DBS Group Holdings Ltd
SGX:D05
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DBS Group Holdings Ltd
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Good morning, and welcome to DBS's First Quarter Financial Results Media Briefing. On the call today are DBS CEO, Piyush Gupta; and CFO, Lim Sok Hui. So we will first take us through DBS's performance in the first quarter, followed by Piyush, who will provide additional observation on the operating environment and the business outlook. So without further I do, Sok Hui, please.
Thanks, Angela. Good morning, everyone. I will start with the Slide 2 highlights. We achieved strong first quarter net profit of $1.80 billion. It was the second highest on record and was exceeded only by the exceptional first quarter last year. ROE was 13.1%. Business momentum was healthy and broad-based. Loans grew 2% from the previous quarter and fee income streams other than wealth management and investment banking were higher than a year ago. Net interest margin benefited from higher market rates, rising 3 basis points from the previous quarter. This was the first increase in 3 years. The performance was moderated by lower wealth management fees and treasury markets income from exceptional levels a year ago. As a result, total income fell 3% to $3.75 billion.
Expenses rose 4% from a year ago due to the mid-2021 salary adjustment. The cost-to-income ratio was 44%. Asset quality was stable, with the NPL ratio unchanged from the previous quarter at 1.3%. Specific allowances of 15 basis points were partially offset by write-back of general provisions.
Capital remains strong and liquidity ample. CET-1 was 14.0% above the group's target operating range. The liquidity coverage ratio and net stable funding ratio were 138% and 122%, respectively. The Board declared a first quarter dividend of $0.36 per share, unchanged from the previous quarter.
Slide 3, First quarter net profit of $1.80 billion was 10% lower than the record quarter a year ago. Total income was 3% lower at $3.75 billion and higher net interest income was more than offset by declines in fee income and other noninterest income from their respective record levels a year ago. Net interest income rose 4% or $80 million to $2.19 billion. Higher loan volumes more than offset the impact of lower net interest margin.
Fees fell 7% or $62 million from the record a year ago to $891 million. Lower wealth management fees and lower investment banking fees more than offset higher loan-related card and transaction service fees. Other income fell 16% or $125 million from the high base a year ago to $669 million as investment gains and trading income both declined.
Expenses were 4% or $57 million higher at $1.64 billion due to base salary agreements carried out in mid-2021. Credit upgrades and transferred to nonperforming assets resulted in a GP write-back of $112 million compared to a GP write-back of $190 million a year ago. Specific allowances were $33 million lower at $167 million.
Slide 4, quarter-on-quarter performance. Compared to the previous quarter, net profit rose 30% from higher total income and lower expenses. Net interest income increased 2% or $47 million as loans grew 2% and net interest margin rose 3 basis points. On a day-adjusted basis, net interest income was 4% higher. Fee income rose 9% or $76 million from higher loan-related fees. Other income increased 98% or $331 million from higher trading income and customer treasury activities. Expenses fell 2% or $27 million as higher staff costs were more than offset by declines in other operating expenses. Total allowances increased by $24 million to $55 million, as a $100 million increase in specific allowance was partly offset by a $78 million increase in general allowance write-back.
Slide 5, net interest income. Net interest income was $2.19 billion, 4% higher than the previous quarter after adjusting for the shorter income. Loans rose 2% in constant currency terms, and net interest margin was up 3 basis points at 1.46% as interest rates began to rise. The higher net interest margin was the first quarter increase in 3 years. Compared to a year ago net interest income rose 4%, loan growth of 8%, more than offset the impact of a 3 basis point decline in net interest margin. Net interest income will continue to benefit as interest rates rise in subsequent quarters, lifting the net interest margin.
