Work of around 430 branches and offices in 19 markets. UOB Bank is consistently rated among the world's top banks, and the bank helps individuals and businesses achieve their financial goals through innovative customer-focused banking solutions while supporting sustainable growth and creating long-term value for the communities it serves. Before we get into the Q&A, we do have a bunch that were pre-submitted, as well as later on, we are going to open the channel for you to ask questions on a real-time basis. But before we do that, we are going to do a 15- 20-minute presentation by Ms. Priscilla Tjitra, First VP, Investor Relations of UOB Group. Priscilla, the floor is yours.
Hi. Good evening, everyone. I will just share my screen first. Hope it is okay. Can you see?
Not yet.
Okay. What about now, Benjamin?
Yes.
Okay.
Perfect.
Thank you. I am part of the Investor Relations team at UOB, and glad to have all of you joining tonight. Our agenda for tonight's presentation, let me just click here to run through a few items. Number one, I will go through an overview of UOB Group and our long-term track record of execution. I will also talk about the bank's core business drivers. Finally, I will be happy to take your questions during the Q&A session. I will start with the overview of UOB Group. Benjamin mentioned earlier that we were founded in 1935, so we have been around for a long time. Last year was our 90th anniversary, and the founder's family, the Wee family, has been involved in the bank all along. Our CEO, Mr. Wee Ee Cheong, is the third generation of family running the bank.
His family currently remains the largest shareholder with around 18%, 1-8. That is a quick overview. On this slide, if you look at the right-hand side, it is a snapshot of our recently- reported first quarter numbers. If you look at some of the ratios there, our balance sheet remain healthy with strong capital and liquidity positions. For instance, our CET1 ratio is solid at 15.3%, LDR or the loan-to-deposit ratio at low 80%. If you look at other liquidity ratios also, we are comfortably above regulatory requirements. In terms of return on equity, we have delivered 11.5% for the first quarter of this year, though slightly lower than last year. This is largely because of the margin compression from falling Singapore benchmark rates, which is SORA, the Singapore Overnight Rate. Three-month SORA is our key benchmark rate. It fell about 200 basis points last year in 2025.
If you recall, there were safe haven inflows into Singapore, creating an excess system liquidity situation as the deposits growth outpaced loans. Our benchmark rates locally have been lower. As a group, 45% of our loan book is denominated in Singdollar. That is why our margin was impacted by this market movement. In terms of asset quality, very briefly, if you look at the non-performing loan ratio in the right-hand side over there, it is stable at 1.5%. I would just like to highlight that in third quarter last year, we have made a preemptive general allowance of SGD 615 to strengthen our provision buffers. This really was to strengthen against some macro uncertainties and also headwinds in U.S. and Greater China, especially the commercial real estate sectors, including office. I can discuss more about this in more detail later. Overall, our core franchise remains solid.
We continue to execute well on our business strategies, and most importantly for our investors would be our dividend policy. We continue to commit 50% payout ratio. Last year, we have also announced a SGD 3 billion capital distribution package. SGD 1 billion was already paid out in the form of special dividends in 2025. We still have SGD 2 billion share buyback remaining. This program is, I think by now, about 35% completed, and on track to be completed by end of next year. Share buyback is ongoing. On the bottom right-hand side of this slide, I would just like to highlight that UOB is also one of the highest-rated banks in the world. We have A A ratings by the three major credit rating agencies with a stable outlook. Next slide, I will just cover what we do.
I'm sure most of you know who we are and what we do. We do provide full banking services across key segments in retail, wholesale banking, and global markets treasury business. In terms of the proportion to loan and income, retail will be around 1/3 and wholesale banking and global markets will be around 2/3. If you look at the bottom left of this slide, as a leading Singapore bank, we have also received strong recognition in the industry. You can see that the awards that we have won over the years. On the bottom right-hand side, in Singapore, our home market, we have a market share which is quite sizable in the Singdollar deposits and loan at around 20% and 24% respectively. Then the next slide, I'll just move on to our execution.
This is also telling you about our growth story from 1965. So many, many years, many decades in this one slide. If you look at the years, we have been expanding our franchise and also making investments in this region. Through organic growth and also inorganic growth, we have been growing, and we have been also going through wars, various economic crises, pandemics, but we have remained profitable year- after- year. If you look at our net profit, in 1980s, it was just SGD 92 million, but in 2024, we reached a record high of SGD 6 billion. Also this slide tells you some about the inorganic expansion. Just would like to highlight that the last one we did was the acquisition of Citigroup Consumer Banking in four markets, Malaysia, Thailand, Indonesia, and Vietnam.
By now, we are pleased to share that we have completed the integration fully. In 2025, if you look at this chart, maybe some of you may ask why our net profit dropped in this year. Basically, like I mentioned, one is the falling interest rate environment. Number two, it was the preemptive provision for asset quality, which I mentioned before. Just to give you some more color on these provisions, it was likely related to our exposures in U.S. and also Greater China, including Hong Kong, commercial real estate sectors in the office especially, which has faced certain structural changes since COVID. You may notice that in the U.S., a shift towards working from home has reduced demand for office space over the last few years. In Hong Kong as well, the market has been affected by slower economic growth post-COVID.
