, say, the current account or iFAST savings account, they pay very little or even nothing, right?
When interest rates are high, then the bank is paying very good money. When interest rates decline, then they get squeezed of money. For iFAST Global Bank, we believe that what's important is for us to be able to deliver a good level or fair level of interest rate to customers. Because of that, we need to stay higher and we're passing on. For instance, in GBP, we were giving the rate of 4% in the previous 10 years. Bank of England rate was 5%. As the Bank of England lowered their rate, then we could move the rates that we are passing on to customers in a similar manner. That's why despite the declining interest rate, we're able to gain our net interest margin.
At the platform side, outside the bank, the net interest margin, net interest income that we're earning would be mainly, the biggest contributor would be Singapore side. On the part of Singapore, we went through a period where, yeah, the Singapore net interest margin that we're getting were higher than normal, right? Because interest rates were quite high in Singapore. Subsequently, I think you will have noticed that in Singapore, interest rate actually has been dropping very fast in the last one year actually, last expiry period. On our part, accordingly, we have lowered some of the rates that we're passing on to clients. We have taken some of the impression on the margin ourselves as a bank.
Because of that, you find that the net interest income that we're earning from the Singapore platform outside the bank actually has declined despite the fact that overall AUA has actually, in a sense, because of this particular effect as well, we find that the revenue that we earn from the Singapore platform actually hasn't grown as much as AUA used to. The overall level is actually dropping by the interest margin actually. That makes some of these changes.
Maybe just on two questions on the Hong Kong side of things. Just realized that the onboarding of some of these trustees has been kind of deferred into the first quarter of 2026. Does it actually translate to a heavier revenue recognition for FY2026? And whether does it have any consequence on the rollout of the Oslo scheme? Because I think previously it was pushed back into 2026, start of the year. Not sure whether it's dependent on the completion of all onboarding of trustees for eMPF. Second question on the Hong Kong side, maybe I'll just start with this first.
Yes. In terms of the onboarding schedule, yeah, so I think the schedule has been official for all the trustees. The final part will be in early 2026. In terms of overall projections and estimates, we have currently already made the assumptions based on our previous guidance. This doesn't change overall guidance. 2026 as a whole, we expect that we will see improvement in the overall guidance.
Maybe just one last question from me. Can we get a bit of kind of description of the work for eMPF after FY2026, after the onboarding of all the trustees have been done? Just to understand beyond FY2026 in terms of the workload. At least get a bit more clarity on the contribution, at least for the next two to three years.
I think the overall work that we need to do will continue to be there. The overall number of customers on the platform, ePension platform, ePension AUA, we'll be able to see that. The overall work actually will continue. With that, we expect a good start, growth in revenue as well in 2026, just not at a very high % rate. In terms of our ability to cope with it, I would say that the onboarding period is actually ourselves, and the reason is because during onboarding, that's when the AUA for the fund managers, for trustees, get transferred from the eMPF platform. As part of that, then all kinds of changes happen, all kinds of changes.
The resources that actually required were actually higher than the AUA amount. Both the onboarding, then the things that, yeah, they're good for us to streamline some of the processes to be more efficient and so on, and that will allow us to continue overall business in an efficient and, from the perspective of profitability. I think earlier on, there was a question about Oslo, Oslo business that we're talking about. We previously mentioned that should be open to 2026. The reason is because we, our current account ourselves decided that given this year, which we're focusing on eMPF part work and also part of this next year. Thanks for the contribution from that, starting in second quarter.
I think that's all I have for now.
Okay, thanks, Frit Wang. Some of you have feedback from the Zoom that the voice from Chung Chun may not be so clear at times. We're just going to get him to shift his sitting next to me because apparently I was okay, you can hear me. Thanks for the feedback from those of you who commented on this. It should hopefully be better now. We'll carry on. Perhaps since we're talking about Hong Kong and the ePension updates as well, there's a few questions regarding the Hong Kong business. Some that I think Chung Chun has covered, but maybe I'll just read out because they are a little bit more specific. That's from Ryan. In which quarter is revenue likely to stop its rapid growth in Hong Kong? Do you anticipate being able to achieve the prior targeted 50% margin in Hong Kong? I'll put the question to CFO Terence Lin in the discussion.
