O39.SIO39.SI
LOADING
|||
Ching Ching Koh: Good morning, everyone. Thank you for joining us to our third quarter results briefing. This results briefing will be Helen's last results briefing. And so of course, we all wish her all the best, and from the fourth quarter and full year results, we'll see Teck Long [indiscernible] next year. Okay. So without further ado, I'll pass the time to Chin Yee to take us through our results.
Chin Yee Goh: Good morning, everyone. Thank you for joining us in OCBC's third Q 2025 results briefing. Our third Q '25 group net profit was SGD 1.98 billion, up 9% from last quarter and largely unchanged from a year ago. This was our second highest quarterly net profit. ROE was an annualized 13.4%. Total income grew 7% from previous quarter. The growth was driven by record noninterest income, which more than compensated for the decline in net interest income. NII fell 2% to SGD 2.23 billion quarter-on-quarter amid declining benchmark rates. We continue to prioritize asset growth to support NII. Noninterest income rose 24% to SGD 1.57 billion, driven by fee, trading and insurance income. The strong results were supported by our wealth management franchise, which continued to scale and deliver record wealth management income. Our insurance business also contributed strongly, reinforcing the benefits of our diversified income streams. Loans and deposits continued to register healthy growth, up 7% and 11%, respectively, year-on-year. Asset quality remained resilient. NPL ratio stable at 0.9% for the past 6 quarters. Total credit costs in third Q of '25 were 16 basis points on annualized basis. Total NPA coverage was 160%. Our capital position remains sound. Common equity Tier 1 ratio was 16.9% on a transitional basis and 15% on a fully phased-in basis. With our solid third quarter earnings, our 9 months of '25 group net profit reached SGD 5.7 billion, 4% below 9 months of '24. The strength of our One Group franchise is reflected in the performance across our banking, wealth management and insurance pillars. Our banking net profit grew 3% from last quarter, demonstrating resilience despite a declining interest rate environment. Double-digit growth in noninterest income more than compensated for the moderation in NII. Wealth management income and AUM were at record highs. Our wealth management income grew 25% to SGD 1.62 billion, contributing 43% to group total income. Banking AUM rose 18% year-on-year and 8% Q-on-Q to SGD 336 billion, driven by net new money inflows and positive market valuation. Net new money inflows were SGD 12 billion in third quarter, above the run rate for the past 2 quarters of about SGD 4 billion to SGD 5 billion. Year-to-date 9 months, net new money inflows were SGD 21 billion. On insurance, profit contribution from GEH grew 50% Q-on-Q to SGD 347 million. This was driven by improved investment performance from insurance and shareholders' funds. GEH new business embedded value or NBEV rose 9% and NBEV margin improved to 48.8%, reflecting GE's strategic shift towards higher-margin products. Moving on to details of our group performance trends, starting with NII on Slide 8. NII for the quarter came in at SGD 2.23 billion, 2% lower from last quarter. Average assets grew 1%, but this was offset by an 8 basis point decline in NIM to 1.84%. Referring to the waterfall chart on NIM. NIM narrowed primarily from lower loan yields, which reduced margin by 21 basis points. This was driven by the fall in benchmark rates, particularly the average rates for SRA and HIBOR. The progressive reduction in our funding costs as well as cash flow hedges partly mitigated the compression in loan yields. About half of our loan book is denominated in Sing dollar and Hong Kong dollar. For these currencies, around 80% of our Sing dollar loans and almost all Hong Kong dollar loans are either on floating rates or due for repricing within a year. The exit NIM for September was 1.84%. At end September, our NIM sensitivity based on 100 basis point drop in rates across our four major currencies of Singapore dollars, Hong Kong dollars, Malaysian ringgit and U.S. dollars was about 11 basis points on an annualized basis. On NII -- sorry, on noninterest income now. For the quarter, noninterest income was up 24% Q-on-Q, supported by broad-based growth across fee, trading and insurance income. For the 9-month period, noninterest income grew 10% year-on-year to a new high of SGD 4.14 billion, listed by the same growth drivers. Fee income was a key contributor, increasing 24% to SGD 1.8 billion. Our fee income reached SGD 683 million in third Q of '25, up 18% Q-on-Q and 34% year-on-year, driven by higher corporate as well as wealth customer activities. As can be seen from the chart, our fee income has maintained an upward trajectory over the past 5 quarters, contributed mainly by the strong momentum in wealth management. The record third quarter wealth management performance lifted our 9-month fee income to a new high of SGD 1.8 billion, up 24%. Wealth management fees surged 35% to SGD 923 million, contributing more than half of fee income. Compared to last year's, customers deploy more funds into investments across all wealth segments with around 60% of banking AUM invested. Trading income for the quarter was SGD 518 million, up 38% Q-on-Q. The strong growth was driven by customer flow treasury income, which was at a quarterly high. Noncustomer flow trading income also improved, reflecting better investment performance across our global markets portfolio as well as GE's shareholders' funds. For the 9-month period, trading income was up 4% to SGD 1.29 billion, underpinned by record customer flow treasury income. The growth was contributed by both wealth and corporate segments. Moving on to expenses. Our operating expenses continued to be well managed even as we invest strategically for growth. For the 9-month period, operating expenses rose by 3% year-on-year. Cost-to-income ratio was held below 40% at 39.3%. Our loan book remains well diversified across geographies and sectors. Loans grew 7% year-on-year and 1% quarter-on-quarter to SGD 327 billion. Growth over the past year was broad-based across consumer and corporate segments. In particular, the transport, storage and communication sector grew the most as we focus on capturing opportunities in the new economy sectors and high-growth industries. Singapore housing loans also grew as we build market share. Sustainable financing continues to gain traction. Loans grew 17% year-on-year to SGD 55 billion and now accounts for 17% of our total group loans. Our overall loan portfolio quality remains sound. NPL ratio stable at 0.9%. NPAs declined by 1% Q-on-Q, largely due to higher recoveries, upgrades and write-offs, which more than compensated for new NPAs. We remain vigilant and continue to conduct ongoing reviews of our loan portfolio, including assessments on the potential impact of trade tariffs. Total allowances for 9 months of '25 were SGD 466 million, down 4% due to lower allowances for impaired assets. Allowances for non-impaired assets were higher. This included preemptive allowances set aside for trade tariffs and macro uncertainties and adjustments, MEV updates mainly to reflect the weaker economic outlook. Credit costs for 9 months '25 were at an annualized 17 basis points. Our third Q '25 allowances were higher quarter-on-quarter as we set aside allowances for impaired assets. Our NPA coverage ratio was around 160% over the past 5 quarters. Allowances for non-impaired loans maintained at 0.9% of total performing loans. Moving on to deposits. Customer deposits rose 11% year-on-year and 1% Q-on-Q to SGD 411 billion. CASA deposits grew by SGD 27 billion or 15% year-on-year across both corporate and consumer segments. CASA ratio improved to 50.3%. Our strong deposit franchise contributed to 80% of our funding structure. All funding and liquidity ratios are well above regulatory requirements. Moving on to capital. Our capital position remains strong. Transitionary CET1 ratio was 16.9%, broadly stable quarter-on-quarter. On a fully phased-in basis, our CET1 ratio was 15%. Our robust balance sheet and capital position enable us to pursue growth opportunities, navigate uncertainties and enhance shareholders' returns. With this, I end my presentation. Thank you. And I will now hand the floor over to Helen. Helen?
