Hi, everyone. Welcome to iFAST Corporation's second quarter 2026 and first half 2026 results presentation. Today, from the iFAST team, we have Chung Chun, our Group CEO; Terence, our Group CFO; as well as members from our Finance and Corporate Communications team. So, I am JP. I am from the Corporate Comms team at iFAST. What I'll do today is, I'll run through the key summary and the business updates, and Terence, our Group CFO, will give more colors and details on the group's financial results before we all proceed to our Q&A.
So, in our key summary, I think we've seen a strong growth across the board for iFAST in second quarter of 2026. If you look at some of the key numbers we've shared here, total revenue was at SGD 162.04 million. That's 34.8% higher year-on-year. Net profit was up 35% year-on-year to SGD 29.85 million. EBITDA was up 32.7% year-on-year to SGD 48.89 million. All these numbers are for second quarter of this year. Group AUA reached a record new high of SGD 36.13 billion. That's 32.8% higher compared to last year. In terms of the net inflows trend, we've continued to see good momentum. Net inflows for second quarter was at SGD 1.31 billion. That's 2.2% year-on-year growth. Regarding dividend, our second interim dividend for FY 2026 is at SGD 0.03 per ordinary share. That's 50% higher compared to last year.
We've seen increased profitability, driven by growth across various divisions. Firstly, robust growth in AUA across the wealth management platforms in the group. Secondly, we've also seen record profit before tax at our bank division, iFAST Global Bank in the U.K. We've also seen growth from our Hong Kong ePENSION division. For the Hong Kong ePENSION division, an important milestone has been crossed in April of this year. All 12 trustees and a total of 24 schemes have been successfully onboarded to the Hong Kong pension platform. As mentioned just now, iFAST Global Bank saw higher and record pretax profit of SGD 1.9 million in second quarter of this year. That's a year-on-year growth of 174.5%, and the bank has continued to build on its first full year of profitability that we saw last year.
In terms of the customer accounts, they have increased by over 50% year-on-year to more than 1.5 million accounts as of end of June 2026. As mentioned, for second interim dividend for FY 2026, the directors declared a dividend of SGD 0.03 per share. That's 50% higher compared to last year. For full year of FY 2026, the directors expect to propose a total dividend of SGD 0.12 per share or higher, which represents a 43% increase compared to FY 2025. This is actually an increase compared to the previous guidance given, which was at SGD 0.105 per share or higher, and we communicated that previously in April. As the group's overall profitability increases and the group's shareholder equity continues to grow, the directors are comfortable with increasing the dividend payout ratios gradually. We'll talk a bit more about that in the business update later.
Barring unforeseen circumstances, the group expects 2026 to see healthy growth rates in revenues and profitability. The group is embracing AI to achieve the various objectives while having a lower group headcount. Overall group headcount has peaked in the middle of 2026 and is expected to be at a lower level at the end of 2028 as we work on achieving the various objectives that we have communicated in iFAST's three-year plan. This will pave the way towards improving profit margins from next year onwards. Looking at our group AUA trend, we saw record AUA level of SGD 36.13 billion. That's a 32.8% higher year-on-year and also represents a robust 10.7% Q-on-Q growth. Both the B2B and the B2C divisions have seen a strong year-on-year growth in their respective AUA. B2B still continues to contribute about 65% of total group AUA, with the remaining 35% coming from our B2C division.
The other interesting thing to note is that a record- high AUA was observed across all the various geographical segments. In terms of the AUA breakdown by market and products, we can see that Singapore continues to be the core market with a contribution of about 69%, followed by Malaysia and Hong Kong at about 11%+ each, and others, which is made up of China and U.K. In terms of products, unit trusts remain the largest product contributor at 55%, roughly, followed by stocks and ETFs, and bonds as well as cash account and deposits. In terms of the various products, they also saw a strong year-on-year growth, whether it's across our unit trusts, stocks and ETFs, as well as cash account and deposits.
So, I'll be going through the business updates, where we're touching on a couple of key main points before getting Terence to share more on the financial results. I think in April of this year, we talked about iFAST's three-year plan. There are six strategic pillars in that plan, and management team had given more colors on those six pillars in April of this year. For this quarter, what we wanted to do was to see whether any of the pillars have seen any progress. On this slide, we wanted to highlight these three points. I think firstly, for Vision 2030, where we're talking about an AUA target of SGD 100 billion by 2030, which represents a CAGR of about 25.6% over the next five years, so w e wanted to also share that, as you've noticed, AUA trends remain very strong.
We saw that 32.8% year-on-year growth in our group AUA. We will continue to work towards building a truly global business with our digital banking and wealth management platforms. We intend, of course, to continue delivering value for clients and partners worldwide. The second pillar that we updated just now as well is the ePENSION. We've seen that milestone that has been crossed in April this year. All trustees, as well as their respective schemes, have been successfully onboarded. We will continue to focus on improving our service quality and operational efficiency. On the third point here, so we communicated, I think, last quarter that we expect to see group headcount peaking. We are confirming that group headcount has peaked as of this quarter's update.
