Good morning, everyone. Welcome to the first results media briefing of this financial year. Today we have with us our Deputy Chairman and Group CEO, Mr. Wee Ee Cheong, and our Group CFO, Mr. Leong Yung Chee. As usual, Mr. Wee will begin by giving a broad overview of how our franchise has performed and the operating landscape that we are all in. Mr. Leong will then go into more details on the financials and business performance from this quarter. After both presentations, we will be taking questions from the media. I would now like to invite our CEO to get us started. Mr. Wee, please.
Good morning. Thank you for joining us today. Happy to see all the usual faces. as all of you know, I don't have to say it, we are operating in a period of heightened global uncertainty. Energy prices are volatile, supply chains remain under pressure. Inflation risk have resurfaced. These are real challenges. We are watching development closely. In time like this, customer looks for stability. At UOB, we continue to work alongside our customers as they manage higher costs and volatility, as they seize opportunities across the region. That is our priority, to be right by our customers. We enter this period of uncertainty from a position of strength. Our balance sheet remains strong. Our capital and liquidity position are robust. Our reserve buffers give us the capacity to support customer as they navigate an uncertain environment.
As you know, our CET1 ratio first quarter is 15.3%. NPA coverage, 100%. GP performance versus performing loans is at 1%. This is consistent with how we have operated over nine years, and how we will continue through uncertain times. Now, moving to our results. UOB delivered a resilient performance in the 1st quarter. Net profit was SGD 1.4 billion, moderating 4% year-on-year, and up 2% quarter-on-quarter, driven by our core franchise. Compared with the fourth quarter, net interest margin held up at 1.82%. Wealth and loan-related fees normalized from fourth quarter seasonal lending. Trading and investment income rebounded. Expenses were well controlled. Asset quality was resilient with NPL ratio stable at 1.5%, and total credit cost within expectations. Our balance sheets remain strong with high CET1 ratio of 15.3% and robust liquidity ratio.
This outcome reflects the quality of our earnings, underpinned by our diversified business model and our regional franchise. Now let me go through the business aspect of the bank. In retail banking, we saw steady growth in CASA, up 10% year-on-year, on wealth up 6% year-on-year, and card billings up 7%. In wealth, we are making progress, supported by growth in AUM and higher conversion of customer assets into investment. In wholesale banking, momentum was positive with healthy loan growth. We continue to expand our RWA light revenue stream through regional connectivity flow, with double-digit growth in CASA and trade loans. Our trade loans first quarter of this year up 19% year-on-year. CASA up 10% year-on-year. Global markets delivered record high income in a more volatile environment. We have never been more confident.
Our foundation are in place across ASEAN, and we are now focused on harnessing this potential. As a long-term operator, what drive us is achieving steady, sustainable returns over the long haul. We are executing according to our plans and not chasing quick short-term result, especially given the volatile market we are in. Now, let me further elaborate. Today, we serve 8.5 million customer across our ASEAN footprint, and we continue to grow organically. This scale give us a stronger base to deepen relationship, build ecosystem partnerships, and deliver tangible value to customers. Over the past three years, our focus has been on integrating the Citi portfolio and bringing everything into a single unified platform. That work is largely completed. It position us as one of the most connected banking franchises in ASEAN, with strong capabilities across retail, SME, and wholesale banking.
We are moving into the next phase now, unlocking the value of our enlarged customer base to reshape the group towards a more diversified fee-driven mix anchor on connectivity, trade and cash, lifestyle solutions like credit cards and wealth. In retail, we see significant opportunities, including in wealth, underpinned by a large and increasingly affluent customer base that is under-penetrated. This give us a long runway for sustainable organic growth. Our immediate focus is to grow AUM and improve invested AUM penetration. Execution over the next few quarters will be focused on these key initiatives. One bank approach, tapping our strength in retail, SME, and wholesale. Strengthening advisory with more personalized solutions. Continuing to invest in talent, including in private banking and advancing digital and cross-border wealth capabilities, particularly within ASEAN and with North Asia.
Over time, our ambition is clear to double wealth income by 2030 through disciplined organic execution in platform, people, and solution. Beyond retail, our strong regional franchise allow us to play a meaningful role in supporting foreign direct investment and cross-border growth. One example, Johor Singapore Special Economic Zone. Through our green lane arrangement with Invest Johor, we have helped facilitate more than SGD 5.8 billion in FDI into the zone. This reflect our role as a regional connector across ASEAN and our commitment to supporting long-term growth. Our integrated platforms for payment, trade, and cash, and deep sector expertise are powering trade and transaction banking growth. We are deepening coverage in high-growth sectors such as technology, sustainable energy, EVs, consumer goods, and infrastructure. We are also penetrating our customer supply chain ecosystems to support their regional growth.
