Good morning, everyone, and welcome to DBS's third-quarter financial results briefing. This morning, we announced third-quarter profit before tax up 1% to a record SGD 3.48 billion and ROE of 17.1%. Nine-month total income and profit before tax reached new highs. As per our norm, our CEO, Tan Su Shan, and CFO, Chng Sok Hui, will start by sharing more about the quarter. Both will be speaking to slides, which you will see on screen. The slides can also be found on our Investment Relations website. And thereafter, we will take media questions. So without further ado, Chng Sok Hui , please.
Thanks, Edna. And good morning, everyone. I'll start with slide two. We delivered a strong set of results in the third quarter. Pre-tax profit rose 1% year-on-year to a record $3.48 billion, with ROE at 17.1% and ROTE at 18.9%. Total income grew 3% to a new high of $5.93 billion. Group net interest income was little changed, as strong deposit growth and proactive balance sheet hedging mitigated the impact of lower rates. Fee income and treasury customer sales reached new highs led by wealth management, while market trading income increased on lower funding costs and a more conducive trading environment. For the nine months, pre-tax profit rose 3% to a record $10.3 billion, as total income increased 5% to $17.6 billion from growth across both the commercial book and markets trading.
Net profit was 1% lower at $8.68 billion due to minimum tax of 15% that has come into effect. Asset quality remained resilient. The NPL ratio was stable at 1.0%, while specific allowances were 15 basis points of loans for the quarter and 13 basis points for the nine months. Allowance coverage was 139% and 229% after considering collateral. Capital remained strong. The CET1 ratio was 16.9% on a transitional basis and 15.1% on a fully phased-in basis. The board declared a total dividend of 75% per share for the third quarter, comprising a $0.60 ordinary dividend and a $0.15 capital return dividend. Slide three. Third-quarter year-on-year performance. Compared to a year ago, third-quarter pre-tax profit was 1% or $42 million higher, while net profit declined 2% or $73 million to $2.95 billion due to higher tax expenses from the global minimum tax.
Commercial book net interest income fell 6% or SGD 238 million to SGD 3.56 billion, as the impact of lower rates was partially mitigated by balance sheet hedging and strong deposit growth. The group's net interest income of SGD 3.58 billion was little changed. Fee income rose 22% or SGD 248 million to a record SGD 1.36 billion, led by wealth management, while other non-interest income increased 12% or SGD 61 million to SGD 578 million, as treasury customer sales reached a new high. Markets trading income rose 33% or SGD 108 million to SGD 439 million, due mainly to higher equity derivative activity. Expenses increased 6% or SGD 144 million to SGD 2.39 billion, led by higher staff costs, as bonus accruals grew in tandem with a stronger performance. The cost-to-income ratio was 40%, and profit before allowances was 1% or SGD 35 million higher at SGD 3.54 billion. Total allowances fell 5% or SGD 6 million to SGD 124 million.
Specific allowances remained low at $169 million or 15 basis points of loans. $45 million of general allowances were written back, mainly due to a large repayment. Slide four. Third-quarter on quarter performance. Compared to the previous quarter, net profit was 5% or $130 million higher. Commercial book net interest income fell 2% or $67 million, as net interest margin declined 9 basis points to 1.96% from lower SORA. Group net interest income was 2% or $70 million lower. Fee income rose 16% or $190 million, led by wealth management. Other non-interest income grew 11% or $56 million, driven by higher treasury customer sales. Markets trading income was 5% or $21 million higher. Expenses increased 5% or $123 million from higher bonus accruals. The cost-to-income ratio was stable. Total allowances were 7% or $9 million lower. Slide five. Nine-month performance.
For the nine months, total income and pre-tax profit reached new highs. Total income rose 5% or SGD 777 million, and pre-tax profit increased 3% or SGD 260 million to SGD 17.6 billion and SGD 10.3 billion, respectively. Net profit was 1% or SGD 111 million lower at SGD 8.68 billion, due to higher tax expenses. Commercial book net interest income declined 3% or SGD 310 million to SGD 10.9 billion, due to a 27 basis point compression in commercial book net interest margin. Group net interest income rose 2% or SGD 211 million to SGD 10.9 billion, as the impact of lower interest rates was more than offset by balance sheet hedging and strong deposit growth. Fee income grew 19% or SGD 499 million to a record SGD 3.80 billion, as wealth management and loan-related fees reached new highs. Other non-interest income of SGD 1.65 billion was only 2% or SGD 32 million higher, due to non-recurring items in the previous year.