We will continue to adopt AI across the various business units, and also improving profit margins, supported by operating leverage. We will expect that to be observed from 2027 onwards. Regarding group headcount, we expect that to be at a lower level by end of 2028. On the next slide, a reiteration of the various pillars, the six key points of how the management team is looking at the three-year plan and the longer-term trajectory for the company. I won't go through that because we have updated three of the pillars already. On the next slide for the individual markets' updates, as mentioned just now, all markets recorded record- high AUA levels across Singapore, Hong Kong, Malaysia, China, and the U.K.
In terms of the various business divisions, I think within Singapore, Hong Kong, Malaysia, and China, they've also seen strong and robust AUA growth rates, whether it's B2B, B2C, or our iFAST Global Markets division. For the profit and net revenue trends, robust growth for the key wealth management centers of Singapore, Hong Kong, and Malaysia. We continue to observe the losses in our China operation narrowing. The U.K., as I mentioned just now as well, so, record quarterly profit in the second quarter of this year. Regarding net inflows, they stood at SGD 1.31 billion in second quarter of this year, bringing our first half 2026 net inflows to SGD 2.56 billion. That's 15% higher compared to last year. We also see a very strong momentum regarding our key product, which is unit trust. Subscriptions were very strong in second quarter of this year at SGD 3.67 billion.
That brings our first half 2026 number to SGD 7 billion for UT subscription. That's 52% higher compared to last year. We want to spend a bit of time talking about the bank as well, because we've seen the latest progress from the bank. So, record profit in second Q at SGD 1.92 million. That's 174% higher year-on-year. First half profit for the bank is at SGD 2.61 million. That's 53% higher year-on-year. For the bank, we also saw customer deposits reaching a record- high level of SGD 1.8 billion as of end of second quarter. That's 25% higher year-on-year. We wanted to just go back to how the bank has progressed with the deposit-taking business, which was launched in April 2023. In the last three years or so, the AUA has progressed. The deposit amount has reached a record- high level, as I said.
Also, net interest revenue growth continues to grow strongly. We saw net interest revenue grow by 37.9% year-on-year. The other division in the bank that's also seen good growth momentum is actually the B2B business, which we call the business banking division. I think, in recent quarters, we have been seeing stronger business account openings and increased usage of the various services that the bank provides to its customers. The third point here is really to just go back to how, with the deposit-taking business, with the growth in customer deposits, the net interest revenue has exceeded the non-interest commission and fee income that comes from the remittance business, which we call EzRemit.
I think, for EzRemit, remittance volumes were actually higher in first half of this year, year-on-year, b ut the revenue per transaction figures have moderated compared to a year ago, because a year ago, the numbers or the revenue per transaction numbers were actually higher than normal. I think in previous quarters, our Group CFO had also talked about that. The last point in the business update here is regarding the management team's outlook for the dividend updates. I think, in terms of the approach, as the group's profitability continues to improve and our shareholders' equity grows, the directors are comfortable with gradually increasing the dividend payouts while maintaining flexibility to support future growth opportunities, capital requirements, and also, business needs. Regarding the dividend trend, so in first half of 2026, the dividend payout ratio was at 28.9% compared to 26.3% in first half of last year.
The directors expect to propose a total dividend of SGD 0.12 per share for this year, which is at least 43% higher year-on-year. Regarding the long-term payout direction, the directors believe there may be scope to actually gradually increase the dividend payout ratio to 40% as the group's shareholders' equity moves closer to SGD 1 billion. The next couple of slides are a repeat of what I've shared, so I won't be really going through a lot of the details. Essentially, second interim dividend, SGD 0.03, so that's 50% higher compared to last year. Regarding the dividend schedule, on the last slide here, the payment date will be 20th of August. I'll now invite Terence, our Group CFO, to run through some of the key financial results.
Thanks, JP, yeah, and a v ery good morning to everyone. For the financial results, I'm not going to run through every line, otherwise, we'll never get to the Q&A. Just want to take you through a couple of just key highlights from the latest quarter of results. I think you heard earlier from JP that I think we've had a very strong growth demonstrated in the wealth management divisions. I think we're at record- high AUAs across all the geographies. Of course, that very strong momentum has continued from the first quarter to the second quarter, and we have also recorded very strong growth in net revenue that has also flowed down to the bottom line. Also demonstrating, I think, in excess of 30%+ year-on-year increases in both revenue as well as in profit.
The other highlight probably on the OpEx side, which is something that we've had a lot of questions on recently. I think on the OpEx, I think we've tried to give you some color in terms of what we expect to happen. I think one of the items mentioned earlier by JP was that headcount has peaked, right? I think we did mention that we expect headcount to peak in the middle of this year. If you look at the operating expenses line for second quarter, I think we're still seeing quite strong increases on a year-on-year basis. But of course, that has moderated quite a bit from the first quarter, right? I think some of that base effects are kind of coming off. More importantly, I think on a Q-on-Q basis, we're actually seeing a bit of a flat lining of expenses as well.
I think OpEx across the group was up something like about 2% or 2.2% QoQ. I think that's something that we expect to make more progress on as we talk about headcount related to 2028 being lower, as well as some of the margin expansion we expect to see going into 2027. I think related to this also, the other observation on the operating leverage, I think this is something that we would expect to show or demonstrate as a wealth platform that scales up with AUA. Of course, as net revenue increases, we then expect to see some of that flowing through in the PBT margins.