Across retail and wholesale, we are reshaping the group towards capital like higher ROE growth, supported by a more disciplined approach to balance sheet management. We are confident of achieving sustainable growth with stability in the coming years. Let me close with a few thoughts on the road ahead. Macro environment is uncertain. We stay vigilant. UOB has weathered many cycles before. We'll continue to work closely with our customers, partners, and stakeholders to capture opportunities for long-term growth and manage risk with discipline. We are also investing in our people, building AI-ready skills and embedding AI across the bank to work smarter and more efficiently. As you know, we recently moved our tech and innovation teams to the Punggol Digital District, as you can see from screen time today, in the heart of Singapore innovation ecosystem.
To guide you for this year, we expect low single-digit loan growth, full year NIM of 1.75%-1.8%, high single-digit fee growth, low single-digit operating cost growth, total credit cost of 25 basis points- 30 basis points. Through good times and difficult ones, we will continue to be the steady hand our customer can count on. Thank you. I invite Tiong Ghee to share more in terms of financial details. Thank you.
Thank you, Ee Cheong, and good morning, everyone. Before I go through the financial results, let me start with a few key messages that you should take away. Our first quarter performance reflected the resilience of our diversified franchise. It has been a steady performance that we delivered. I'll go through the financial details of each of those items in a short while. I wanted to highlight that in terms of the execution of our strategic priorities, all of our businesses, whether it's retail, wholesale, and markets, have continued to show and evidence steady growth. In retail, both the CASA and wealth products, as well as credit cards, demonstrated steady growth. While in wholesale, we saw double-digit growth momentum in trade, as well as CASA. Likewise, for global markets.
The third message to leave with you is a stable risk profile with a limited Middle East exposure that has been stress-tested. Our capital and provision buffers continue to remain resilient and will help us navigate the uncertainties in the market. Lastly, in terms of momentum in the business, we continue to see healthy client engagement and pipeline activity, even with the market volatilities that we are seeing. In terms of the financial highlights, in the first quarter of 2026, we delivered an operating profit of SGD 1.9 billion and a net profit of SGD 1.4 billion. This was 2% up quarter-on-quarter and 4% down year-on-year. Net interest margin moderated 2 basis points to 1.82. We have a page discussing this in more detail later, which I'll go through.
The move in terms of the net interest margin is consistent with the prevailing rate environment, but it was also offset by proactive management of our funding cost. In terms of net fee income, we maintained positive trajectory, rising 2% from last quarter. This was driven primarily by strong loan related fees as well as steady wealth management activity. Trading and investment income increased 88% quarter-on-quarter to SGD 405 million. This follows a seasonal year-end lull in the fourth quarter of last year. This is alongside more favorable trading and liquidity management performance. Asset quality remains stable at 1.5%. NPL ratio at 1.5%, while our NPA coverage remain at a healthy 100%. Including the collateral taken into account, that's 272%.
I have a page that goes into that in more detail. Our capital and funding positions remain strong. CET1 ratio at 15.3, with NSFR at 115%. I'll just draw your attention to two lines here in terms of operating profit. If you look at the middle of the page there, quarter-on-quarter we grew 8%, and at the net profit line, quarter-on-quarter we grew 2%. I'll focus on the group retail performance. In terms of the overall performance, our retail franchise remain consistent and disciplined, focusing on priorities and delivery across the businesses. Although the challenging rate environment led to a moderation of profit at the profit before tax level to SGD 537 million, it was a continued benefit from resilient contributions from our wealth management and cards business.
In terms of wealth, invested AUM and wealth income rose 9% and 6% respectively. Card billings also grew a healthy 7% year-on-year. Likewise, for our retail CASA balances, it grew 10% year-on-year, with the CASA mix to deposits improving to 58%. This reinforces the strength and stability of our group's deposit franchise. I'll cover wholesale banking. Consistent execution of our strategies have led to a consistent delivery of results. If you look at our transaction banking line, it continues to remain about half of the wholesale banking income, supported primarily by double-digit growth in CASA balances as well as trade loans. I think you saw in CEO's presentation earlier, CASA balances grew 10%, while our trade loans grew 19%. From a customer treasury income for wholesale customers, it grew 11%.
Investment banking continued to show good momentum. Year-on-year, you see some moderation because, first quarter of last year, we had mentioned that there was an extraordinary, slew of items, one-off transactions during that quarter. Overall, loans grew 4% year-on-year, continued to be led by solid demand in the technology sector in particular. Next, in global markets. Client demand for hedging and investment solutions rebounded following the year-end seasonal slowdown, lifting our customer treasury income to SGD 294 million. Also, from the non-customer treasury income, a favorable cost of funds environment helped us to capture liquidity deployment and trading opportunities amid the heightened market volatility. Next, I'll talk about net interest income and margins. Net interest income did moderate due to the shorter quarter by 1%.