Excluding these items, treasury customer sales grew 14% to a new high. Markets trading income of SGD 1.22 billion rose 60% or SGD 456 million, marking the second highest level on record. The growth was due mainly to higher interest rates and equity derivative activities. Expenses increased 6% or SGD 377 million- SGD 6.88 billion, with the cost-to-income ratio stable at 39%. Profit before allowances grew 4% or SGD 400 million to a record SGD 10.7 billion. Specific allowances remained low at SGD 439 million or 13 basis points of loans, while general allowances of SGD 143 million were taken. Slide six. Net interest income. Group net interest income for the third quarter of SGD 3.58 billion was 2% lower from the previous quarter and little changed from a year ago. Lower interest rates impacted net interest margin, which declined 9 basis points quarter on quarter and 15 basis points year-on-year to 1.96%.
We continue to mitigate the impact of lower rates through two factors. The first is proactive balance sheet hedging, which has reduced our net interest income sensitivity and cushioned the impact of lower interest rates. Second is strong deposit growth, which was SGD 19 billion during the quarter and SGD 50 billion from a year ago. The growth in deposits exceeded loan growth, and the surplus was deployed into liquid assets. This deployment was accretive to net interest income and return on equity, though it modestly reduced net interest margin. For the nine months, group net interest income rose 2% to SGD 10.9 billion, despite a 9 basis point compression in net interest margins to 2.04%. The resilience in net interest income reflects the combined effects of balance sheet growth and of hedging. Slide seven. Deposits.
During the quarter, the strong momentum in deposit inflow was sustained, with total deposits rising 3% or SGD 19 billion in constant currency terms to SGD 596 billion. The growth was led by cash inflow of SGD 17 billion, most of which was in SGD. The cash ratio rose to 53%. Over the nine months, deposits grew 9% or SGD 48 billion, with more than half of the increase from cash. Liquidity remained healthy. The group's liquidity coverage ratio was 149%, and net stable funding ratio was 114%, both comfortably above regulatory requirements. Slide eight. Loans. During the quarter, gross loans was little changed in constant currency terms at SGD 443 billion. Increases in trade and wealth management loans were partially offset by a decline in non-trade corporate loans from higher repayments. As deposit growth outstripped loan growth, surplus deposits were deployed to liquid assets.
This deployment was accretive to net interest income and ROE, while it modestly reduced net interest margin. Over the nine months, loans rose 3% or SGD 14 billion, led by broad-based growth in non-trade corporate loans. Slide nine. Fee income. Compared to a year ago, third-quarter gross fee income rose to a record SGD 1.58 billion. The increase was broad-based and led by wealth management, which grew 31% to a new high of SGD 796 million from growth in investment products and bancassurance. Loan-related fees were up 25% to SGD 183 million from increased deal activity. Transaction services and investment banking fees were also higher. Compared to the previous quarter, gross fee income rose 13%, led by wealth management. For the nine months, gross fee income reached a record SGD 4.48 billion, led by new highs in wealth management and loan-related fees. Slide ten. Slide ten shows the wealth management segment income.
The third-quarter wealth management segment income grew 13% year-on-year to SGD 1.54 billion. The growth was driven by a 32% increase in non-interest income, which more than offsets a decline in net interest income from lower rates. For the nine months, wealth management segment income grew 10% to a record SGD 4.38 billion, due to a 28% rise in non-interest income. Assets under management grew 18% year-on-year in constant currency terms to a new high of SGD 474 billion. The percentage of AUM in investments also reached a new high of 58%. Net new money inflow was SGD 4 billion. Slide 11. Customer-driven non-interest income. We have introduced a new slide to provide a clearer view of non-interest income, which is driven by customer activity. This comprises two components in the commercial book: net fee income and treasury customer sales.
For the fee and treasury customer sales, fall under different lines of the P&L financial statements due to accounting treatment, they should be viewed equally as they are both driven by consumer and corporate customers' demand for financial products. For the third quarter, customer-driven non-interest income grew 22%. Net fee income rose 22% to SGD 1.36 billion, while treasury customer sales rose a similar 21% to SGD 581 million. Both were at new highs and led by strong wealth management activity. For the nine months, customer-driven non-interest income rose 17%, driven by record net fee income and treasury customer sales. Slide 12. Expenses. Nine-month expenses rose 6% from a year ago to SGD 6.88 billion, due to higher staff costs from salary increments and bonus accruals. The cost-to-income ratio was stable at 39%.
