Q4 2019 Earnings Call
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People are not connected to the power grid.
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Just one of the change in line.
Right.
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Good.
Hi, good morning, I could actually than those of you outside the room or and further east.
Thanks for joining us for Sina on a Monday morning here and talk about our 2019 hold your results.
Got it.
Sort of unusual for about four for me that yes, I'll see if you think upfront and we will go through a lot of the detailed outcome come back and touch on some of the progress we made against the strategic objectives that we got that we refreshed a year ago. There's just a quick that brought.
I feel very good about the progress that we've made against each of the strategic priorities that we set out last year really everyone a and in every region and everybody business. So it's really very happy with the progress that we're making.
The network enough what activities will dig in a in a bit more detail on these later, but.
Good growth on all fronts continued to be strong returns you evidencing the the logic that we set out in the first place just that we think we've got the the right focus in terms of our client segments. These areas, where we can differentiate ourselves and we've we've continued to do that.
Pushing digitization is going up at full speed.
Weve completed the rollout of our digital banks across Africa, we're beginning to roll to roll those out.
Okay that model elsewhere building, our our business in a in Hong Kong and and many other markets, we'll talk about that in a little bit of detail.
The four markets that we focused on improving performance.
So good progress a in each one for different reasons I will begin productivity.
Been really good strong improvement with was basically flat expenses a year on year against the <unk>. The income growth that we've experienced a this is this is reflecting both our management of expenses, but also the focus on real underlying productivity.
We completed our the buyback that we announced a year ago. A if you will see we've announced a second tranche to commence immediately so indicating that our determination to continue to manage our our capital base.
As aggressively as as mechanics, and as is appropriate and we'll talk a little bit about sustainability. You. Just saw the this is video but this this is going to need a tremendous area of focus for us, but because it's the right thing to do but also because as you see an enormous profit opportunity for standard chartered bank for us to help our client transition to a low carbon economy I don't think there's a bank.
In the World is better placed a two to provide assistance we are.
So the production numbers that we'll get into in a lot of detail on this improvement in our early.
And.
Little bit of a comment on the on the beginning part of 2020, what were we were quite encouraged by the progress in the early part of the you're really up through two and including today.
But we know that the the most of the central portion of the impact from the virus has not yet as I have settled so.
While we are we continued to see the evidence of the strategy is playing out I know that it's a it's going to be more challenging for us to hit our ROTC target and 2021 as we had originally set up and we expect that income growth and 2020 will be a little bit slow, but we'll get but we'll give some that some context for that as well [noise].
Yeah.
Couple of things like don't always talk about in the beginning of our our annual results presentation, but which is to me and to the rest of our management team onboard just critically important it's a big chunk of my time spent focusing on the the re skilling and development of our of our workforce, but the thing that's going to allow us to generate the kind of growth that's going to get us consistently above cost of capital.
I was going to be the investments that we're making in a in our people and the recycling and retooling of our workforce I relative to what we needed in prior periods.
So this is a tremendous area of focus Russell, one where I think we're taking a leading position in a number of regardless and I feel very very good about the progress that we're making here, but the people we can attract but but importantly also what we can do with our for their colleagues in house.
And ER.
Page four again is the the focus on climate.
We came out with a very important document a couple of months ago outlining the private sector financing requirement to.
Meet the sustainable development goals over the next five to 10 years talking 35 trillion dollars is what's going to be needed something like 2.5 trillion dollars per year refinancing to hit the the climate change targets, we know that our markets are likely to be most affected by increasing global temperatures should should that happen. We also know that our clients in those markets.
Had the most need to transition their own activities to a lower carbon future and a lower carbon footprint.
Senator chartered as it happens is one of the leading banks in the world and infrastructure financing and removal financing in particular, and we intend to push this very very hard we see this was one of the growth opportunities that that is really unique to our time and particularly relevant for senator chartered.
In addition, it's the right thing to do so.
With that I will hand over to and eat go through a through all the numbers I'll just make a couple of comments later on some detail on our strategic priorities.
Thank you pretty much bill good morning, good afternoon.
So let me just starts with the normal overview slide on the numbers and then can drill into things a little bit more detail.
I think headline recalled last few years actually having been pretty resilient through the business, particularly in the context of some of the challenges in all regions with the U.S. trying to 10 shouldn't see on breast in Hong Kong, except for.
So just going through the key numbers the operating income up by 20% on reported basis that is 4% on a constant currency basis, and we had a bigger than usual, which will come on Twitter TV a charge in the period. If we had not had that we would be in at the 5% left.
