Hi. You want to go ahead, Hong Nam, now?
Yeah, sure. Thank you. Good morning, everyone. Thank you for joining our analyst briefing with our CEO, Piyush, and CFO, Sok Hui. As we've just had slide presentations, we can go straight to Q&A. Operator, can we please have the first question?
Ladies and gentlemen, we will now begin the question-and-answer session. Audio participants with questions to pose, please press zero-one on your telephone keypad, and you'll be placed in the queue. To cancel the queue, please press zero-two. Once again, zero-one on your telephone keypad now. Our first question is from Aakash, UBS. Please go ahead.
Hi. Good morning. Thank you for taking the questions. Apologies, I think some of this might have been discussed in the media briefing, but we were on a peer banks call, so, you know, we couldn't get a lot of that. The first question I have is just on the outlook for credit costs for this year and next year, I mean, given, you know, a lot more uncertainties that we have today on the growth side and geopolitical risks and everything. Do you think you still can go to a zero sort of level this year, close to zero level for this year? And then what about next year in credit costs?
All right. I addressed this in the media conference today. You know, if you think about the overall outlook, Ukraine and everything. Here's how I think about it. The first order impact on us is de minimis. We really have nothing in Russia, Ukraine, et cetera, you know, it doesn't fundamentally change anything for us. The second order impact I think of through the commodity complex really, gas, energy prices, metals, minerals, food, et cetera. That could create some idiosyncratic risk. You know, you could have individual companies or corporations who are on the wrong side of some pricing bets or positions. That could create some vulnerability. I call it idiosyncratic. You can't sort of model for that.
You can only sort of go back and look at the whole portfolio and see if anybody's impacted at a point in time. I'll come back to that. The third order impact is really the macroeconomic flow through. That is something theoretically you should be able to model, but it's not easy. That's, you know, what happens when inflation comes through. What is the impact on sales of companies? I mean, volumes might come off, prices might go up. What is the pass-through they can do on their pricing? What is the impact on their margins, et cetera? You can sort of put something. The debt servicing is likely to go up because of interest rate increases, and so on.
That's something you can model and try and take a look at what might happen over the course of the next couple of years. It's not that easy to be able to put that in the model, especially since nobody's really seen a high inflation environment in the world for a period of time, if you will. The way we've been dealing with that is actually stress testing and doing bottoms-up. We've been doing a lot of stress tests across each of the obvious industry clusters, food and agri, metals mining, energy complex, et cetera. We're doing a lot of stress tests around property, obviously, and we're doing a lot of stress tests around some of the consumer goods and making.
Trying to figure out, you know, what pass-through mechanisms there are, how much margin squeeze there might be. Based on that, in the short term, which is, I think, fairly confident, for the course of this year, we are not seeing any material pickup in our cost of credit relative to what we normally assume, right? Our specific provisions, therefore. In the past, I've said that we should start looking at specific provision guidance for DBS somewhere between 15-20 basis points range. We're not seeing that materially change, on the back of all the stress testing that we've done. On the zero allowances, then assume that you'd get a, you know, SP number of around that level.
Because we've built up so much general provision buffer in the last couple of years, we would start releasing the general provisions to match that SP requirement. We'll come back to close to zero like last year. Whether we release the general provision buffer is something we'll be a little bit more thoughtful about in the course of the year. It really depends on, you know, whether the situation has better line of sight or not. At the same time, we expect the interest rate uplift to give us some unexpected tailwind. Even if we decide to hang on to the general provision buffer for longer, you know, whatever we sort of lose by not releasing it, I think we will more than make up for that through interest rates in the course of this year.
Now, when you look at the projection for next year, like I said, it's harder to model and figure what the impact of that next year might be. Our portfolio, like I said, is quite resilient. The biggest impact in a two year timeframe is likely to be on the SME book. Our SME book has been really well stress tested over the last two years. Mostly a secured book. Because all of these challenges are right from the, you know, the pipeline from 2018, 2019, we've gone through three, four years of, I call it, you know, trial by fire through the crucible. We really refit the book quite nicely in the, you know, building and construction, retail, you know, wholesale trade. My own anticipation is that book will stay quite robust.