Third-quarter expenses were 6% higher than a year ago at SGD 2.39 billion, led by higher staff costs, as both bonus accruals rose in tandem with a stronger performance. Compared to the previous quarter, expenses grew 5%. The cost-to-income ratio was at 40%. Slide thirteen. Non-performing assets. Asset quality was resilient. Non-performing assets declined 1% from the previous quarter to SGD 4.63 billion. New NPA formation at SGD 113 million for the quarter was below the recent quarterly average and was more than offset by repayments and write-offs. The NPL ratio was stable at 1.0%. For nine months 2025, new NPAs were SGD 449 million, significantly lower than the SGD 739 million from the prior period. Slide fourteen. Specific allowances. Third-quarter specific allowances amounted to SGD 170 million or 15 basis points of loans, stable from the previous quarter. For the nine months, specific allowances were SGD 430 million or 13 basis points of loans. Slide fifteen.
General allowances. As at end September, total allowance coverage stood at SGD 6.43 billion, with SGD 2.35 billion in specific allowance reserves and SGD 4.07 billion in general allowance reserves. The general allowance reserves comprise two components: baseline GP and overlay GP. Baseline GP refers to the GP set aside for base scenarios. In addition to the base scenarios, we incorporate stress scenarios for macro uncertainty and sector-specific headwinds. As at 30th September 2025, the total GP stack of SGD 4.1 billion comprised baseline GP of SGD 1.6 billion and overlay GP of SGD 2.5 billion. You may recall that we had increased GP overlay by SGD 200 million during the first quarter this year to incorporate tariff uncertainty. Slide sixteen. Capital. The reported CET1 ratio declined 0.1 percentage points from the previous quarter to 16.9%, driven by higher RWA and partially offset by profit accretion.
On a fully phased-in basis, the pro forma ratio was stable at 15.1%. The leverage ratio was 6.2%, more than twice the regulatory minimum of 3%. Slide 17. Dividend. The board declared a total dividend of $0.75 per share for the third quarter, comprising an ordinary dividend of $0.60 and a capital return dividend of $0.15. Based on yesterday's closing share price and assuming that total dividends are held at $0.75 per quarter, the annualized dividend yield is 5.6%. Slide 18. Summary. In summary, we delivered a record third quarter and nine-month pre-tax profit, with ROE above 17%. Total income was also at a new high as we sustained the strong momentum in wealth management and deposit growth, while mitigating external rate pressures through proactive balance sheet hedging.
As we enter the coming year, we'll continue to navigate the pressures of declining interest rates with nimble balance sheet management and our ability to capture structural opportunities across wealth management and institutional banking. So thank you for your attention. I'll now hand you to Su Shan .
Thanks, Sok Hui. So hello and good morning. As you have now seen our numbers and Sok Hui's comments, I will say that Q3 was a solid quarter. I think the team delivered a solid quarter in spite of very strong interest rate headwinds, especially in Singapore. We had a record top-line total income, record fee income, record treasury sales, and record PBT. Of course, tax, we had to pay the minimum tax, so that took off some of our net profit upside.
And I guess from my slide, both the fact that we had some nimble hedging and we were able to capture some opportunities when the market became volatile speaks to our resiliency. So it was hedging as well as some fixed-rate assets. And what was also pleasing was the fact that we saw a huge amount of deposits coming back to us. A large chunk of that was also cash. So, SGD 19 billion quarter-on-quarter growth, a lot of that surplus deposits was deployed to HQLA. And in terms of the structural growth, I think we had both structural and cyclical growth. And both the structural and cyclical growth came into gear in Q3 because the capital markets were very strong. So we saw strong momentum in wealth management fees, up 23% quarter-on-quarter, 31% year-on-year. These are very strong numbers.
While wealth management AUM remained very high, I think what was also pleasing is we are seeing the momentum also travel to the retail and retail wealth segment as well. We're trying to get more of that digital flows back. We had a whole refresh of our digital wealth strategy, which is now yielding fruit. That's also quite pleasing to see. The second market and cyclical opportunity is in capital markets in both ECM and DCM. For DCM, as rates come down, corporates are coming back to the market. We are winning market share. I told our DCM team that I think we have a right to win in the global market. To my surprise, actually, starting from a very low base, we're now number six in the Middle East, for example, in a MENA league table as of October 2025.