I think you will see a spike on the PBT margins, where that number, at least on the headline side, doesn't really show up, but it kind of, but it's also because we have this very sizable business in the Hong Kong side of things on the ePENSION division. Of course, on the PBT margins, if you were to look at the individual geographies, I think you will then very clearly see that for the likes of Singapore, Malaysia, even for the U.K., right, which is actually a deposit-taking business, you will see that actually, we have made quite good progress on the PBT margins in those markets. Of course, Hong Kong has its own specific nuances because of that ePENSION project, and of course, we have talked about the headcount just very briefly earlier on. I think these are some of the key highlights from the financial results.
Not wanting to go through all the key numbers for each time, but I guess just want to point to, perhaps, on the ROE side as well. This is on slide 24. I think we continue to generate or demonstrate very high levels of ROE, 27.2%, even for a business that has a bank within the ecosystem. Just as a reminder, we make in excess of 95%, or rather almost 95% of our net revenue coming from our fee-based income sources. So, the net interest income at the bank is still currently just over 5% of our overall net group net revenue. Moving on to the geographical segments on slide 25. I think you can clearly see the strength in the wealth management divisions, Singapore, Malaysia, even Hong Kong was continuing to demonstrate very good growth year-on-year.
The kind of an unusual number there for Malaysia, I think Malaysia demonstrated really strong growth in the second quarter. I just wanted to highlight also that there was a bit of a benefit from some IT development revenue that has come in in Malaysia. But even if you take that out, then I think Malaysia wealth management standalone also demonstrated very good growth. Just want to point you to the tax expense line, just as a reminder that since the bank became profitable, I think we have started recognizing a deferred tax asset at the U.K. bank entity. We have continued to recognize that, and therefore, you can see that the tax expenses have not grown as quickly as the growth in PBT. This is really the deferred tax asset that we have started to recognize , actually, since the fourth quarter of 2025.
Just moving on very quickly to the, yeah, the last slide in this section was slide 28. Again, this is the different geographies demonstrating very good progress. Just want to point you to the U.K. line, that the U.K. line has a bit of a lower rate of growth there. You can see on the net revenue side, that +3.8%. Actually, this is a combination of a very good growth on the deposit-taking business. We saw over 36% growth in net interest income at the bank. Of course, on the EzRemit division, which was actually the largest business within the bank, but it's now a smaller part of the bank's net revenue contributor, so t his business actually experienced higher than normal margins in the year-ago period.
I think you will see some of that coming off in the third quarter and beyond. But based on the second quarter's number, if you compare that on a year-on-year basis, you're still seeing a bit of a decrease, even though transaction revenue, t ransaction volumes are actually higher. You put that together, you're actually looking at not a very strong growth number for net revenue, but actually, it's not a true representation of the underlying business strength. I just wanted to make those points before we move on to the Q&A.
Yes. Thanks, Terence. We'll now move on to the Q&A segment. As always, we have attendees here at the boardroom, as well as those who have joined us virtually. For those virtual attendees, feel free to raise hand or type your questions in the chat box, and we will cover your questions in this section. Does anyone want to maybe kick start the Q&A session? Yes, [Roger]?
Good morning.
Good morning.
I would like to ask about Hong Kong, these are ORSO sector, right? So, h ow are you going to recognize the revenue? The AUA or administrator fee-based?
For the ORSO business, we are, at this point in time, targeting for it to take effect end of this year. By the end of the year. You'll see the contribution more next year, but hopefully, it gets on board then. In terms of the revenue, it will be sort of AUA-based. We will be earning the revenue in terms of as a percentage of the AUA. It's similar to our wealth management platform.
I saw the projection like in 2030, right? The Hong Kong AUA is only like SGD 11 billion+. Does that mean, like, ORSO contribution will be, the market share will be very low in Hong Kong?
I think you're referring to the projection or the scenario that we painted the previous quarter. We have put in assumptions that are quite conservative in our opinion for that. We essentially look at our existing wealth management platform , then we have the ORSO business coming up, and we basically assume some growth. But generally speaking, we didn't assume a big growth on the ORSO side. As we mentioned, this is a scenario analysis that we put up. It's not actually a projection, nor is it a target, but we basically paint a possible scenario for how those numbers could actually be arrived at, assuming we get the permit by the end of the year.
On the payment side, I remember you received the payment license in Malaysia last year.
Yeah.
It's almost a year, but you haven't launched. When are you going to launch it?
Yeah. We expect to launch it in the fourth quarter of this year. We have been preparing and we have been working internally and so on. Official launch will be soon. [audio distortion]
And 99 Speed Mart, the founder is the owner of, he's also the owner of iFAST. Are you going to, like, collaborate with 99 Speed Mart in the offline space?
Sorry?
99 Speed Mart .
99 Speed Mart. No, it's not related to iFAST. 99 Speed Mart partnered with iFAST when we put in application for the digital bank license in Malaysia. That's a major relationship that we actually have, but we have not, o h, they do own a small stake in iFAST as a shareholder. But yeah, operationally, they are not actually involved.