You know, we will have to make a better assessment of it as the year unfolds. The other big thing is obviously consumer finance. Again, we don't have a very large consumer finance book, secured consumer finance book. Again, that's really the function of what happens to wages and what happens to debt servicing capability of the consumer. Again, something we get a better sense of, towards the second half of the year, when we're looking out for 2023. Because of those uncertainties inherently being difficult to model, the way our current inclination to deal with that is to be a little bit more careful before we release our GP buffers and allowances. You know, we've got about over the time $1.8 billion out of GP that we built up outside of our models. We can be quite comfortable that our buffers are fairly solid.
Okay. Understood. Thank you, Piyush, for that. The second question I have is on the trading gains. You know, it particularly looks surprising when other banks are reporting weakness and losses on that front. Can you explain what the difference is with DBS versus other banks? Like, you've also mentioned that, you know, higher market volatility is likely to help on this going forward. Could you just help us explain that as well? How does that work?
Actually, I'm surprised. You know, I'm not sure what our peer banks reported. If you look at the results of all the U.S. banks and the European banks, everybody had a very strong FICC quarter. Macro trading has done really well in this environment, and that's true for UBS. UBS just reported some massive results, mostly because of macro trading. So did all of the U.S. banks, very strong macro trading. We saw the same thing, that all of our desks, particularly rates. Rates did really well, but so did FX, so did credit, equities, all of them did well because there's so much volatility in the market that if you position well into the volatility, you could make reasonable money.
Now, I do think we are advantaged and helped because we have built up our flow business very nicely because of all our digital distribution over the last two, three years. It is true that we sit on very good flows, and that gives us a greater advantage in terms of warehousing and positioning. Like I said, all of the locals also reported good results.
I see. I think from the MTM perspective, it probably, like you've said, it usually flew through the OCI channel directly and returned back to P&L numbers.
Well, that's correct. The negative that comes on the long bond book goes through the OCI channel. It doesn't come through the P&L. Again, you can see that in the numbers. All of the negative.
Hi. Sorry, there's a cross line coming through. Could you mute, please?
Yeah. I think the OCI impact, again, you can see in the numbers of all the global banks, that the increase in interest rates means that your long bond position with your investments, those get marked down, but that goes directly to equity. If you look at our own numbers, you can see it in the reduction in our shareholder funds for the quarter. That doesn't come to the P&L.
Okay. Cool. Great. Thank you. The last question I have is on the staff cost pressure. I mean, you guys are seeing a lot more pressure than peers year-on-year. I'm just wondering, like-
On what?
You know, staff cost pressure.
Yeah.
I'm just wondering, like, why is it more at DBS versus peers? Like, what areas is this coming from? Keeping this in context, can you still meet your cost guidance, which is, I think, slightly higher compared to last year for the whole year, whole of this year?
Well, you know, I haven't again looked at the peer staff cost, but I think if you just go and check the market, technology talent is very, very scarce across the region and particularly in Singapore. The turnover rates for tech attrition rates are, you know, high across every market. I think it's also been exacerbated by the Ukraine, Russia problem. Last time they told me, there were 300,000 engineers who are outside the market in Ukraine and another 1,000,000 in Belarus and Russia. So most of the big tech firms are busy hiring for tech talent in our part of the world. That is something that is flowing through everybody's numbers that I can see. Yes, when we are giving a guidance for, you know, cost increase like to last year, we've already factored in the fact that there is a flow-through impact of the wage increases we did last year, as well as what we are likely to have to do this year. Is there.
It's mainly technology is what you're saying, not wealth management or other parts.
It's mostly the lift in technology. It's broad-based. We did well. Salary jumps this last year were broad-based across the spectrum. The turnover rates are the highest in tech, data, analytics, in all of those sectors.
Okay. Got it. That's all my questions. Thank you so much.
Thank you. Our next question, Harsh Modi from JP Morgan. Please go ahead.
Hi. Thanks for this. Couple of questions. One, Piyush, a technicality on NIM of 18-20 basis, SGD 18 million-SGD 20 million per basis. How does the NIR affect it? Is this adjusted for the NIR slope changes?
Yeah. Harsh, of course. If you look at our NIM impact, today about half of it comes from the dollar book, not the Sing Dollar book. That of course doesn't get impacted by NIR or anything. That flows straight through. Today, about 94% of our dollar loan book is CASA funded. And it's mostly a floating rate book. That all the upside goes straight to the bottom line. The other half of the impact, which comes from the Sing Dollar book, obviously that is impacted by the flow-through assumptions from U.S. dollar rates into Sing Dollar rates. There, if you look historically, when the Sing Dollar is strengthening, the flow-through tends to be lower. When the Sing Dollar is weakening, the flow-through tends to be higher.
