Good morning, everyone, and welcome to DBS's fourth quarter and full year 2024 financial results media briefing. This morning, we announced record earnings in 2024 of SGD 11.4 billion. ROE of 18%, it's one of the highest among developed market banks. To tell us more, we have our CEO, Piyush Gupta, Deputy CEO, Tan Su Shan, and CFO, Sok Hui Chng. Without further ado, Sok Hui, please.
Good morning, everyone, and a very happy Chinese New Year to all.... We delivered a record performance for full year 2024. Net profit rose 11% to a new high of SGD 11.4 billion, with return on equity at 18.0%, sustained at the previous year's record. Total income rose 10% to SGD 22.3 billion from broad-based growth. Commercial book net interest income grew 5%, led by a 4 basis points expansion in net interest margin to 2.80% and balance sheet growth. Net fee income crossed SGD 4 billion for the first time, led by wealth management, while treasury customer sales also reached a new high. Markets trading income rebounded 27% to SGD 922 million. Expenses were 10% higher, with Citi Taiwan accounting for 3 percentage points.
The cost-to-income ratio was unchanged at 40%. For the fourth quarter, net profit grew 10% from a year ago to SGD 2.62 billion. Total income rose 10% to SGD 5.51 billion from growth in both the commercial book and markets trading. Asset quality was sound. Non-performing assets rose 4% in constant currency terms from the previous quarter to SGD 5.04 billion, as new non-performing assets were partially offset by repayments and write-offs. The NPL ratio of 1.1% was little changed. Specific allowances were at 20 basis points of loans for the fourth quarter and 13 basis points for the full year. Capital was healthy. The transitional CET1 ratio was 17.0%, with a fully phased-in ratio at 15.1%.
The Board declared a final ordinary dividend of SGD 0.60 per share for the fourth quarter, an increase of 6 cents from the previous payout. This brings the ordinary dividend for the financial full year to SGD 2.22 per share or SGD 6.3 billion, an increase of 27% over the previous year. In addition, the Board committed to managing down the stock of excess capital over the next three years. To begin with, it plans to introduce a capital return dividend of 15 cents per share per quarter, to be paid out over financial year 2025. For the full year, net profit rose 11% to a new high. Commercial book total income grew 10% or SGD 1.92 billion to SGD 21.4 billion.
Net interest income rose 5% or SGD 757 million to SGD 15.0 billion from higher net interest margin and balance sheet growth. Net fee income rose 23% or SGD 784 million to a record SGD 4.17 billion, led by wealth management, which grew 45%. Commercial book other non-interest income was 21% or SGD 379 million higher, driven by record treasury customer sales and property disposal gains. Excluding the property disposal gains, commercial book other non-interest income was up 15%. Markets trading income rebounded 27% to SGD 922 million, as FX interest rate and equity derivative activities benefited from market volatility. Expenses were 10% or SGD 839 million higher at SGD 8.9 billion, with Citi Taiwan accounting for three percentage points of the increase.
The cost-to-income ratio was unchanged at 40%. Profit before allowances increased 11% to a record SGD 13.4 billion. Specific allowances were SGD 559 million or 13 basis points of loans, and general allowances of SGD 63 million were taken. There were one-time items amounting to SGD 119 million. They included SGD 100 million that was set aside as part of the bank's CSR commitment, announced last year to allocate up to SGD 1 billion over 10 years for vulnerable communities. For the fourth quarter, net profit rose 10% from a year ago to SGD 2.62 billion. Commercial book income increased 9% to SGD 5.35 billion.
Net interest income rose 5%, or SGD 194 million, to SGD 3.83 billion from a 2 basis point increase in net interest margin to 2.77% and from balance sheet growth. Net fee income grew 12% or SGD 101 million to SGD 968 million, led by wealth management. Commercial book other non-interest income grew 41% or SGD 158 million to SGD 548 million due to higher treasury customer sales and property disposal gains. Excluding the property disposal gains, commercial book other non-interest income was 19% higher. Markets trading income rose 40% or SGD 45 million from the previous year's low base to SGD 158 million. Expenses increased 9%, or SGD 190 million, to SGD 2.40 billion, while the cost income ratio remained stable.
Profit before allowances grew 11% to SGD 3.11 billion. Specific allowances were SGD 229 million, or 20 basis points of loans, while general allowances of SGD 20 million were written back. Compared to the previous quarter, fourth quarter net profit was 13% lower. Commercial book total income fell 1%. Net interest income rose 1%, or SGD 35 million, as balance sheet growth more than offset a 6 basis points decline in net interest margin due to low interest rates. Net fee income fell 13%, or SGD 141 million, from seasonally slower wealth management activity and a decline in loan-related fees. Commercial book other non-interest income was 6% or SGD 31 million higher from property disposal gains. Markets trading income fell 52%, or SGD 173 million, from the previous quarter's high base and seasonal factors.
Expenses rose 6% and profit before allowances was 11% lower. Total allowances increased by SGD 79 million due to a rise in specific allowances. Compared to the previous quarter, the group's net interest margin rose 4 basis points to 2.15%. Lower funding costs and accounting asymmetry for markets trading more than offset a 6 basis point decline in the commercial book due to low interest rates. Net interest income increased 4% to SGD 3.73 billion. Commercial book net interest income rose 1% to SGD 3.83 billion, as balance sheet growth more than offset the decline in net interest margin. For the full year, the group's net interest income rose 6% to SGD 14.4 billion from balance sheet growth.