Slide 6. Gross loans increased 2% or $8 billion in constant currency terms over the quarter to $422 billion. Non-trade corporate loans rose 2% or $6 billion faster than in recent quarters. The growth was flat by Singapore and Hong Kong across a range of industry. Trade loans grew for the first time since mid-2021, rising 5% or $2 billion amidst rising commodity prices. Housing loans was little change as bookings fell due to the additional cooling measures in December. Wealth Management loans were also a little changed. Compared to a year ago, loans grew 8% led by non-trade corporate loans.
Slide 7, deposits. Deposits increased 4% or $18 billion in constant currency terms over the quarter to $520 billion. Current and savings accounts of CASA grew 3% or $11 billion to $392 billion. This takes the growth in CASA since the onset of the pandemic to $152 billion. The CASA ratio of 75% was [ similar ] the previous quarter and 16 percentage points higher than before pandemic. The higher CASA ratio has increased the interest rate sensitivity of our net interest income. We estimate that 100 basis point increase in the U.S. [indiscernible] fund rate increases net interest income by between $1.80 billion and $2 billion. The loan-to-deposit ratio declined 1 percentage point to 80%. Surplus deposits continue to be deployed to high-quality liquid assets. Liquidity was ample with a liquidity coverage ratio at 138% and the net stable funding ratio at 122%.
Slide 8 on fee income. Gross fee income fell 6% from the record a year ago to $1.02 billion. Wealth management fees fell 21% to $406 million from the exceptional levels a year ago due to weaker market sentiment. Lower investment product sales were moderated by an increase in bancassurance sales. Investment banking fees were also lower by 12% to $43 million as fixed income activity fell. Other fee income activities were higher. Loan-related fees grew 21% to $144 million. Card fees rose 11% to $187 million as debit and credit card spending exceeded pre-pandemic levels and travel picked up. Transaction service fees grew 4% to a new high of $240 million, led by cash management fees. Compared to the previous quarter, gross fee income rose 7% due mainly to higher fees from loan-related activities.
Slide 9 on expenses. Expenses rose 4% from the year ago to $1.64 billion. Increase was due to base salary increments carried out in the middle of last year. Compared to the previous quarter, expenses were 2% lower as higher stock costs were more than offset by lower non-staff expenses. The cost-to-income ratio was 44% for the quarter.
Slide 10 on nonperforming assets. Credit quality remains healthy. Nonperforming assets rose 2% to $5.98 billion. New performing -- new nonperforming asset formation, which included significant exposure this quarter were offset by [indiscernible]. The NPL ratio was unchanged at 1.3%.
Slide 11, specific provisions. Specific allowances amounted to $167 million or 15 basis points of loans similar to recent quarters when significant repayments were excluded.
Slide 12 on general provision. Total allowance reserves stood at $6.81 billion, with $3.06 billion in specific allowance reserves and $3.75 billion in general allowance reserves. During the quarter, there was a general allowance write-back of $112 million from credit upgrades and transfers to nonperforming assets. General provision overlays were maintained. General allowance reserves remained prudent. The reserve exceeded the EMEA requirement by $0.2 billion and were $1 billion above Tier 2 eligibility. Allowance coverage was at 114% and 193% when collateral was considered.
Slide 13 on capital. Capital remains strong. The common equity Tier 1 ratio declined 0.4 percentage points from the previous quarter to 14.0%. The CET-1 ratio included a temporary 0.4 percentage point impact from the digital disruption in November 2021 that had been announced previously. The CET-1 ratio was above the group's target operating range of between 12.5% and 13.5%. The leverage ratio of 6.3% was more than twice the regulatory requirement of 3%.
Slide 14 on dividends. The Board declared a dividend of $0.36 per share for the first quarter, unchanged from the previous quarter. Based on yesterday's [ going ] share price and assuming that dividends are held at $0.36 per quarter, the annualized dividend yield is 4.4%.