So just slightly actual below the guidance lead you into income range.
The fourth quarter number, particularly will come onto published numbers, 1% again, if want to adjust for the D.V. I am currency that was actually 4% so not dissimilar to the momentum in the profile courses.
Operating expenses were well controlled those were essentially flat period on period.
Credit impairment was a little bit higher but off a very low device in the previous yeah.
Put all that together and the underlying operating profit at 4.2 billion. It's an increase all 8% reported or 10% on a constant currency places.
So as it down risk weighted assets were up 2%. So that was pretty much in line with the rate of income growth.
The underlying earnings per share up 23% combination all see increased profit a slightly lower tax charge and reduced number of shares in the issue following the share buyback or last year.
And the proposed dividend per share at 27 cents being a 29% increase year on year that is on a consistent trend with all endeavor to double the dividend by 2021.
Cetone ratio at 13.8% at the high end, all out 13% to 14% buttons range and hence the announcement stay as you'll see as Bill mentioned, all I know the half billion share buyback, which with the share price where it is we can't wait to get onwards.
So you don't really see up to 6.4% <unk> 1.3 percentage points, both gain on the roce entering the year.
Let me just go through a number of thought it was just a little bit we'll do so.
First of all the rights fee.
20, 18.1% 2019, 6.4%. So the 1.3 percentage point improvement major components that slightly low on net interest income with volume growth not quite full fixing margin decline.
Fees on the other had very strong financial markets in particular had a very very strong year up 12% on income on a reported basis well finish and also a good yeah.
Spencer's impairment not huge impact and then the tax and UK Bank Levy, putting more tax say, we would just below the 30% level on the tax rate, whereas last year via before we were slightly above 30%, but due to a mix of country profits allow ability of expenses and probably your settlements we.
I'd expect getting foods, the tax rate to be get will take the 30% level.
And then finally equity peering some time on a full year chart with the reduction in the share count from the buyback has also contributed to getting to the 6.4% number in putting us in context, we were half a percent negative on rotate in 2015. So we have actually move seven percentage points all over the last four years.
More clarity to do but we have moved pretty significantly off that range.
Sorry.
Let's move on to income two slides here, so sworn full year and the one that pull is on the fourth quarter.
So we've taken the twinkie 18 published hands adjusted to it to the FX rates do we experienced in 29 team and also for the deviate experts in 29, taking so you can see that T.V. I has had an impact hundred 77 in the yet so exiting out to TV, a 14.5 a year ago.
And 15.3 and 29 teen vast as you can see from top 5% increase.
<unk> Green percentages staff on the chart <unk> show the ex DJ constant currency growth rates in those major areas within all business. So you can see the financial markets, particularly proud of is ahead, so 22% growth on that basis, and then pretty even performance.
Across many other errors that business transaction banking retail products wealth management, except for all grew 55, 6% during the period.
And the one that held us back to some treasury with the higher interest rates, but well paid to the businesses pull their liabilities, So 15.3 billion, 5% pop constant currency at <unk>.
This chart is then the equivalent for the fourth quarter. So published a 3.6 a year ago I think Maltese noteworthy here is actually have a full year D.V. I have 177, a lot of it was in the fourth quarter. So 118, if it was in the fourth quarter alone and.
Hence depressed the reported income growth for the quarter. If you ex that out then the underlying was 3.45 billion a year ago and back increased to 3.6 billion or thereabouts for 2019 again, a symbol of patent that wont go through all the detail, but you can see in fact, if anything financial markets even stronger assets.
33% growth.
But wealth management also very strong during the fourth quarter.
Now, let's change track a little bit more detailed on slide 10 on the client segments.
The key point to make <unk> spend. This chart is we had income improvement profit improvement and rotate improvement in all four pump segments during the year.
So just going through and pulling out one or two things from this corporate and institutional bank, which is obviously the biggest singleton second by some weight in the business very strong year at 5% reported income growth seven cents on a constant currency actually 9% on constant currency pre deviate that was all delivered with reduced.
<unk> expenses, so jewels opened up considerably and consequences that is early to 8.5%, which is about the percentage points higher than a year ago.
Retail banking also strong performance. So it is our highest routine business remains not a 12.6% which is also about the percentage points of improvement 3% up on income reported 5% on a constant currency basis.
In some sense is commercial bank Perrys the star the show here with a doubling of operating profit in the period and I think if you recall the business back three or four years ago. This has improved the most noticeably the routine now at 7.3% starting to get fairly close to the corporate institutional bankruptcy. So I.