Net interest margin fell by 2 basis points to 2.13%, as an increase in the commercial book was more than offset by a decline in markets trading. Commercial book net interest income rose 5% to SGD 15 billion from higher net interest margin and balance sheet growth. Net interest margin expanded 4 basis points to 2.80%, due mainly to the repricing of fixed-rate assets. During the quarter, gross loans rose SGD 3 billion, or 1%, in constant currency terms to SGD 437 billion, led by a SGD 4 billion increase in non-trade corporate loans. Trade loans declined SGD 1 billion, while consumer loans were little changed. For the full year, gross loans rose SGD 12 billion, or 3%, led by non-trade corporate loans and trade loans. Deposits.
During the quarter, total deposits were stable in constant currency terms at SGD 562 billion, as Singapore dollar CASA growth offset a decline in foreign currency deposits. For the full year, total deposits rose SGD 20 billion, or 4%, with the increase driven by fixed deposits in the first half of the year and by CASA inflows in the second half. Notably, Singapore dollar CASA inflow was SGD 5 billion for the full year, in contrast to the SGD 19 billion outflow in the previous year. Fee income. Compared to a year ago, fourth quarter gross fee income increased 16% to SGD 1.24 billion. The growth was led by wealth management fees, which rose 41% to SGD 520 million from broad-based growth in investment product and bancassurance. Cards, transaction service, and investment banking fees were also higher.
Compared to the previous quarter, gross fee income fell 6%. Wealth management fees declined 15% due to seasonal factors. Loan-related fees were also lower. The declines were partially offset by increases in cards, transaction service, and investment banking fees. For the full year, gross fee income rose 23% to a record SGD 5.09 billion, led by a 45% growth in wealth management fees. Excluding Citi Taiwan, gross fee income rose 17%, led by a 38% increase in wealth management fees. For the fourth quarter, commercial book non-interest income, which is boxed up in red, rose 21% from a year ago to SGD 1.52 billion, as fee and treasury customer sales benefited from strong wealth management momentum. It declined 7% from the previous quarter due to seasonal factors.
For the full year, commercial book non-interest income rose 22% to SGD 6.33 billion, led by a record fee income and treasury customer sales. It also included property disposal gains in the third and fourth quarter. Combining the commercial book and markets trading, total non-interest income for the fourth quarter grew 13% from a year ago and declined 18% from the previous quarter to SGD 1.78 billion. For the full year, it was 20% higher than a year ago at SGD 7.87 billion. Cost income ratio. For the full year, expenses rose 10% to SGD 8.9 billion, led by higher staff costs. Citi Taiwan accounted for 3 percentage points of the increase. The cost income ratio was unchanged at 40%.
For the fourth quarter, expenses of SGD 2.40 billion rose 6% from the previous quarter and 9% from a year ago. The expenses included a special one-time bonus of SGD 1,000 each, paid to all staff except senior managers, as an additional reward for their contribution to the record performance. A total of SGD 32 million was set aside for this. Consumer Banking. Full-year Consumer Banking and Wealth Management income rose 13% from a year ago to SGD 10.2 billion. The growth was led by double-digit increases in investment product sales and cards. Income from loans and deposits rose 3% to SGD 6.24 billion, as growth in loans and deposits was partially offset by a lower net interest margin.
Investment product income increased by 41% to SGD 3.03 billion from higher sales of investment and bancassurance products, while card income rose 22% to SGD 856 million on higher spending. Both investment products and card income were bolstered by the consolidation of Citi Taiwan. Singapore dollar savings deposits grew 4% or SGD 5 billion to SGD 133 billion, in contrast to a SGD 10 billion outflow in the previous period. Wealth management. The strong wealth management performance was a highlight this year. Full year wealth management segment income grew 18% to a record SGD 5.22 billion. The growth was led by a 45% increase in non-interest income from growth in a broad range of investment products and in bancassurance, as well as the consolidation of Citi Taiwan. Excluding Citi Taiwan, non-interest income grew 37%.
For the fourth quarter, wealth management income rose 10% on year as higher non-interest income more than offset a decline in net interest income. Assets under management grew 17% to a record SGD 426 billion, with strong net new money inflows of SGD 21 billion during the year. Strong investor sentiment continued to fuel the conversion of deposits to investments, and the proportion of assets under management in investments rose from 54% to a new high of 56%. Institutional banking. Full year institutional banking income declined 2% from a year ago to SGD 9.16 billion, as higher loan-related fees, cash management fees, and treasury customer income were offset by a decline in net interest income. Loans income was little changed at SGD 3.38 billion, as higher volumes and fees were offset by a lower net interest margin.
Trade income declined 4% to SGD 638 million due to lower average volumes and net interest margin. Cash management income fell 6% to SGD 4.08 billion, as higher fees and a 1% growth in deposits partially mitigated the impact of lower net interest margin. Treasury customer income rose 6% to SGD 907 million. Investment banking income was little changed. Full year treasury customer income rose 20% to a record SGD 2.32 billion from growth across most products. For the fourth quarter, treasury customer income was SGD 546 million, 8% lower than the previous quarter due to seasonality, slower activity, and 21% higher than a year ago from increased sales to wealth management customers.