If this was day adjusted, the net interest income would have increased by 1%. Overall, our net interest income remained resilient at SGD 2.3 billion, underpinned by disciplined funding cost management, balance sheet optimization, as well as modest asset growth. I'll discuss the NIM in more detail on this page. If you recall, our fourth quarter NIM was at 1.84, and we walk through from left to right. Despite a lower SORA environment in the quarter, our Sing Dollar book delivered a 3 basis points uplift. The HIBOR, however, reduced NIM by 2 basis points, reflecting some of the rate dynamics in the Hong Kong Dollar book. We did undertake proactive funding cost management, both across retail deposits in the form of our One Account.
We also did the same for our wholesale banking deposits, led together, offset the asset pricing pressures. Just one more point on the NIMs. The exit NIM for the quarter was 1.83%. We ended the quarter at 1.83%. Gross fee income grew by 1% to SGD 857 million. This continues to be underpinned by momentum and wealth as well as loan related fees. Card fees dipped in March, we expect that to normalize in terms of spending for the rest of the year. Next, expenses. Stable expenses. Strong management discipline in terms of managing our IT, non-IT and other expenses.
Our overall expenses stood at SGD 1.5 billion. This is balanced with continued investment in three areas: strategic initiatives that we are deploying across the bank, technology to support franchise expansion and meet regulatory environment requirements, and third, our people. The next couple of pages, I'll discuss our asset quality in more detail. NPL ratio stood at 1.5% unchanged. If you look at our NPA formation, it's SGD 341 million. The following page discusses some of the credit costs. From 19 basis points total credit cost last quarter, this quarter's total credit cost is at 26 basis points, in line with our guidance, 25basis points-30 basis points. The general allowance write back in the quarter reflected certain migration accounts to NPL, with a lower write back versus last quarter, underscoring our continued conservative provisioning stance. Next.
In terms of our coverage ratios, we maintain our GDP coverage ratio at 1%, NPA coverage at 100%, and the unsecured NPA coverage improved to 272%, as I mentioned earlier on. Gross loans grew 4% year-over-year. This was driven by broad-based expansion across our businesses in wholesale, term funding, trade lending, and also retail mortgages. The quality focus lending is amidst very strong market competition, even amidst prevailing market conditions. Let's talk about funding next. Our liquidity and funding positions remain solid with LCR at 144% and NSFR at 115%, both comfortably above the minimum regulatory requirements. CASA deposit balances continue to remain strong, underpinning our stable funding profile. In terms of capital, our CET ratio for the quarter, CET ratio of 15.3%, fully loaded 15.2%.
With this strong capital base and resilient liquidity position, we are well positioned to support customers through this period of uncertainty. Our return of excess capital to shareholders remain on track. Our SGD 2 billion share buyback program, as at March 2026, we have done SGD 706 million, equivalent to roughly 35% of that plan. It is on track. In summary, let me just repeat some of the key messages for you. Our performance reflects the resilience of our franchise. We continue to execute consistently across key segments. Direct exposure to the Middle East remains limited. We do expect uncertainties to prevail, but our capital base is strong, provision buffers are adequate to help us manage through that.
Looking ahead, in terms of guidance, loan growth to be in the low single digit range for this year, net interest margin to be within 1.75- 1.8. Continued execution in wealth, cards, and trade will support fee income growth towards high single digit levels, and we remain disciplined on costs, but we expect some low single digit growth in terms of our operating costs as we continue to invest in technology and people as well as our strategic priorities. With that, I conclude my presentation, and we will open up to questions and answers.
Thank you, Yong Gee. We will now begin the Q&A segment. For those dialing in on Teams, please use the raise hand function if you have a question. We'll take the first question from Lynne.
Hi. Congrats on the numbers. I have three questions. The first one, could you talk a little bit more? I think at the beginning you mentioned UOB is looking to double wealth income by 2030. What kind of number we will see by then? I'm not sure which base you are looking at. Second question, many analysts pointed out to NPA formation in Greater China, which expanded 15% on quarter. Which sector is that? Is it still CRE? Could you share with us, Hong Kong or Mainland? Whether UOB is looking to seek access to Mythos, the Ant Group AI model, what are you doing about that? Thank you.
I anticipated for this wealth question. Okay. I think over the last three years, our focus has been on integrating the Citi consumer, even though we took over Citibank for the last, or since four years ago. The whole integration effort is very critical for me. Everything is over now. As you listen from my speech, I think, we will position us to be one of the most connected bank, because we took over We have the most comprehensive ASEAN footprints. That take a lot of time, effort to connect. Without all this infrastructure, it's going to be very difficult. I don't want to take in the customer if I cannot deliver. Okay. I think all these are way ahead of what we anticipated.