Yeah, I think. We've spoken about this to, I think, the investing community many times. We are not able to give very specific answers as to the kind of when the revenue steps up, when it ceases to step up, and so on. I think the way we've explained this is in terms of the level of activity that we've been doing. I think earlier, Chung Chun has also mentioned, I think for some of you that maybe didn't hear clearly, that the question on 2026 and beyond, right? When all the trustees are onboarded, there's still going to be quite a sizable level of activity there. In terms of the revenue recognition profile, I think that would be quite aligned with what we're doing. I think the question specifically is on margins.
I think this relates back to, I think, prior to that adjustment to the target that we did in April, right? Before that, you would have noticed that the margin we were targeting was 50%, I think, based on the targets. Then I think that has come down a bit to approximately 38%. I think we are in this situation where we are still at sort of the last bit of the onboarding process. You know that we have hired more people to make sure we satisfy and we get this phase of work done. In terms of margins, we are enjoying quite healthy margins so far on the business, even with this ramp-up in hiring. I think it's probably a bit premature to sort of think or try to target a certain margin going into 2026, right? We have also taken some questions in the past for optimizing of manpower and expenses and so on. There will be a time and place for that. At this point of time, it's really just make sure we get this onboarding done, make sure all the trustees are onboarded, make sure we carry on that next phase of work now that I think we expect all participants in the scheme to be onboard by early next year. I think that's the comment we'll make for that. Yep.
Thank you, Chung Chun and Terence . I think Li Qing had a question, a couple of questions regarding that. I probably won't repeat maybe the same similar questions. Unless Li Qing, maybe you may have clarifications to make, feel free to text in the Q&A box. I'll go to the other question from Ryan. I think just now Chung Chun mentioned about the easy remit, the point about certain corridors having a higher than average revenue in the second half of last year. His question is, why was it elevated and now lower? I think Chung Chun kind of answered that. Could you walk us through the reason for the decrease in banking margin for the quarter? That's a little bit separate on the bank.
On the bank, as I mentioned, the key reason for the decline is easy remit. Easy remit is a remittance business. You have money being sent from a number of the Middle Eastern countries, particularly to the various countries where the employees are from. One of the corridors, I think in our case, the Pakistani corridor in particular, previously was having a bit of better margin, partly also because of some additional incentives that were being given in those markets by the authorities. Some of those are being taken away. Because of that, the industry as a whole saw lower margin for that corridor, and that accordingly has been the case for us as well. Because of that, you saw some reduced average transaction, average revenue per transaction for the easy remit business. Going forward, I would expect that the overall transaction volume that we have as a group will remain healthy or continue to grow. Remittance is also a competitive business globally, and we would expect that there will still be some keen competition in the industry that will not allow the revenue per transaction to be too high.
Because of that, we expect that while the transaction volume is expected to grow, the overall revenue may not be growing that strongly. That's the general thinking that we have internally for easy remit. For the bank as a whole, we think that even though the easy remit volume is not something that we're counting on to be able to drive substantial revenue growth, for the bank as a whole, we expect to be able to grow quite substantially in the years ahead. We are primarily counting on two main divisions for the bank. The first is the digital banking division, and the second is the business banking division. Especially as we continue to enhance our services further, that will continue to bring in the amount of deposits that we have as a group, and as we do so, that will grow the net interest income that we have as a bank. That itself will also increase the fee income that we have as a bank as well. With these couple of key factors, we believe that the bank will have a good positive trajectory going forward. Even the easy remit business can, we'll probably see the. Average revenue per transaction, being in a competitive environment.
Thank you, Chung Chun. We have a question regarding the partnership with Shopee in Malaysia: the plans, the objectives, how it fits into strategy, and other markets potentially. This question is from Lin.
For us as an investment platform, we run a business as a B2C platform and a B2B platform. B2B as a group actually contributes 70% of our business. B2C is 30%. B2C is a part that is easier to understand, right? In Singapore, the brand contributing B2C is FSM or Funds for Woman, and that is a business that we started off with. The business model for that is actually easier to understand. The B2B business, traditionally, our key base of customers have been the independent financial advisors. That continues to be the key base of customers, and that continues to be something that grows very well because financial advisors are running a business where they are basically increasing the AUA that they have all the time as well. That is a traditional key driver for our B2B business.