When do you expect to receive payment license in Singapore or Hong Kong?
Singapore, we have been applying. We are hoping to make a lot more progress quite soon. Currently, we're waiting. Hong Kong, we don't have even a concrete timeline as of today.
For the Chinese side, are we still targeting to be next year?
We are, internally, targeting. That's where we are.
For the fourth time is the iFAST pension, is it more like cost center or you expect any revenue from there?
It is an internal segment of the business that provides support to Hong Kong eMPF business. Yeah. I think we better give a chance to other.
Yeah.
People.
Yes, I think, yeah.
Okay.
Yeah, go on then.
Okay. [Rian]?
I think, previously, you mentioned that you're already working with one trustee on onboarding. Any update of that and whether reaction is coming up from other trustees?
That part haven't officially started to contribute. As I mentioned earlier, we are targeting to onboard them in [audio distortion] .
So, for now it's still just one?
They're basically preparing behind the scene. This whole thing has been delayed because of the onboarding of eMPF project. That's our big priority for the whole industry. That's why there is that decision to delay somewhat, but now, the full onboarding has happened for eMPF, then the targeting for [audio distortion] .
Maybe on iFAST Global Bank, there's been a lot of news about China's offshore wealth being down, and [audio distortion] issue last Friday, and the banks are already [audio distortion] Chinese activities. I think we are hearing feedback from some clients that they see iFAST Global Bank being featured on Xiaohongshu platform. Any comment on that and how it will impact on some of the growth projections for 2030?
Sorry, your question is?
The growth.
Can you repeat the question?
iFAST Global Bank, given that there's a lot of Chinese offshore wealth being down, and that, I guess, it's also a part of the business given that investment seen on Xiaohongshu and things like that. S o, how it will affect that SGD 15 billion target and your activities in targeting all this?
Firstly, in terms of the contribution from the Chinese resident to our overall deposit in the bank, it's actually quite a small percentage currently. I think, online, you probably see some of these amendment activities and so on because it is a service that a lot of Chinese resident wants offshore banking services. It's something that they would like to actually have. Because of that, there's actually quite a bit of discussions and so on. I think, in terms of the actual contribution to us, today, it's actually a small percentage. More importantly, on an ongoing basis, it's about doing a business that doesn't violate the regulations. I think the iFAST Global Bank caters to consumers who actually want to place their money offshore.
There are some, actually, official regulations that officially allow some deposits to be sent from a Chinese bank overseas, and that's within the limits of $50,000 per person per year. We don't go beyond any official limits and so on. That being the case, we don't foresee that being a problem.
Another question on trade receivables. It has been higher than what has been observed last year. Has any of this got to do with cash received from the eMPF projects being delayed?
No. Maybe, I'll take this question because we typically have a lot of discussions on trade receivables. I think, previously, the main item inside there, as you will see from our financials, which we have already split out in the first quarter, was actually the margin financing receivables bit. I think once you take that out, you can really see that impact from what is essentially a new business to us. I think we're quite one of the last few brokers to get into margin financing. Of course, that line has grown quite strongly. I think the rest of the trade receivables, other than the BAU that we have from the traditional wealth business, I think, of course, the Hong Kong project that we have done, or we're still working on, does have an element of a receivables position.
That, of course, as the business has scaled up, of course with revenue growing as well, that has also grown. But I just want to mention earlier, I think there's this division we also talked about, which is the EzRemit division. This division is actually a remittance business. It is a pre-funded business because that's the nature of how remittance works, right? I think on this part, earlier, I think we made the comment that, while we have seen some declines in the margins on the business, we are actually executing more remittance transaction volumes. With that, I think you can also see there's been some addition of working capital. On the working capital side, that actually adds to the receivables position, by nature of how remittances are accounted for. Actually, that has been a contributor to that increase.
I think it's a combination of all these different businesses. Yeah, I just wanted to give some color on the trade receivables number.
I gather that the AUA is up by 33%. To what degree is the increase in AUA due to revaluation versus organic new customer money?
Yeah. The changes in AUA is essentially a function of the net inflow and the market effect.
Okay.
These are, essentially, the two components. If you look at the net inflow, which is a number that we release every quarter, if you just do the sums, you'll find that the rest are essentially changes in market effect.
Okay.
The guidance on headcount decrease till 2028, can give us a sense of, in terms of percentage of the total current workforce and also the nature of the headcount decrease, how much do you need to pay out so-called termination, rationalization- related expenses versus natural rolling off of [audio distortion] ?
Yeah. I think, firstly, we're not looking at a huge percentage in terms of reduction. I think we're making the point already, is that last five, 10 years, we have been growing. Last five years, particularly, headcount growing quite significantly, so as we grow, then, e xpenses continue to grow. That growth was really sharp in the last two years as we've been hiring for the eMPF. As that happened, then, wealth management side, again, also, we have a more liberal hiring policy as well. But given that the most difficult part of the growth process in terms of execution has happened, then we feel that there's room for us to essentially, yeah, gradually reduce the number. While we say that we're big, we are not looking at a very sharp reduction. It does take account of that too. That's the first point.