I think for this year, the next few quarters, we'll start to see the wealth business will be picking, because we are focusing on doubling our wealth, as you said. We will continue to double our wealth management, RM, and the infrastructure is ready, and we are also focusing on one bank approach because the wholesale and retail, we all work together to generate. We are strong in foreign direct investment. These are all the foreign people coming in to operate in this region. As an organization, as a bank, the effort is collective effort that we are trying to work on. To answer you, yes, the next few quarters or the next one, two years, we will start to see, we are doubling our wealth.
Income.
Income.
Yeah. Any number that we can see, we may see at the end of 2030?
The number would be great. I cannot tell you the number, but I think definitely it's a big potential looking at our customer base that we have.
Yes. This is the whole bank, not just private bank, but wealth.
No, the whole bank.
Okay.
The whole bank.
Thank you, Mr. Wee.
The private bank would be, again, it's a whole collective.
If I could-
It will come.
could supplement a few of that. Chanya, if you're looking for a reference point, 2025 is when we communicated. Use that 2025 as reference point.
Sounds about right.
That's all right. All right, for doubling of wealth to 2030. You had another question on the Greater China NPA formation that is specific to real estate. If you look from a NPL ratio, it is a heightened NPL ratio with lower NPA coverage, but unsecured coverage continues to remain high. Right. I think you had a question on Anthropic, and its announcement, I think, was on seventh of April regarding my thoughts. I think this is something we are all taking very seriously, but although to date, many of our vendors and key partners in the technology space are still assessing and reviewing actions to be taken.
In the meantime, from our own perspective, a lot of things are being done in terms of strengthening our surveillance, hardening our infrastructure, making sure we are working jointly with the agencies in Singapore and also in the industry peer group as well. Everybody is keeping each other abreast in terms of developments on how to navigate as that evolves. It will not be the first and probably not be the last of such attacks. Not attacks, sorry. Such capabilities that could lead to attacks.
Will you have access to this?
I think this is exactly what I tried to say. These are the current infrastructure. we want to bring in customer that they feel safe.
Okay.
You look at our tech line right by you. Very important. Rather than I just take a short-term profit, it's easy money. You look at even our deposit growth, it's quite muted.
Why? Market is uncertain. If I take the money in, where do I have to place up? If the long growth is not as good, like, unless I want to enlarge my balance sheets, is it the right time to do this? Right? I think P&L is one thing, balance sheet is one thing. The world is still very uncertain, right? Even across ASEAN today, right, you look at Thailand, they have an oil crisis. Maybe Malaysia, Indonesia is good, for us it's a portfolio that we are looking at.
Thank you. Thank you.
Yeah.
Renu.
Morning. Renu from The Business Times. Congratulations on the results. Two broad questions. First, on wealth talent, right? You mentioned you'll be boosting hiring. Is it mostly in the ASEAN forum market, so can we expect some hiring in Singapore as well? There's quite a bit of competition for the wealth talent among all the banks. How are you going to navigate that? The second broad question is on the house view on U.S. Fed and the rate expectations. Has that changed from three months ago? What's your own interest income sensitivity to that? Thank you.
You know, the wealth space is something that, yes, competition is there. Everyone is competing. If you want to join an organization, you have to see the customer base. Because you as an individual, your connection is limited. You want to join an organization that can help to support you over and above your own connection. You look at us, we have the ASEAN footprints. We also have the North Asia that we want to double down. We have two engines that we are running. As I emphasize, it's a one bank approach. My wholesale, I cannot share with you the statistic, but I have the statistic, the wholesale bankers supporting a lot of our retail customers. What we're doing now is to make sure the infrastructure is ready, right? From the user-friendly standpoint, also to protect the customer.
That to me is important. If we are ready, we are and in fact, we are ready. The next few quarter you will start to see coming. I don't want to have a short term and then customer are not happy, then they leave to somebody else. Strategically, I think Singapore, you got to look at it in the medium to long term with the Middle East crisis, Singapore increasingly will differ, and we are one of the local bank. Okay. I don't see our wealth figure is so much different, given our setup, given our ASEAN footprint. Bear that in mind.
On the interest rate question, maybe I can take that. Our house view on US rates is that we expect there's still 1 more rate cut this year. The translation between U.S. rates to SORA I think has significantly decoupled compared to history. We are obviously a lot more sensitive to SORA as opposed to U.S. rates. As far as SORA is concerned, we expect limited more downside on SORA. I think it has already moved significantly over the course of last year. If you look at NIMs from our last two quarters, in fact, it's been bouncing around and quite stabilized, looking quite stabilized. Even if there is downside, it is fairly limited. I point you again to our NIM guidance for the full year. We think it 1.75%-1.8% should be comfortably within that range.
Wee?