As we move on, as we evolve over the years, as we have more products, then we find that we have customers that also are not actually independent financial advisory firms, but they are actually keen to partner with us and use our services as a B2B investment platform. Some of the customers that have come in in recent years include some stockbroking firms that actually use us. For some of these players, you find that the digital solution tends to actually be something that's adopted more widely than the financial advisory firm. Shopee is actually, in a sense, one of the newer types of business partners that we actually have for the B2B business.
In their case, the investment isn't their core business, but because of the ecosystem that they actually have, the very strong ecosystem they have, they would like to be able to broaden the range of services they provide to the customer, to include offering them some investment services or cash management services. This latest partnership is basically one such model whereby, without them having to invest as much into the overall backend capability, through the partnership with us, we're able to actually bring these services to the market in a synergistic way so that both sides benefit accordingly. This is something that we. Are seeing recently, and the announcement was made, yeah, because of that. That's for Shopee.
Okay. Yeah, thanks, Chung Chun. We'll move to a couple of questions on the eMPF and the ePension. I think first from Jaden. I think it would be helpful if you explain on what basis revenues for eMPF are booked. Does Q2025 form a new base which then steps up further as the system is available to more members and trustees? There seems to be an assumption for many questions that iFAST is paid on some activity basis as members are moved across.
Yeah. I think clearly there are a lot of questions about the eMPF. Maybe we'll provide some clarifications here. Again, yeah, just to say that first. The revenue has been determined based on certain predefined scopes of work, right? All these were scoped out as part of the whole contracting process. Again, we do know the level of revenue that we will achieve over the life of the whole contract. It's just that we can't be explicit about how much that is and when exactly we recognize how much. I think it's also something for us to clarify that the revenue recognition process is not determined by or is not dependent on the level of transactions that actually happen on the platform, nor the number of members that are onboarded, nor the level of AUA, right? This is a very different type of fee business compared to our traditional wealth management business, which is AUA dependent. Hopefully, that answers the questions that were brought up.
Yeah, thanks, Terence. Heidi has a few follow-up questions as well regarding ePension. Notice that the number of schemes was reduced from 24- 22 under the same 12 trustees. Does this have any impact to the total contribution? If administration fees are to be lowered upon full onboarding of trustees, as per the MPF chairman, will this lower the ePension revenue profits as well? Given that PBT has run ahead of revenue year to date versus the full year guidance, should we expect PBT margins to moderate in fourth quarter 2025 as the remaining onboarding involves higher near-term costs?
Again, just building on the previous response, right? I think it's clear that the number of trustees or the actual number of pension beneficiaries, etc., does not affect our revenue recognition profile, right? Because, again, that was contractual based on predetermined, I guess you can call them KPIs or milestones. I think the point on administration fees being lowered, I think this is something that the MPF wants to do, right? Which is why this whole digitization of the pension scheme was actually done, right? I think, as you know, again, building on the previous response, the contractual revenue that we have involves us being part of this consortium to digitize the MPF scheme.
In short, it doesn't affect our revenue recognition or profitability. I think there's also a question on margins, which I think earlier we also made a comment on this, is that I think there was a question of whether we can see margins going back to 50% as previously targeted. The situation is still a bit fluid. I think earlier we mentioned we have also taken on more headcount, right, to support this business to make sure we execute well. There will be a time and place sometime in the near future to sort of look at optimizing some of these costs to improve the margins. Perhaps now it's still a bit premature to discuss this aspect.
Yeah. I wouldn't expect margin to go back to 50%. That's not our current target, right? Because we have increased the amount of resources, and our revised target that we mentioned in April 2025 doesn't assume 50%. While we expect that our overall revenue and profitability should continue to grow in 2026, we're not looking at it being as high as 50%.
Yeah. I'll follow up with a couple of questions on also Hong Kong, also and also China. This is from Kim Chua. First question, so is also, will it still contribute from early 2026? Secondly, what else will iFAST try to do to achieve this turnaround in China segment?
The current expectation is second half 2026
And the turnaround in China?