Second point is, actually, we're not doing any retrenchment. I think the group that I personally mentioned on my presentation that we generally have a no retrenchment policy. We expect that headcount reduction will happen solely through the fact that, firstly, some of the positions are on a contract basis. As that expire, we won't renew as many. Secondly, natural attrition. I think every year has a certain level of resignations, natural attrition. Each time that happens, we take the chance to review the number, and over time, that will allow us to achieve a certain reduction that we are aiming for. I know that in today's world, businesses generally look at retrenchment as something that is part and parcel of business or even a good thing quite often, because shareholders tend to reward management when you announce that they are retrenching.
But at iFAST, we believe that management of headcount should be done properly, and that is part of the required things that ensure that we have a certain corporate culture that allow us to really grow wealth in the long run.
I'm sure. I guess any update on the U.S. link that [North] mentioned to me? That's what it means on the line item. It's there. I guess what's the update? Let's launch.
Yeah. So, that is something that, yeah, so f irst couple of years we were waiting for the licensing and so on, and last year, it was approved, and then in the last nine months, we've been basically getting ready, doing the testing and so on. Internally, we have started to route some of our transactions with iFAST Securities U.S. directly. That has started to happen this month in a gradual basis. But it's not something that we are trying to rush in a big way. We want to make sure that everything is fully tested very well before the bulk of the transaction go through. But essentially, yes, we're starting to actually route transactions through that, and we do expect that activity going forward will happen a lot more.
Having said that, I also want to remind shareholders that we are not actually directly trying to target U.S. customers. This is more a link that allow us to directly access the U.S. exchanges without having to go through another broker. That will also position, that is, that will also be more competitive over time [audio distortion]. Additionally, that will also sort of open up the possibility of having different kind of business models for us as we go.
Yep. [Megara]?
Okay. I had a couple of questions on Hong Kong side. As you were mentioning, ORSO onboarding will happen towards the end of the year, so then, t he AUA of roughly SGD 3 billion or so that we're expecting, would that come into the second half, or would that be pushed into?
If the timetable is as per the latest target and expectation, then we expect that the AUA will add on to the number at the end of the year. All right. You add onto the group AUA end of the year. Even though the actual revenue contribution, we don't expect to see too much of it for this year.
Next on Hong Kong, in terms of the PBT, given the first half performance and second half, even if we assume it to be flat year-on-year, still, on a full- year basis would be about 11% growth, which is in line with the guidance that has been given about a double-digit growth. Is that how we should be thinking about Hong Kong side? That kind of assumptions of 11% growth year-on-year, PBT?
I suppose that's a possible way of looking at it. We have indicated that we expect or we target for Hong Kong to see double-digit growth this year compared to last year in terms of revenue and profitability. That target remains the target that we have indicated.
Thanks, [Megara]. [Devanda], you had a question?
Mr. Lim, what is the biggest risk facing the business at the moment?
Well, I would say that we have gone through quite a bit and we have gone through a difficult time last one, two years, especially, as we onboarding the eMPF project. I think for a while, the eMPF project onboarding was seen by the industry player as something that, I think, was quite a bit of risk. I think that has gone through the most difficult part, and going forward, it's about continuing to improve the service level and so on. From where we are, I suppose some of the normal risk, in terms of operational risk, IT risk, et cetera, remains and so on. Yeah, that's something that, of course, we continue to work on strengthening and so on.
The other risk that they play is something that most people will think about, will be the fact that we now operate as a bank. Previously, we as a group, we have a business model that doesn't require big balance sheet, that is cash generative. But given that now, we own a bank within the group, you start to see that the profile of the group starts to shift somewhat, is a business whereby the balance sheets start to expand. Bank level that requires capital start to move up and so on. I think there are some banks that are not managed well in terms of the balance sheet. When that happens, that introduce an element of risk to the group.
For us, we are very mindful that for a bank, if we take the bank in the wrong direction, then that will itself introduce quite a bit of risk to the group itself. Which is why right from day one, we've always emphasized that we take a business model for the bank that actually tries to minimize the balance sheet risk. We don't lend to risky customers and so on. We basically have a business model for the bank that ensures our bank balance sheet remains very liquid and t he assets that we own are actually very high quality, essentially, mainly sovereign bond, Bank of England deposits, as well as investment grade bond, of which the bank investment grade bond will be the main one. Yeah, so, the risks are there if we go off track from what will be the right path.
I think it's something that we're always mindful about. If we continue to manage it in a very prudent manner, then I think the risk will be something that will be manageable. Yeah.
We'll take one last question from our physical attendees before we move to our online attendees, because the questions are piling up. Thank you.
Just a question on the operation in China. Can you share a bit with us what is the momentum currently, maybe in terms of number of accounts? Where should we be at the end of this year in terms of number of accounts and what type of customers in terms of segmentation? Share with us.
I think the China business is a business where if you look at the numbers in recent quarter, the growth is there. The growth is actually, in percentage terms, growing quite well, quite nicely. Having said that, it remains a small percentage of the group's business. It is a business that we expect to continue to grow. We hope to get to a point not too far away where we actually start to hit the pretty even level and so on. The exact number of accounts and so on, we don't separately break it down, but it is a significant percentage of the overall group accounts that we actually have. That's something that we believe will continue to track in the right direction.