Now there's a bit of an oversupply situation of office space in Hong Kong, so that's affecting the sector. As part of this exercise, we accelerated the recognition of certain problem loans. This has been done since third quarter last year, allowing us to kickstart the recovery process earlier. The good news is, following the exercise two quarters ago, provision coverage has improved significantly and continue to be maintained at a comfortable level. We're also seeing stabilizing NPL, and also encouraging recovery process. As I mentioned, we accelerated the recognition of some of the problem loans, and then we were able to recover some of the assets from these loans, especially in the U.S. Importantly, this slide also highlight that despite all these challenges, we remain consistently profitable year after year, including the various economic downturns. Moving on to slide seven here.
There are two things in this slide. The left side shows our footprints in the region. If you look at the map over there, we are present across Asia with a particular focus on Southeast Asia and also Greater China. In total, our extensive network, we have about 430 branches and offices spanning across 19 markets. With the Citi acquisition that we have completed, we believe that our presence in the ASEAN region will deepen further. The right-hand side shows our UOB business strategy. I mentioned we operate retail banking, also wholesale banking. I will talk more about these strategies in the later section. Now, moving on first on to slide nine to show you how we grow our loan book over 20 years. These next few slides will demonstrate our consistent long-term track record.
Starting with loans, on the left chart, you can see that our loan base has increased more than 10 times over the last 20 years or so, while keeping the asset quality resilient, as represented by the non-performing loan ratio chart on the right. In a nutshell, we have never compromised our asset quality while growing our loan book. Now, if you zoom into the right-hand side, our NPL ratio has been maintained at a low and stable level between 1%-2%, and this has been maintained despite various up and down of the economic cycles. If you look since 2007. So 1%-2%, and the last number was 1.5% reported. Now slide 10. By now, some of you may also ask what is inside our loan book. Having a diversified loan portfolio is very important to UOB.
There are three breakdowns here by industry, geography, and also segment. In terms of industry, if you look at the real estate-related exposure, housing loans represent around a quarter of the book, of which 70% over is in Singapore. Asset quality has been resilient. This has been a resilient asset class with NPL ratio of about 1% or below. For the other quarter of the loan book, which is also related to real estate, it is building and construction. If you look at over there, 25%. Also, a significant portion of that comes from Singapore, and mainly to large corporate and institutions, like your property investment companies. Then the rest of our exposure to other industries, we have manufacturing, general commerce, and so on. They are quite broad-based and diversified.
Now, moving on to in terms of geography, if you look at the top right-hand side of the slide, our loan book is anchored by a strong base of Singapore as a home market, and then we are also complemented by higher growth market outside of Singapore. The intention is to maintain Singapore as the home market with about 50% mix in terms of the loan book, because it is our home ground, and also because of Singapore's AAA sovereign rating with strong corporate governance standards. This will help our overall to maintain our credit rating at the AA range. Now, outside of Singapore, if you look at the exposures into the ASEAN markets, we have Malaysia, around 10% of the book, followed by Thailand, about 8%, Indonesia, just about 3%, and Vietnam is quite low, just about 1%. Greater China is 13%.
Then you also have rest of the world or others, which includes gateway cities such as New York, London, Australia, where we follow our network customers from this part of the world. We are very selective in these markets outside of Singapore. We don't try to be a bank for everyone or to compete with the local banks. However, we are going after niche segments. In terms of the retail customers that we target, they will be the mid-to-high affluent, upper mass affluent kind of retail customers. For the wholesale banking customers, they will be the larger corporates with cross-border ambitions. We aim to keep our loan mix around this proportion. In terms of the segment over there on the bottom right is also group retail, 33%, about 1/3 from retail, and Group Wholesale Banking or GWB, about 2/3 of the loan.
Moving on to deposits. At UOB, our business is mainly funded by customer deposits. Some of you may also be our customers who place deposits with us. Our multi-year effort and strategy has been done to cultivate trust from customers and build this strong deposit franchise. On the retail side, we aim to be the main transaction bank for customers. While on the wholesale banking side, we also have been strengthening our cash management platform to handle the operating account for our corporate client. In terms of deposit mix, if you look at the donut chart on the right-hand side, we continue to build our low-cost, stable current account, saving account franchise, or we call it CASA, and it represents more than half of our customers' deposits. Coming into income and profit here.
Our steady loan growth, backed by the diversified funding, as highlighted in the last two slides, as you can see, has translated to resilient earning franchise and sustained profitability over the years. If you look at the chart over there, even during challenging periods such as the 1998 Asian financial crisis, 2008, the global financial crisis, and also COVID pandemic, we continue to generate positive earnings. While earnings may fluctuate year- by- year, depending on the operating environment, our diversified business model and also prudent risk management enabled us to navigate the economic cycles successfully, and we can emerge stronger over time. On the back of this consistently improvement in profits trend over the years, we have been also able to pay out a growing dividend to our shareholders, which many of you will be happy to hear.