Yeah. For China, the efforts that we have been putting in in recent time really would be to grow the overall China business that we have, yeah, both in terms of the onshore as well as the offshore. When we look at the recent performance that we have in terms of volume for China business, while it remains a small part of our overall business, it is a number that is actually growing. We are seeing that growth in revenue internally. On the cost side, we have also been looking at controlling the cost quite well, and that indeed has been the case. Because of that, we have been reducing the overall losses that we're making from the China business. The current internal target that we have really is that we're targeting reaching breakeven by 2027. That's what we are doing currently. In the meantime, we have been executing the various steps as I mentioned earlier.
Thank you, Chung Chun. We have a question from Benjamin.
I think the last scenario part is completely last. I think this quarter might be profitable, or is it?
No, not the next quarter. As I just mentioned, we are currently targeting 2027 for it to get into the black.
I guess it's not an AUA. I guess this fourth quarter was considered strictly a quarter where you see a huge jump in AUA. Is there a sort of like how this year's AUA sort of looks?
There isn't really that much seasonality in terms of the growth of AUA. I would say that to some extent, it depends on the overall market condition. Market condition, yeah, I don't think we can say that fourth Q is historically a stronger quarter. Generally, we're not expecting that quarterly differences in terms of seasonality as well. I suppose the recent overall momentum in terms of net inflow that we're seeing has been very healthy. In the short term, we expect that to continue to be healthy as well.
Heidi had another question, which was on iFAST Global Bank. Does management foresee increasing the deployment of customer deposits into longer duration assets to potentially enhance net interest margin, or will the bank continue to prioritize the conservative capital and liquidity position?
In terms of the strategy on being conservative, the balance sheet, that will continue. Certainly, we will continue to adopt a conservative balance sheet policy. Because of that, you find that the loan-to-deposit ratio that we have is actually extremely small, almost non-existent. It is something that we'll do more in terms of the lending part, but we expect that to be at quite a low % overall. In terms of how we deploy the assets, as I mentioned, we continue to remain conservative.
In terms of whether we will take on longer duration investment in the investment-grade bond or government sovereign bonds, etc., it does to some extent depend on the interest rate environment, depends on the yield curve. We have been in the last two years seeing a yield curve that is essentially inverted. Because the yield curve has been inverted, the right thing to do would really be to. Be very much focused on the short end of it. The yield curve today, to some extent, is still inverted, right? If I take the one-year, two-year, still inverted yield curve. Beyond that, looking at three years and beyond, I think the yield curve is starting to get back into a normal kind of a slope. As that happens, we will be evaluating our strategy in terms of how we deploy the assets, right?
There will be potentially a bit of increase in the average tenure of the bonds that we put in. I would say that we will not take some risky move that some banks elsewhere have done, which is to buy into very long-dated bond, which will then hit the balance sheet when the interest rate environment moves against them. The overall thinking, overall strategy will remain conservative. Depending on the yield curve environment, we will tweak some of the deployment assets accordingly.
Do you intend to take more business consumer loans as part of the business as you grow the iBanking or just continue deposit, bonds, and just sovereign?
In terms of loans, today, we essentially have margin or product financing. We are internally looking at being able to expand and broaden the type of loans that we give. We have been moving at a cautious pace, right? We know that we should, and there's an opportunity for us to improve the overall profile of the business further by having a more different kind of loan. As I mentioned, we are not rushing in a big way. That essentially is the current thinking. I would say that you can expect the loan book to increase, but it will still be very conservative by the standard of most banks. We intentionally want to have a bank, especially since we're a digital bank, we keep it very liquid in terms of the balance sheet. That is a business model that we feel we're most comfortable with.
Three Q, your customer deposit went up to $1.55 billion. It's about $100 million increased from the earlier quarter. It seems to be a slowdown. Is it just a timing flow or?
Partly timing flow and partly because in the latest quarter, we seem to be seeing some relatively sizable amount of money moving from cash into investment, right? Including back to some of the investment platform that we have. There's a bit of that shift. I think. were some interest rate changes during the last four or five months, particularly on the Hong Kong side, the HIBOR situation dropping and then going up. That actually caused a bit of volatility in terms of the movement of deposit. We initially benefited more strongly from it, but after that, we saw a bit of maybe hot money moving away. Because of that, the growth in deposit in Q4 hasn't been as high. The overall growth that we have in terms of number of customers, etc., for personal banking continues in a good place.