The good fulfillment doubling the ROI to during the period and then private banks moved from the overall scheme of things, but again I think very positive progress here swaps that increase in income third consecutive year that we've seen the growth in income or a good profit printed for the period a assets under management, a growing by 14% net new money apply.
But two and a half a billion dollars. So again good performance in that part of the business.
Slide 11 is then addressing the same topic, but now looking at this from a geographic lens, so great to China, and North Asia, albeit just region. That's most as to be aware. This has been able difficult period. It has spent the majority of the macro challenges that we have seen across the group.
But nonetheless, we have had a flat top line slightly up when you feel in constant currency basis, we how tightly controlled expenses and therefore see profits growing by 3% in a difficult period and overall I think in performance that that's been extremely strong Hong Kong as being robust China has.
Being strong and overall, we've come into this year I think in pretty good shape in the overall circumstances.
I see on himself in Asia region has also had very strong period. So this is now contributing a billion dollars operating profit 6% growth in income. It's it's also managed to do that both reducing expenses. So who's opened on July seven percentage points.
Africa Middle East numbers, there little bit impacted by currency, so 2% damaged reported basis on income actually 4% up if one puts it on constant currency basis, and particular focus upon credit impairment has resulted in a 29% increase in overall profitability for that region.
And then Europe in Americas was the income print to 3%. This is the region, taking the majority of the D.V. I hit if there's not being for that it would have been printing a 10% increase in income. So I think good good performance in off so central hub that.
Central Alba then leave the items that are not included in any of the numbers you seen before they're largely the management of the balance sheet and the center.
I think sort of to take weighs on the bottom left you can see the caught by client segment, where we have got the level of income and profit down about point 3 billion that is the impact of higher interest rates being paid to the businesses for the liabilities or managed in the center that will unwind a bit over time as interest rates.
Come off on the right 10 side on the region you can see the numbers that she has stayed fairly similar so small loss and slightly reduced on the previous year with the impact of higher fixed costs being more than covered by a hedge ineffectiveness reversals and total capital charges.
So moving on to expenses and said earlier. These all I think on the very good control now so 10.1 billion at constant on the previous you're at 10.1 billion doctors and opening up on the jewels. It is I think evidence old several years now or.
Spend on I T and process improvement the productivity if formations in terms of income per full time employee is actually up five percentage points on a year ago, which is one of the biggest improvements we've had been a single year.
Clearly this is gonna be a very big area focus, particularly in a softer income period, but I think your track record on the cost is now well established on the bottom left you can see the cash investments, we're making we are continuing to absolutely focused on investing in the future of the business. So $1.6 billion spent that similar to.
The previous year, they highlighted in green showing the proportion with that but we're spending on strategic project is slightly increasing so this is things like the virtual bank in Hong Kong, which hopefully will be launching before too long a lot of investment in straight through processing in all corporate businesses real time onboarding in several of the.
Asian markets et cetera. So we are doing whatever we can to be able to call if enough out of the core cost base to be able to keep and in some respect increase the momentum on the spend for the future.
This is maybe on slide 14 slightly different way to visualize. The so this is the cost income ratio over the last three years as many of its we'll know we have got pretty stuck at around 70% point over the last several years that has now started to improve so 27.
Yeah. It was basically flat, we then improve things by two percentage points and then by three percentage points over the last year in total so that's what I think evidence that we have got a good focus upon the course.
So moving then on different topic, all credit and credit quality as I said earlier on the top chart here has got the charge net income statements about just over $900 million. So whilst it is up slightly on a year ago vast is a low point of comparison a 29.
Well still a 27 basis points or gross book charge I.
I think within those numbers for the thing that is interesting is the charge for the stage three loans to the nonperforming reduced quite a lot during the period and what we saw was an increase in the stuff warm and two charges a about $275 million off of that was to do with deteriorating.
True economic variables and about half hall was specific to Hong Kong.
On the bottom left you can see the overall level all create on things that we all focused upon so the stage three cats nonperforming category tools et cetera, and I think it take care. There is that is who's actually remaining at a pretty pretty constant level in fact in the 9.3.
For 29 seen this about point 3 billion, which is to do sovereigns downgrades in one or two smaller countries. So actually it's that we would have actually seen the overall numbers that I'm slightly improving so clearly very much alert two things relating to the current novartis now, but certainly as we exit last year, we had the overall book.
In a good state of health.
Turning then to the assets liabilities and the NIM.
Oh left chart is the overall assets so cooled off to the 5% is the increase in customer ending so that is continuing with a good momentum.