Hi. Wei from Reuters. Thanks for the presentation and congrats on your results. I have a follow-up on the wealth angle. In terms of flows, you know, where are you seeing kind of the greatest opportunities, from flows?
I would say ASEAN is one of them. South Asia, even though we are not so strong on South Asia, I increasingly we are also paying a lot of attention from Greater China. The Middle East is not so obvious at this point in time. Mid to long term, it may swing some of the activity back to ASEAN, it's yet to be seen.
I think our immediate is the customer base that we have, right? Not so much, yes, new customer it will come. Okay. We will engage relationship manager, they will target new customer. My existing customer base of eight over million, this is where the low-hanging fruit is.
This is why we are very, very confident the next few quarters. I cannot tell you the number. Right. We will definitely increase the AUM. We also improve the investor AUM because the investor AUM is the customer base that you have. If we are, we are conservative, we want to protect our customer. You don't just ask them to take money, invest. Because today the environment is very uncertain. I would rather they be safe. We can earn less fee, but they are I want them to be safe. Opportunity come, this is where the potential is.
Thank you. Another question on the war itself. I know you have limited exposure in the Middle East, but then the higher oil prices are hitting pretty hard the ASEAN economy. Where do you see kind of the impact from that, especially given your focus on the-
Yeah, I think the first order impact, I think for the Middle East, I think our exposure is quite insignificant. Second order impact is that may affect the SME customer. So far we are going through a stress analysis. It's too early to tell at this point in time, okay, because everything is so fluid. The worst is if it's prolonged, then you may get a stagflation kind of thing, inflation and no growth. This is where I keep emphasize balancing this important. UOB capital is strong. We want to make sure we're ready to serve the customer. P&L, yes, it's important. All of you looking at P&L. Yeah. I also looking at P&L. End of the day, we have to have a balance. I have to be strong first, then P&L.
If I'm weak, I just continue to drive P&L, but my capital is not, then I'm chasing after too many things. At this point, market is uncertain. We want to make sure our staff is well trained to combat AI. You can see the government is also paying a lot of attention of the people and all these things. We need to be responsible. We need to be socially responsible.
If I could add to that, Wee, your question around our wealth where it comes from. More than, or roughly 58% of our wealth comes from overseas customers. Your question around Middle East, I think as you mentioned, our first order, meaning companies with direct, geographical exposure in Middle East, that's less than 2% of our loan exposures.
The focus now is on second order, third order, but second order is more looking at energy vulnerable industries. Sectors such as transportation, basic materials, utilities, agriculture, et cetera. We're looking and assessing how much of these industries and clients who are in these industries may be affected as a result. Third order is a little bit harder because it's a lot of assumptions around how prolonged this will be. There is potential impact on overall Asia's economic growth environment, inflationary pressures and so on. That, that actually requires much further stress scenarios. Yeah.
Thank you. Mr. Wee, I took your point on strong balance sheet, and you are making sure that your staff is well taken care of. I mean, I have seen some filing this morning about disposal of minor assets, and there's a ongoing rationalization. Can I take it that you meant there won't be any job cuts at UOB?
Maybe I can clarify that. There was a filing today because we set up a company.
Yeah.
It's actually part of our BAU activity because under our venture management business, we do occasionally set up a GP for managing funds for investors, right? That was actually something that's being set up specifically. T Hat we are managing for a family office, a client.
Of course.
You know, with AI, a certain job may be taken over by AI. But as a responsible employer, Spend money to train our people, make sure that they are able to navigate into other fields. That is our job to do.
Ultimately, I mean, it's up to our employee. Give them the confidence, give them the secure environment. We also provide them the job, on-the-job exposure. That is important. No point to train KPI. At end of the day, you train them, you have to put them on the job to experiment. This is what we are trying to do. AI for us is not artificial intelligence. It's actually augmented intelligence.
Yeah.
The priority is to roll out tools that augments our staff's capabilities, how they improve productivity, efficiency, customer service, risk management, et cetera. A lot of the things we are doing is actually supporting our people. As a number or statistic to you, about 30,000 of our staff today have Copilot at their fingertips. We are actively promoting the use of these tools and training and reskilling our staff members.
You know, our process is quite heavy. We have streamlined a lot of processes that cut across. Singapore may be better, but cut across the whole region processes. I also want our staff to be happy, work-life balance. We are giving them the tool, make sure that they work hard, but not long hour for productivity. That is our job.
Go on Disney cruise.
Huh?
Go on Disney cruise.
Many of them have gone on.
You see the emphasis with Punggol Digital District, us moving, our teams like 2,000 staff. They're all very focused in terms of our tech digital initiatives. We've also started an innovation academy, dedicated to training our staff. You have seen that we've launched an innovation hub at NTU.
in the news articles in prior months. I think it's all part of a continuum of activities that we undertake. It's a journey, right? It's not just a one-time exercise. This is here to stay. Yeah.