Actually, there's some synergy between the wealth management and banking side. Of course, you're seeing some outflow, but you say some of it flows back to our Core Wealth Management platform. From my understanding, most of our iFAST Global Bank customers are mainly depositors in the U.K., and wealth management is dominated in Asia. They may not be so familiar with the Asian products. Right now, you're still seeing some of these flows across your two platforms.
Earlier on, I was explaining about the iFAST FinTech ecosystem. The vision that we have in the last couple of years really is that the financial sector is one where it doesn't involve physical movement. If that's the case, there's no reason why banking and wealth management shouldn't be a more globalized kind of a business. Actually, when it comes to retail banking particularly, I think most banks still run it in a manner that's still relatively constrained by geographical border. For us, as a global digital banking and wealth management platform, our belief is that things will become more and more global. When we have the digital bank in the U.K., even though it's a UK bank, we actually find that a majority of our customers are, in fact, non-U.K. residents, especially those from Asia. That has been actually a major driver for our banking business.
A lot of these customers are, in fact, actually more familiar with us in Asia, Singapore, Hong Kong, etc. Chinese customers. That's why using our investment platform in Asia is actually something that's actually quite normal. We want to continue to build on this thinking, this business model of having a truly global business model. We have customers from around the world open a bank account. After that, some of the money can move to Singapore, Hong Kong, etc. That is something that we want to continue to build upon.
We can just talk a bit about business banking. What's the direction like? What are the customers coming from? What is your thinking?
Yeah. So business banking. I think if you look at our slides in the last two years or so, we tend to be saying transaction banking. We say DTB or digital transaction banking. Now we talk about business banking because business banking includes transaction banking. When we started transaction banking, the core group of customers would be what we call the EMI, Electronic Money Institutions, or players with a payment license, etc. That has been our core group of customers when we started, and that's something that was growing quite well initially. Last one year, it was growing, but it sort of slowed down in terms of growth rates for the moment. I think in the meantime, we're building more services and capabilities so that it can continue to be able to grow well.
For this year, one of the additional things that we introduced in terms of services is what we call the commercial banking. Now business banking includes transaction banking and commercial banking. Commercial banking would target more of small, medium enterprises that will want to open a bank account, use us for some of the payment services, or use us and place some deposits. That includes companies that are U.K. companies as well as non-U.K. companies, especially those from Asia who are familiar with iFAST. This group of SMEs, we feel that the demand and the potential is actually very substantial. In the last couple of years, I've been mentioning that opening a bank account outside your home country as an individual is actually very difficult.
Actually, opening a bank account as a company that's not in the U.K. is even more difficult, even because most banks are not too keen doing so. We actually see a very substantial opportunity for this commercial banking part of the business where we provide the banking services to SMEs. That's something that we sort of launched only this year, only in recent two quarters. We believe this part of the business to have a very substantial potential, but we are at a relatively early stage in terms of building up this part of the services. As we move forward, we expect that our customer base will grow both from the personal banking side as well as the business banking side. Business banking, I spoke about SMEs, but what we started off with has been the transaction banking where the key customers are the EMIs, the payment companies, and so on. That will continue to grow, but we want to grow the business banking in a broader way so that in the next few years, we have a broader base of growth from the different parts of it.
We have a couple more questions in the Q&A box. The first one from Kelvin: When is the eMPF contract due for renewal? Understand it is a seven-year contract.
The seven-year will end around 2030. MPFA has the option to renew it for an additional three years, so that will bring it to 2033. After that, any further renewal, there will be that negotiation and so on that we have to go through. Yeah, but essentially, it's 2030, then 2033.
Yeah. Okay. Maybe I'll just take Heidi's question that just came in. Is there any update on the Macau pension project since the initial progress in July of this year?