On average, if you look through cycles, you tend to get roughly a 60% or so flow-through from U.S. into Sing Dollar. Right? When we build our models, we take a flow-through assumption of where we see the Sing Dollar going, where the Sing Dollar will tighten, weaken, and we build that into our model. We also build into our model the likelihood of our having to money outflow, you know, paying off our liabilities, et cetera, et cetera. We put all that and then we take a very conservative view for what that might be. All of that we sort of modeled and put into the number that we indicate to you.
Okay. Basically my presumption here is that you would assume, let's say 60% pass through, let's say if that holds. I should not then further slice the SGD 18 million further down [crosstalk].
Yes. You should not.
Into working capital. Okay.
I've already done that in the numbers.
Awesome. Okay, cool. That actually adds to what I was thinking the number would be. Thanks for that. The second thing, CET1 quite comfortable. What does it mean for payout ratios, buyback, evolution over the rest of the year?
Well, you know, we've got this 0.4% impact from that operations penalty. I don't know how long MAS is going to keep that. You know, the last time they penalized us, it took us over a year for them to reverse it. I'm going to keep an eye on that and see how long. I mean, we've, you know, we're on top of what needs to be done. My own base case is that they'll keep that penalty in place for, you know, some period of time. That's one thing I got to keep an eye out on. The second thing I will keep an eye on is if rates continue to go up, then we'll get more impact on our OCI as we saw it, like everybody will, right? There'll be some pressure on capital that might come from that. Those are two things to keep an eye on. The third, yeah, Sok Hui's remind me. Go ahead.
The third thing is our Citi transaction. We expect to complete it sometime after the sort of June next year. That will add another 0.7 percentage point in capital.
When you put all of that together, we sort of balance it with the, you know, obviously the capital efficiency we get from our P&L. Now, obviously if rates go up, we'll make a lot more money, so that'll obviously be beneficial. Right now we're not anticipating any unusual share buyback. Our current thing is to stick to our dividend policy, which is steady and incremental growth in dividends in keeping with our profit growth in profits.
Right. Okay. So what I'm coming to is, Piyush, even after everything, 14 seems like a pretty defensible number, assuming, let's say the 0.4 comes back, let's say 12 months time and then 0.7 goes out. Net-net you still are at least 100 basis points above where your target is. Is it fair to assume payout ratios increasing, especially with rising rate environment gives you that? Even if you provide a bit more, let's say rather than zero, it is closer to 10 basis points. There's still lot more room to accumulate capital. Is it fair to assume that the payout ratio?
I think a fair statement that we have a lot of room. You know, I never look and indicate a payout ratio. I've never done that so far. Our dividend policy is not based on ratio. To work backward, we figure our ratio has been close to 50%-55%, but I don't really start with a payout ratio and then determine what dividend to pay. We try and figure out how much is the growth rate and the growth in our profitability, what we can use the money for, and then we work forward to see what is the appropriate dividend that we can pay out.
Okay. The final question to you, Piyush, if I may. Lakshmi Vilas, Shenzhen Rural Commercial, Partior, a lot of activity now. A lot of stuff in the works. At what point in time do you see even more meaningful capital allocation to one or more of these businesses? And how do we think about P&L impact? Is it more 2023 or 2024, overall, the incremental delta both on capital and on bottom line? Thanks.
Harsh, I think the businesses impact and capital allocation are the ones we acquired inorganic, the same, because they're chunky. LVB integration went really well. It's coming through quite smoothly. Over the next two, three, four years, we plan to continue to allocate more capital into India and grow the India book. You know, I think that's the last two years India has already been outperforming. Our current strategy will continue to work, but it'll still need capital for the next three, four years before it can generate its own capital. On Shenzhen Rural Commercial Bank, at this point in time, we don't need to deploy more capital.
If that, again, the bank is doing well, the business is doing well. If their capital falls over the next two, three years, we put more capital in. It could be if you look at, you know, they brought us in as a shareholder at this point in time, you know, prior to them going to the public markets, which is, hopefully a three, five year event. It is possible that as a bank might need more capital, then certainly we look at it, if that happens. Again, that's meaningfully accretive already, and you can again see that in our numbers. Maybe Sok Hui wants to comment on that.
Yeah. Currently we put the associates contribution under other income because it's not so material yet. For this quarter, it's actually about SGD 66 million versus SGD 40-odd million in the last quarter. Because last quarter we had about two months impact. This quarter we have about three months impact. That it's not, it's not that small either, SGD 66 million per quarter.