I have a slide here on dividends as well. If you're wondering what kind of dividend payout level we usually pay. To reward our long-term shareholders, we currently have a policy of paying out about 50% of our reported profits as dividends. As long as we maintain our profit growth trajectory, shareholders can look forward to steady growing dividends over time. We also mentioned earlier about the special dividends of SGD 0.25 each times two. We paid 2x in 2025. We have also announced a SGD 2 billion share buyback program. As I mentioned, it's 35% completed as of the latest number we disclosed was at March. That's on the dividend policy. Moving on to core business drivers. We just like to explain the retail banking segment that we have.
We aspire to be the bank of choice for individuals in ASEAN, supported by rising affluence and also increasing digital adoption across the region. The acquisition of Citigroup Consumer Business in ASEAN 4 markets have significantly strengthened our retail franchise. Today, we serve around 8.5 million retail customers. It was 5.5 million before the Citi acquisition. That was the previous base. Then we acquired almost 2 million customers from Citi, plus the organic growth over the last three years or so. Now we have 8.5 million customers. This creates meaningful cross-sell opportunities, especially across our focus on deposits, cards, and wealth products. We have been successful in deepening customer engagement. If you look at our current account, saving account balances, which provide us low-cost funding, it has continued to improve.
If you look at the card business, the bottom right-hand side of the slide here, card billings continue to grow at 7% year-on-year. It is a healthy growth above industry average. How we engage our customers to use our debit cards and our credit cards, it is also by offering lifestyle kind of offers, including partnerships with artists such as maybe you remember Taylor Swift or the more recent names like Sammi Cheng, as well as experiences like a Disney Cruise Line. We identified our customers to have lifestyle aspirations along the line of travel, dining, and entertainment. We continue to focus on giving offerings around this key area. Wealth continued to also be another key growth driver. Our assets under management, if you look at this AUM chart, has been expanding steadily.
55% year-on-year, based on the March number, supported by healthy net new money inflows and also stronger investment penetration. Now with the enlarged customer base, as I mentioned, 8.5 million customers, growing current account, saving account franchise, resilient card business, and also growing wealth platform, I think we believe we will remain well positioned to capture the long-term retail growth opportunities in ASEAN. Now to touch on the wholesale banking side. Our ambition here is to be the leading cross-border trade bank in ASEAN. We have an entrenched regional network, and also we have deep client relationships to capture the trade and investment flows intra-region, intra-ASEAN, also between ASEAN and Greater China. We are here to facilitate the flows. Over the past decade, if you notice, we have invested significantly in our platform capabilities to strengthen our transaction banking franchise.
This also support our clients' cross-border banking needs. In terms of the transaction banking now, this line over here, it has contributed a meaningful part of the wholesale banking income. Now about 50%, about half of the total income. We continue to reshape our balance sheet towards higher quality, and more capital efficient businesses, including fee-based business. In recent years where we have also been growing our trade loans, if you look at the chart over here on the middle bottom. Trade loans have been growing also faster than the traditional lending, and we have been increasingly bundling these trade loans product with cash management, FX treasury solutions that can generate fee income. Other than that, our sector specialization strategy across the ASEAN region allows us to better support clients with industry specific expertise. We try also to diversify away from real estate sectors.
Together with the healthy deposit growth and strong client activity across the treasury and capital markets, we are building a more resilient and less rate sensitive business model over time. Now just touching on to almost the end of the slides. Global markets here, our focus is to help clients manage risk, optimize liquidity, and also capture investment opportunities. As markets have become more complex and volatile, demand for risk management, hedging solutions continue to grow. It also create us opportunity to further deepen our customer relationships. Together, I think these capabilities position our global market to be an increasingly important source of diversified income for the group. Last but not least, just a summary slide for all of you who are listening today. Typically investors are drawn to UOB because of a few things.
I think number one, also a key differentiation with our direct peers, we have stable management. We are an owner-operated bank. As I mentioned, the Wee family still hold a meaningful shareholding in the bank. So the interest of the management team, also our current CEO is part of the family. They are aligned with our long-term shareholders. So it also gives investors confidence in the long-term direction and the performance of the bank. Number two, the network in ASEAN.
We mentioned that we also have an entrenched presence across ASEAN markets with a deep local knowledge. So we are well-positioned to serve targeted customer segments and capture the regional growth opportunities. Lastly, we are a bank that has been around for 90 years, weathering the various economic cycles, continue to maintain strong balance sheets. And you can see the numbers for yourself. We continue to deliver on growth earnings and dividends as well. With that, I wrap up my presentation. Thanks for listening and back to you, Benjamin, for the Q&A.
Thank you so much, Priscilla. Thanks for that presentation. Always very helpful for a list go to discuss both the financials as well as strategy with people on the call. I also want to welcome Jasmine Loke. Jasmine Loke is a First Vice President of UOB Group, also in the IR function. So Priscilla and Jasmine, I think you're coworkers, right? So thank you for joining us as well.