Markets trading income was SGD 922 million for the full year, rebounding 27% as FX interest rate and equity derivative activities benefited from market volatility. Fourth quarter markets trading income fell 52% to SGD 158 million from the previous quarter's high base and from seasonal factors. It rose 40% from the low base a year ago. Hong Kong. Hong Kong's full year net profit was stable in constant currency terms at SGD 1.60 billion. Total income increased 6% to SGD 3.39 billion, driven by higher non-interest income. Net interest income was 4% lower at SGD 2.08 billion, as net interest margin declined 11 basis points to 1.80%. Loans were 6% lower in constant currency terms from sluggish loan demand.
The impact was partially offset by a 3% growth in deposits, which were deployed into non-loan interest-bearing assets. Net fee income grew 25% to SGD 831 million, led by wealth management. Other non-interest income rose 26% to SGD 481 million from an increase in treasury customer sales and trading gains. Expenses rose 10% to SGD 1.33 billion from higher staff costs and general expenses. Total allowances were 11% higher at SGD 152 million, as a decline in specific allowances was more than offset by an increase in general allowances. Non-performing assets. Asset quality was sound. Non-performing assets rose 4% in constant currency terms from the previous quarter to SGD 5.04 billion, as new non-performing assets were partially offset by repayments and write-offs. The NPL ratio was little changed at 1.1%.
For the fourth quarter, specific allowances were SGD 228 million or 20 basis points of loans. While new IBG specific provision charges of SGD 124 million were in line with recent quarters, write-backs of SGD 18 million were materially lower due to timing. For the full year, specific allowances were SGD 560 million, or 13 basis points of loans, similar to the 11 basis points in the previous year. Lower new charges and higher write-backs for IBG were offset by higher specific allowances for consumer banking cards and unsecured loans. Total allowance reserves stood at SGD 6.51 billion, with SGD 2.55 billion in specific allowance reserves and SGD 3.97 billion in general allowance reserves. General provision overlays were little changed at SGD 2.4 billion.
Allowance coverage stood at 229%, and at 226% after considering collateral. Capital ratios. The reported Common Equity Tier 1 ratio was 0.2 percentage points lower at 17.0% based on transitional arrangements, while the pro forma ratio on a fully phased-in basis was 0.1 percentage points lower at 15.1%. The declines were due to an increase in risk-weighted assets. Credit RWA rose mainly from currency effects, and operational RWA was also higher. The leverage ratio was at 6.7%, more than twice the regulatory minimum of 3%. Dividends. The board declared an ordinary dividend of SGD 0.60 for the fourth quarter, an increase of SGD 0.06 from the previous payout.
This brings the dividend for the full year to SGD 2.22 per share, or SGD 6.31 billion, an increase of 27% over the previous year. In addition, the board committed to managing down the stock of excess capital over the coming 3 years. To begin with, it plans to introduce a capital return dividend of SGD 0.15 per share per quarter, to be paid out over financial year 2025. In the subsequent 2 years, it expects to pay out a similar amount of capital through this or other mechanisms, barring unforeseen circumstances. Taking together the ordinary dividend of SGD 0.60 and the capital return dividend of SGD 0.15 per quarter, the annualized dividend yield is 6.7%, based on last Friday's closing share price. In summary, we achieved another record performance for the full year.
ROE was 18%, sustained at the previous year's record, and is one of the highest among developed market banks. Balance sheet management supported net interest income growth, and improving sentiment drove wealth management fees and treasury customer sales to new highs. While macroeconomic and geopolitical uncertainties persist, our franchise and digital transformations position us well to continue delivering healthy shareholder returns. Thank you for your attention, and, I'll now pass the mic to Piyush.
All right. Thank you, Sok Hui. So let me again wish you all a very happy New Year. Gong xi fa cai, xin nian kuai le, wan shu yi. I was just mentioning to, Goola here, this is my 61st and last quarterly briefing. So as you can imagine, I'm actually quite pleased that, I'm able to go out on a high note. It's a good thing to do. Our 2024 was actually a solid year, and frankly, we outperformed the guidance that we've been giving through the course of the, of the year. We had 10% growth in income. We'd sort of guided to high single digit. We actually hit double digit. We had 11% growth in NPAT, so, which is, very solid.
And that's despite a 100 basis point cut in the rates in the fourth quarter. What is more pleasing is our fee income. The non-interest income was very solid, 20% plus. Again, we'd guided to high teens, and so we outperformed, pretty much across the board in fees and treasury sales, in trading, across the board. And ROE of 18% is steady. I think if you look at compare most, global bank ROEs, even the ones which have recovered, have recovered to 13, 14% range. So at 18%, I think we are, we are ready to stand out. Outside of the financials, last year allowed us to continue to build on, much of our agenda.
So I'm actually quite pleased with the progress with our technology resiliency, the progress with the use of artificial intelligence and generative artificial intelligence across the company, our whole approach of managing through journeys, horizontal organization. Each of our strategic initiatives actually continue to see very good progress in the course of the year. And finally, as you can imagine, I'm very pleased also with the very successful transition. I've been handing over to Su Shan now for, you know, the better part of 5, 6 months. It's gone extremely well. She's pretty much on top of things. Many of the decisions we are taking now, Su Shan has an active role in making them happen. And, as you'll see from announcements data, our entire chain of internal succession, the consequential moves, are pretty much internally driven.