Yeah. There's been some. The Macau pension part of services has actually been rolled out. We're working together with a business partner who basically started offering the Macau pension services. There's been some quite healthy traction coming from Macau, some good steady inflow of volume coming in the Macau part of the business. Of course, in terms of absolute number, it's still small relative to the overall platform that we have, and these are initial stages. Going forward, we expect that to grow. I think Macau is also planning to expand the overall pension requirement for the various companies. I think by 2027, a certain part of the pension services will be made mandatory. It's a market that actually will grow. They started contributing right now and something that should grow as we move on.
The last question in the Q&A box from Benjamin. The markets that iFAST clients can trade are only Singapore, Malaysia, Hong Kong. When will we be adding other markets?
Yeah. Today, we have Singapore, Malaysia, Hong Kong, China through the Stock Connect, and U.K. Yeah. So we do offer the U.K. market. That's where we are currently.
His follow-up question was, can you comment on how you think iFAST strategy is similar or different from Fortune?
Yeah, I can't comment too much on Fortune beyond what I can observe publicly. I would say that I think in the stockbroking industry, there are actually many players. Stockbroking is a business where in Singapore, probably a number of players are more limited, but I think if you look at other markets, they're even more clear. Globally, there are many different stockbroking firms, including online plays and so on. I would say that by and large, the way we internally look at the industry, we tend to see in terms of the kind of focus that the stockbroking firms put in. I think the majority of stockbroking firms from what we can see tend to be more focused on having investment products that probably will be a bit more trading-oriented.
They may start with stockbroking, but after that, they may expand to other investment products that are even more volatile, I would say. If I take Robinhood, for instance, they started with a stockbroking offering zero commission, a growth customer base. After that, they, to a large extent, try to make their revenue from options and so on. Along the way, they went into crypto and so on. The path that many broking firms take will be to start with stocks, but after that, you move along the line whereby you're offering more and more trading products for the end client. That tends to be the normal path. For us, we are probably a bit different, probably a bit closer to what Charles Schwab has done historically. Charles Schwab started as a stockbroking firm, but along the way, they went into mutual fund and became a mutual fund platform.
Eventually, it became the biggest platform in the world. Stockbroking is a big part, including an ETF and so on, but mutual fund is actually another huge part, a major chunk of the overall business. This path that is taken is more along the line of a wealth management business. That's why it also caters to B2B and B2C, so a somewhat different path compared to, certainly compared to the likes of Robinhood. I would say compared to the majority of broking firms that are around there in the world, it's actually somewhat different. In the case of iFAST, very clearly, we are along the wealth management path. Because of that as well, you find that the products that we tend to focus on will tend to be products that are less volatile.
Importantly, from our perspective, it's more about helping the clients to grow their wealth in the long run as opposed to offering them gambling products. In our case, we are stockbroking, but as we want to beef up our services further, we keep looking for areas where we can help the client grow their business better in the long run. An example would be in FSM, we decided that one of the areas where we want to make the bigger difference in will be for ETF. ETF is one area where we feel, firstly, helps the client grow their wealth very well in the long run. Secondly, it's sort of similar to unit trust in some way. It's a fund. It helps the client invest globally in a fund, and in our case, given our background, it sort of fits in well.
The type of focus that we put in will be about, yeah, in addition to the stockbroking part of services, looking at how we can help the clients select the ETF better, etc. The other thing that we do will be the bonds and cash management solution and so on. The focus tends to be over time in a slightly different trajectory than quite a number of the other broking firms who tend to be there taking on more and more volatile products. That, I would say, would be some of the key differences. The path that we have taken is something that we believe we are well placed to be able to continue to be a market leader for, and that thinking will continue.
Seeing that the nine month ROEs are slightly higher, I recall that the previous quarter, your dividend payout ratio is about the mid-20% level. Is there any plans to increase this dividend payout ratio in the next couple of years? Moving on, seeing that I don't think ROEs will be any lower compared to this nine-month peak.
Yeah. I think our nine-month payout ratio is about 26%. Yes. Internally, we're mentioning we're comfortable with 26%- 30%. At this point in time, that will still be sort of the guidance that we give. I would say that as we progress further, as our balance sheet gets bigger, then I think there's some room for some upside in the payout ratio in the next couple of years. That's the way I would describe it.
Thank you, Chung Chun. If you don't have any more questions in the Q&A box as well, and if that's all from our investors, thank you so much for joining us for our results briefing. Take care.