Slide 15, in summary. In summary, we had a strong start to the year. This was understand by strong and broad-based business growth, cost discipline and robust asset quality. Our capital and liquidity positions remain strong and the general allowance overlays. We had built up in [ property ], risks were contained. Looking ahead, geopolitical developments in recent weeks have created macroeconomic headwinds and financial market volatility. We have stress tested our portfolio, and we expect asset quality to remain resilient. While there are revenue risks in certain activities such as wealth management, our overall business pipeline continues to be healthy and will provide sufficient opportunities for growth. We'll also benefit significantly from interest rate increases in the coming quarters. Thank you for your attention. I will now pass you to Piyush.
Okay. Thank you, Sok Hui Lim. I have just 2 slides to supplement Sok Hui's observations. The first slide, which is called outlook. I don't need to repeat the fact that the world has changed dramatically in the last 3, 4 months, the issues in Ukraine have caused a massive slowdown. I think both World Bank and IMF growth rate forecast are down close to 1%. Inflation coming through, particularly in the entire commodity complex metals, food, food systems, and obviously, there's potentially some downstream impacts of that. And supply chain disruptions continue to be the case, even the earlier disruptions from chips, but also now added to that other supply chain disruptions coming out of the war.
And then finally obviously, the COVID-19. By and large, most of the world is opening up. But as you know, lockdowns in China, and there are some issues in Hong Kong continue to persist. So that's a little bit of a mixed story. But I think about the world, the macro at large, I think about the Ukraine situation in particular. The first order impact for most of East Asia and certainly for us is de minimis. We really don't do too much in Ukraine and Russia, et cetera.
There is a second order impact, and that's principally through the commodity complex. Gas prices are up, oil prices are up, metals are up, food is up. And that obviously is likely to create idiosyncratic risks in banking. You have customers who deal in all parts of the spectrum so you never know who might stub their toes. But there is a third order risk, which are likely to flow through, which are very hard to understand and model right now. And that's what I call the macroeconomic flow-through. So what happens to say is that the function of the prices, prices go up, but volumes come down. And so that might have some impact on the sales outlook for companies and corporations.
The second question what happens to margins. Interestingly, so far, we're finding that in many sectors, companies are being able to push prices through particularly in food and agri and industries with inelastic demand. But I don't think that's going to be the case everywhere so you probably see margin squeeze in some industries. As interest rates go up on the back of inflation, debt servicing is going to start creating its own set of headwinds. And as I mentioned before, that's likely to be more acute for small and medium enterprises than for large companies. So when you put all of these together, it's quite clear that the outlook over the next year or so is going to be difficult to forecast. It's something that you got to keep a careful eye on.
Fortunately for us, our own portfolio continues to remain quite resilient. As Sok Hui pointed out, we have spent the time doing a lot of stress tests. We've stress tested the entire commodity complex, the food and agri, metals than mining. All of the usual industries you'd expect to get impacted by Ukraine, we've been stress-testing our property portfolio, the consumer side, FMCG in the context of China lockdowns, et cetera. And that we're seeing no imminent areas of concern or stress in our portfolio. As I said, SME is likely to face more pain, but again, it's a well-tested and well-stressed portfolio in the last few years because it's been challenged for the last few years. So -- and then our portfolio is largely secured. Retail portfolio is also very secure and unsecured book is quite small and the rest of it is mortgage. We really see no material impact from the China lockdown still again given -- principally the nature of our exposures is very high end as our target markets are high quality, and we really have very little in the FMCG complex which is downstream. So we're not seeing too much of that.
That notwithstanding, we will continue to be somewhat cautious about releasing general provisions. As Sok Hui pointed out, we've built up a good buffer of general provisions over the last couple of years. And given all the uncertainties in the environment, we will continue to be thoughtful about when we start releasing those general provisions, when will be appropriate. Now obviously, because we are going to be benefited by the tailwind that comes from interest rates, we can afford to take a more cautious view on GP release without really impacting the bottom line materially.