That speaks to the robustness of our bench and our entire talent management succession process. Fourth quarter, just a quick comment, it is solid. We are at 10% year-on-year growth in income for the fourth quarter. And again, the fee income was very strong. You know, I saw some of the analyst comments earlier, and there's some question marks on, you know, the quarter. It's a little bit soft. Actually, it's not. 16% gross fee income growth for the fourth quarter is very solid. It's 12% net income growth, and that was actually powered across many things. Wealth grew 41% in the quarter, and this quarter doesn't have Citi Taiwan, because that was already there in the previous year. So 40% growth is solid....
Trading was up 40%, year-on-year. Now, it's a small number and down quarter-on-quarter, but fourth quarter is always a soft number for trading. Credit cost, transaction banking, everything was up. Loan fee was somewhat down, but loan fee is very cyclical. It depends on a lot of idiosyncratic loans which come in and go out. And so, very pleased with the overall trajectory of the fourth quarter financial performance. Loan demand was healthy. We grew SGD 3 billion, mostly non-trade loans, which is good. Trade came off a bit cyclical. But non-trade growth, really the pipeline is strong, and that's despite some pay downs, continued pay downs in North Asia, in Hong Kong, China.
It is broad-based, it's real estate, it's metals and mining, it's in Southeast Asia, it's in India, it's in the Western Hemisphere, so fairly broad-based loan growth. Deposits, the good thing with deposits were two. One was that the CASA outflow turned around, and we saw an inflow of CASA about Sing Dollar CASA was up by about SGD 5 billion for the quarter. And so the outflow going out to treasury bills and going out for the last 2 years, that's now got stemmed, and in fact, we saw an inflow now for the quarter. So that's good news. Another good news is that our overall deposit costs came off.
So if you look at our performance summary, deposit costs for the quarter are down by 25 basis points, which means a large part of the market reduction in interest rates were able to flow back into our cost of deposits. So that's also good news. Group NIM, as you saw, surprisingly went up, even though commercial bank NIM came off 6 basis points. Group NIM went up, and this is the trading. You know, that's why we started splitting out commercial book NIM from trading NIM. 'Cause the trading book has benefited from both things. One, they fund in the market, and market rates come down, that's helpful. But also, they do a lot of swaps.
They swap from one currency to the other, and that creates accounting anomalies because they get the gains or losses below the line or below the line in the other non-interest income, and they get the drag on the interest income line, so it's a little noisy. And the uplift was really from that. In the third quarter, I'd actually already indicated that July, August were challenging, September was slightly better. So we anticipated as we went into this quarter that the trading would give us some benefit. But truth be told, that by the end of the early this year, the trading benefit will disappear, so I wouldn't you know, assume that the NIM upside is going to be long lasting.
I think our guidance that NIM will track around last year's, there will maybe a couple of basis points lower, is the right way to think about our NIM. Moving on, slide. If you move on to wealth management, I just want to circle back to. I mean, it's just been very, very strong. As you know, last. Now, this is our third year running when our new net new money is well over $20 billion. It was $23-$24 billion a couple of years. Last year was still $21 billion. And that's been very strong. People are continuing to put the money to work at the same time, so the deposit investment ratio has been going up as well. And therefore, overall, the 40%+ increase in wealth management fee income is solid.
If I exclude the Citi Taiwan impact, it's still 37%-38%, which is very, very robust. And the good news, the momentum continues. We had a very strong start to this year, so it's not slowing down. Expenses, by and large, well managed. The, you know, 10% growth for the year, minus the 3% from Citi Taiwan, so it's 7%. The fourth quarter growth is, Sok Hui pointed out, we took the opportunity to reward almost all of our staff, 90%-95% of our staff with a special bonus for recognizing the performance. We obviously already obviously took the, you know, previously declared community contribution. I think Su Shan may talk a bit more about that as well. Asset quality.
So, you know, if you look at our NPL rate, looks like it popped up, but half the pop-up is translation, is exchange rate, and it's actually a give back. If you look at the third quarter, we pointed out that we benefited from exchange rate. In the fourth quarter, we gave up on the exchange rate. So if you take out the exchange rate impact, it's not that materially different from most quarters, which is why our NPL ratio is pretty flattish. Asset quality continues to be quite sound. We are seeing some stress in the property in China, Hong Kong as well, but it's secured to a large extent. And the good news is that where we've had and been able to put two transactions, we've recovered our loan value.
So I'm relatively comfortable with where we are on that front as well. So, you know, as we wind up the year, I think we're in good shape. And, you know, we've asked Su Shan, since it's going to be her baby, to tell you what she thinks 2025 is going to look like.
So since it's Piyush's just last quarterly results, I have to say thank you so much. You are really going out with a big bang. It's a fabulous fourth quarter, and you're handing the bank over to me and our team in robust shape. So thank you for your incredible leadership for the last 15 years. You will continue to be an inspiration to all of us in DBS. So 2025, our outlook, I will talk about it through interest rates, through fees, and through expenses, and therefore, through our profit line. When we last met, our previous guidance was actually for 4 U.S. rate cuts in 2025. We are now assuming 2 rate cuts, and probably likely in the second half as opposed to the first half.