Hi.
Hi. Okay, let's kick off with the pre-submitted questions. There is one about UOB's financial performance over the past year. The premise is that the past performance has been relatively softer compared to the broader industry trends. Would you be able to elaborate on some of the key factors behind this? Oh, you are on mute.
Oh, yeah, sorry. Thanks, Benjamin, for the question. In terms of the financial performance, I think there are two main factors behind this. One is the low interest rate impacting margin. As I mentioned, the net interest margins was impacted by the falling benchmark rate, especially the three-month SORA, which is our key benchmark for the Group. This mattered because about 80% of the loan book is floating rate and 45% is in Singdollar denominated. As the lower benchmark rates flowed through quite quickly into asset yields, it was also outpacing the fall in funding costs. I think there is a lag impact. We have also adjusted our funding costs or deposit costs gradually over the course of last year. Yeah, basically rate is something that we cannot control.
I think, what is our strategy to cushion if there are still pressure from the margin side of things, we will focus more on growing our non-interest income, particularly in areas like wealth management. We can talk more about this if we have questions on that. Over time, I think they should help to offset the impact of the lower interest rates and also improve our overall return. That is number one. I think number two, which is also what I discussed earlier, I touched upon was the preemptive provisions top up in third quarter last year. It was quite meaningful in terms of the size where we decided we would just want to strengthen our post-provision buffers to cover the key hotspot areas of U.S. and Hong Kong commercial real estate.
This temporarily lifted the credit costs up to 55 basis points, which is double of our usual run rate. As I shared before, there has been stabilization from, if you look at the NPL formation or non-performing loans, and their recovery progress, some also we have seen, I mean, in the U.S., even though I think Hong Kong side of things are still quite challenging, but we now have the buffers we can hold on to better pricing also when we want to liquidate our assets. For this year, 2026, we guide a normalization in credit costs. I mentioned last year was total about 55 basis points. This year, we should expect the credit cost to be in the range of 25-30 basis points, so closer to the usual run rate. Hope that explains a little bit of that recent performance.
Yeah, thank you so much for that. That actually provides a good segue to the next question, which is something that you touched upon in your response to the first question, which is the non-interest income. You mentioned about the wealth management and other non-interest income kind of revenue streams. Will you be able to elaborate a little bit more on UOB's plans in that regard?
Yeah. Okay. If you take the 2025 numbers, about 70% of our income came from net interest income. The remaining 30% was from non-interest income. If you think that interest rate, especially in Singapore, with the liquidity inflow still coming into the system, if rates are expected to stay relatively at this current level, SORA about 1%, then our focus is, as you rightly pointed out, we will grow our non-interest income further. This historically, just take the historical numbers in lower rate environments, the non-interest income portion from the 30% may increase to around 35% of total income. I think in the past few years, during COVID, when the rates were really close to zero, we did have more contribution from non-interest income, including wealth.
Our key fee income drivers, maybe I recap a bit that we also have card business, wealth management, and loan-related fees. The other side of thing is to also grow our treasury and markets income. Like I mentioned on the hedging and trading solution for our corporate clients, and also we can structure investment products for our retail and wealth clients. These will be the drivers for our non-interest income. Wealth management particularly very important because it tends to be countercyclical. If rates drop, then return on deposit, if you just place your money in CASA, the saving account or deposit at a fixed deposit, it will be less attractive. For the customers, they will look for alternative or other ways of investment, right? This will create demand for our investment products and our advisory services.
That's why we are stepping up our investments in wealth. Both also to lower the interest in income, I mean, to get a more non-interest income generation, and also to close the performance gap with peers. I think one of the differential with peers, some analysts, some investors do look at us compared to our peers in terms of the return on equity. Wealth is something that we need to close the gap to also catch up with the peers.
Okay. All right. Thanks for that. You also mentioned provisions for doubtful debt, doubtful loans, and bad debts, right? There is a question on the Q&A panel here. You mentioned that you have taken a look at some of your more risky clients, and then you've called in some loans and made provisions for that. The question here is UOB considering increasing its provision for bad debts further this year? If yes, would you be able to comment on how big an increase that would be?
Yeah. Our coverage level, following the top up I mentioned in Q3 last year. In terms of the coverage level, maybe there's one metric that's important for investor to note. It's called the general provision coverage of the performing loans. While the non-performing loans we already classified and provided for it, the performing loans, if there are more skeletons in the closet, it will be still performing, right? We will have to provide against these still performing loans. The buffer is 1% right now, which is quite robust, much more above the regulatory requirements, and also comparable to peers. I think, in terms of provision coverage now, we think that this 1% is quite okay.
We are comfortable with it, and we don't really need a top up unless the economic environment really change a lot, or we are seeing some vulnerable accounts down the road turn into bad loans in our key markets. I mentioned the top up of provisions was really to cater for the weaknesses in Hong Kong as well as U.S. commercial real estate. While U.S. there has been some improvement in the liquidity, we are mindful that Hong Kong side may be a little bit lagging behind. Hong Kong side of things, in terms of the recovery in the market, while the property market has already crashed quite a lot, as a bank, we don't think that it will crash much further. But the recovery has still be U-shaped, so we don't know how long will the recovery be.
Across segments also, we can see that the picture is still mixed. In residential, we are seeing some improvement in the liquidity and the prices. In retail commercial, some recovery supported by tourism, some stronger local spending by Hong Kong people. But office space recovery is still more selective. Demand for prime grade A buildings, I think in the central areas, may see some recovery. But overall, supply also remains elevated. I think given backdrop, the thing that we are still remain cautious is one of this market will be Hong Kong. But given that we already taken proactive provisions earlier by strengthening our coverage, it puts us in a better position to manage the risk.
Okay. All right. Thanks for that. Your response there was very comprehensive. You actually answered quite a few of the forthcoming questions.
Yeah.
All right, so let's move on to a different theme. There is a question here about how UOB's management assess the potential impact of geopolitical developments, especially what's been happening in the Middle East, the Gulf War, including any disruption to the transportation of oil products from the Middle East to the rest of the world. So, what's UOB's take on the risk management and the operational risk of that kind of far away events?
Okay, so maybe for this question, I'll just jump in to try to answer the question. I think we have saw what happened with the Middle East tension. For us, we have articulated that the direct impact to us is limited because we don't have a presence in the Middle East. However, I think as a bank, we have been looking very carefully at the possible indirect second order impact on our customers. Earlier this year, we have ran several stress tests on various industries that are more sensitive to your higher energy prices, such as oil related businesses like your petrochemicals, your plastics, and also energy intensive sectors, manufacturings, utilities, transportation. Based on our stress test scenario, we actually stress that oil prices will reach up to about US $150/bbl .
We found that the sectors only made up a very small portion of our total loans. Also in terms of the stress number is really quite immaterial for us, and we are already engaging them proactively. I think looking ahead, definitely there are some encouraging signs of easing tension. But the situation is still uncertain. Also I think even if the situation would improve, it may also take some time for energy supply to fully recover, which means that energy prices could remain high, and then there will be inflation and things like that. So we continue to monitor, and also take appropriate action to ensure that we are there to support our customers.
Okay, thanks for that, Jasmine. All right, so changing directions here. There is a question about whether UOB may consider issuing a special dividend instead of a share buyback given the current levels of its stock price.
Yeah. I think we announced this program last year. Back then, the composition of this SGD 3 billion capital return was that about SGD 1 billion was special dividend, and then SGD 2 billion was share buyback. Why we structure it in this way was also to cater for the different investor base. So, in our shareholder mix, really, we are made up of various geography. So not just a local base, Asian base, but also U.S. and European-based investors. Some do prefer a share buyback program because I think for U.S. investors, they will save on tax-
Yeah
if we conducted it in the form of share buyback rather than the cash dividends. But of course, for retail investors, we can understand that you will prefer
more cash dividends, so special dividends will be better. I think, in terms of how we do it has been reviewed regularly, so management internally also has been discussing and we will also seek regulatory approval if we were to maybe change some of the mix that was communicated earlier. If we do a different consideration, we will announce it in our results briefing. But as of now, priority is to finish the share buyback, the SGD 3 billion up to end 2027. The form, you may want to hear more update if we have quarterly results briefing, then we will announce any change.
Okay. All right. Thanks. Next question is about ESG, right? ESG initiative sustainability. Does the UOB Group have any ESG initiatives that may have a material financial impact on the performance of the group?
Yeah. Okay. We do have a net zero commitment.
Yes
As a group, we announced net zero commitment by 2050. It was announced in November 2022. Despite some of the global banks, they have been withdrawing their targets. For us, we are fully committed. We are still on track to achieve this commitment, and continue to be on this sustainability journey to support our clients also in their sustainability efforts. The net zero commitment is really covering six sectors for us. The energy value chain, power, automotive, and oil and gas, and then the build environment, real estate, construction, and steel. We choose to focus on these six sectors because these sectors made up almost more than 70% of the global emissions. Also, it is a big part of our corporate lending, like 60% out of the corporate lending. That is why we identified these sectors.
Investors, you can have a look at our sustainable report, which we publish every year to see the journey of our ESG and net zero commitment. We are on track. Year- after- year, we are currently trending below our committed reference pathways. Every year around March, we will provide this update together with the annual report. I think in terms of ASEAN context, despite some of the U.S. banks or other global banks, they have been withdrawing from the targets. For ASEAN, the climate change over here in this region, the impacts are real. You can probably feel the extremely hot days recently, right?
Yeah
Yeah, and a lot of things will be connected to this. In the long term, cooling needs for example, will be a major driver of energy consumption. Then data centers relating to AI-
Yeah.
...they also require energy, right? So all of these things, renewable energy, I think we are still committed to facilitating for our clients, if they have aspirations to go into the more greener path. So, we are standby and also encourage them to do more in this area.