Ula.
I've got three questions. One is sort of what do you see in this, in the opportunity around RWA that wholesale banking? Is it mainly wealth or is it something between?
Trade is one thing.
Okay.
Trade is one thing.
Trade, maybe CASA.
CASA. Also transaction banking stuff like trade.
Yes, cash management.
and cash management. Okay.
Liability management is very important.
Okay. Okay. You're doing that, a lot of it anyway, but you intend to accelerate.
Yeah
More of that.
Well, you can see our deposit growth is not that high.
Okay.
Like we are.
You want to have more deposits. Okay. The question on deposits-
Cheap deposit.
Cheap, the CASA. Okay. Your peer, I'm gonna have to bring their names to you.
Sure.
They said they've brought a lot of deposits, and they are putting them in HQLA.
Yes
loan growth has.
Yes
sort of moderated with them. What's your view on that? Are you doing the same thing, or is that
I think there are two parts to the question. I shouldn't be commenting on what other.
I mean, I'm asking what are you doing?
Okay. There are two parts to it. One is just bear in mind that our deposit growth overall is in line with system growth.
Okay.
If you look at the components of what we are doing.
Mm-hmm, mm-hmm
at CASA level, and maybe this is something you should ask others, our CASA ratio at retail is 58%. CASA ratio at wholesale is 60%.
Okay, you are higher than-
Those are fairly industry leading. Yeah. That's it. Yeah. The reason why focus on CASA is lower cost of deposits better stickiness in terms of customer franchise, better opportunities to cross-sell. Those are things that we have articulated a strategic intent, and we're executing.
Well to that intent. For HQLA, I think that relates more to, look, if you got excess deposits.
You're not deploying it to higher return, users loans and so on.
Do you deploy this to HQLA to maintain your NII versus managing NIM, right?
Our perspective on that is you need to strike a fine balance between NIM as well as NII.
Of course, you wanna make sure you continue to bring in NII deploy excess deposits, right, into HQLA, as long as they are view positive, right?
At the same time, you cannot lose sight of your NIM as well, because that's the overall margin in terms of your books, and it's how your cost of funds and your yields, your funding mix, it all comes together.
The other thing also that we had from the previous briefing was that.
That they have risk, they have de-risked their SME and consumer franchise a bit in places like, well, they said India, which you don't have, and Indonesia. How I mean, You don't separate out the Indonesian market on your first quarter?
Could you give us an idea of how that has performed?
Indonesia is still very small for us. I think maybe it's 3%.
3% of our loan base.
Okay.
About the exposure. I would say, it's easy to talk about de-risk.
Like, end of the day, it's the origination. You look at the customer-
Mm. Mm.
You look at employers.
Mm. Mm
You look at the employment track record and things like that.
We are still growing.
You look at the mortgages.
This is Indonesia?
Yeah. In fact, this is a time, especially the SME.
You have to stand by them.
Okay.
This is not the time to de-risk.
Okay. Okay. That's it.
Okay.
Okay. Okay. Who are your customers in Indonesia in terms of the consumer? Are they the
The higher. Yeah.
Yeah.
Affluent customers.
Affluent customers.
Yeah.
The SMEs are the medium?
We do have more big corporates, I would say, you know, because we have a limited distribution.
Mm. Mm. Mm.
Point.
Retail is mid, high affluent customer base. likewise for the wholesale banking when you're out in countries outside of Singapore.
Mm. Mm
Whether it's SME or large customers, I think it's guided by our Sector Solutions Group . We've identified seven specific industries, and we're guided by those industries. Singapore, because its home market, we are more broad-based provide services across the whole spectrum of customers. Outside of Singapore, it's more targeted, because there's information asymmetry when you're operating in somebody else's backyard.
Okay.
So-
Just one final question.
Sure.
On the SGD 231 million ECL, what percent? Have you sort of changed your MEV model at all, or is it because of the Middle East and from the tariff to the Middle East? Could imagine there'd be a lot of changes. Okay. Th e SGD 341 million of NPA formation.
Where was that from the?
Sorry, what was the question on the NPA formation?
Where, what, you know, what sector or what geography was that?
I think if you step back and look at our BAU run rate. U Sually NPA formation is, should be normalized around SGD 3 million-SGD 400 million in arrangement quarter.
Mm. Mm. Okay.
Yeah. I think it's in that range. I mean, you can't run a business with zero NPA formation.
Okay.
I think with respect to the MEV, I think we are starting to take some of the uncertainties around Middle East to account. Also bear in mind that the first two months of this year was pre Middle East, right?
Effectively-
Tensions flared up February 28th.
Mm. Mm. Mm.
That continues to be the case, and we will continue to monitor and adjust accordingly. That, you should probably expect MEV refresh to be adjusted in the following quarters.