We did 32 DCM issuances, including 13 public bond deals, and we're number one in private placement league table for the key Middle East banks. So I think if we put our minds to it, we can execute, and I think both the capital markets, GCM, DCM, ECM pipeline looks good. The wealth pipeline looks good, and the FIG pipeline looks good, so these are both cyclical and structural opportunities to capture more loan fees, sorry, to capture more fees. The other momentum is in loan fees. You saw the loan fees up 20% year-on-year. That's also structural because, as I alluded to the last two quarters, I think that speaks to IBG's focus on winning market share, wallet share, and mind share, and having expertise in the industries that we cover and we target.
So both the loan-related fees and market trading as well was very strong, up 33% year-on-year. Very strong equity derivatives activities from clients, strong warehousing gains, good customer flows. Then I want to talk about the digital assets. I alluded to this also in the last quarter where we talked about the whole digital asset ecosystem and how we had a head start and how we want to continue to drive this head start. And I think the GENIUS Act changed everything, as I said before. And we are still waiting to see how regulations turn out because different regulators have different priorities and different timelines and different ordinances. But we've gone ahead. I mean, for example, this quarter, we issued some structured notes, or we tokenized structured notes on the Ethereum blockchain.
We've also announced that we are working with Franklin Templeton's BENJI Fund to list that on our digital exchange. We're also working with Ripple to use to get Ripple to use Ripple currency, digital currency, into in and out of the BENJI Money Market Fund as well. So we're pretty active in the tokenized ecosystem. We've been tokenizing deposits for a while now, and that's also seeing a lot of customer interest. And we've also started to look at the potential for Ripple and collateralized use cases as well for tokenized money market funds. Asset quality, as Sok Hui alluded to, pretty resilient. NPL ratio at 1%. And again, I think this speaks to the discipline of the team. Many years back, before COVID, we started to watch lists of industries or sectors that we felt were to come under scrutiny or under some pressure. That's worked out for us.
So we have been quite early in monitoring clients that might get into problems. And in fact, if you see, we had quite a fair amount of loan repayments in Q3 this year. And surprisingly, that came out of Hong Kong, primarily Hong Kong real estate. So I think we've been pretty disciplined in who we bank. We've onboarded and banked really the big blue-chip companies, our LTVs against real estate is pretty conservative. And that's why I think our NPA formation remains at a multi-year low. Next slide, please.
I've been traveling quite a fair bit in Q3 for the IMF and IIF board meetings in Washington, to the FII in Saudi Arabia, the Hong Kong Monetary Authority Financial Leaders Conference this week, and to visit my colleagues in our iBlock in China and visiting regulators and colleagues in our core markets, Taiwan, China. I'll be in India next week, etc. I will say that there's a lot of momentum in deal flow. There's a lot of momentum in the U.S., certainly in the whole tokenized stablecoin digital asset ecosystem. Outside the U.S., there's a lot of momentum in terms of potential trade flows, both because customers want to diversify their supply chain and also customers are looking for new markets to grow. This shift in trade and investment flows is something that our team is very focused on.
We're looking at growing the pipeline. State intra-regional trade between Asian countries, ASEAN countries, China to ASEAN countries, Singapore, China, etc. There's been a lot of two-way conversations. And the upscaling of the China agreements that most countries in ASEAN have is also being put in place. China GCC trade also is projected to double to $1.9 trillion by 2025. So there's some good structural shifts in global macro flows, and we want to play to that. I talked about the capital markets revival. You all know about the long pipeline of deals in Hong Kong and China. We're trying to play to our strengths there as well. Singapore also has a strong pipeline. And the MAS recent measures to rejuvenate the markets here, the equity market development program, seems to be working as well to create some liquidity and some momentum.
I was struck also by the concentration of the market cap of the U.S. U.S. still is about 70% of global market cap valuation at $72 trillion, Hong Kong at $7 trillion, China at $13 trillion, Singapore at $0.6 trillion. I think there could be next year, let's see, maybe valuations will change. But the good news is, as I said, the pipeline for ECM remains very strong in our part of the world in Asia and Japan. Another theme I want to talk about was the internationalization of the RMB and also the revitalization of the Chinese market. You see that from the authorities talking about high-quality growth. You see also a lot of investments in AI and chips. The enterprise use of AI is formidable. Their commitment to internationalizing the use of RMB for global trade, that figure has quadrupled over the last three years.