The third is the Citi Taiwan, which obviously we'll integrate only by summer next year. Again that business starts getting accretive and throwing off money very quickly. That's also again quite meaningful in terms of size. Now this is separate from the digital activity that we have. If you look at the digital exchange or Partior or FIX or, you know, even the software monetization we started working on. None of these require too much capital, so you don't have to allocate capital to those. As they scale up, we might have to start allocating some expense dollars and things like that. These businesses, any one of them, is not going to show up materially in our numbers over the next two, three years. It's a slow burn. Got it.
Thank you so much.
Thank you. Our next question, Nicholas Teh, Credit Suisse, please go ahead.
Hi. Thanks for taking my question. Just wanted to clarify on the credit cost guidance. I guess 15-20 basis points in terms of SP would be the normalized run rate, and you're being more conservative on the GP write-backs because obviously the macro is quite uncertain. I guess when we do see the SP migration, there will automatically be some GP reversals. Is this kind of run rate of, you know, 5 basis points of overall credit costs that we're seeing in the first quarter accurate to look at if barring any unforeseen circumstances, obviously?
Yeah. You know, that's a good question. I hadn't thought too much what is happening right now, Nicholas, you're correct. Because we've been conservative in our ratings and our models. As things are moving to SP, we are finding about almost 70% reversals from GP. Is that right, Sok Hui?
No, I think it's really depending on the case, depends on how fast we pick it up. We have a good early warning tool. I would say that, in a good scenario, we should be able to release about half the SP from the GP that we have made.
Okay. In the last quarter, we've released a large chunk, let's call it half. On a good provision, some of the half of it automatically comes from the models in the book, and the rest of it is incremental. Yeah, when we say 15-20, we'll find SP. Some of that will come from GP. Maybe half of it will come from GP in the natural course, yeah.
Okay, thanks. The second question I had is just, I remember, you know, you were talking about monetizing some of your digital assets last year. Obviously, the market has changed quite a bit. But is there further details in terms of, you know, which parts of that digital portfolio or platforms you have that you could look to monetize? And is this, after looking at it, is this something that doesn't look like it's possible in near term given the market?
Yeah. First of all, the intent of monetizing was never a, you know, we will do it in 2022 kind of thing, right? It is something that we can monetize. If you look at it, I sort of in my head think of it as three categories that we're exploring. One is businesses which are in the bank that we could potentially spin out. The two which are most the ones we're exploring the most, one is the payment business, the remit business, and the other is the NAV Planner, democratized wealth business, the financial planning tool business. Both of those we still think have possibilities. We have teams who are working on that.
Our real agenda too is to make sure that we have line of sight to EBITDA, cash flows, and how we scale those businesses if we do externalize them. It's not a imminent activity, but yes, that continues to be a possibility. The second category is the businesses I spoke to Harsh about, the businesses we put some new business investments in Climate Impact X, the Partior business, the DBS Digital Exchange, the FIX Marketplace, etc. These I think are slower burn. I think each of these has got some possibilities, but there will be like conventional long, you know, lead time before they start scaling up to larger numbers.
The third category is we actually in the process of packaging and seeing if some of the technology that we built we can monetize just by distributing the technology itself to other people. There's a lot of interest in our technology solutions, and that is something also that's got some legs. It is unlikely, particularly given the market and the massive sell-off, I don't think you should expect to see any of that happening in the course of this year. You know, even next year, we will judge whether there is real opportunity and when the timing is right.
Okay, great. Thanks a lot.
Thank you. We have our next question from Jayden, Macquarie. Please go ahead.
Hi. Thanks for doing the call. Apologies if this was covered on the media briefing. I was unable to make it. Just around the trends for wealth management. Obviously there's been a slowdown, but can you provide any color on what you've seen in terms of assets under management, if you're still seeing inflows? If we should still expect to see you know, high single digits or 10% growth over the space of the full year. What's your latest views on the wealth franchise in particular?
We did talk about it in the media call, but AUMs were up by about SGD 3 billion. I think they went from SGD 291 billion to SGD 294 billion for that quarter. Net new money was also up. We got, I think, almost $3 billion of new money. Most of the AUM growth was new money. The rest of the portfolio sort of held flat. Overall, the wealth business, as we indicated, was down 20% from Q1 last year. That's because Q1 last year was also an outsize quarter. It was very, very strong. As we are going into the Q2 , I think we're tracking more at last year's level. Sort of, you know, just a huge down, but we're also not seeing a big lift from last year.
If markets stay where they are, then we'll be challenged to get a lot of growth on a year-on-year comparison basis. Certainly, at this point in time, given that 20% drop in the Q1 , I don't see us getting double-digit growth for this year. Whether we eke out single- digit growth is a function of market sentiment in the balance of the year. If, you know, obviously market sentiment recovers, which is principally the equity market, then obviously activity will come back. The only positive thing from that is that we have a lot of dry powder. You know, like I said, AUMs are up, customers are up, and our non-invested monies in the AUMs are quite strong. We do have a lot of our customers have a lot of dry powder, I should say. If there is a turnaround in the sentiment, I can see the money being put to work quite quickly.
Okay. It sounds like there's nothing structural. It's just short-term cyclical. Any sort of color you can provide on new customer acquisition or anything like that to sort of prove that it's still growing structurally?
Well, you know, I can give you anecdotal stuff that there is obviously, as you can imagine, a lot of customer growth from North Asia into Singapore. You know, part of it because obviously the COVID environment and so on. Frankly, in the last two years of COVID, we've had more than, you know, 10,000, including the mass affluent, more than 10,000 new customers from North Asia. It's been a consistent phenomenon over the last two years, and in some ways that continues to pick up steam.
Okay, great. Thanks a lot, Piyush. Appreciate it.
Thank you. Our next question is from Krishna Guha. Please go ahead.
Hi. Thank you very much, Piyush. Just a couple of questions from my side. If you can give a bit more of color on your loan growth. I think you mentioned that a potential second half slowdown. Because I mean, the street seems, at least investors I talk to seems to be saying second half will be better than first half with inflation coming down. But you mentioned that potentially a second half slowdown. So if you can give some color as to what you are seeing, and is it going to be a high probability event or is it just something not to be too worried about? That's my first question. The second question is on the fixed deposits. Are you seeing, you know, any shift to fixed deposits, especially for your U.S. dollar liquidity? The final bit is on the write back. I mean, out of your general provisions that you have made, how much is related to oil and gas, or is it all already taken out? If you can answer that'd be great.
Okay, Krishna. On the first question on loan growth, on the corporate side of the business, I really don't have an answer. I mean, in the cap finance, you know, if you look at our pipeline, it's quite robust. Q1 was 2%. Second quarter is also very strong. The pipelines are good. That's only predicated from a view of the macro that while, you know, nobody knows that inflation comes down a lot in the Q2 or the GDP growth rate reduction flows through in business activity or not. Because, you know, everybody is calling for much lower GDP growth into the second half of the year, it is possible and it's logical that that should impact our loan growth in the second half of the year. What is my concept?
Just being cautious that given overall what's happening to the GDP environment, loans might come off. One area of the corporate side where we benefited in the Q1 was trade. You know, trade went up by SGD 2 billion, and partly that's because of underlying prices. The volume of trade didn't change so much, but the value of trade went up because obviously oil, energy, everything went up. Now, if the prices start correcting the second half of the year, you know, that could reverse that trend. So that's the only thing to think about on the corporate side. The other challenge we have, which is why I'm guiding for slightly slower second half, is on the consumer, on the wealth side and the mortgage side.
The original agenda, I mean, our thought was that we'd be able to grow the mortgage book by $2 billion-$4 billion this year. My revised outlook based on the December tightening the government did is, I think we'll be lucky to get about $1 billion and change. We probably at least going to be short a couple of billion dollars in the mortgage book. On wealth management, it really is linked to the first question. Part of our growth in the last year or two has come from margin financing. If customers don't deal because the environment is not conducive and the confidence is low, then that impacts the margin financing book at the same time. There are a lot of moving parts over here.
You know, could we continue to get 2% growth in the quarter? It's not impossible. When you put all of the uncertainty, is it possible that you get a slowdown in the second half of the year? Yes, it's possible as well. That's what I'm guiding. Your second question on the fixed deposit shifts, actually we're not seeing anything right now, including in the U.S. dollar book. I'm actually, as I said, quite encouraged that a large part of our CASA base, especially U.S. dollar, is driven by transactional activity. It is all of the, you know, APIs and the cash management system putting pace. I keep reflecting that the underlying volume growth for us has been up 15%-20% each year, 2021 over 2020 or whatever. In the last two years, we're getting that kind of growth.
A large part of the CASA base I'm hoping is very sticky because they're captive by transaction volume. No, right now we're not seeing any shift. We're not even seeing the shift in Sing Dollar. Of course, it will come. When rates go up, you will expect to see some shift, and that's what we modeled into our assumptions, but we're not seeing it yet. Your last question on the GP provisions, we don't have anything particular related to oil and gas in this. The oil and gas portfolio is pretty much cleaned up. In fact, in the last year or so, we've been getting recovery. A couple of the chunky recoveries we've seen in the last year have all been from the oil and gas sector. We don't have anything specific for that sector at this point.
Just one last question. Oil and gas recovery, do you kind of get a sense of how much of idiosyncratic recovery can you have on that portfolio?
I don't think there's a lot more recovery in that portfolio either. I mean, the chunky one which I was watching out for have flowed through. We see some. Every quarter we see some. We're very conservative when we dealt with that portfolio, so, you know, as we've been able to get rid of some of the assets, the drill ships or the steam, et cetera, we are seeing recovery. But, you know, there are no meaningful large recoveries that I'm anticipating now.
Okay. Thank you very much. Thank you.
Thank you. Our last question is from Melissa Kuang, Goldman Sachs. Please go ahead.
Hi. Thanks for taking my question. Earlier, last quarter, you mentioned that your exit NIMs are looking like 1.58%-1.6% based on four hikes. Given what we are seeing in terms of hikes this year, can you perhaps give us, if you have, a revised guidance on this? Then the second question is just on your digibank Indonesia offering. At the heart of this thing, I mean the digital bank in Indonesia. Are you also going to stay in that and push there? Thanks.
You know, it all depends on how many rate hikes you assume, Melissa, and what phase. The last I saw some modeling based on seven rate hikes, a couple of them frontloaded, in the base that we get full year NIM somewhere in the what we told you was the exit NIM last time, around the 1.58-1.60 range. Our exit NIM would be closer to the 1.80 range, is what I saw last. Like I said, you can, you know, come up with your own thing. It depends on whether you put a 50 basis point hike in May, another 50 basis point hike in June, we'll figure out roughly. I think order of magnitude, that's what you might want to look at.
An exit NIM closer to, you know, 1.70%-1.80% and a full year average NIM closer to 1.50%-1.60% kind of levels. Your second question on digibank, we continue to grow our business. As I said, you know, we focus on making sure that we get good quality customers, and we are increasing the cash flow and trying to monetize the base. We are not growing the digibank customer base just for customer acquisition. That's been our strategy now for the last two years. It's a slow, steady goal. We still lose money. Our annual expense both in India and Indonesia are not being covered by the revenue we're getting, but the revenue that we're getting is improving every year. We do have some optimism that we should be able to break even on our cash flow revenue basis over the next few years.
Right. Thank you. All right.
Melissa, just to be clear, the NIM guidance that we're talking about assumes that we have about seven, eight rate hikes this year. When you ask the question, I think it all depends on the number of rate hikes. Yeah.
Yeah, just to underline. I mean, you know, I'd rather, you know, you make your own assumptions on the rate hikes and see where we wind up at. When I say I saw this, I saw something internally which said that if we have seven, eight rate hikes, this is what we will wind up with.
Okay. Maybe you answered this earlier, but maybe I'll just. Last question. In terms of the CET1, the drop from 14% to 14%, but then the dividend payment, was it due to the MAS, you know, the pull back on your capital or was there some other things in terms of the CET1 drop?
Actually, mix of two, three things. Maybe Sok Hui will give you some color on this.
Yeah. The operational risk charge is that 0.4 percentage point. You can think of it as, that's the primary reason why it dropped from 14.4% to 14.0%. There are a few other drivers. I think you see most of the U.S. banks also announced that there was an implementation of the Standardized Approach to Counterparty Credit Risk. If you look at our Pillar 3 disclosure, that we quantified 0.2 percentage point. The decline on fair value for OCI bonds, that was another 0.2 percentage point impact. But that was offset in this quarter because we also received the approval from the MAS after working for two years on the advanced model for wealth model. That gives us an improvement of 0.4 percentage point. While these are the drivers, they actually offset to neutralize the effect of the SA-CCR, the MV OCI.
All right. Okay. Thank you.
It's in the Pillar 3 disclosure.
Thank you. We have now come to the end of the Q&A session. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Thank you, everyone. We'll speak to you next quarter.