The tariff thing has gone.
Yeah.
Are they over, or what I mean, how do you view this, and how do you build it into your second and your, and your stress test? Do you build it in or how do you build it in?
It has not gone away, but it has morphed.
Into a war.
Into a war.
That's not for us to comment.
Yeah
I think the tariff numbers still factors into consideration when we talk to clients, and clients need to take that into account when they make their CapEx and investment decisions. That has not gone away, but it's been, I guess, superseded by.
By the war.
Logistical issues, fuel costs, lack of access to materials, and potential impact on demand. There are other implications now for them to take into account.
Also, in terms of your stress test, does it change? I mean, it has to change a lot within the last year. It must have changed a few times.
Yeah, you look at it's all gray.
Because it's all gray. That's right. Yeah.
At the end of the day, I think there is no right and wrong. At the end of the day. Very difficult for us to predict what is gonna happen. It is a very unpredictable world. We have to make sure that we take care of ourselves first.
That is the first priority. If we can't even take care of ourselves, how are we going to take care of our customer?
That is the very basic fundamental.
Sure.
We have to be strong. We take care of customer responsibility.
Yeah.
That is important. Not every customer we will take care. Make sure that customer with a good track record, has been with us for a long time, then we will continue support because they will have to go through a hump. This is not something that is the business failure. This is the external factor.
Just to be clear also with, what Leong Yung Chee mentioned about NPA, you said that within range, the, in each quarter, SGD 300-SGD 400.
That's also applicable to the Greater China formation, right?
You said that it's all well covered.
It's a whole book, right? It's a whole book.
Our GP coverage, I'll point back again.
GP is good. Yeah.
in Q3 when we raised
Yeah, yeah.
provision coverage, it brought our GP coverage to 1%.
Yes.
For the last three quarters, Q3, Q4, and now 1 Q, you've seen that our GP coverage remains at 1%.
Mm. Mm. Mm. Mm.
In fact, we were getting questions this morning from other people, you know, "Why don't you raise it more?" Right?
I was wondering.
Yeah, given Middle East, and I think that blends with what, Wee Ee Cheong was mentioning. The situation
Okay
End of February. We are monitoring. There's still a lot of uncertainties, and the impact is still yet to be fully transmitted through our economies.
Mm. Mm. Mm. Mm.
I don't think we are saying that there will not be any more. I'm saying that we need to be watchful. Adjust accordingly.
if things deteriorate. Yeah.
For specifically, I'm being painful here.
Yeah.
I'm sorry about that.
No.
Uh, but Greater China is there a concern because the spike of 15% on quarter is it from real estate, and is it Hong Kong or Greater China, and do you see that coming down soon?
It's Greater China. It is real estate. I think that was raised earlier on.
Mm. Mm.
I also highlighted that even though our NPL ratio and NPA coverage had moderated slightly because of that, but our unsecured coverage for Greater China portfolio continues to be comfortable.
Thank you.
We have a question from online, Sheila from The Straits Times.
Sheila, could you unmute yourself and ask your question, please?
If we can't, open back to the floor here.
Okay. Any other questions from the floor? Yeah. Sorry. Yeah. Business Times.
Thank you for your presentation earlier. I have two questions, again, on wealth and the other on manpower. The first on wealth has become increasingly important for all the banks'.
Yeah
Including UOB. UOB thinking of pursuing further M&A to grow its market share and wealth in the region, and are there opportunities in this area that you are looking at? The second on manpower, you've talked about AI. UOB's workforce shrank in 2025 compared with a year ago.
What is your outlook on headcount this year, considering what AI can do, as you've pointed out earlier as well?
You know, wealth, everybody's focusing on wealth, right? If there's opportunity, I believe the price will be very high, right? End of the day, it got to make sense. It got to make sense, right? What makes sense to me at this point in time, I'm not ruling out inorganic growth. Organically, we can grow. This is our strong point. Other people don't have the customer base. I have the customer base.
Mm. Mm.
Okay? That is the key differentiator. The next quarter or so, we will start to see that happen.
Around headcount.
Yeah.
So-
Headcount, I think we are managing it. We will continue to grow certain segment that we need to grow. In terms of wealth, we will continue to increase our headcount on wealth. Certain segment we can de-emphasize, but certain segment we will overemphasize. On balance, I would say it's quite stable.
Quite stable. Despite the AI, despite that you see from the newspaper, you are the writer, you say, "Oh, people retract." I think that is the last resort. It's a very negative way, right? You want to train people, at the same time you tell them in their face, "After you train, you get retract." No.
It's largely stable.
Yeah.
It's natural progression of the headcount and workforce across the year. We continue to invest in areas where there are growth opportunities and hire people.