Okay. All right. Thanks for that. There is a question here about UOB's integration of Citigroup's consumer business.
Yeah.
Specifically, does UOB Group expect any kind of write-off from the acquired portfolio? If so, what would be the percentage, the amount?
In terms of Citi integration, as I mentioned, we have completed the acquisition, both legally and also migrating the customers we have won.
Over the last, how many years, yeah, since end of 2022, so three, four years down the road. I think customer attrition has been minimal. We have continued to grow our customers base organically. In terms of hiccups during the acquisition, for example, where we first onboarded the customers, there will be some people who cannot log in to the new TMRW app or have some payment issues in making payments and all those, but those are already behind us. In terms of the portfolio now, I think we are cleaner. We do not expect to write off any, like, with regards to this portfolio we acquired from Citi. But what we want to do further is more to cross-sell products.
Yeah.
The synergies that we have identified, because the ex-Citi customers, so the old Citi customers, they initially only had one product. Typically they all only hold the Citi credit card. Now, when we acquire, of course, we can sell more products to them. We started with selling current account and saving account. If you look at our CASA ratio, the low-cost funding ratio, it has improved from about 47% to 58%, over the last, how many, three years or so after the acquisition.
Because we have been selling current accounts, saving account products to the ex-Citi people, customers. And then the retail deposit, as you can see, have continued to grow strongly. Then I think the next phase, which I also mentioned, because wealth business is also an important driver for our ROE improvement, so we would like to gradually increase the number of customers who invest in us, so the wealth- product penetration. Over time, this will also lead to higher wealth income.
Yeah.
Yeah. Then also, maybe last point on CT. Cost synergy, we have also been started doing this, right-
Right.
...over the number of years that we have finished the integration now. So some overlapping staff, for example, have been redeployed across the organization. If there were overlapping staff like ex-Citi staff and then UOB staff, then we can move people around. We have done so. If you look at our ASEAN markets, the four markets, Malaysia, Indonesia, Thailand, Vietnam, now they have been seeing some improvement in terms of the cost to income ratio. That's probably what I can share on the Citi acquisition update.
All right. Thanks for that. It sounds like the integration and operational issues are all done and dusted, it's about creating value for customers.
All right. Yeah.
Cool. All right. Let's move on. Okay, there is a question here which I am not quite sure you can answer this. Do you have a view on Singapore interest rates? It seems that Singapore interest rates have decoupled somewhat from U.S. rates.
Jas, you want to take that?
Yeah. So, okay. I mean, our house view. So, okay. So what happened is, historically, we do know that SORA actually moved in tandem with U.S. rates, right, with a 60%-70%, long run pass-through rate. So in 2025, we saw that this relationship has broken down.
Yeah.
In the sense that the Fed funds rate remained constant, but we saw how SORA fell unprecedentedly over the-
Yeah.
...over the year, dropped about 200 basis points. Our house view, I mean, not my view, but our house view-
Yeah.
...is that SORA should find some bottom, and then will remain stable at the current level. Our house view is that there will be no Fed rate cut this year.
Oh, okay.
Yeah, no Fed rate cut this year.
Yeah, fair.
I mean, there are some different views in the market. Some view is that there may even be a rate hike-
Yeah.
...in the second half of the year. This is our house view. I mean, of course, this is a very fluid environment. I think things may change. I think right now there are even some analysis in the market saying that SORA may continue to creep up. I think it really is anyone's guess where SORA will be headed. But, overall, yeah, I think what we have highlighted earlier, our NIM guidance for this year continue to be a full year 2026 NIM of 1.75%-1.8%.
Thank you so much for that, and very appreciative for your comprehensive answer. I didn't expect I mean, you're from IR. I mean, I expected this to come from head of wealth management or head of research to give this.
Yeah, I mean, we do have-
Thank you.
Regular update from our research team.
Yeah.
I believe they are usually quoted in the media as well on-
Okay
...what is their view and all this. So, yeah, just a caveat that it is not our view, it is the house view, and happy to discuss that, any questions that you have.
Yeah. Maybe we should help you guys distribute the house view. This is probably the wrong forum for this.
Maybe now you can ask us easier questions.
Yeah. Instead of looking into the tea leaves, right? Trying to read the tea leaves. Okay, let's move on to Okay, we've already covered this one. All right. So the question here, okay, so there are three local banks, all also want to focus on net, non-interest income, right? So wealth management. So how is UOB's approach going to be different from the other two banks? I mean, what differentiates UOB's wealth management offerings, and how is that going to be monetized, and showing up in the books? Yeah.
Yeah. If you look at our wealth business, I think last year we have been growing quite meaningfully. So mid-teens kind of performance, so 14% in 2025. This year also, we grew further. In terms of the medium-term target, it will be to double the wealth income in the next five years. If you take the 2025 numbers, I think about SGD 1.3 billion annualized. We hope to double by 2030. To achieve this, we are focused on growing our Assets under Management, so our AUM. If you recall, we have a slide on the AUM, it has been growing over the recent quarters. We will continue to do so. Also to increase the proportion of invested assets.