That's also admirable. The Southbound Bond Connect is also busy. There's also quite good structural growth in wealth management onshore in China. So wealth, global net wealth reached $512 trillion in 2024. I think that's grown a lot this year because of the market moves and also some wealth creation at the high end. So we remain committed to our strong focus on wealth management. The teams that Shee Tse Koon and his team hired over the last couple of years are starting to mature and yielding returns for us. Similarly, for IBG, the FIG focus, the institutional client focus is also yielding good returns. I've gone to see several global sovereign wealth funds with my team, pension funds with my team.
And I think DBS has a role to play with these global IIF and FIG clients across various products from custody to FICC flows to digital flows to ECM, DCM block placements to rebuilds, reverse rebuilds, etc. So I think playing to our strengths in wealth and FIG is structural focus. I've said this time and time again. I feel like I'm a grandmother nagging, but I do believe that these two growth pillars will continue to yield returns in the next few years. And in terms of other big theme, of course, everyone's talking about AI, generative AI, agentic AI. When will agents start using when will customers start using their own agents to deal with bank agents, etc. Suffice to say, we've been at the forefront of this. We have been rolling out both horizontal and vertical use cases. Some working out quite well, some less well.
But I think the momentum continues to be pretty strong. And we're working with various partners, both in the U.S. and elsewhere in Asia, to accelerate the tech adoption. What's pleasing to me is pretty much most of our staff have started to use it. They're saving time. They're taking a lot of productivity saves in the more mundane work, like writing credit memos, KYC, transaction screening. And our wealth managers are using it also to good stead in our Wealth Copilot. Our tech guys are using it for coding, for developing. So I think there's good momentum there, and that will continue to evolve. Last but not least, I talked about the growing interest in tokenization and stablecoins. As you know, we had a head start in 2021. We will continue to support regulators in their quest to stay ahead of the trends.
Right now, our key focus is on tokenizing deposits. For stablecoins, we will play where there is a play in different jurisdictions. But I think the regulations have to evolve there for us to have a clearer look. In the meantime, we believe that we can play a role like more of a picks and shovels kind of role in the whole asset ecosystem, whether you want to tokenize your assets, you want to tokenize your deposits, you want to trade on our digital exchange, you want to customize with us, you want to use it for payments, etc. We've learned how to do it end to end. So I think that's also a differentiator for us. So the right side is a short pitch of DBS as a differentiator bank.
Increasingly in a bifurcated, volatile world with geopolitics being volatile, I think our clients are looking for a safe, neutral bank for their long-term needs, and I think DBS plays to that. We've been recognized by Global Finance as Asia's safest bank now for 17 years running, and we're ranked number two globally amongst the 50 top safest commercial banks. So I think being safe, being dependable plays to our strength, and I think we have a right to win more market share, so I think being safe, being dependable plays to our strength. As a diversifier bank, we are now seeing global ultra-high net worth thinking they should have a bank in Europe or Switzerland, a bank in the U.S., and quite possibly a bank in Singapore, and that bank should really be us.
MNCs and advisors as well are looking for a diversifier bank for both their custody needs and their transaction needs, and I think that plays to our strength. As a disruptor bank, having an innovative head start, the fact that we can work with the likes of Franklin Templeton or Ant or JB or any of these big platform companies means we are a head start. We've been holding a lot of teach-ins for our clients, and as the world starts using more generative and agentic AI, we want to be at the forefront of that as well.
As I said before, I think the fact that we've organized our data, the fact that we've organized our tech, and the fact that we organized our people and processes quite a few years ago thanks to Piyush and the team's foresight, I think we've created a digital and data mold to be able to embrace these big AI moves that are upon us. So last but not least, the digital and data capabilities I've talked about. We were just recognized as the world's best AI bank at Global Finance Inaugural AI Awards this year. We've implemented over 1,500 AI models, 370 different use cases, and we hope to create an impact of $1 billion in AI this year. Okay, so next slide is the 2026 outlook. And we are looking for total income to hold steady to 2025 levels in spite of significant interest rates and FX headwinds.
We're looking at SORA to hold at current levels of one, well, to hold at the sort of the one-month and three-month MAS bill levels at about 1.25. That means there's a 60 basis point decline from this year's average. We're looking at three Fed rate cuts next year. And we are also looking, well, we're also using for our forecast a stronger SGD. So there you have significant interest rate headwinds and FX headwinds, which we want to make up for with volume growth and fee growth. So the commercial book non-interest income growth to be in the high single digits. And the reason for that is whilst we have great headwinds on the loan side, we also have tailwinds in terms of our cost of funds because of our floating liabilities as well, mostly in dollars.
We are looking to continue to have mid-teens growth in wealth management and also in FIG and to maintain our cost-to-income ratio at the low 40% range. And SP, we've assumed that it will normalize to 17-20 basis points. So far through cycle, this has worked. And asset quality remains resilient. We're comfortable, but we're not complacent. We're still watching constantly stress testing our different exposures for impact from trade, geopolitics, real estate, etc. And so if the macro conditions stay resilient, we could actually also have some room for GP writebacks. And if conditions soften, we have quite a lot of buffer, as you heard from Sok Hui earlier on, through our allowance reserve and our strong capital ratios. So we're looking for net profit to be slightly below 2025 levels or pretty flat. That's it from me. Thank you very much.
Okay, thank you, Tan Su Shan. We can now proceed to take questions from the media. So if you have a question, please tap on the raise hand icon in Webex, and then we will call on you. And when we do that, please accept the invitation to unmute yourself before proceeding with your name and the media you represent before asking your question.
Okay, we have a question from Nylun from BT.
Hi, this is Nylun from BT. Hi, just want to check, right? Because I understand you have a SGD 200 million GP already taken at the start of the year, but then are you foreseeing you to take more of that, especially as you mentioned you have some macroeconomic uncertainties or sector-specific headwinds?
Yeah, so let me clarify. I was saying that actually our stack of total GP, SGD 4.1 billion, comprised two components, right?
The baseline GP and the overlay GP. And the overlay GP is quite substantial at SGD 2.5 billion. If you look at our September 2020 last year, it would be about SGD 2.3 billion because we did top up SGD 200 million this year. In the second quarter, we said it's actually sufficient. So we are not topping up further. So just to convey that we are actually very adequate in terms of our general provision levels.
Okay, thank you.
I'd say we're more than adequate.
Yeah, more than adequate because we actually exceeded the MAS 1%.
Thank you.
Okay, question from Goola.
Hi, thanks, Tan Su Shan and Sok Hui. Congratulations on the very good results in the current environment. Can I ask at least three questions? Okay, so the first one would be on the capital return and the share buyback.
Because I think that Sok Hui has said that you are committed to paying SGD 3 in total dividends for this year and next year and 2027, is it? Could you just correct me on that if that's wrong? And then there was a share buyback program. And how much of that have you completed? Because it looked like a very low percentage based on, well, I must have missed out. It looked like 10%-12%. I'm not quite sure. So, I mean, what happens if you don't complete it within the timeframe? And what are the other avenues for management to return the earmarked amount to shareholders? That's one question. Should I carry on? Okay, so then you mentioned that your deposits, because you've got more deposits than a lot more excess deposits will be deployed into HQLA.
Are these local government bonds? Are these U.S. government bonds? Or are they corporate bonds? And what's the currency and duration like? I mean, you don't have to say the company or the country with the sovereign, but just an idea, whether they're sing dollars or non-sing dollars. And the last question is funding related. Again, you have no AT1s anymore based on your current, your third quarter. So what are your funding plans? AT1s, are they cheap now? Or is there any reason? Is there any regulatory reason why you don't have any?
Okay.
That's it. I think that's it. I mean, that's it. Two more general questions, but only when everyone else has asked this.
Yeah.
Thanks, Goola. I'll take the first one as Tan Su Shan, and then Sok Hui will take the HQLA AT1 question.
So on the dividends, we've always said that our stock, we had SGD eight billion of excess stock of capital to return. We remain committed to returning that. SGD three billion was allocated to share buybacks. We've done about 12% of that. And our philosophy is to buy it when the market is bad, right? So that's a philosophy. We don't want to chase it up. And the SGD five billion is to be returned to shareholders through capital, the capital return dividends. So as you can see, we've got many different things in our toolbox to pay our shareholders back. You've got your normal dividend, of course. You've got the step-up dividend. Then you've got the capital returns dividend, and then you have the stock buyback. And so based on that, we intend to keep to that SGD eight billion commitment.
How much of that SGD eight billion has been returned?
The share buyback, 12% would be SGD 371 million.
Yeah. And then the dividend return was SGD 850 million, which is SGD 0.15 per share per quarter, if you remember.
No, I mean, how much of the SGD 8 billion is just?
So in total, we've basically used 15% of the SGD 8 billion.
Oh, okay. So there's a lot more. 15%.
No, but the SGD 5 billion is committed, right? Because it's SGD 0.15 per quarter. So that's SGD 0.60 a year. So that's committed. So over three years, that will be all paid back.
Okay. And the three years is 2025, 2026, 2027, right?
Yes, correct.