Next slide, our outlook on the business. If you look at the business, and as Sok Hui pointed out, we had a very strong first quarter. And so despite all the doom and gloom around the world, underlying business for us continues to hold up quite well. Loan growth was a couple of percentage points, very broad-based across countries, across industries, it was in property, it was in TMT, it was in energy. So quite broad-based. Our pipelines are still robust. I think we're in good shape to do 3% to 4% growth in the first half of the year. The second half of the year will remain to be seen how our growth rate comes through. One of the periods that we are not seeing the growth that usually anticipated, obviously, was the mortgage book, the tightening measures in Singapore in December has obviously slowed down that book. And so we think we get some growth in the book this year, but nowhere near what we originally thought we would.
The fee outlook is mixed. Some parts of our fee income continue to do very well. Cards is benefiting. Again, as Sok Hui pointed out, the card spend on credit and debit is up over 2019 levels. The spend on travel is coming back, though it is still much smaller than the 2019 levels. But as the borders continue to open up, that showed that increased travel should give us another boost on the card fee income. The investment banking fee income is doing well. Our cash management and payments volume is up almost 15-odd percent last year. So that's quite strong. I think that should continue to do quite well.
On the fee income side, the 2 uncertainties: One is wealth management. The first quarter wealth management was down 20% over first quarter last year. Of course, first quarter last year was exceptional. As we are going into the second quarter, I think we're tracking closer to last year's level. But relative overall to last year, that could prove to be a little bit of headwind.
The other is investment banking. Debt capital markets, fixed income was slow in the first quarter. In the last 2 weeks of March there was a flurry of these and we did quite a few, but for the whole quarter it was slow. ECM was also slow. Issuance out of Singapore and Hong Kong was down some 75%, 80% for the first quarter. We actually outperformed. We did [indiscernible] in the first quarter, including a couple of SPACs. But overall, the environment for investment banking continues to be somewhat challenging, so if the margins don't open up, that could create some small headwinds.
The thing that really outperformed was Treasury markets. We continue to have a very robust quarter. It wasn't, again, as strong as the first quarter of last year, which was exceptional -- but all things considered, it was fantastic, and we benefited really from market volatility across most of the debt, the interest rates, in particular, but also credit and FX. We -- there's a lot of big moves, as you know. And I think we were able to capture most of these big moves quite well. I think, as I mentioned the last quarter, in part, we have benefited from the far more robust flow business that we have. The fact that we've got digital connectivity to customers, we see a lot more of the customer flow. And I think that's allowing us to position our books much better.
Obviously, the big upside for us as we go forward is the sensitivity to interest rates. We continue to model our book, and it seems to us that the $18 to $20 million per basis point is something that is quite robust. So which means, as Sok Hui said, if rates go up to 100 basis points, we should expect to benefit to the tune of $1.8 billion to $2 billion. As you look at the track record, when rates went down, the rate cut between late 2019, early 2020. And we said before the base rate cut cost us about $2.8 billion in interest income. So it's not illogical to assume that if you get those kinds of rate increases back, you should be able to accrue a lot of that income back. So that's a positive. If rates go up faster or sharper, then obviously, that benefits us even more.
And finally, our expenses, we continue to be quite thoughtful. There is inflationary pressure as we mentioned before, wage inflation in particular, is coming through, but we are being thoughtful about how we manage our expenses to make sure we're investing sensibly for the future, while keeping an eye on the -- what we need to do in the short term. So I'll stop there and happy to take any questions.
[Operator Instructions] Diana can you see if there is any questions from the media, please.
[Operator Instructions] We have got the first question from [ Takashi Nakano ] from Nikkei.
You've had a number of digital projects such as a DBS digital exchange and [indiscernible]. So are these businesses expanding as planned? And are there any new projects planned for the digital business?