So with that, NII will probably be slightly above the 2024 levels. And having said that, though, we still expect group NIM to fall slightly with the decline in the commercial book NIM because of the rate cuts. However, with the lower funding costs, our treasury team will have some tailwinds there. And group NIM should reach about 2.10 or plus or minus a few basis points, you know, depending on the asymmetry impact from the market's trading book. And we still assume loan growth of around mid- to single-digit growth. And as Piyush had said, the loan growth is primarily in the corporate non-trading book, which is a good book, and the pipeline still looks pretty robust.
And, in terms of the fee income, the commercial book non-interest income growth will probably still be in the high single digits. Again, you saw the numbers from wealth management. The good news is the wealth management AUM continues to grow quite nicely, and that gives us the fodder to continue to grow our wealth management fees. IBG also has been growing the fees quite nicely, and so, I think, we should be expecting a continued high single-digit growth there. And, in terms of our cost-income ratio, we are looking for it to be in the sort of the low 40s, 40, 41, 40, you know, ish range. So we maintain our guidance there. And, for SPs, we are assuming that SPs will probably normalize back up to 17-20 basis points.
On SPs, we are comfortable, but we are not complacent, right? So we're mindful of all the geopolitical risks that stands in front of us. We continue to stress-test our portfolio very, very regularly. Whatever new news comes out from the Trump administration, we're on top... we try to stay on top of it. But so it depends on what happens for the rest of the year. But there could be some potential for GP write-backs as well. If the external conditions remain stable, we might be able to reduce it. If it deteriorates sharply, and SPs, you know, exceed the normalized range of 17-20 basis points, then there could be a shift from the model GPs to SPs.
So therefore, pre-tax profits will be pretty flat to last year, and net profit will be below because of the new BEPS minimum tax rate of 15%. That takes out about SGD 400 million from our net profit line. Slide. So distributing our earnings, sharing our earnings with all our major stakeholders, from our shareholders, to our community, to our employees. Both Sok Hui and Piyush mentioned that the dividends will go up by SGD 0.06 to SGD 0.60. Based on our fully phased-in CET1 of 15.1%, we'll probably have about SGD 8 billion in excess capital. And if you use the midpoint of 12.5%-13.5% target, with this SGD 8 billion, we already committed to SGD 3 billion in share buybacks, and that leaves another SGD 5 billion available to distribute.
If you assume 15 cents quarterly capital return for 3 years, this will amount to roughly about SGD 5 billion, right? 1.7 per year. But we've decided to give ourselves some flexibility, so this year we'll do it. Next two years, we'll give ourselves some flexibility, because if you think about it, we've come up with multiple ways to return capital to our shareholders, right? You've got your normal dividend, you've got special dividends, capital return dividends, share buybacks, and bonus issues. So we'll give ourselves some flexibility for the next two years and see what's optimal depending on the market situation. So for the community, another SGD 100 million, part of our 10-year commitment that Piyush spearheaded, of SGD 1 billion to, to support all the vulnerable segments in our societies.
For employees, we will be giving a one-time bonus of SGD 1,000, or the PPP equivalent in the other countries, to all our staff except the senior managers. This is to recognize everyone's contribution to our record profits. That's it from me.
Thank you, Su Shan. We can now go to media Q&A. So before you ask your question, I request that you say your name as well as the media publication you represent. Do speak into the mics in front of you because we have a live stream going on, just so that the people watching virtually can hear your question. Or alternatively, we do have roving mics around, so you can also put your hand up if you want to have it passed to you. Felicia first, and then Chanya. Felicia?
Hi, good morning and congratulations. I'm Felicia from The Edge Singapore. I have a total of four questions. The first two is for Su Shan. The first one is, what are the likely changes that you will be making to your management team, and what sort of CEO are you likely to be?
A good one. A better one.
The second one is, what are your immediate plans and goals for the bank, if any? The third one is for the, the, all three, I suppose: What is the bank's Malaysian angle, and can you comment on the reported purchase of the Alliance stake? The last one is, we want to know your thoughts on bank deregulation. How will deregulation affect the Singapore banks and their ratings? And do you have any thoughts on, Trump's tariffs? Yeah. Thank you.
So on your first question on what are the changes that we are making, we have announced already that my last job as IBG head will be taken over by Han Kwee Juan, who used to be the Singapore country head, and the Singapore country head will be taken over by Lim Him Chuan. Tse Koon remains our consumer and wealth head. We will be announcing a few more couple more internal shifts or moves this week. So we have been grooming, as Piyush said, right? We've been grooming our internal slate of succession quite thoughtfully over the last 10-15 years. So all these, when we make the announcements, shouldn't really be any surprise to anyone internally.
We should keep the stability of the management and the way we manage and our operating process. So what kind of CEO will I be? I'll give it my best shot. You know, I always say Piyush is a hard act to follow, and we wear different shoes. We have different styles. But whatever has been set in terms of our culture, the culture of the bank, the way we do things, the embracement of digital transformation, the purpose, and the focus on returns, right? Whether it's high ROE businesses, whether it's, you know, releasing capacity from the use of generative AI.