We started in 2025 for the capital return dividend.
2025, 2026, 2027. So we will end by end 2027.
Correct.
Okay.
Okay, got it.
Maybe the only thing I would add is that we also communicated that we would be able to step up ordinary dividends, SGD 0.06, in the fourth quarter for 2025 year and then 2026 year.
Yeah. By SGD 0.06, is it on the?
By SGD 0.06 in the fourth quarter, which means a full year impact is SGD 0.24.
Okay. And the full year impact will be next year, right?
No, we'll step up end of this year, so you can get it approved at the AGM in March 2026, and then it will actually flow through, so a full year impact is SGD 0.24 for ordinary dividend. So what you see on the slide at SGD 0.60, we then step up to SGD 0.66 per quarter.
Okay.
And then you still have your SGD 0.15 on the capital return dividend, which we have committed up to FY 2027.
Okay.
Okay. It's the HQLA and the AT1, yeah.
Okay. Your next question was about the HQLA. You see on my slide, in the loan slide, you see that loan. Actually, the growth rate was slower than the deposit growth. For nine months, our HQLA, which you can also see in the Pillar Three disclosure, is actually up SGD 30 billion. These are all in high-quality liquid assets. They are in government securities. They are in U.S. government securities. These are the main items where we have seen the increase. Very, very safe assets.
Okay.
You had a question on the AT1. Our CET1 is already at such a high level. Transitional basis, we are at 16.9%. There's no point raising AT1. The CET1 currently doubles up. For AT1, the stack is already quite a lot.
So we don't intend to actually sort of pay up for AT1 until the need arises, right? Because you see on the slides as well.
Because it's not a regulatory thing with the stuff that's going on with Credit Suisse and UBS and what Basel wants and doesn't want, right?
It's just. Yeah, they need AT1s because they don't have enough CET1s, right?
So regulators set CET1 minimum, AT1, and Tier 1, and then total. So it's a stack. So if your CET1 is already well above the minimum, they can count towards Tier 1 capital.
Okay. All right. Okay. That's all I have on that. I'm just wondering, what's the difference between your structural tailwinds and your cyclical tailwinds? That's the other sort of general question. And the other one is that you said that bancassurance was one of the reasons why you have the fee income.
You've got a bancassurance agreement with Manulife. And I'm just wondering, that one is 15 years. How much longer does that have to run? And what is the state? I mean, is it performing to what Manulife wants?
Okay, so on your question around what are the difference between the structural and cyclical tailwinds. Cyclical tailwinds, to me, are what cyclical. So when markets are strong, stock markets are up, money supply is up, etc., that sort of cyclical. Structural is more long-term. So where you have demographics, demographic reasons, or structural reasons for the growth. For me, the cyclical tailwinds were just the markets were very strong, right? Q2, Q3, the markets were strong. After Liberation Day, the rally was a lot higher than most people expected. The structural tailwinds I talked about was the fact that there was structural wealth creation.
So the wealth management theme remained structural growth for Asia and, frankly, for the rest of the world, for the U.S. particularly. And then the structural growth in FIG, IIF assets under management, quite a lot of these funds, there are clients, they've seen trillions of dollars in asset growth. So you've got these two growth pillars that are structural. On Manulife, I think we signed in 2015. It was 15 plus 1, so 16 years in total. So this is because of 2033. 2033. And the partnership has been growing really well. It's been fantastic, actually. Shee Tse Koon is here. You want to say anything?
Yeah, I think it's gone very well. So I mean, earlier on, I mean, when we talk about wealth fees, right? The wealth fees growth has been a factor of both investments and insurance at the same time.
So there is a need for insurance, life estate planning, etc. And that is another structural theme, Goola, because you look at China, silver economy, Singapore, Hong Kong, all these people need to plan. And actually, that's our USP, right? We're good at onboarding these clients, discussing their long-term plans, putting it in estate planning, helping to plan for the next generation, for their own life, etc. And that creates a very sticky long-term relationship for your wealth clients. And Manulife has been a great partner in helping us to design suitable products for our customers, having a portfolio approach, and thinking very long-term. The long-term investors in Asia, good credit rating, etc. So they've been a very good partner.
Okay. Okay. Thanks. Thank you very much. Thanks. Thanks for all the time I've taken.
Thanks. Thanks, Goola. Next question from Bloomberg, Rthvika. Rthvika, you will need to unmute yourself.
Okay. Sorry. Just took me a second to figure that out. So I'm with Bloomberg. My name is Rthvika, and I had two questions for Su Shan. You've talked about wealth as a structural growth pillar with mid-teens growth targeted. Given recent high-profile wealth scandals in the region involving RMs and client fund misappropriations, what safeguards do you have in place? Are you seeing any reputational or compliance headwinds? And what do you think of extra regulatory scrutiny off the back of these scandals? How does this affect Singapore as a wealth hub?
Okay. I'll start, and then Shee Tse Koon's going to weigh in. He saw what
Okay.
Was said. So I think, by the way, we have wealth presence in all our core markets. So it's not just Singapore, right? But of course, Singapore is a major financial hub for us and for many of our peers.
And I will say that the bar is set very, very high right now in Singapore and in all the major jurisdictions. The bars are set very high for KYC and AML, number one. Number two, there's been very rigorous source of wealth declarations, and we all need to triangulate with proof of documents, etc. And there's no let-up in these high standards. It still takes a fair amount of time to onboard a new client because of these. And transaction surveillance remains a key part of triangulating for bad money, right?
Right.
Every bank sees what they see, right? So if you don't see the flows between the Middle East and the U.S., for example, and you will only see your flows from your bank to another party.
And so when you have big scandals like this, it behooves multiple countries and jurisdictions to work together to be able to triangulate the global flows. Because otherwise, most banks will see their own bilateral flows, and they don't see the other flows. And you need to put the pieces of the jigsaws together to see that, oh, there is a trend, or there's a scam, or there are all these patterns. So I will say that these kind of global transaction surveillances remain a challenge. In Singapore, we set up with the regulator something called COSMIC, which has been a good platform on which we can look at sort of the banks can work together to weed out the bad actors. And I think that's been working. It's pretty new, but that's been working.
But it takes multiple parties to work together to be able to catch these and catch them early.
Can I just add to that? Then I would say that Singapore is clearly a very, very strong wealth management hub, right? And it has been growing very, very steadily over the last couple of years. If we look at the standards that we have, right, I will say that it's something that is aligned with those that are global wealth hubs, right? If you look at whether or not there are issues that have arisen, I'll say there's nowhere where it will never be a zero kind of a situation. The important thing is that there is robustness from which the new typologies that we see will lead us to continue to sharpen our capabilities.
We can see in Singapore, the big difference in Singapore is that when things happen, I think the industry comes together very, very quickly between regulators, law enforcement, and the industry to just handle it. I think that in itself speaks volumes of the strength of Singapore as a continued wealth hub. I don't see any of these being a hindrance to Singapore becoming a wealth hub. In fact, this speaks to the very strength of Singapore being a wealth hub.
Are there any other broader risks that DBS is weighing out that could affect Singapore's reputation as a wealth hub globally?
Sorry, I don't quite get that question. Which angle?
Yeah, like any other I mean, any other threats, I suppose, aside from the scandals.
I'm not sure if you are specifically asking about DBS per se.
She's asking about Singapore.
I will say I beg to differ. I think your question, you're asking if there's any risk. I would say that Singapore's status as a clean hub has been reinforced by the swift action taken by the authorities, right? Number one. The rule of law here is strong, right? And we are open for Singapore as a hub is open for business. It's a diversifier hub, as I said to you earlier on. And it's a digital hub. And there's enough wealth practitioners here of high quality and standards. And I believe that the authorities are protecting the reputation and the standards here rigorously. The bar is high. They'll tell you the bar is high for KYC and source of wealth verification. So I don't know where you're going with this question, but I will say that the fact that and we're very open, right?
When there's scammers are caught, it's open. It's all declared. So I will say that it should reinforce the seriousness that Singapore takes in keeping the standards high.
I guess maybe if there are two so I say risk, right? When we talk about risk, I think the inherent risk is no different in the financial industry wherever you operate, right? The difference is we have robust standards, and we deal with it swiftly. If you're asking about whether the risk of Singapore being a wealth hub, I think actually what we've done as a nation will enhance that. And in my interactions with clients, I think there continues to be a very, very strong interest. And as you can see, the performance of the wealth management business, I think that speaks volumes as to the robustness of the continued growth.
And if you ask me whether there's a risk of us being a wealth hub, the answer is no.
Okay. Thank you. That was helpful. Thank you.
Thank you. We are now at 11:42 A.M. I think that might be all the time that we actually have because we have an analyst briefing at 11:45 A.M. So I think we will wrap things up here right now.
So thank you, everyone. And we'll dial out here. Thank you.
Thank you.
Thank you.