The growth is still there?
The growth is still there.
Thank you.
Sure. I think Jayden from Macquarie raised hand. Jayden, can you hear us?
I can. Can you hear me okay?
Yes, we can hear you.
Great. Yeah, thank you so much for the opportunity. I have a few follow-up questions. Just on the Hong Kong revenues, I know that you report it on a combined basis, but if you look at page 19, I think the total revenue for this quarter was lower than last quarter. We noted that, obviously, the AUA in Hong Kong has gone up, but can you be sort of clear on what the driver was as to why revenues were sequentially lower? Was it from wealth or was it from the contract or was it from something else? That was my first question.
Yeah. I'll take this question. Jayden, as you know, I think the wealth numbers you can see are, I think they're quite strong across the board. That includes Hong Kong and the growth of AUA and so on. Yeah, I think you can clearly see it's not related to the Hong Kong wealth business. I think, in terms of how we think about the ePENSION business, the revenue recognition, I think we did see some uplift from the very high onboarding rates, right? We went from a sort of a lower rate to a higher rate, I think in the fourth quarter and also in the first quarter. I think that has come off a bit in the second quarter because now, we are operating at a more steady state type of revenue recognition process.
But of course, as what we have been trying to communicate, it is still a very high level of revenue that we recognize, right? I think you're not seeing any material change in that revenue recognition. I think overall, put together with the wealth business, there is a bit of a flatlining that you can see on a Q-on-Q basis on that measure. Yeah.
That's very clear.
Hope that answers your question. Yep.
Thanks, Terence. I had a couple more questions. I think , before, you mentioned about the desire to have the contract labor sort of rolling off naturally, right, as the terms come to an end. Would you be able to share with us roughly what the terms are for the typical contracts where you do have staff helping you out with the project? I'm just trying to get a sense of how soon we'd start to see things materially roll off or if it's going to take still some time. Thanks.
Well, for us, the majority of our staff are essentially still permanent staff, but there is a certain percentage that's on contract. It could be one-year , two-year contract. Yeah, the exact number and percentage is something that we manage on an ongoing basis. But we expect that the way the terms are, and we will be able to gradually manage down the overall group headcount over the next couple of years. As I mentioned, we're not looking at a big sudden reduction and so on. It's something that, in line with normal good practice, we always ensure that things are managed in a manner that allow us to control all the processes very well.
Okay. Thank you for that. My final question is just on the bank. You made some comments before talking about how the liquidity is managed prudently. I just wanted to get a sense on sort of how you manage the liquid assets. If I look in the annual report for the bank, about 1/3 of the investments, if you like, are in instruments that are Baa1 to Baa3. Can I just confirm these are to corporates and not to the Bank of England or other central banks? And how do you sort of manage the credit risk for this, given that you're sort of not really set up to do lending, right, and you just look at managing the liquidity as such? Just wanted to understand on this particular point as it's come up as a question with some investors recently. Thanks.
Yeah. Maybe I'll answer this part. If it's on the investment side of things, then yeah, it will be on the bond side. These are all liquid. I think in terms of liquidity, it's a T+1, T+2 type of instrument. Yeah, it's not lending any sub investment with individuals or companies on a bilateral basis. These are all securities. Yeah.
Okay. Thank you so much, Terence. Thanks very much.
Okay. Thanks, Jayden. We'll go through some of the questions we have in the chat box. I think we'll take these two questions from [Mano]. So, quite high level. First, which segments of your business do you see offering the fastest rate of growth going forward?
Okay. If I broadly look at the group business in three different segments, o ne is our core wealth management business as an investment platform all these years; t wo would be the bank; and t hree will be the ePENSION product business. If I look at all three segments, I'll expect all three segments to grow further, but if I were to rank in terms of the order or in terms of a percentage growth rate, I would say that probably, the bank will grow at a faster percentage, mainly because firstly, it starts from a low base.
If you look at the current level of the bank for us at a deposit level of SGD 1.8 billion, in the banking context, it's actually still a very small number relative to the opportunity that we're looking at relative to the potential that we can see given our overall ecosystem and business model. We are expecting that that can have the highest percentage growth rate for us. I would say that the wealth management platform itself will continue to have a pretty robust growth rate. That's why the two parts together, we are continuing to essentially see that we are getting to achieve SGD 100 billion AUA by 2030.
And [Mano's] other question, I think you talked about risk just now, but his other question is, which segment or geography worries you the most in terms of possible setbacks?
I think every segment has its own consideration. Every segment has its own level of risk, and the risks are a bit different in nature in different segment. As I noted earlier, I think that the banking business is something that is relatively new to the group, and we are mindful that we need to manage it in a way where we don't take too much vanishing risk. As long as we do that on the top, then I would say that we are quite comfortable with the risk of the business. Other than that, would be the operational risk, IT risk, and so on, that is an ongoing thing, ongoing process. It's something that, internally, we have to keep improving, we have to keep strengthening our overall management of the risk.
These are things that may not keep me awake every night, but there are some people in the group that have been kept awake every night because of all these different considerations.