I want to be a CEO that is conscious of the macro movement, so risk aware, and also conscious of what are the big trends in the market, whether it's technology or geopolitics, and bringing it to bear to how DBS can optimize or be ahead of the curve, and serve our clients better and continue to grow. So focus on high ROE business, focus on the connectivity, focus on the cross-buy, cross-sell, focus on digital transformation and optimization there. And also, you know, and also be humble and continue to be humble and hungry. What was your second question? What was the plans and goals?
Immediate plans and goals, if any.
Oh, okay. So, you know, we, we will be having our various, you know, leadership off-sites in the next few weeks. And, I don't want to share too much yet, but, you know, the team and I have been working around some of the key things that we can do in the short term and the medium term. And, the first is around obviously, you know, transformative technology. This Gen AI changes can be profound, and I'm glad to say that DBS has created a moat, both around the way we manage our data and our digital assets. And, we've already come up with our various AI machine learning models.
So continue to harness what new technology there is there, and as the cost comes down, it's useful to create better customer experiences and to also release some capacity from the mundane jobs that we have to do today, to do more customer-facing roles, to have more customer-facing time, and to deepen the relationships, and to get more customers, right? So when I talked about some of the high ROE businesses, obviously wealth management, as you can see, stands out. And the team, you know, led by Zekun and the team, have done a great job to both increase the net new money, which is really fodder for growth in wealth fees. Also increase the number of RMs, which is also fodder for increasing customer touch points. And the wealth continuum, we will continue to sharpen that.
So not just the high end, but also the middle priority banking. So it's private banking, private client priority banking, also down to digital wealth, right? So the whole continuum is where we want to serve better and grow more. And then in the other higher ROE businesses like, you know, financial institutions group, other treasury cross, treasury sales, both in both IBG and CBG, we want to focus on that as well. And also, of course, GTS, you know, payments, GTS are also high ROE businesses. Malaysia, sorry, cannot comment. And, your last question was around bank deregulation and Trump's tariffs. When... You mean deregulation?
You might want to touch on the Special Economic Zone. There's something about the-
Oh, okay. On the Johor-Singapore SEZ, obviously, we do believe there are opportunities, especially for Singapore and Singaporeans, Singapore SMEs particularly, but also, you know, it's a mix of large corporates and SMEs to benefit from a lower cost. We believe that with our digital capabilities and our, you know, big push into technology, sustainability, you know, renewable assets, and the ability to connect both countries, there will be... If the SEZ can be like the GBA is to Hong Kong, I think there's quite a lot of potential upside for Singapore and DBS, of course. Trump's tariffs. So there's-
Deregulation.
Oh, what do you mean by deregulation? Sorry.
I think there's,
What's the bank deregulation?
Yeah, I guess there is a view in the U.S. that the Trump administration is going to do active deregulation of the banking system.
Of the banking system.
Right, of the banking system. But yes, first of all, MAS has always been a very pragmatic regulator. So if you really look at the way a lot of the Western central banks and agencies apply the regulatory prism, MAS hasn't. In fact, most of the Asian regulators haven't been like that. If you look at the heart of the regulation in the last decade, which is dialing up capital, dialing up liquidity, actually, I think they were sensible. And if it's applied sensibly, I'm not overly concerned. As you can see, we already have a lot of capital. If it turns out, on the back of deregulation, capital requirements start heading down south, I think it's an open question whether banks like us in Asia will follow that, right?
And so I do think that a certain level of capital is not a bad thing to have. Outside of that, a large part of the regulation is, tends to be around disclosure and reporting requirements, and if that obviously starts getting cleaned up, it will be helpful. Some of that has been around, you know, increasing reporting for new stuff, sustainability stuff, et cetera, and some of that can be onerous. So if that actually starts getting simplified, that would be helpful. But on the whole, if you ask me, would this deregulation make a dramatic difference to a bank like us? I doubt it.
So on the Trump tariff question, I think, you know, certainly from what we see from China, they're well prepared. They're better prepared this time, Trump 2.0. And like this morning's metals announcement, you know, frankly, the team tells me that the metals that they use there is fungible anyway, and it's exchange-traded, so it shouldn't be too much. I think what we will be looking for is better intra-regional trade with the RCEP. And we'll be focusing more on what are the trade opportunities between ASEAN and North Asia, and certainly Europe as well. Some of the Western MNCs from Europe and the Asian MNCs are looking to do more within Asia as a result of this.
I think we just focus on where we see some growth opportunities. Chanya, you had a question?
Oh, yes. Actually, thanks to Teresa for asking questions on tariff. But just to follow up a little bit, do you see more impacts on growth, economic growth, in the region because of Trump's tariff, especially on North Asia? I just want to say this because this is Piyush's last quarter, so thank you so much. I mean, your candid style of answering makes this Q&A very fun to cover and thank you so much for that. Sorry, second question: Could you talk about your exposure to New World Development, because DBS is listed as a principal banker, and have you started setting up provision for New World?
Okay. So I'll take the tariff questions, and we can take the New World question together. On the tariff question, yes, I mean, there will be policy swings, right? So we are expecting a lot more volatility, both in markets and in rates and in FX, as a result of, you know, announcements from the Trump administration, and they're now daily. However, I think it's important to look at both the short term and the longer term, right? This is a four-year administration, so I think we can't manage. I know we're already... I can see some people rolling their eyes, but, you know, we can't manage our business day by day. We have to take a view, and then be guided by longer term trends.