On the bottom left is the average liabilities. So in the middle is bloodless is on which we're not paying interest as a 7 billion, India and owns the very bottom in the dark a color is the vidler system or interest bearing so those were 3% up in the period.
Well you can see on the top right. Then is what has happened with yields. So on the assets. We are getting 816 basis points improvement enables compared with year ago or the liabilities. We are playing 27 basis points more we're a year ago on the average and hence the overall margin is seven basis points down I think.
<unk> similar to what some of our competitors has been experiencing so we exited the year Q4, <unk> won 64 and clearly as we go into this year a huge amount of focus upon this specifically would certainly hoping this year that we can improve slightly all not Q4 exit rate a number of reasons.
Cool thing a reasonably comfortable with that is the focus we have had recently or increasing the current accounts and savings accounts, reducing time deposits within the business, which in the second halt was quite a strong progression. We have done quite a lot to de risk. The book in terms of interest rate sensitivity and we all focusing.
A lot on the new hubs for tick in Hong Kong Singapore.
So see tier one ratio, 14.2% a year ago, 13.8%, but the into 2019 remember that the buyback took about 40 basis points out of that number also the half billion that we've announced today does not get reflected in these numbers, but when we come to the first.
Core so the whole filling will be about 20 basis point reduction from the first quarter C.T. warm numbers and all so lets bear in mind that with the tomorrow to sale, so hopefully not too far away.
It actually that should have the potential to look at returns.
Risk weighted assets then on the bottom left as I mentioned earlier days are moving off roughly in line with income so 2% $6 billion three main moving parts warm asset growth business growth good.
Second credit migration small parts of it and thirdly efficiencies that we had set but we will continue to focus polling said put all those together and the closing out of via is at 264 billion.
So just putting this together before I hand back to bill less than somebody targets, we talked about last year and I think on most of these fronts. We have done pretty well in 2017, certainly 1.3 percentage points gotten very T is good inc. fraction below guidance range, but oney.
Traction below expenses tightly controlled in the capital at top of the range.
As Bill said, so you start all Twentytwenty January what we're seeing so far in February has actually been encouraging underlying momentum similar to what we had in the fourth quarter Beard, clearly well aware that the client of ours impact will be more March and onwards. So just a word of caution on that.
For that reason, we have said this year cordless right in income likely to be slightly lower than the 5% to 7% medium term guidance range.
And secondly on the road see gives them that certainly compared with a year ago. We have lower interest rates. We have a macro that is not looking is promising and we have the current novartis has said it is likely that the 10% will take longer we absolutely believe can get into 10%, but it is likely that it will take longer.
With that I will hand back so.
Thanks, Andy.
I'm, just gonna run through the a little bit of a mark to market on the strategic objectives that we set out a year ago and progress that we've made a first on page 20 side 20 is the quick review of our network business.
It seems to be very very strong we've had good growth in a incline income for those those clients, we specifically targeted to grow our network and come to our our next hundred clients and a new client to now extending to 100 declines.
Overall income is up 6% the percentages is flat or the early R&D remain strong in fact is getting stronger for that for that network business. We see the overall corporate and institutional banking business at an 8% Aro tea is getting towards that cost of capital plus return that we continue to think is.
Absolutely achievable as we continue to both worked the investments that we've been making in this area over the past couple of years increasingly digitizing increasingly focusing on on new tools are you on our own and in partnership.
To deliver some some differentiated supply chain solutions.
Of course, with a with continued strength and the financial markets business, which is which he's got his legs and is beginning to move quite nicely now of course, it will be volatile from from period to period as as is normal with the client plus in that business, but we think our underlying capacity to generate good and strong growth international markets like the rest of RC I'd be business is very strong.
Looking at the a at the affluent clients is again the story is a very good one in terms of progress a little bit more difficult environment, certainly in Hong Kong and the second half glass here Hong Kong no need to remind our most important a single mark.
Broadly, but also for the affluent quite business. Despite that we had good growth and clients good growth in net new money and private banking and in the affluent proposition.
Got a continued.
Improvement in the mix in favor of of that affluent client segment and the ongoing very strong returns from that segment and in terms of return on.
Tangible equity.
During in the private bank as well so good returns and that business over also one that we will continue to invest and quite heavily.
We launched a series of differentiated offerings <unk> different asset level sort of different levels. So you've introduced a premium client segment into that several of our key markets over the past here. It's really clients have responded extremely well to that so these are clients that were I would otherwise had been in our our personal over mass market offering.
That are getting a differentiated level of service.
They feel a bit more special or in terms of the or the customer service that they're getting and they're responding very well and likewise, we've got a segment of the top of the stack called the priority private.