Actually, as we indicated last time, we have a few what I call pokers in the fire that we put out in the last year. The digital exchange was one of them. We floated the carbon exchange where we are a 25% shareholder. We also floated something called Partior, which is a blockchain-based settlement system. We got something called DBS Fixed -- the fixed income marketplace that is to facilitate fixed income issuance for clients. We're actually also looking at monetizing some of our other software capabilities that we've built over the years. So there are quite a few digital activities that we have floated and [ spawned ]. The truth though is that these are still relatively small. So it's going to take some time before they hit stride and before you start seeing the impact of these in terms of P&L.
On the digital exchange itself, our assets under custody are slowly creeping up towards the $1 billion mark. We're just a tad shy of $1 billion right now, but trading volume for the first quarter actually slowed a bit. And again, reflected the issues I cited earlier on wealth management. People are doing a little bit less activity right now.
Nevertheless, as we go into the year, we're expecting to make this whole offering, the cryptocurrency offering online for our accredited investor customers. So I do expect that volume will continue to pick up in the course of the year. We're also doing tokenization and listing. We've done one last year. We have a couple of more in the pipeline of different asset forms. So you should expect to hear more from us in this space.
We can take another question.
Our next question, Goola Warden from the Edge.
Well, I've got about 4 questions, but I may compress them. Has there been any change? I mean you've guided on loan growth and the interest rate impact. But has there been any updates in your guidance on the credit cost because the economic outlook has changed so much? That's one question.
Then the second question is about your funding mix because you largely need 52% of CASA, but are there any signs of customers looking to switch to FDs and what sort of impact would this likely have?
And the third question is on the balance sheet. One of your peers said this morning that there was an interest rate impact on the valuation of its high-quality liquid asset which you hold for your liquidity coverage ratios and -- your net stability, whatever, coverage ratio. So and I noticed that your HQLA has actually risen quarter-on-quarter. So is there any impact on this from rising interest rates and how would this be treated?
The last one was the impact of rising rates on net interest income but you've mentioned that.
Okay. Goola, I'll take the 3 questions. Maybe Sok Hui can pitch in on the third. But in terms of credit cost guidance, really, there's not any material change in our specific provisions guidance at this point in time. A couple of quarters ago, I had said that in the past, I used a guide that we should be looking at 22 to 25 basis points of SPs. But in the last 3 years, we got a lot more confident about both our portfolio and our credit discipline. And therefore, on the SP line, somewhere between 15 and 20 basis points is likely to be a more considered level of provisions that we might have. The difference is -- subtle difference only that in -- I had guided earlier that whatever we get on SPs, there is a good chance that we could release general provisions this year. So the net allowance's number could be like last year, close to 0.
At this point in time, as I said, we would be really thoughtful about whether we do release the provisions or not. If we get a lot of benefit and tailwind from interest rates, we might hang on to those general provisions for longer. But it's too early to comment on that right now. Outside of that, our credit guidance hasn't changed. Like I said, all our stress testing and underlying thing is not showing us any imminent issues in any part of our book or any part of our portfolio. In terms of the funding mix, actually, our CASA ratio is 75%, not the number you mentioned. And it is -- as Sok Hui pointed out, it used to be sub-60% prepandemic, it's now 75%, it's very broad. And so far, we're not seeing any material outflows from CASA into fixed deposit.
In our modeling, we assumed it will happen. As rates rise, people will trade from CASA to fixed deposit, and we factored that into our interest rate sensitivity, return to FDs, et cetera. But we're not seeing too much of that happen at this point in time. The interest rate sensitivity guidance we've given of $18 million to $20 million per basis point, it actually modeled for all that, included in that number. And finally, on the balance sheet impact on our fixed income portfolio, like everybody else, we obviously hold a long bond portfolio of high quality liquid assets and other assets. And when rates rise, that portfolio gets marked down, but the way accounting was that markdown doesn't go to the P&L. It goes directly to equity. And so you can see that -- see that in our shareholder fund. Our shareholder funds are down to about $1 billion. That's because we have taken the impact of that directly into equity in the quarter. Sok Hui, do you want to elaborate on that?