Meaning to say that, currently, the mix of the Assets under Management is still higher on the deposit side. I think, 42% is invested, the remaining is in deposit. For our peers, I think they have more Assets under Management, AUM, in the more half between deposits and invested. Our goal is to increase the proportion of invested assets. Again, how to do so, we have strategies in place, including to also hire RMs. That is one strategy. Roll out new products and platform capabilities. We identify the gaps with our peers.
If we still have digital wealth capabilities that are still lagging behind our peers, we will introduce new features as well over time. What really differentiates us also, what we try to do is not just the product. Because products usually from wealth, we also market a third-party product, so it is an open architecture model. Typically what customers seeks when they want to switch banks is the better advice or the performance. So we are strengthening more of our advisory capabilities-
Yeah.
...and also leveraging on our RM base. As I mentioned, we will also hire more RMs. In certain region, like for example, because now our AUM still roughly 60% coming from nationalities, not Singaporean but they are largely based in ASEAN. So the-
Yeah.
...the clients will be the Malaysian, Thailand, Indonesian. They park their money in our private banking in Singapore, for example. We would like to grow more and target more of the potential in North Asia. North Asia, including Hong Kong, the customer base there also typically have higher risk appetite. It is an area that we have not been penetrating quite aggressively because now our distribution is mostly in Southeast Asia. We would like to grow more over there and, well, you may ask also how are you going to compete with the Hong Kong banks and the likes?
Yeah.
The industry tailwinds are behind us. I mean, I think they are, if the rates are kind of still low, then people will seek investment ideas, investment kind of products. The industry tailwind is behind us. And we are low base. In Hong Kong, we are really not so big. From low base, we hope to gain some market share. And yeah, we continue to strengthen key areas and basically building a wealth business will take time. While over the last few years, we have been focusing on integration of the Citi acquisition. Now, I think the next focus is really on wealth. So, how to create a stronger momentum in the net new money inflows, for example. And that also needs some focus on the private bank side, where our peers may be ahead of us because-
Yeah.
...they also did some acquisitions in the past where we have been growing more organically. This is an area of focus of management and, in terms of the journey, it may not be linear, but, once we begin the strategies, the key building blocks are already in place. We hope that we can see the inflection point and you can see more meaningful growth in the future.
Okay. Thanks for that. There was quite a lot of news pieces about how AI tools are going to be taking over some of the usual tasks done by junior private bankers. I suppose now the emphasis more is on service-
Yeah.
...bedside manners, rather than the actual how to do it and the mechanisms.
I think the tools will also help, for example, our RMs are also equipped with new tools. Say for example, comparing the client's existing portfolio, like the asset classes that the clients have, the likes and don't likes of the client. It will show in that platform, in the iPad.
Yeah.
But also, to align with what is the UOB CIO house view. If we are underweight certain markets and equity, or we are overweight gold, for example, then, if we compare to the portfolio position of the clients and there are deviations, then the RM can go to the client, oh, why not you overweight more gold? Just for example.
Yeah.
Yes. It will help the RM to start conversation with the clients also.
Yes. A more bespoke, tailored experience.
Yes. Correct. Equipping-
Yeah
...the RMs better, basically.
Okay. That is a good segue into the next question, which is about UOB's possible divestment of UOB Asset Management, which was, I guess, in the popular news the last few months. Is that going ahead? Again, mindful that you might be having private discussions with potential suitors, so obviously do not disclose anything which is proprietary to the organization.
Yes. So, with regards to this transaction, I do not think we have made any formal announcement on this. These are just market speculation and some media reports. I think what we can comment is that the group will regularly review our portfolio of businesses and also investments to ensure optimal allocation of capital and also to enhance our shareholder returns. As part of this process, we may time to time make some strategic decision to divest some business. For instance, last year, we actually exited our mainland China retail banking business. I am not sure whether you have saw it. Also, I think over the last few months, there are also some disposals of certain buildings.
Right.
I think the management will regularly review, and if anything is real and anything is confirmed, you should hear it from formal announcements.
Okay. All right. That's fair. That's good. All right. Next, question about risk management, specifically, cybersecurity. A lot of talk about Anthropic, Meta, Fable and so forth, being able to crack Bitcoin. Okay, I made that up. But obviously it's scaring quite a few people, especially Donald Trump's administration. How is UOB's approach to cybersecurity given all these advances in AI? Are there any specific plans or updates or CapEx that you're putting in to strengthen that risk factor?
Yeah.
Mm. Yeah. Maybe I can start first, then maybe Pris you can add on. I think, as we all know, the banking landscape here has been becoming more digital over the last few years. So definitely scams and cybercrimes remain a key concern for the banking system. We have heard the announcement of Mythos by Anthropic and others. I think what we have done in UOB is that we continue to strengthen our real-time fraud surveillance. We have, over the years, implemented several cybersecurity, how to say, efforts such as pulling off safeguards, your Money Lock, and all this.
Also we have been using AI to improve how we do our surveillance and how we do fraud detection and others. Definitely the bank has been investing very heavily over the last few years to make sure that the systems are well protected by all this, and then enable us to identify potential issues earlier, which is complementary to our existing risk framework.
Maybe just to add that, AI, we are mindful that it will accelerate vulnerability discovery, and it increase the speed and the scale of cyber attacks. This is something we are very mindful upon. The challenge is always, the attackers, they only need one weak point, but for us, the defenders, we must secure all points, right? It is a-
Yeah.
...fair challenge for us. Increasingly, we have been looking into this. UOB's response, I think we have been reassessing also the security architecture internally. Increasing the use of AI, using AI to find the AI, right? Also, I think we engage ecosystem partners. For example, I think we engage Accenture. For rapid attack cycles if it does escalate from Mythos or from something else. Internally, we do acknowledge the risk, and we are doing things about it. Yeah.
Okay. Okay, great. You touched on AI there. A few questions about that. With regards to the general use of AI as well as digital transformation, IR, VR, AR, sorry, within UOB, do you have specific plans to incorporate that into your workflow and/or your product stack?
Yeah, so maybe in future, next year you will be speaking to some AI bot for the CS presentation.
I hope not.
Not investor relations officer.
I am not sure whether AI can take jokes. I am not sure. Okay, but okay.
For UOB, our focus for AI is to continue to use AI responsibly, I think in three key areas. Number one is to improve your customer experience. Number two would be to enhance operational efficiency, and number three, which we have talked about earlier, is to strengthen risk management. In terms of improving your customer experience, where we are using AI is to deliver more personalized insights, such as when you log into your TMRW app, they can give you product recommendations and like as and when they see you are traveling, they can actually pull up certain deals for you if you are in that particular country, things like that.
In terms of enhancing our operations, we continue to automate certain manual processes allowing our employees to focus on higher value activities and also customer engagement. I think this is not unique to us. I think a lot of organizations are actually using that as well. Last but not least, I think what we have spoke about earlier, risk management, which is very important for us in areas such as fraud detection, anti-money laundering, credit monitoring, and things like that. I think more importantly, the point to note is that we take a very disciplined approach to AI adoption, meaning that every use case is subject to appropriate governance, regulatory requirements, and also human oversight.
Yeah.
Whenever we talk about AI, we don't call it automatic intelligence, right? It's actually augmented.
Oh, right. There's a human factor.
Yeah. There's a human element involved-
Yeah.
...to provide oversight. I think that's the key point that I'd like to bring across.
Mm. With that regard, with all these AI initiatives, digital transformation, how do you track the success of all these things? How do you say, okay, we did well by rolling out these AI tools in this particular sector?
Yeah.
Is there specific targets or how do you--
Yeah. I think, as of now, we do not really have a targeted number to it, but definitely we assess the success over a range of financial and non-financial metrics, I would suppose. Financially, we will probably be looking at productivity improvements, revenue, and how do you increase your revenue from that. I think equally important will be your non-financial outcomes, like your customer satisfaction score, faster turnaround time, and things like that. Resilience, cybersecurity resilience, digital outage, and things like that. I think these are equally important as well. To answer your question, I would imagine it would be a range of financial and non-financial metrics that the management would look at.
Okay. Okay. Time now is one minute past 8:00. I think we will just do one more question and then call it an evening.
Sure. Sure.
I guess as a wrap-up question, what is the biggest driver of UOB's value creation over the next decade?
Next decade. Wow, that is a long-term question.
Yeah.
I think the biggest driver for us would definitely be our ability to capture ASEAN growth through the shift towards a more capital light, fee-led, and a resilient, diversified business model. I think based on what you have heard from us during the presentation, our ASEAN strategy has not changed. The region continue to benefit from certain structural trends, and we believe that definitely with our network and our franchise, we are well positioned to capture this growth.
I think the value creation levers would be things like what Priscilla has already articulated just now, growing wealth management, growing cards, growing trade finance, transaction banking, and also cross-border flows. I think this will be the key drivers for, I believe, the next decade. I think it also definitely depends on how Macro environment plays a part as well-
Yeah
...your interest rate environment, your macro developments, and things like that. We will be well positioned to navigate anything and also to capitalize on all these opportunities.
Okay.
Hope that answer your question.
Yeah. It is a good fit to what is happening in the region as well as your company's organization. Yeah, it is a great answer. Thank you so much for that. I will take this opportunity to thank yourself, both Jasmine as well as Priscilla, for all your insights as well as your candid comments to some of the questions that we have. I am very grateful that you spent evening with us, and of course, next year we will look forward to your AI chatbots that I will be trying to joke with.
Definitely will not be as good as us.
For sure. But jokes aside, thank you so much for joining us.
Thank you, CS, for the opportunity, and thank you to everyone online as well for spending your precious dinner time with us. We truly appreciate your support and interest in UOB.
Right. Thank you so much. Have a great evening ahead.
You
Priscilla, Jasmine, as well as everyone else on the line. Thank you so much.
Thank you everyone. Bye.
Bye.