Which areas that you see as less opportune? I mean, wealth is something that you will emphasize and add, but which areas that Mr. Wee said will de-emphasize?
De-emphasize?
Which area is less relevant to growth for you now?
Well, certain job, like, you know, our call center, we can make use of AI.
Automate certain processes. I can use the robotic, you know, I mean, you can see all this, so we can depend less on human. Okay? Make the service more predictable.
Thank you.
Let me emphasize again, right? It's about augmenting our staff, not replacing. All the AI initiatives that we are pursuing, again, it's about improving productivity, improving efficiency, improving our risk management, right? These sort of things helps our staff. We have to improve productivity. If you have natural attrition, you don't have to replace at the same replacement rate. We are managing this over time.
Not replacing staff with AI. I think the notion that accountability and trust can be replaced by an artificial bot, I think that's not the philosophy that we ascribe to.
Understood. Thanks for that clarification.
I think I'll just read out the question from Sheila from The Straits Times. Will you share UOB's acquisition strategy in the region?
particularly in light of reports that we had explored acquiring HSBC's Indonesian assets, which was eventually bought by OCBC, how does this shape UOB's inorganic growth plans going forward?
I think CEO mentioned that briefly. We are always on the lookout for opportunities.
Yeah
whether previously or going forward. Whether the opportunities make sense, it has to check quite a few boxes, whether it meets our strategy, does it meet certain capabilities that we want? Are they filling certain business gaps that we don't have or geographical gaps? Ultimately, is the price to pay correct?
It's not just a dollar price. Don't forget, there's also integration cost. In going forward, do you think the cost synergies and revenue synergies are gonna make sense for you? The calculation isn't just about the transaction price, but the cost of the entire project itself has to make sense.
You know, you look at our acquisition of Citibank.
The lesson learned. The integration is not as straightforward as one would think.
Mm-mm-mm.
It set us back a few. The benefit is we have the 8 million customer base that we are looking. This is already water under the bridge.
We are now trying to monetize this. Okay? The initial part of it is actually quite.
We have to use Citibank technology platform while we are building our platform. You know, it cost us arm and leg to make use of Citibank platform.
It's all over.
That is a strategic move that we think is important for us to scale, especially the consumer business. Don't underestimate that 8.5 million. Now in fact our customer base is bigger than Singapore. It's growing. You can see that. People are Our business partner, they want to deal with us because our customer base. You look at Disney, you look at Taylor Swift.
Why are they coming to us? Because of our regional footprints. People from Thailand, people from Vietnam.
That is the power of connecting. Don't underestimate that. Okay. For me to generate wealth, right, in the digital way, in a cost-effective way, is easier than including our app. This is what we are doing, infrastructure, our UOB TMRW. I can share with you my CIO fund, the growth is 300%.
These are small number.
It's not I'm dealing with a sovereign wealth fund, suddenly put in SGD 5 million, SGD 10 billion. No.
This is sustainable. People can trust us. Every month, SGD 100, SGD 200, but accumulate. This is where you want.
You mean that there's been a 300% close in money coming into from your UOB TMRW?
From our UOB TMRW app, the what they call the CIO Funds, right?
Funds. Yes, yeah.
A few billion Singapore dollars.
Few billion?
No, SGD few billions.
I think Gula will take that offline.
You can take it offline. I can give you the exact number.
Provide us that. Oh, okay.
Okay? These are all well distributed.
These are curated, fund wealth management ideas for our clientele that they can access directly from the UOB TMRW. I think the statistics, we'll take it offline and provide it to you.
I think that's all the time we have today.
Well, but
Yeah
following your integration. Your costs were a bit high these last two years. That was because of the integration over and above the one-off.
Yeah, of course.
So-
The cost high because my revenue actually went up, right?
Yeah, yeah. Yeah.
Because when my revenue go up.
Yeah, yeah.
We were able to get the customer base.
Yeah.
It's already there.
You think So the CIR, the cost to income ratio should.
Yeah.
There are a few things. The cost relating to Citi-
both the acquisition as well as the integration costs.
All over.
over. Over, yeah.
The whole platform tech stuff all done.
Yes.
As for cost looking forward, I think it's a balance that you need to strike because we can always manage CIR by turning off the taps in terms of investments forward.
Mm. Mm. Mm.
I think we are keeping a very balanced approach in terms of continued investment in people.
Continued investments in technology stack.
Forward-looking investments as well, what we need to build. I think cost to income ratio is something we will watch obviously very carefully.
Okay.
It swings with time as well as income.
Mm. Mm
numbers as well.
Okay.
I think we've guided, our cost growth this year is likely to be in the low single digits.
We need to continue to make investments in our people and platforms.
All right. Thank you. That's all the time we have today. Thank you very much. If you have any further questions, do reach out to the team and they'll assist you with that. Thank you.