Yes. So a large part of our high-quality liquid assets are held in the investment book because we actually think that we will, in the course of time, have to hold this high-quality liquid assets. So because they are held under the OCI format, fair value to other comprehensive income rather than direct mark-to-market in the P&L statement, you find effects will show up in the OCI line and affects the book capital. So it doesn't affect the P&L as much.
Okay. Would it affect -- it won't affect your dividend, will it?
No, it would not.
Okay. Okay. Okay. Just one last question on the investment banking outlook, especially for your equity, what is the pipeline like? Is there any impact from China -- the China problem or any other areas?
Actually Goola, pipeline is very strong, both for fixed income and for ECM. There are a lot of people who would like to continue to access the public market. And so the pipeline is very strong. The question really is, are the markets open and are investors are willing to come in to these issuances. Like I said, we did 10 IPOs in the first quarter, which included a couple of SPACs. We launched a SPAC business in Singapore and some interesting deals. But by and large, investor appetite is ginger. And therefore, with the ECM and DCM, you've got to continue to keep an eye on it, if you get a market window in which investor appetite picks up, you can launch some deals, and if not, then we just have to wait.
Because we've not seen any IPOs this year.
No, we did a couple of these as well in the first quarter.
Our next question, Anshuman Daga from Reuters.
This is Anshuman here. So overall, I mean, obviously, the results had a tough comparison from a year ago. But specifically talking about the wealth management business, do you see more pain for the next few quarters? I mean, can you give some color on how weak do you expect this to happen because this will obviously weigh on the performance.
So like I said before, the first quarter last year was just off the charts. And therefore, first quarter this year is about 20% down from first quarter last year. It's early days, but as we are going into the second quarter, I think we track closer to last year. It looks like that right now. So I don't think you'll see a continued fall on a year-on-year basis.
Then beyond that, it depends on market sentiment. If consumer confidence turns, if the markets look up, then obviously, the underlying secular nature of our business is very strong. But our AUMs are up for the quarter, as you can see, we are up $3 billion in the AUM. And our net new money is also up. We continue to benefit from incoming flows. So in other words, there is a reasonable amount of dry powder in the system. And if the market turns and confidence improves, then we will go back to getting growth in the business. But if confidence is slow, I suspect we might track closer to last year.
So is the issue that clients are deleveraging? And also, is the bank doing that on its own as we see the collapse in tech shares and others?
That is mostly client-driven. We haven't had a problem in terms of too many margins, we are quite conservative in margining. So we haven't seen a lot of issues with respect to margin cost or anything that caused us to cost deleverage. The clients are being a little bit careful and wary with all of the volatility in the markets.
Yes. We've got [indiscernible], Asian Private Banker.
I also have similar questions on Wealth Management. Would you be able to share a little bit more color on the performance this quarter, given that -- the first quarter last year was a record high. And now if you see like the Singapore, Hong Kong and even South Asia, they're reopening. Do you expect that client activity will resume in the second quarter -- I mean, in the second half of the year?
[indiscernible] what I said to Anshuman. The year-on-year comparison from first quarter was unusual because first quarter last year was great. On a year-on-year basis, our AUMs are up and therefore, even lower activity, our overall income will hold closer to last year. Whether it starts going back to double-digit growth really depends on market sentiment. And your guess is as good as mine on whether market sentiment comes back in the second half of the year or not.
So do you see -- so how about the AUM performance in the first quarter?
So what is the question?
The AUM in the first quarter.
As I just said, our AUM was up, by about $3 billion, it went up from I think $291 billion to $294 billion. So we are up by $3 billion in AUM. That includes some net new money as well.
We now have [ Chris Kang ] from the [ Straight Times ]
I was thinking about some [indiscernible] about environment, do you plan to increase costs [indiscernible] going forward.
You're not coming through, you're not coming through. We can't follow you.
Can you hear me clearly now?
Yes, that's better.