Pik Kuen Wong: Thank you, Chin Yee. Good morning, everyone. As usual, very happy to see faces. I always say that because when I started, we can't see faces. It was COVID. So it's always good to have you at office. Just want to start with some comments on the third quarter results. Of course, it is our strongest quarter this year, and it's the second highest on record. I think we lost out -- this quarter lost out to first quarter '24 by like SGD 4 million. So -- and it's all in all, a very good quarter. Of course, net profit is up Q-on-Q by 9% and SGD 1.98 billion, of course, and is closest, as we said, closest to first quarter '24. I think we achieved this despite a declining shipment environment through a few things. I think the first thing has to mention is the ability of our diversified business pillars, right, and producing or generating balanced earnings through economic cycles. And covered by -- as covered by Chin Yee, NII and NIM moderated, but our noninterest income rose 24% quarter-on-quarter to a new high with double-digit growth across quite a variety on fees, on trading and insurance income as well. So to sustain our NII, we are focused on asset growth. I did mention before in some of the other briefing on interest rate cycles, there are always interest rate cycles, they are always up and down. You cannot rely on high interest rate to generate a wider margin. So the cost of the matter is always to focus on growth and asset growth is important to defend the NII. So -- but equally important is to manage the funding cost. So growing deposits in the right manner, especially lower cost deposits is key as well. So I think we have been able to and we continue to focus on driving regional account openings for corporates and also for commercial banking customers and capturing a lot more cash management mandates. Cash management mandates are important as they bring in the money and the operating account normally are not fixed deposits because they work on that. And indeed, as you gather the cash management mandate, that means the remittances, the FX, everything comes in as well. So this is what is important. So our robust noninterest income also reflected results of our strategic actions to strengthen our franchise. Be it in wealth and be it in our cross-border capital flow, sustainability, as Chin Yee has mentioned, our sustainable finance is growing well and also some of the newer economy customers that we are able to start to bank with more and more. Wealth management strategy, of course, continue to play out positively. We are well positioned for long-term growth. As shared by Chin Yee, net new money for the third quarter is SGD 12 billion, and this is quite good, well spread across and contributed by all segments. By that, we mean the private banking side, our premier private and our premier customer wealth segments. Quarterly wealth management fees and income grew to record levels with sustained momentum across all segments as well and product channels. We do talk about our investing in more relationship managers, but our wealth platform has been very effective for our customers. And indeed, whenever we come up with new products, we will be able to apply across our wealth platform for different segments. Of course, we check the suitability, right? So -- but that means whenever we invest in anything, we can consider to launch on the same platform, which makes our channels very effective. We continue to deepen our regional private banking and premier banking franchise. RM bank strength, we talk about private banking and also our PPC segment having more RMs. But I think importantly is the products that we develop and the advisory capabilities across the wealth spectrum, including insurance. I think productivity also is another key. Recently, we did announce private bank using AI to have our RMs to do KYC and which has significantly shortened the time spent, meaning they have more time facing the clients, but will be -- continue to be effective and protected. Trading income, we're happy with it as well, rose 38% Q-on-Q. It's now above SGD 500 million in the third quarter as customer flow treasury income hit an all-time high. This is again both for wealth and also for corporate customers as we built on cross-selling as One Group. And this is not just in Singapore, but across geographies as well. And for insurance, the profit contribution from GE was up 50% Q-on-Q. GE indeed is working on increasing collaboration with the whole group. And I would say insurance plays an essential role in our Wealth Management business. We have also seen more insurance policy working together with the trust side to -- as a way to protect the wealth of our customer. So we always talk about wealth continuum. This is what we have been working on, and it is important that we continue to have that. So cost-to-income ratio is around 40%. Of course, we exercise quite a good cost discipline as well. And important to continue to invest in our business, in our people and also in technology. This is indeed for future growth. Asset quality is sound. NPL ratio held steadily at 0.9% since June 2024. And we are closely watching risk arising from trade tariffs, but we've talked about it for the last 3 quarters already. So I think there is, of course, potential impact, but I think we have been tracking well. Our customers have been managing quite well as well. One sector we remain particularly cautious, of course, Hong Kong CRE is a question that some of you will raise, but indeed, we have been quite cautious. We're comfortable with current level of allowance coverage. I think 160% as an NPL coverage is quite satisfactory. And then coverage on performing loans is at 0.9%. Loans will also grow, I think, 7% and 4% on a constant currency basis. We have gained market share in Singapore mortgages. And through -- for one example, we have a partner care program, which we work very closely with property agents and to encourage them to bank with us more and also through the referral customers and mortgages to us as well. For corporates, we continue to expand, deepen relationships with new-to-bank customers as well as supporting customers across our international network. So that is not limited to ASEAN and Greater China, but through our major international branches as well. I'll pass to Teck Long later to talk a bit about that. Flipping the page, of course, we always say there is uncertainty and uncertainty become more complex as well. But happy to say that global trade and most major economies have shown signs of resilience. And of course, this year, in particular, supported by some front loading for trade and also technology up cycling, particularly for Asia. For this year, we are keeping to our previous guidance on our financial numbers, except for NIM, we want to -- and we are changing it to around 1.9% from the previous 1.9% to 1.95%. Looking ahead, I think as we said, operating conditions continue to be complex and 2026 may see slower economic growth across various countries and geographies. And of course, trade policies can continue to shift. Geopolitical tensions are still there that could have an implication on the demand and supply chains for our key markets, but we do feel that the fundamentals remain resilient, and we are positive on the mid- to longer-term growth prospects as well. Also want to report on our strategy. I think we refreshed our corporate strategy in 2022. We talked about a 3-year plan of incremental revenues of SGD 3 billion. Glad to report by end of September, we have already surpassed that growth of SGD 3 billion. So hopefully, we'll end the 3-year plan quite ahead. First thing is ahead of schedule, but also above plan. That means the initiatives we all put together and how we work as One Group has bear fruit. And I think this will shape up well as a firm foundation to capture growth opportunities going ahead as well. We talk about growth pillars, but also fundamentally what is important is a One Group approach, and this is an important enabler. Today, we work much more closer as One Group. That means not just collaboration, but synergy and synergy is both in business volumes and more customer and also synergy in terms of cost savings as well. So this is important because it is -- as we have more customers and they bank with us on more products and more and more countries and more effectively because we also make digital a very important offering. So I think we are managed to work as One Group together. We are well placed for the future and -- because we still have a very strong balance sheet position and the business franchise. For 2025, we stick to our commitment to deliver the 60% of dividend payout ratio, and we will complete the share buyback plans by end of 2026. That is still there. So we stay committed. So we now hand over to Teck Long to talk a bit more about the business and the business environment.
Teck Long Tan: Thank you, Helen. I will share two key factors which we are monitoring. One factor is obviously the tariffs. And I would say it's not just the tariffs, but also the broader trade restrictions other than tariffs. We feel that the ripple effect of the tariffs and trade restriction has not been fully filtered throughout the economy. So we are watching this very closely. Having said that, some sectors are still growing, for example, digital infrastructure, domestic construction boom. So we see these sectors continue to grow. Indeed, from a different angle, because of trade tariff where materials come from, for example, a large market, a large manufacturer market like China, the input cost could be lower for some of these corporates in these industries. The second big factor is interest rate. Interest rate helps in the sense that the wealth customers start to relook at onboarding risk in their investment. And also for corporates, it has an effect on them evaluating the hurdle rates for investment. Having said that, the overall tone of the environment is still cautious in investing. So I will pass that back to the colleague, Ching Ching.
Ching Ching Koh: Right. We'll open the floor now for questions. Maybe [indiscernible].
Unknown Analyst: Yes, so to start off, what does this mean for OCBC moving forward? And what's the outlook for the next quarter and...
Pik Kuen Wong: Which one? Sorry, can you repeat that once more?
Unknown Analyst: What does this mean for -- [indiscernible] for us.
Pik Kuen Wong: Okay. It's an exciting set of numbers. We are happy, reflects on some of the investments and the commitment we have made in the past. We did talk about the corporate strategy, where we are focusing on and indeed improving for the wealth segment, in particular, we said we are hiring more RMs. I remember last quarter, we did talk about we achieved the number, in particular for the private bank, we achieved the number earlier than we expected, meaning we hire faster than we hope. The use of AI has generated a lot more -- some cost savings, meaning we become more productive in a sense. So we hope that this is a good foundation going forward. Fourth quarter since we're going to only announce by next year, and we're only 1 month into the fourth quarter. Of course, we hope momentum is still there. But generally, the last quarter is a more quiet time for wealth. Normally, it is the case. And we have changed our -- [indiscernible] some of our guidance, meaning we think loan growth can still be mid-single digit. We continue to try to defend our NII. But again, I think the noninterest income sees most results from what we have invested in the past. So we hope this is laying a good foundation for 2026.
Unknown Analyst: Okay. So with AI assisting [indiscernible] helping RMs do KYC, so [indiscernible].
Pik Kuen Wong: If we have RMs, that's great, right, because they have more time to talk to customers. So they're able to generate business volume. I think I also mentioned in the past with the use of technology, you have not actually seen there is any need for us to say that we have to release people. First thing is because we continue to train our people so that they will be able to take on more complicated jobs. But the second thing is you invest in technology, it brings on more volume. So you also need the people to do the job. And there's always natural attrition. So I wouldn't say that because of AI, suddenly there will be a loss of job. We haven't seen that, and I do not expect it in the foreseeable future.