Thanks, Chung Chun. We have a few questions related to the net inflows trends. I think we had this one from [Kin Choa] prior to the results call. He sent these questions. The iFAST Global Bank deposits are up by about SGD 200 million to SGD 1.8 billion. What are the drivers behind the increase in iFAST Global Bank's AUA? Is it one-off? Do you think it's sustainable?
Yeah. I'll say that if you look at iFAST Global Bank's deposit trend, you'll find that between one to two years ago, the growth rate was actually quite robust. Sometime second half last year, it did enter into a period where the deposit growth actually slowed down somewhat. Recently, that momentum started to improve again. I suppose part of the reason why the deposit growth slowed during the second half last year was, firstly, because there were some changes in interest rate environment, meaning interest rates were generally declining last year. And at the point when we are trying to build the overall size of the bank, and then you have a environment of generally declining interest rate, and then we, along the way, we're also adjusting the interest rate downwards as well, that actually led to some slowdown in momentum. That was one reason.
The other reason was the fact that as our markets were doing well and so on, we did see some money moving to wealth management platform , some other business. That was the reason why the momentum slowed down somewhat in the second half of last year, and maybe early this year. In recent times, we're starting to see some improvements in the momentum again. That momentum is being seen in both the personal banking business as well as the business banking business segment that we usually call digital transaction banking. That momentum on the business banking has picked up as more of our corporate customers start to use us for our payment services and so on. Yeah, those momentum, improved momentum that we saw in recent times, we expect that that should continue as we move into the second half and maybe beyond.
That's where things stand currently. I would think that we will probably be targeting for a faster pace of growth than what we have seen in the first half of this year, going forward for the coming quarter.
The other question is, are you seeing a noticeable increase in net inflow in the Singapore market? And maybe, I will just link it up to the other question from Kelvin. Has iFAST net inflows been affected by the recent regulatory penalties on Futu in China?
The net inflow for us has been quite robust so far this year, and I think in the recent months as well, it continues to be robust. I think after some announcement on the China side in June, I think, I would say that for us overall, momentum has continued to be strong. July, so far, has been a very strong month in terms of net inflow. The overall business for us continues to see the good momentum. The net inflow, I think the question about the net inflow into Singapore, I think the Singapore platform has seen a strong net inflow. Some of that does move into Singapore equity, if that's a question. Singapore equities generally have seen some improved momentum in the last few quarters. The net inflow that we are getting actually goes into all the various asset classes, not just in Singapore.
Just a couple more questions online. One question from [Reggie], which is, there has been a significant increase in customer accounts. Can you give some information where these new customers are coming from? Are they from the bank, the wealth side, and why the huge increase year-on-year?
The customer accounts, the biggest increase come from the wealth management platform. I think the bank side, we have seen some improvement in the momentum as well. I think in terms of the overall increase, the bigger proportion still come from the overall wealth management side of the business. That includes from the B2B side of the platform business as well, both B2B and B2C. I think on the B2B side of the platform business, in recent times, we have some of our business partner that have seen very strong growth in account opening. That has accelerated the increase in the customer account number for us in maybe the last six months particularly.
Just two questions on this, Chung. The first one it's regarding the incorporation of iFAST Corporation Pte. Ltd. EU Holdings in Ireland. Any significance or strategic plans to highlight here?
We announced that because we need to announce. But I suppose, as a group, when it comes to our business, one of the questions that I've been asked about in the past is, do we see ourselves expanding to other market when it comes to the banking business? Today, our bank license is in U.K. My answer has been that, given that we operate our business increasingly on a truly global business model, we don't think that we need to have too many banking licenses. Having said that, we feel that there are still certain jurisdiction where we want to, at some point in time, in the future, work towards being able to have a banking license. The two that we mentioned was, one is actually somewhere in European Union.
Given that EU and U.K. are just next to each other, there's a quite a good level of synergy, especially when it comes to the business banking side of things, and given that if we have a banking license in one country in European Union, that has the potential to look at it for the whole of Europe. That's the reason why we start to take the step of starting the possibility of getting some banking license somewhere in EU in the future. The process has started, that's why we incorporate the entity. We'd like to say that we expect this to be a process that takes some time. Typically, a bank license doesn't get acquired in a very short time. It's a long process in terms of the path towards getting there.
It's a process that we've started, but you should have the expectation that it's going to take a couple of years before you get to something tangible. The other jurisdiction that we talk about in terms of potentially trying to have a banking license sometime in the future would be back in our headquarter, Singapore. Again, that is something that we're not sure how long it will take, and we haven't formally started this, at the back of our overall long-term planning, next five years and so on, that we feel that that's something that we should try to, at some point, work towards as well.
Just one last question before we go back to our attendees here. So, congrats on the results. Higher DPS guidance is good news to shareholders. What prompted this big revision upwards in DPS guidance so quickly after the initial guidance? Wonder if this has to do with fundamental earning strength and visibility tracking stronger than we had expected at the time of the prior guidance, or any other reasons regarding this change?
If you look at what we have been doing in terms of dividend payout ratio in the last couple of years, you'll notice that we've been paying out about 25% of our earnings as dividends. That has been a ratio that we've been using, and that's a ratio that we continue to use when we were recommending the first quarter dividend. But as we progress and as we look forward, and as we see our overall earnings and shareholders' equity continue to grow, then we do more detailed projection for the future, in terms of what we expect for profitability, cash flow, and balance sheet projection over the next three to five years, then we feel that we are comfortable with gradually raising the dividend payout ratio. It doesn't have to just stay at 25%.
If you look at the first half of this year, based on what we are recommending, what we have declared or proposed, it works out to about 30% in terms of dividend payout ratio. It's a number that we're comfortable for this year. There's a reason why we've decided to declare a higher dividend. We feel that since that's the position that we have taken, after deeper analysis internally and so on, then we should be stating our policy for this year in terms of our dividend right now. That's what we're doing today.
Any more questions from our attendees here in the boardroom?
I have just one question on the Macau side of things. Has it started contributing already? The AUA?
Yeah. It started contributing. It goes into the net inflow for the group in terms of AUA. That's a good part of the business that started, and we expect that to continue to contribute more. Having said that, of course, it's not a huge percentage of the overall business of the group or Hong Kong at this point in time. But it is an area that we expect to continue to grow further.
Can you remind us the AUA on the Macau?
Sorry?
The AUA.
The AUA goes into our group AUA.
We did mention at the end of last year it was about SGD 70 million. I think that number, as you can tell, is not very large. I think we have made some progress since then, but it's not a number that we would like to come back and update. I think the ORSO is probably the one that will have a bit more of a material impact. I think that's the one that we have been providing a bit more color on. Yeah.
Just want to be clear. Remind me again, how much of the AUA has the IGB deposits been contributing? Has the IGB deposit contributed? Is there a figure or?
Yes. For the IGB, we've disclosed that the amount is SGD 1.81 billion, as of fully recognized under AUA. Yes.
Just to conclude, on the eMPF business, so t he way we should think about it is revenue is relatively flat, maybe come down a bit because the onboarding-related revenue should start to decline. But cost is also rolling off, hence, overall PBT should still be growing on an absolute basis. Is that the way we should be thinking about?
If you look at, I think, quarter-to-quarter, sometimes, there are some slight fluctuations because certain items and so on. But on a year-on-year basis, we expect that to continue to grow this year as a whole. Then, going forward, we expect to see some growth as well in revenue, just that on the eMPF part, it's not going to be a huge percentage. But cost is the area that we can look at so that overall profitability can continue to be healthy. There's some growth. But again, not a huge percentage on the eMPF part on its own. But taken together, in terms of all the different measures we are taking for ePENSION as a whole and the group, then I think the increase efficiency in terms of cost can actually keep growing strong for the next few years.
Maybe, we'll just wrap up, [Dev], with one last question that we have online.
Oh, okay.
Okay. [Dev], I think you have one last.
Yeah, just one last question on the bank, actually. If we look at the past few quarters, we see that the net interest revenue has, as you've highlighted also in slides, net interest revenue has been exceeding the non-interest side of the bank. Is this how you expect it going forward as well?
Yes, because when we acquired the bank, the main business of the bank was essentially the EzRemit business. The bank, when we acquired it, they didn't have a strategy of trying to build the deposit base. They see the deposit as a working capital there to support the EzRemit business. But since we acquired the business model have, and enhancing the personal banking as well as the business banking, which will attract more deposits and grow the net interest income. In previous quarters, you see some overall fluctuation in revenue profitability because the EzRemit business tends to be a bit more volatile on a quarter-on-quarter basis.
As we move forward, given that net interest margin is becoming more important than the EzRemit business, and even the business banking and the personal banking itself will bring across some non-interest fee income on its own as well, so o n an overall basis, I think that you should see a better consistency in terms of growth as we move on. That's the way to see it.
So, about iFAST Global Bank as well. Now, we are at SGD 1.8 billion AUA targeting SGD 15 billion by 2030. As we make this progression, we are currently investing the bank's assets in financial products. Do you expect business banking eventually to make a bigger percentage of the overall bank contribution? Otherwise, the regulator will say that, you're a bank, but you're not helping business activities, in terms of lending to businesses, and mainly collecting deposit and investing in financial products. Do you have such concerns?
That, it's not something, to our understanding, there's a concern for the regulator. I think the regulator, primarily as a starting point, they're most concerned about safety. Safety of the bank, safety of customer deposit, the robustness of our overall business model. Even we are not lending to SMEs and so on, it doesn't mean that we're not contributing, because quite a bit of the deposit goes into Bank of England, goes into government bond, and it goes into buying investment on other banks. That in itself will bring about its own benefit to the U.K. economy. So, all in, I would say that we don't think that's too much of a concern for regulator because priority is safety.
Okay, one last question online from [Edward]. I think going back to your reply, Chung Chun. What's the business strategy for future banking licenses?
I suppose you're talking about what's our strategy, once we get the license, yeah, in the additional jurisdiction that we are aiming about. A bit too early to discuss this topic, in detail, but I'll say that the overall direction will probably not change in a big way, where, essentially, in wealth management and digital banking platform. Even when we do get additional licenses in other jurisdiction, we will focus in those areas.
Okay. There are no more questions. I think we can conclude.
Yeah.
This results briefing.
Thank you everybody.
Thank you very much, everyone. Thank you.