Given the current -- my question was given the current rate environment, do you expect to restore rates on its retail customers [indiscernible] accounts and is there a time frame you're looking at for this?
Chris, actually, it's not coming through clearly.
I heard you said, "given the current environment" and then you got garbled again.
Yes, given the current rate environment do you expect to restore interest rates on customers [indiscernible] accounts for retail customers and is there a time frame for this?
Maybe I'll repeat for you because you want that me as well. She's asking whether in the current interest rate environment, whether we intend to reinstate rates on the multiplier accounts.
Whether we need -- frankly, I haven't given it too much thought. But obviously, as the interest rates in the overall environment go up, they start getting reflected in all of our pricing, both on loan pricing and eventually our deposit pricing. At this point in time, because we're sitting on so much CASA, we will be quite thoughtful about what [indiscernible] products we create and the pricing on those.
Our next question [ Rebecca Isa ] from S&P Global Marketing Intelligence.
Thank you again for hosting this conference today. It's a great quarter. Just wanted to get a little bit more of your thoughts. You said that the interest rate would impact your net interest margin quite well. Could you talk a little bit more about that?
Yes. I guess as you know, for us because our book is so heavily CASA funded, 75% CASA ratio. And if you look at our underlying loan book, the Sing dollar loan book is all funded by CASA. And the U.S. dollar loan book is 80% funded by CASA. So what that means is when rates start going up -- and by the way, the bulk of our loan book, U.S. dollars are floating rate and Sing dollar is predominantly floating rate, 2/3. So when rates start going up, obviously, the interest -- the yield on the books start going up and our cost of funding tends to lag. And therefore, that gives you this net incremental NIM. So depending on when the rate hike happens, rate hike happens earlier than the NIM flows through quicker, if that happens, like if there's 7 or 8 rate hikes, one every Fed meeting in a [indiscernible] then you'll get NIM impact will be less this year. But actually over 2 years, you will see the full impact of the NIM through our portfolio. Most of the impact of the NIM through our portfolio. So that's why we've modeled it, effectively we've given this guidance of the $18 million to $20 million of impact per basis point increase in rates.
Sok Hui, you want to add to that?
Yes. For the $18 million to $20 million per basis point, you should note that it is how the sort of rates play out over the full year. So it's very much dependent on timing of the rate hikes. There's some dependency on pass-through assumptions as well as conversion to FD or outflow. So we have been quite -- I think we have been quite prudent in our modeling. So it takes into account all these factors, and we think this range in a reasonable range.
We've got [indiscernible] from Bloomberg.
It's a quick question. If we...
Sorry, you are not coming through clearly either. [Technical Difficulty]
Okay. Yes. I just want to seek some clarity. I mean, of course, there's so much interest in cryptocurrency and Singapore's stance on cryptocurrency. And you have mentioned it before in the last earnings that you were looking to expand crypto-trading services to retail clients by at least at the end of 2022, but then recently at the AGM, you were also saying that probably this might not happen in the near future. So it would be great if I can get a definitive stance from you on what's the plan with regards to expanding crypto-trading services to retail clients.
Yes. First of all, it's quite clear we won't do any retail crypto in Singapore this year. But what we will do is get our current crypto offering online. So people can deal on mobile and on Internet banking. We have a fairly large affluent customer base and accredited investor customer base. So we have the opportunity to continue to scale this business quite nicely just focused on the AI base in the course of this year.
On the retail, I would have liked to see [ people trying to ] retail this year, but 2 things, one, it's taking a little bit longer than I anticipated to put the technology apparatus and the processes around it. Also, regulators are not that comfortable. Around the world, regulators are a little bit more careful about letting retail access to crypto. And so as a consequence, if we get to retail, it's unlikely to be this year, actually. We will start getting our arms around that in the earliest next year.
[Operator Instructions]
Okay. It looks like we don't have any questions in which case then let's draw this time to a close. The analyst briefing will commence at 12:15. Thank you, everyone.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect.