Hi, everyone. Welcome to the 3Q Results Call. You've heard the media, so we'll go straight to Q&A. When I call upon you, you'll be given the opportunity to unmute yourself. Please do, and then go ahead and ask your question. First question from Jayden from Macquarie.
Can you hear me okay, Nick?
Yep. Yep.
Great. Thank you so much for the opportunity. Appreciate it. A couple of questions. On the media call, you were fairly upbeat, Su Shan, I think, on the outlook for demand for loans. Just any thoughts on sort of what's changed versus prior quarters? Any commentary you can give us in terms of industry or geography? My second question is on the NIM and the sensitivity. Can you provide us with any sort of updates? As last quarter, you gave us very helpful sensitivity on how the NIM would perform with respect to various base rates. Those were the two questions I wanted to ask. Thank you.
Okay. Let me walk you through the non-trade loan growth expectations. This year, we're looking at non-trade loans to grow in the mid-single digits next year. Structural growth, you see it in tech, data centers, etc. TMT will remain strong. Real estate, there's quite a lot of government land sales still in Singapore. There's quite a lot of big government projects as well here. The public sector, and I guess real estate in selected cities, Singapore, possibly Australia, London, will see some good momentum. I talked about TMT alongside the whole Gen AI adoption as well. We're seeing some structural growth there. In energy, although there seem to be, at least from the headlines, a rollback in renewables, actually, we are seeing in Asia still a lot of new flow, M&A buyouts, and transactions in the renewable space.
As rates come down, I think the LBO market will come back. That should also see some growth there. In food and agri as well, you are looking at sort of inventory financing for some of the big guys as well. Housing loans, mortgages, we also had a good Q3 this quarter on new launches. That should filter in next year. Also, I think for wealth, as rates come down, there should also be some of these wealth loan growth as well. You want to add anything, Kwee Juan ? Kwee Juan is our Head of Corporate and Institutional Banking.
No, I think it's largely in that area. The TMT, ERI areas are quite interesting for us next year. Looking at pipeline comparisons.
Okay. Then you want to talk about the NIM sensitivity, right? We have net floating assets of about SGD 110 billion. If rates come down by every one basis point, we will lose SGD 11 million there. We have SGD 160 billion of net floating assets. Sorry, the other way around. We have SGD 110 billion of net—no, oh, sorry, sorry, sorry. We have SGD 160 billion of net floating assets. For every one basis point drop, we will lose SGD 16 million. This is for next year. We have SGD 50 billion net floating liabilities. For every one basis point, we will lose SGD 5 million. Minus SGD 16 million plus SGD 5 million.
Okay. Thanks very much, Su Shan. Appreciate it.
Yeah. Sorry, for this year, I didn't tell you for this year, right? For this year, it's SGD 120 billion net floating assets and SGD 50 billion net floating liabilities. It's plus 12 minus 5. So 12, 1, 2, 3, yeah.
Okay. Thanks very much.
Next question is from Yong Hong from Citi.
Yong Hong, you can go ahead and ask your question.
Yep. I have two questions. The first question is on deposits. A strong growth quarter-on-quarter and year-on-year. Just wondering where the source of money is coming from and if they are corporate or are they consumer monies or both of these are also drivers. A follow-up to that is, given that we are in a position of excess liquidity, what are your thoughts of managing down cost of funding more aggressively, maybe even lower than the 1% SGD FD rates that we are seeing? I have two more questions after this.
Okay. The deposit growth was actually quite wide. We had, from the retail side, quite a lot also because the Treasury bills matured and it came back. We had SME deposit loan growth. We had wealth loan growth. We had corporates as well with a fair amount of—it was quite widely spread. And across. SGD and foreign currencies.
Yep. Maybe.
It was also helped, I guess. In Singapore, we have the CDC Vouchers, right? So people were spending a little bit less in Singapore. That also meant some more SGD customer retention as well.
Yeah. Given the position of excess liquidity, any thoughts of managing down your cost of funding more aggressively, maybe even lower than the 1% SGD FD rates that we are seeing right now?
Yeah. This is Phil here, Corporate Treasurer. If you look at our deposit margins, they are basically above 1%. We do not have any need to cut back on deposits. In fact, this is a very good deployment for us. As all the wealth deposits come in, the GTS deposits come in, we can put it to work, and we can make a very good margin on that.
Yeah. Because what the treasurer— We are always open for deposits, right? The fact is, philosophically, you must always bring in deposits. We can always reinvest. HQLA is a good high ROE. Decent NIM spread.
Yeah. Maybe the context of my question is, given that deposits growth is so strong, I do not think they are coming in for that 1% kind of deposits rate. Based on your deposits coming in, do you see any room to manage down your cost of funds, especially if you think that the deposits coming in are not going after the rates?
Oh, rates are already low, right?
Yeah. No, we actually make sure that we always have a positive deployment margin on all our deposits. So if you look at our FD rates versus MAS bills, for example, we would always make a spread on that. Now, the NIM might get diluted because the marginal deposits versus the marginal deployment will be less than our current average NIM. So you get a NIM dilution, but it's ROE- accretive and it's NI- accretive.
Yeah. Yeah. No, yeah. I understand this.
Deposit cost is already down 20 basis points.
Okay. Got it. Maybe just moving on to AUM. Any breakdown on the net new money and the market's impact? Any color on where this net new money is coming from, how sustainable that is, and whether that is a result of natural flows into Singapore, or is there something that we have done in recent years that is yielding results?
Okay. So when we talked about the net new money, that was only at the high end. If you include Treasures and above, then the growth was actually stronger. The total wealth stack, which is Treasures, TPC, and PB, AUM grew 7% quarter-on-quarter, 18% year-on-year, to SGD 474 million. That is really across the board. As we said earlier on, we have wealth centers in pretty much most of our core markets, right? Singapore, Hong Kong being the two big onshore/offshore hub. China, we have a new wealth hub as well. India, we are also trying to focus now more on wealth. Taiwan, after we bought Citi, it is a strong, mature wealth business in Taiwan. Indonesia, onshore wealth also is growing. It is across the board. Hong Kong is seeing very good flows from Greater China, Hong Kong area.
China onshore is also seeing very good flows because I think we were not involved in the whole trust debacle the last few years. We have a good reputation there. We talked about the need for insurance and life planning by the mainland Chinese. We talked about Stock Connect. We are able to give them good wealth management products and solutions, SIPs, etc. There is good organic growth there. Tse Koon is here. He can weigh in.
Yeah. I think, yeah, just. Aligned with what Su Shan has said. Generally, the wealth growth has been very robust and very well spread, right? First thing, we benefited from the fact that—and we continue to benefit from the fact that we have a full wealth continuum. In other words, we are able to bank customers, whether from their first thousand to their first hundred thousand to their first million, even to those with billions with us. I think we are one of the few that have the full continuum of wealth from private bank, ultra-high net worth, to those kind of almost emerging to private bank, right into the affluent, even right into the retail wealth. We have also been able to connect internationally very well. Customers who use us to manage their wealth both onshore and offshore, right?
Our wealth management customers come from more than 120 nationalities. Being anchored in Asia with two booking centers in Singapore and Hong Kong has been very, very strong. Our full suite of products and services, some of which Su Shan had alluded to, is very, very comprehensive. These have actually been a key contributor to how we have been able to deepen and broaden our wealth franchise.
Maybe my final question is on dividends. The SGD 0.15 extra quarterly dividends per year, I think based on the latest guidance, they will expire by year-end. The guidance is that a similar quantum will be.
No, no, no. Sorry. That's not correct. So who's that?
Yong Hong, you're referring to the capital return dividend. The capital return distribution we talked about lasting for three years until the end of 2027. The SGD 0.15, that amount is per quarter, goes on until the end of 2027.
Okay. Okay. I think previously. Originally it was said a similar quantum.
He said it was SGD 8 billion, SGD 3 billion for share buyback, SGD 5 billion for 3 years of the SGD 0.15 step-up. SGD 0.15 times 4 is SGD 0.60. SGD 0.60 times 2.84 is SGD 1.7, right? SGD 1.7 times 3 years is SGD 5.1. That SGD 5 billion is return over 3 years.
Okay. Yeah. Good that this is a firm.
Ordinary dividend is a different category from capital return dividend. So do not be confused.
Yeah. Yeah. I'm clear on that. Yeah. Okay. Now, I was just wondering whether this SGD 0.15 could be returned in a different form. I think that is clear from Su Shan. On buyback, if the share price continues to be quite strong, can we be flexible to allocate the capital for buyback to do something else? Or should that be reserved for a certain period of market downturn?
I think we always assess the opportunity, and we said we'll do it over two to three years. If by the end of three years, we have not fully bought back the shares, we could always think of other ways to return the capital.
Okay. Got it. I think.
Yeah. Good problem to have.
The general mechanism is that should not exceed the trailing 30-day preferred price or something, right? After buyback. Is there any general, or that is not disclosed before?
No. We just said we'd be opportunistic.
Yeah.
Okay. Got it. These are all my questions. Thank you.
Thanks, Yong Hong. Next question from Hash from JP Morgan.
More questions on the payout and buyback. How do you see the trade-off between a program buyback that is every day, irrespective of price, at VWAP or something, you do consistent buyback versus trying to be opportunistic? What have been the discussions and how do you see, as in, what I am trying to get to is, is there a possibility to move to a program buyback, or do we stay with the current stance?
We are not in the camp of doing program buyback every day, whatever the price, but we do have an alignment on how we will go about doing it. We look at standard deviation of the price, and if it is a bit higher, more than one standard deviation over a period, then we will do less. If it is much lower, we will do a lot more. I think we calibrate it that way internally. That is how we have been running this program.
Sorry, I got muted. Yeah. Thanks for that. The problem with doing buyback in an opportunistic basis is the daily trading volumes. During down days, can the buyback amount be half of the daily trading volumes? Otherwise.
We can't because of an internal rule that we, in general, will not exceed 10% of the daily turnover on the exchange.
Exactly.
Or stock. Yes.
Exactly. If that's the case, then if the weakness lasts for, let's say, 3, 4, 5 days, then you can't use up this entire amount if you're just opportunistic.
We have 3 years, right?
Yeah. It is still again, if I look at the YTD performance, and if the stock continues to do well, which we all hope it does, then there is this question on, can you really use that buyback? Either you have to tweak that rule of 10%, that during down days, you can go as high as 30%, 40%, 50% of volumes if need be, or you need to do program buyback. Otherwise, this buyback amount becomes a bit question mark.
We'll take that back. I think we have been discussing this at the board level. This whole VWAP program buying, well, every investment bank wants to do that because our stock is liquid, right? God knows what they do with it behind the scenes, right? I think it's just a bit more prudent that we keep the option to exercise more discretion on coming in on bad days because the market will be volatile next year, right? We want to be able to have that flexibility.
I understand that, Su Shan.
We hear you on the 10% rule.
Yeah.
We'll take it away.
The risk is things remain too good. Second question on NIM. Thanks for a very detailed guidance on your assumptions. On rate cuts, three rate cuts, flat SORA, SGD appreciation makes sense. If out of the blue, if we end up getting, let's say, a USD rally, in that case, some of these assumptions on the SORA pass through and SGD a ppreciation may not materialize. How are you looking at adjusting your hedging strategy in that scenario? What are the various pros and cons if that ends up happening? Thank you.
So your question is, just so I get it right, the SGD does not appreciate. It depreciates instead of appreciates, right?
Yes. Yes. That may be just because dollar goes up, right? Because this year, dollar was down massively. Yeah.
Okay. Okay. U.S. rates?
Still same, let's say, rate cuts. Because the dollar depreciation this year was largely due to risk premium increase, right? And for whatever reason, the risk premium on dollar decreases. Despite the rate cut, we end up getting dollar rally, which we are starting to get now. Dollar is up 3-4% from the lows. So that's the question that in case of an outcome which is different from your base case assumption, how do we think about impact on NIM? And how is the bank preparing for that eventuality?
A weak SGD is always good for us. When we report, because we have a fair amount of US D income and HKD income and non- SGD income. Honestly, a weaker SGD is not a bad thing for us at all, in fact, we like it. You are thinking, in the past, when you have a weak SGD , you actually have higher SGD rates because of the forwards, right? That seems to have broken down now, Hash. We have taken to checking the MAS bills as a guidance on SGD rates because SORA, overnight SORA is also too volatile, very hard to predict, right? Up and down 40% sometimes overnight. It is very hard to use that as a gauge of the real cost of money in Singapore. We use the MAS bills instead.
If you think the SGD depreciates, I do not think SGD rates can collapse, right? It should, if anything, go up from here. If you have higher SGD dollar rates and lower SGD , that is both a double tailwind for us.
Right. So next.
Both are true.
Yeah. Yeah. No, exactly.
We're all passing the reverse.
No, that I 100% agree. So that's on your commercial book, you'll make more money because then SORA kind of stays steady and SGD depreciates, so translation gains get. Is there any risk on the hedging book that we should worry about, or it is basically wash. Either direction?
There should not be any risk on our hedging book because we put it as a dynamic book, right? We put it on every year. Things roll off. Things get put on. We have not really been able to put on quite a lot yet because the yield curve is not in our favor. It is a dynamic hedge, Hash. We will see next year. If what you say comes true, we might hedge more, right?
I think we have shifted a lot of the hedging more to USD because SGD are not attractive to hedge at these levels. As they roll off, our hedges have been more in the USD category.
Right. Thanks. Sorry, the last question on this is the hedges rolling over. Basically, you have a very good track record of being able to replenish those hedges which are rolling over. We should assume something similar going forward. Is that what is baked in your guidance for NIM and NII next year, that the bank will be able to catch these waves quite well over the next three-four quarters? Or have you lengthened the hedge duration so that you have visibility?
Okay. Hash, next year, we have SGD 78 billion of fixed-rate asset maturities. The maturing rate was 3.3%. We are looking to do 2/3 of that to be replaced.
Got it. Thanks. If I may ask just one last question, this is on wealth management. Net new money growth this year, if you could give some granular details on which countries, residents, is it more North Asia? Is it more South Asia? Any particular market, that will be very useful. Thank you.
Thanks for the question. This is Tse Koon here. Our net new money has been very, very strong, I think has been for the last couple of years. Actually, as we dive deeper in, it's actually very, very broad-based. It's across various markets. Just as an indication, the private banking customer base comes from more than 120 nationalities, right? We have two booking centers in Hong Kong and in Singapore. We're agnostic. It depends on where the customers choose to book. Some of them have bookings in both. They are very, very broad-based, right? We have customers from Southeast Asia, of course, being here in this part of the world. We have customers from Northeast Asia. We have customers from South Asia. We have customers from the Middle East. We have customers from Europe, both Western and Eastern Europe. Very, very broad-based.
Thank you for that. This year, has there been any particular market which has seen a faster pickup in net new money growth compared to, let's say, last year?
No. I can't single out any market in particular. Also, to elaborate a little bit further, in our net new money, the growth has been very, very robust through the entire wealth continuum that has got both the private banking clients, the high net worth and ultra high net worth, as well as in our segment we call Treasures, which is the affluent customer base. It is the same trend we have seen. It is very, very broad-based.
Got it. Thank you so much. Those are all my questions.
Thanks, Hash. Next question from Akash from UBS. Akash?
Can you hear me now?
Yeah.
Okay. Great. Sorry, there was a lag there. Thanks for taking my question. This is Akash from UBS. The first question is just on the NIM decline this quarter. I wanted to understand a bit better because in July, the exit NIM was 1.95. And so it was already down 10 basis points from the previous quarter average level, right? After July, we had 4% deposit growth, which were parked into HQLA, which are NIM- dilutive. Loan growth was much smaller, so a majority of it went into HQLA. We also had further SORA declines, SORA overnight rate declines in August and September. How did any of these affect the NIM? How did NIM stay at 1.96 for the whole quarter? That's the first question.
Okay. So you're looking at the quarter. Why did it stay so flat when SORA overnight went down so much, right? That was your question.
Yes. HQLA as well, Su Shan, because HQLA would be NIM- dilutive.
Okay. Two main reasons. The first is the group NIM declined less than the commercial book NIM because the markets trading broke because of the lower accounting asymmetry. Our cost of funds also was lower. There was some pushing back from that. There was also a rebound in HIBOR as well. That also helped the overall NIM for Q3. There was also IRS and fixed-rate asset deployment as well, which was about a third of the commercial book assets. You want to add anything, Sok Hui?
I think you're right. Your observation is right. I think with the commercial book, we gave you guidance last round, right? That in July, it will be about 1.95, and you will be able to hold it. That is partly reflecting that markets trading has also helped to cushion the pressure.
Okay. Okay. Got it. The second one is I also wanted to understand the hedges a little bit better because I think your NII guidance for next year, which is slightly down. I think people expect that if hedges are going to roll off next year, this guidance does look a bit more optimistic. To have a higher level of confidence, I think if you can share more details on the hedging book, the IRS swaps that you have, right? Because we only see annual numbers. We know it was SGD 59 billion at the end of 2024. What is that number today? What is the breakup between the different tenures? How much of it is expiring next year? If you can share that information, I think that will be very helpful.
Okay. Akash, this is Phil, Corporate Treasurer. I'll just give you a couple of data points. We've got about—we don't look at IRS and bonds separately. When we talk about the hedges, we're talking about both the funded and the unfunded hedges collectively. When we've given you that SGD 200 billion of assets, fixed-rate assets, that's the totality across bonds and IRS, right? That number is about there still. Of that, about SGD 78 billion rolls off next year. We actually have assumed, and it's consistent with the assumptions Su Shan just gave, that we're probably going to redeploy that at about 50 basis points lower than the maturing yield that those particular assets have. It's built into the forecast, and it's all consistent with all the guidance that Su Shan has re-articulated.
This 78 billion is primarily the fixed-rate mortgage book, or is it the IRS swaps?
It's a mixture. It's the IRS. It's got the mortgages because remember, mortgages in Singapore are not long-dated, unlike, say, in the U.S., right? In the U.S., you take long-dated mortgages and you sit on it. In Singapore, typically, it's 2 years later. So the average weighted life of a mortgage is actually only one year if you think about it, right? So the mortgage book does roll off. The IRS does roll off. But the numbers I've given you incorporate all those effects rolled together.
You should think about the NII as having a few components, right? Floating rates will also come off. Fixed-rate hedges will also come off. We will also benefit from the deposit volumes that we have told you about. All the deposits that come in, we can deploy at slightly more than 1%, and that is going to cushion the effects of the lower rates. I think if you look at the treasury book, I think the funding costs will go down quite a bit with the rate cuts. That is another relief from the hedge wins in the commercial book. Net net as a package, when we say slightly down, we are not saying like a little—I mean, it is like a point something, a few point. Yeah, SGD 0.3 billion, SGD 0.4 billion down, that kind of number.
Okay. Understood. Thank you for explaining that. The third question is just on, broadly, liquidity. And Su Shan, I heard your interview with Nicholas on the podcast yesterday. Very interesting, very inspiring. I think one of the comments that you made was liquidity in general has helped financial assets everywhere, right? Now, some of that liquidity also found its way to Singapore and must have helped with the wealth management net new money that DBS has seen. I just wanted to get your thoughts on how do you think about this inflow? What part of it is cyclical? What part of it is structural? Would you extrapolate this net new money strength into the coming years, or do you think maybe it can normalize this pace of net new money that you have been seeing?
I look at M2. I look at the market cap of different markets, and I try to find where the money flows might go next. It is interesting because Hong Kong, China have been very strong performing indices this year, but a lot of the U.S. flows have stayed in the U.S., and the money, the wealth creation has stayed primarily in the U.S., right? When you think about the U.S., it is now 70% of the world's global capital markets. It is very concentrated. The wealth creation and the wealth effect in the U.S. is very real. Money supply and the banking deregulation in the U.S. is going to be helpful. Yes, I see liquidity remaining strong. Do I see it coming to Asia? I see liquidity, certainly in China and Hong Kong, because China rates are so low. No one's buying real estate.
The money's got to go somewhere. That is why you see very strong growth in things like bancassurance, insurance, life policies, and as people get more and more sophisticated as well. People are starting younger, right? You have the Robin Hood phenomenon where younger people in their twenties, early thirties, starting to invest as well, which is why we are building this digital wealth for retail as an offshoot of our current, more mature wealth business. The team has rolled out digital wealth products online precisely to meet the needs of the young twenty-something-year-old millennial or Gen Z investor. I see North Asia liquidity remain pretty robust. Singapore depends whether we have more SGD assets to absorb the M2. There are some government land sales, there are some government projects, there are new launches of property, the stock market is getting better. Let's see.
I hope that the liquidity in Singapore dollars gets recycled. I think people are trying to build a private assets ecosystem in Asia as well. There have been private equity deals, certainly in Japan, and some nascent venture and all that in China because of the AI and humanoid robots boom that we are seeing. We see some interesting flows. There is a bit of the formal flow now back into China because the market has done so well. I see that happening. I do not know. Like every other of my peers, I do worry about the high valuations in the U.S. on these AI companies. We are very cognizant of not being caught up, too caught up in that. Whilst we invest in AI ourselves, we are also cautious about the high valuations that we see.
Got it. Thank you. Just to.
Yes. I think North Asia liquidity remains good. South, Southeast Asia. Yes. Large corporates are doing okay. The mid-size SMEs are doing less okay. People are saving more and spending less. If they can recycle those assets, as I said, into the stock markets, into REITs, into more real assets, then hopefully that sort of domino effect, the velocity of money picks up. The problem is the velocity of money hasn't been very high in Asia, right? That's the problem.
Okay. Thanks, Akash. We'll move on to Melissa from Goldman.
Just back on this that you're talking about. Liquidity and North Asia being a better area in terms of the liquidity. Do you think then in terms for DBS, the net new money coming in and also your deposit growth that you have been seeing can still be sustained from this year to the next? Also, you mentioned.
We're now number four in Hong Kong, yeah? We're the fourth largest bank in Hong Kong. We've been doing very well in Hong Kong and wealth. Our wealth centers in Queen's Road Central and all that are doing well. We are also growing in China onshore wealth as well. As long as it's any of our six core Asian markets, we're happy.
Right.
We're not Singapore- only.
Okay. Just to clarify, earlier you said in terms of taking in deposits and putting in securities, you get roughly about 1% in terms of NIM, or that's at least the base point at which you ideally do this kind of gapping scenario. Would you say the ROEs on this, it's roughly about 20-30%. In doing this versus your book itself is about 17%?
My treasurer tells me the ROE is 50%.
Fifty percent.
Because of the high credit.
Yeah. The risk rates are pretty low, so.
For government securities.
For government securities. If you're collecting deposits and deploying it, all you get is a small interest charge.
Okay. Okay. Most of these that you do will mainly be Gulf securities. For your other books, you will kind of have a spread, right? If you look at your security book, there is a good spread between Gulf and corporate bonds as well.
Corporate bonds are done by GFM. The corporate treasury team does not take views on corporate bonds. I think the corporate bonds are taken in the dealing room. The more nimble they can respond, yeah.
Okay. That's good. I had another question on your tech and data centers exposure that you were saying that you've been growing. If we look at, by geography, others, it's now quite high, almost 19%-20% of total loans. It was only 16% in 2022. On the other category?
Data centers is about SGD 8 billion or SGD 8.6 billion.
Okay. No, I was talking about just in geography-wise, the other geography. We are seeing Hong Kong, Greater China, Southeast Asia, and others. The other category has been growing quite fast as well.
I think on that itself, as you know, the phenomenon, this is Kwee Juan on the institutional bank. We do see the data center phenomenon being one whereby it is growing in Southeast Asia, as you saw it, just not Singapore. We are seeing some in, we are doing some in Thailand. We did some in Australia. Also, US, we are participating in the growth in the U.S., lending out Singapore. As you know, the U.S. market itself has got quite a big development there as well. The others would be from the U.S..
Right. I was just wondering about.
We only do these very structured. This is a heavily structured 15-year hyperscalers- only. No build on SPAC, yeah?
They're all triple net- type leases. All variable costs are passed on to the hyperscalers.
Right, right. Okay. I just wanted to get that because in terms of that, you've been growing, right? In terms of it's the biggest hype now, what if we are down five years later in terms of asset quality? Are we quite confident that it will be still okay in terms of growing this exposure fast?
It's really the underlying off-taker that you see, Melissa, because we believe that in the AI space itself, your big tech companies are the ones who are investing and are providing services because they have the ecosystem to have their customers take off their AI solutions. They do need a fair bit of data center, which is why you're seeing so many deals being cut by all the hyperscalers. These data centers that we are lending to are actually supplying to these hyperscalers where variable costs are passed on to them. We are quite confident of that particular piece of portfolio. We do not go out to do the others, the one that says, "Oh, GPU as a service," whereby the customer base could be any corporates out there who are looking for an AI use case. Those are not the ones that we are in.
Therefore, from a risk perspective, it's pretty much in line with what most of the TMT analysts say on who could be the AI winners. It's really those who already have the moat today in deploying AI solutions like the likes of Microsoft and what have you.
Okay. Thank you. Just lastly, I know it's too far away, 2027. You've mentioned before that 2026, in terms of dividends, step up the SGD 0.24 . You're comfortable with that for next year. In terms of 2027, now that we're a bit nearer there, do we have confidence to say that we can do it, or we still have to wait and see?
I think we have to wait and see. Give us some time.
Yeah.
Okay. Those will happen. The macro environment is still quite volatile.
Very dynamic.
All right. Thank you.
Sorry, Melissa. Thanks.
Thanks, Melissa. Last question from Hui Kuang from CGS. Yep. Yes.
Yes. Okay. Thank you for taking my question. I just wanted to ask, I think moving forward, going to 2026. In your guidance outlook, you mentioned that there is a possibility of write-back in GPs. I just wanted to understand what is the guiding principle when you look at writing back GPs? How much are you allowed? How much do you allow yourself to go below in terms of, I guess, management overlay or whatever? Yeah, guiding principles that you may have. Thanks.
I think we'll have to calibrate it. Based on the external environment at the time. Remember, I told you overlays are also based on stress scenarios. We have been very prudent. We built up SGD 1.8 billion during the COVID period, and we have actually not released that. I think we do assess the external environment, and we'll take a call. Whatever it is, we think we have more than adequate buffers for us to be able to release some if the external environment is okay.
Do you consider the current environment as stable? Because I'm just thinking out loud that, I mean, it has built up, even though, I guess, if you just look at it retrospectively, things have kind of been relatively stable. Yeah. There is kind of enough that you have on your balance sheet to write back some.
Look, it's definitely better than April 2nd. After Liberation Day, we took, remember, we took 200 for Liberation Day, we took the tariffs, and we haven't released the COVID GP buildup yet. It depends. I think lower rates are benign for borrowers and for real estate and for most corporate borrowers and for retail borrowers as well. Where we still see some headwinds are in the consumer unsecured loan side. We're looking out for things like unemployment rates, etc. Also, SME. They're not recovering yet. The larger corporates, the financial institutions, the high net worth families are okay. They're doing very well. It's a bit of a bifurcated recovery, if you will, right? Unfortunately. We remain quite prudent in our asset book. We tend to be, we have target markets. We use a lot of data.
Cash flow analysis to make sure that our clients are okay. I think we will stick to that discipline.
Okay. Thank you so much.
Thanks, Hui Kuang. Just one follow-up question from Melissa.
Hi, hi. Just one follow-up. What is your exit NIM that you have this quarter? Also, in terms of the HIBOR , has everything been factored in, and or should we see perhaps some NIM uplift from HIBOR moving up next quarter?
The exit NIM in September was 1.95, Melissa. October was 1.92 because of SORA.
Will we see some benefit from HIBOR next quarter?
Unlikely.
Okay. Thanks.
Okay. Thanks, Melissa. That's all the questions we have. Thanks, everyone. We'll speak to you next quarter.