And as I said earlier on, we still believe that, you know, whilst there will be reactions around some of the tariffs, at least for our markets in Asia, especially in China and Southeast Asia, the countries here are looking to be more resilient internally, and to look at more intra-regional trade. Having said that, though, we will stress test the portfolio. There will be inflation, there will be longer routes to be taken, et cetera. There will be inflation, which may keep rates higher for longer, so we have to prepare for that.
If rates remain higher for longer, then, you know, there might be some stresses in the SME book or in the consumer book that you have to be ahead of and be risk aware. In terms of the large corporates, we continue to stress test based on real estate, based on some of the dislocation that we might be seeing in things like autos, or potentially metals and mining, et cetera. And as long as we stress test and we make sure, okay, on the margin, do we have enough buffer, will these guys survive, and do we have enough collateral to repay them? Then these stress tests will instruct us on how we manage our total exposures.
Thank you, Su Shan.
It's actually interesting. If you really look at Trump one, it didn't impact global trade materially, right? And so we, nobody knows what they're going to do this time. But what's also interesting is the total amount of global trade ex the US continues to grow, and therefore, while there might be tariffs in the US per se, I do see that there is enough tailwind around connectivity and interactivity around the other countries in the world, so that gives us an opportunity. In Trump one, we also found, we don't know what it, how it will play out this time, that the shift from China to China plus one was quite helpful to us, and so that is another, you know, upside. So it depends on how exactly they levy tariffs, but, it could actually have some interesting possibilities as well.
On New World, we can't talk about it, obviously. As you know, we're listed as a banker, and we have exposure, but I'll just make two, three comments. One, a large part of our exposure tends to be secured. And without getting into details, overall, our loan-to-values of our commercial book in Hong Kong are about 50%, and so far, the market clearing prices for most assets has been north of that. So the couple of ones that we had to actually, we were concerned about, we've been able to clear at well above that and recovered our loans, not from New World, in general. So I think, the security cover is actually not bad. They're looking at, in discussions, as you know, right now, on commercial refinancing, for stretching out some of the payments.
There was a lot of support from the family. The Chow Tai Fook has a lot of resources. They've been helping New World. They've bought a lot of their assets in the last year or two at market prices, high prices. The company has a lot of land bank in the northern part of Hong Kong. They've got properties in China, where there's a lot of interest in those properties. So they have an active plan to actually monetize some of their assets, as well, as part of their restructures. I think if there's a refinance, which there will be, it will be on commercial terms. For us, it's a current exposure. It's not, you know, special mention exposure right now.
I see.
They're paying.
They're still there.
They're still current.
Special mention. Yeah. Thank you.
They're still current. They're still paying.
Thank you.
They have a lot of land bank as well.
Yeah. Thank you. CNA, Alexandra?
Hi. My first question is to Mr. Piyush. Looking back at the bank's growth, over the past, well, more than a decade, what are you most proud of, in terms of what you're leaving behind? And my second question, to Ms. Su Shan: Looking ahead to 2025, what are you most excited about regarding the bank's prospects in the face of, of course, growing global uncertainties, and how the bank plans on staying ahead of that? Thank you.
Well, I'm obviously very pleased with the financial performance of the bank. You know, in this period, we've more than doubled our ROE from 8%-9% to 18%. You know, we've quadrupled or quintupled our net earnings over this period of time. The market cap's huge, and so. And obviously, financials are good. I'm actually quite even more pleased with the customer franchise. We used to have 5.1 million customers. We today have 18 million. And more important, the customer feedback we get from all of the surveys and so on have seen our customer service evaluation go from middling to the top of the pack in every market that we're in. But if I had to choose one thing I'm most pleased about, it is the culture and the employee base.
You know, we've grown triple our size of 40,000 odd people, but we've been able to create a culture which is innovative, a little bit risk-taking, a little bit forward-looking, while retaining what's special about DBS, a sense of purpose and people working together. We're not a political company. We work together, but we've been able to create a nimble, agile culture. So that translates into a lot of stuff, whether it's the digital agenda, whether it's use of AI, we use of GenAI, working differently. I think that nimbleness and agility is going to be critical to us as we go forward. I'm of the firm belief that competitive advantage in the future will come as much from what you do, not only what you do, but how you do it.
Because what you do, the change is so incredible, you just can't predict what's going to come down the pike. So you have to build the core in the company to respond, and I think we've been able to do that, and so that's actually quite pleasing.
So it's a good segue to my answers. What am I excited about? I talked about remaining hungry and humble, and I think we need to add agile to it. So let's deal with the humble first. You know, we need to stay ahead of the risks that the geopolitics and the markets will throw at us, and also the technology risks that will be there for everybody. So staying humble and being resilient is key for us to stay ahead and look after our customers.
And staying hungry because, you know, there's still a lot of growth, there's still a lot of white space for us, whether it's in wealth management, it's in GTS, it's in corporate banking, Western MNCs, Asian MNCs. I mean, we still see a lot of growth opportunities, connectivity flows that we can harness. And the hunger for learning, Piyush said rightly that our culture today is one of being innovative, curious, open to experimentations.
And because of the way we've organized ourselves, both in terms of being horizontal, but also because we have machine learning, AI, and the culture of the bank is such that we're willing to work not in silos, but as one bank, and be able to move fast, experiment, fail, fail fast, and tweak around the edges. That gives us, I hope, an advantage to harness whatever new generative AI technology there is. I'm excited. I think the changes will be profound. I think if we get this right, there will be capacity release, as I said, for more customer-facing good outcomes. Obviously, as I said, we have to be risk-aware. We have to make sure that we are responsible in the use of such technology and data.
But if we get this right, there is some exciting upside to be had here.
Yeah, I'll just add one thing. Su Shan referred to it as humble humility. I talked about purpose. As I reflect, that's something which is really different about DBS. I think it comes back from its root as the Development Bank of Singapore and owning POSB and all that stuff. But to me, that's been special and continues to be, that our outlook on doing real things for people. You know, when we committed SGD 1 billion to give back to community, there was a broad, unanimous acquiescence from the board that it is the right thing for us to do. I think before purpose became a buzzword in the West, it was there in DBS. And after DEI is out of favor in the West, it is still there in DBS.
And so that sense of genuinely believing that we need to do real things for people, I think that I'm very proud of that.
I think we have time for maybe one last question. Gula? Okay.
Yeah.
Can you speak into the mic? Yeah.
Sorry, can I ask a very mundane somewhere. This is more some mundane questions. So can you explain the impact of this, is it Shenzhen Rural Commercial Bank on the capital? Do you deduct—Because you have, do you have less than 20% still? And will you deduct, do you deduct it-
Nineteen percent.
19%. Do you deduct it from the, your CET1?
We have capacity under the Basel rules to accommodate it based on the risk-weighted assets.
Okay. Oh, okay, okay. And then, okay, so, so Su Shan mentioned that you see two, two interest rate, I mean, two, two falls-
Yeah.
in interest rates. So what, how would you manage your securities book based on that? I mean, will you extend duration, shorten it, or whatever?
Okay, the risk-
Mm-hmm.
The premium that you will get from extending, you know, tenure now is quite flat. You know, it's obviously steeper in the last couple of years, last year, certainly. It's now quite flat. So, it depends on where the yield curve goes, but right now, you know, there isn't a lot of reason to extend it yet.
Okay, and then the other question is on the IPO pipeline. You haven't had many IPOs in the last year or two.
Not us-
Do you have-
... The region hasn't had many IPOs in the last year or two.
Yeah, so, I mean, what's your pipeline like for this year?
The pipeline is good.
It's good.
Pipeline is very solid.
Okay.
But the pipeline has been very solid for a year.
I think-
The question is, the market's not been ready to be able to take IPOs to market, right? And so we have a solid pipeline. As you know, typically, most years, we've done a lot of REIT and REIT-related IPOs. We obviously lead that in Singapore. But we've also done a lot of stuff actively in recent times in Hong Kong, China, et cetera. The pipeline's been there, we have mandates on hand. So if the sentiment turns around and we can take things to market, we're actually quite constructive. It's actually a very funny anecdote. Every year, we budget for our ECM, you know, annual budget, and we do it based on the mandated pipeline. And based on the mandated pipeline, our budgets have been aggressive.
The last two years, the actual realization has been a pittance, and that's because the markets have just not been supportive. The market's turned a little bit positive, I think there's upside there.
Sorry, just for clarification, Avi, you mentioned that net new money for the past three years exceeded SGD 20 billion?
Yes.
I think, right, that we had SGD 24 and 24 billion in 2022 and 2023. Last year, we had SGD 21-22 billion.
Any more colors on that, like origin?
Oh, so that's very broad-based. So we still... It's not changed very much. We get about 40% from North Asia, we get 40% from Southeast Asia, and the balance we get now increasingly from India, Middle East, Europe, et cetera. It's quite diversified.
I see. Okay, I'm afraid that's all the time we have. I mean, I know Jovi has a question. We have an analyst briefing, I'm afraid.
Sorry, just very one follow-up.
One, one question, Jovi.
Right. So thanks. Su Shan, you mentioned earlier the various ways DBS has returned earnings to shareholders. What other sorts of mechanisms could DBS explore? And conversely, what is not on the table for DBS? Like, would you consider a share split?
Oh, I thought that five ways was quite a lot already, you know, I think more than most, in terms of, returning capital. Share split?
Doesn't return capital.
Oh.
The share split doesn't return capital.
I know.
So the question-
Yeah
... in the old days used to be at $45, are we too expensive for the common man? Should we split?
For the retail, yeah, yeah, yeah.
What happens now, because you can buy 100 shares.
Yeah, yeah.
So when you couldn't buy 100 shares, it mattered. Today, you can buy 100 shares, so it's, you know, less. It, it could be an optical thing you would look at doing at some stage-
Yeah
... but it doesn't really result in returning capital.
The Singaporean retail I know looks at the share price, right? So...
Okay, thank you for all your questions. I'm afraid that's all the time we have, so we'll draw this time to a close.
All right.
Thank you.
Thank you.
All right, everybody, thank you. Just one big thank you to all of you in the media. You've been great supporters, so thank you all for your support. Please continue to give that to Su Shan.
Thank you.