Ching Ching Koh: Anyone else? [indiscernible].
Unknown Analyst: So one question I had was how critical is wealth management to Singapore's growth strategy right now, especially as lending margins compress? And then my second question is, how do you balance the growth opportunity from ultra-wealthy clients with heightened regulatory scrutiny around money laundering and sanctions compliance.
Pik Kuen Wong: The first one you're also referring to wealth. And you asked about loan margins?
Unknown Analyst: No. Mostly just how critical is wealth management to Singapore banks right now as a strategy?
Pik Kuen Wong: I think wealth management has been a very important -- also in our own corporate strategy, it's a very important growth pillar. And the reason being that Asia is getting more affluent over the years. And so Singapore definitely is the center in particular for ASEAN. And wealth management -- and Singapore is a highly rated country. And even you have seen over COVID or some uncertainty in the world, actually, there will be net new money coming into the country. So that's why this is a very important growth pillar for Singapore banks. And in particular, most research would say that the Wealth business will continue to grow like high-single digit or even double digit, right? Over the next 5 years or so. So that is why it is important. When we say it is important, that means we should be able to handle business in a fair manner. Fair manner meaning that you serve your customer well, but, of course, you stick to your laws and regulations. And also we uphold to the higher standards, right, because we are responsible to -- not just to our regulators or rules and regulation, it's to our stakeholders as well, right? We defend our reputation, we defend our business franchise. So when you need that history -- to the second question, how do you balance that? I wouldn't even call it a balancing act. We strongly adhere to -- of course, we have to adhere to rules and regulations. But it is not rules and regulations that Sing -- that keeping us from not doing business. Rules and regulation is there. And if there is no rules and regulations, how do people conduct business. So that's the fundamental. So adhering to rules and regulations, there's no negotiation, yes. And then it is about how do you use your people, use your technology to identify what is not suitable. So KYC is a very important thing. And it doesn't mean that if you do KYC, you cannot put clients on. But KYC is the way for us to keep away not suitable clients, right, those -- and so I don't think it's a balancing act. It is we need to continue to invest in how we conduct our KYC. The world has become a lot more complicated. That's why AI comes in handy. Using AI information, it can summarize much better than you put in a lot of manual hours to do it, right? But I want to recap that this is not a balancing act. You just have to do it, but that doesn't stop us from able to put in more customers and offer our service to them.
Ching Ching Koh: Maybe Thomas...
Unknown Analyst: So I have a question for them because you just mentioned that digital infrastructure is growing sector, but a significant portion of investment obviously [Technical Difficulty] so do you foresee any possible [indiscernible] or overheating? And how do you monitor?
Teck Long Tan: I think the demand will be sustained. The digital infrastructure is needed because of the trends of companies adopting digitization in their processes. It also has to do with consumer behaviors, individual behaviors, serving the net using video services as opposed to just searching on Google for information. So all these are data intensive and this fuel the growth of AI and therefore -- sorry, fuel the growth of digital infrastructure. Now AI is even more demanding for data center. So this is the beginning of the AI wave, and I think the trend will sustain.
Ching Ching Koh: Sorry, maybe I go to [indiscernible] .
Unknown Analyst: I have one question on the net new money inflows. So it's SGD 12 billion, and it's about the run rate of about SGD 4 billion to SGD 5 billion in the past 2 quarters. So I was wondering what changed. And in terms of the geographies, where are they coming from?
Pik Kuen Wong: It's a good number, of course, and it is also a result of some of the early work we have done, the hiring of the new RMs are beginning to bear fruit, right, because we did say that we accelerated the hiring a bit more for the last 2 years. With that sometimes people say, is this the new normal? I think you cannot see it as like what you call a new normal because a lot depends on the market conditions as well. And when the interest rate coming lower also help because customers maybe actually be more active. And if you have good products and then, of course, they said, I give money -- put money into OCBC Group because you can offer me good products and give me good investment plans. Generally, fourth quarter is a bit more quiet as we always see. So don't take it that SGD 12 billion will repeat in the fourth quarter necessarily, okay? But as to the spread, it's quite well spread among our three segments that we report, meaning the private banking side and then our premium and also premier private. And it also comes from various places. It's not limited to -- I'm not to say that it's particular one country contribute the most.
Ching Ching Koh: [indiscernible].
Unknown Analyst: I have two questions. The first one is what's the basis of the assumptions for the new guidance on NIM of 1.9% as the basis of assumption? And the second question is how confident are you with the asset quality amid all this macro uncertainty? And do you see any -- foresee any like specific sector stress, for instance, like Hong Kong, CRE and...
Pik Kuen Wong: Yes. I think NIM, we provide guidance because we have been providing a guidance on NIM in the past. In an interest rate cycle as now interest rate going lower, NIM will continue -- I mean NIM will have pressure, yes. So what we have been focusing this year, which we described in the past is very much protecting our NII, yes. So NIM becomes like a pointer. It's not really like a target. It is a pointer to help us to look at how -- in particular, look at how we manage our funding costs. And how we defend, of course, our loan margin as well. So I think the reason why we do want to show this is because we have been showing NIM before, and we don't want to misguide because we do see NIM dropping in the last quarter, which would mean that the whole year -- I mean the last quarter and also the coming quarter because interest rates coming down. So that's why we want to provide an updated NIM. But it is -- it doesn't serve as a target. We say we need to protect that NIM because I said before, interest rate cycle -- I mean we cannot control how interest rate turn, but we can control and we can invest what we can do to bring in more volume to counter that loss and more volume also pointing to more volume on noninterest income as well. So that is it. The second question is on the quality of our portfolio. We are quite uncomfortable. It has been stayed -- the NPL ratio has been staying at 0.9%. Our coverage, I think, is quite comfortable as well. We do not see any systemic risk. There are sectors that we watch much more closer. It doesn't mean that we foresee something very bad coming up. But of course, nobody can look too far beyond. Everything is about -- I think Teck Long just talked about it. We always know that there is geopolitical tension, there is trade tariff situation, doesn't mean that it's entirely gone. And so -- but what we can -- what we are more comfortable is we feel that the area we are in still offer a lot of resilience in the economic situation. Next year, maybe the global growth may be slower. But if we are in more resilient regions, we hope that through the opportunities we have identified, through the work and investment we have put in, we'll be able to continue to grow our franchise and to grow our business.
Unknown Analyst: Just a couple of questions. I think you mentioned that there will be some focus on asset growth. Will this be loans? And if so, what sectors? And will it also be on your book, your securities book? And if so, what currencies are these likely to be? That's one question. The second one is, of course, Great Eastern. You said that there were higher margin products. Just wondering -- and we're wondering what sort of products these were that give higher margins versus what they had been, I think, last year because less powerful last year. And then the -- there's one question which I'll ask to you later. It's about the strategy over your regulatory loss allowance reserves. You have it, but one of your peers doesn't. And I don't understand the reason for it because you can't use it, right? You can't -- it's not like an overlay which you can draw on if you want to boost your [indiscernible].
Pik Kuen Wong: I will answer that -- you want me now?
Unknown Analyst: No, no, answer that to me -- so basically, asset growth and [indiscernible].
Pik Kuen Wong: I think I start with asset growth, but I want Teck Long to comment on it. It's both our loan book because we have onboarded more customers, especially the corporate customers as well. Mortgages, we mentioned, we have gained a bit more market share. And of course, we want to serve customers across geographies and which we have done quite well. And when we onboard big customers, we are able to serve them indeed in different countries. And of course, we do have funding growth, which we will put into high-quality securities asset. That would be quite a bit in U.S. dollars, but also in, of course, in Sing dollars, which is our home base currency as well. So I pass to Teck Long to talk a bit about the loan growth.
Teck Long Tan: [indiscernible] one of our banking franchise, and we will continue to focus on that. I think the question also has to do with the overall economy, the overall uncertainty in the economic environment at the moment. As you can see that uncertainty has been there for quite a while, whether you look at it from duration day or caused by the spike of interest rate a couple of years ago. So we have navigated quite well. We see growth potential in the corporate sectors where the demand is certain, like domestically driven industries like construction or even renewable energy, where usually there's involvement of the government or major energy corporates in offtaking the generation of the power. So we look at it from an industry-led aspect to manage the risk. So we are industry specialists who will look at this valuation closely and navigate that environment. So we expect continued growth in the corporate loan book. On the other aspect is really the individuals and to some extent, the corporates as well. It relates to real estate in Singapore. So real estate in Singapore, the price is holding up and the demand for real estate continues to be there. So we will also get our market share in this part of the loan book.
Unknown Analyst: Can I ask you how confident are you about the U.S. dollar? Because you mentioned that you will raise some of the U.S. dollar, you will increase -- you will buy U.S. dollar treasuries based on the asset for the securities book. So how confident are you of the U.S. dollar remaining [indiscernible].
Teck Long Tan: Okay. I think it's a new question. I didn't say anything about U.S. dollar. I think Helen made a comment. Yes, I can start answering this, right? U.S. dollar is still a major currency. So its use is still very prevalent. So although people may talk about the basement trades, that's largely focused in gold, so which also from our perspective is really U.S. dollar is still very dominant at the moment. And gold is while growing in prominence, it's not used for trade or day-to-day use. So in that sense, from a reserve viewpoint, maybe gold has grown a little bit more in prominence because of the volume as well as the price of the gold. But generally, U.S. dollar is still the dominant currency.
Unknown Analyst: You are comfortable with only U.S. dollar treasuries.
Teck Long Tan: Yes.
Unknown Analyst: [Technical Difficulty] insurance products at...
Pik Kuen Wong: Yes. I don't think we should speak on behalf of Chin Yee. They have that results session. But I think it's quite normal that you stay focused in doing a business, balancing volume and margin, right? So -- but I don't think we can speak on behalf of them. I think Chin Yee will take the RLAR question.
Chin Yee Goh: Okay, RLAR, that is regulatory loss allowances reserve. When you look at our NPA coverage, we do have that as part of the total allowances. How RLAR came about was in the past, whereby there's a requirement to meet -- regulatory requirements to meet the regulatory allowance -- sort of allowances for -- allowances reserved at a minimum level from a regulatory sort of requirement. Now we have already met all that. But given the uncertainty in the environment, we decided not to release that but instead to just keep that. We can actually release that. We -- in terms of the regulatory -- meeting the minimum regulatory requirements anymore.
Ching Ching Koh: [indiscernible].
Unknown Analyst: Question is from the -- I think Q1, you mentioned about some cost optimizations that the bank was looking at? [indiscernible] give an update. [indiscernible] about 3% operating cost. Is that sort of within expectations [indiscernible]?
Pik Kuen Wong: I think this is part of it, meaning when we talk about cost discipline, we have -- in a way we have grown volume without need to hire a lot more people. I think that is one thing. Synergy, we also save some money on synergy because, for example, Bank of Singapore, a lot of the support functions is -- we have one -- actually one support function to serve both -- it's a separate legal entity, but they're also served by the same support functions. GE, we've discussed a lot more. And I think in the future, that's another opportunity. But very much it's also because of technology investments as well that, as we said, you do things faster. So you can generate more without investing or putting more money.
Ching Ching Koh: Okay. It looks like everyone is happy.
Unknown Analyst: At least a lot more information this quarter in your presentation really [indiscernible].
Ching Ching Koh: Yes, maybe Helen wants to...
Pik Kuen Wong: Yes, I just want to say something. It's -- as Ching Ching said at the beginning, this will be my last results communications with the media. It's been a very fruitful and wonderful 6 years stay in Singapore with a bank that I actually started with. To me, it's always discreet feeling, a bank that I started with and I ended my career with. Retirement is just another phase of life. It doesn't mean that I forget about OCBC and all the wonderful people I have met and worked with, including you guys. So thank you all for the support all these years. You always come up with a very good question and sometimes make me think, a, are we missing something? You are interested in something that must be a reason. So help us to improve ourselves along the way as well. So I want to thank you all the while to -- of supporting the OCBC Group and supporting me very much. I hope that you will continue to provide the support to Teck Long. I'm very sure -- Teck Long has been with us for more than 3.5 years now. So he's part of the leadership team, and I'm very happy we have Teck Long to lead the group going forward. And I'm very sure that he will bring OCBC to the next stage. So a lot of things have happened over the last 6 years. But as again, I have nothing but gratitude and really feel honored to have been the Group CEO for OCBC. So thank you very much.