Which our clients that are underway to thing getting to the full service white glove treatment from a from a private bank.
Getting it from standard chartered where obviously, we're combining that with that that local operation that really is differentiated obesity. Many of the other private banks that are competing for some of that money. So overall, we're feeling very strong about the affluent client segment.
Looking at the four markets that we have really focused on for turnaround.
The number of the keeps I'll I'll call out as the greater the lower left which is the aggregate pre provision operating profit is up 15% and it's up in each of the individual markets and obviously when when we step to the next number up on the on the lower left to the aggregate profit is only up 10% the differences or single name credit losses that we had in.
India and Indonesia.
Question always, especially in this uncertain time is this the beginning of a trend or is it something that a indicates.
There's been any loosening in credit standards. The short answer is no or these are very small number of cases that are.
That are genuinely idiosyncratic.
And.
Of course, the overall credit cost as Andy mentioned is still around 27 basis points for a year. So.
Let up on last year, but still lower than I would expect for sort of a through the cycle I love that credit impairments.
We feel good about the progress in each market since market is quite different India. The story is a income costs and active management of capital Korea. It's it's substantially about the management of capital with ongoing cost constraints.
And and cost focus in the elite, it's largely about the improvement in loan impairment. So there's been a real focus on managing the extent space, there as well and Indonesia.
Again, it's income expenses and matter of capital. So we we remained relentlessly focused on this we think we're on the right track and does this part of our strategic Trust should do its part to deliver our 10% or can be plus.
As soon as we can possibly get there.
Good focus on productivity Andy mentioned the the.
Aggregate numbers and give a couple of examples.
We look we're looking at at pulling many many different levers on the productivity side clearly digital sales is one thing that would that we're watching actively we've had a steady increase and digital sales of steady increase and the cumbersome none of our process. So.
Turnaround time for Onboarding clients, they decision, making time for financial crime compliance reviews.
Our all steadily improving and that's driving the improving in income or risk adjusted income per full time equivalent.
And as Andy mentioned, the cost income ratio.
It's continuing to improve we've got a series of a key initiatives around understanding and delivering client journeys.
Which is which is in the process of transforming our bank. This will drive productivity and it's certainly in the medium to long term, but we're not shying away from the actions that we need to take in the short term as well that our strategic where they need to be <unk> tactical where they need to be but but in any case are driving this productivity figure.
Quick quick touch into digital.
Of course every bank is investing substantially in digital surely the bulk of our discretionary investments are going into various digital applications is paying off our mobile and digital adoption rates and the retail business are approaching the I would say the benchmark in our key markets, Hong Kong, Singapore, Taiwan or India are at.
Industry Center level some of our smaller markets are further behind terms of digital adoption, but we will continue to push that obviously with the rollout of our digital banking platforms around the world.
We see both enormous productivity gains, but also a fundamental improvement in the and the quality and efficiency in service.
Likewise in this and the she I'd be business.
We've had to a city increase in straight through digital processing and international markets, but that applies to our cash payments to Ah two or capacity this and security services et cetera.
And and commercial banking, we're looking at the number of clients and in some of these cases, the they're quite small used to doing things and old fashioned way are increasingly adopting our latest digital tools.
And this all come through into a into some recognition externally so yeah, when I when I travel through our markets in Singapore et cetera, I do have accounts with a number of our a number of our markets are frequently hear from our own colleagues, who sometimes acknowledged to me that they have thank you can't that other bank as well that our mobile banking apps are really the best ER and so.
Before we have we have the best mobile banking applications. We have had for sometime we recognized as having of ethanol banking applications for several years now.
Global Finance I give us not only the Singapore Award the Global Awards. This year does the words mean much no.
Our my colleagues and centered chartered bank.
Sure the objective no, but I can tell you they tend to be very very very critical.
And.
Because market, but the fact is we're delivering stuff.
To to our clients, that's differentiated and through time, yeah. There's we look at that the improvement in our retail business in Singapore, and Hong Kong in India, It's coming down to the nuts and bolts things like a better quality better service and a higher efficiency lower error rates and you can expect to continue to grow so that and and see the progress that we're making.
Page.
25, the just a quick run through on some of the commitments we made the actions that we're taking.
Apart from the narrowest measure of financial contribution.
We understand our responsibilities as it back we understand that where the frontline and fight against natural crime. We're delighted to have been able to put the the U.S. litigation actions behind us over the course of 2019, but we haven't let down our guard at all in terms of the focus on role we play in this area and we will continue to Brooklyn.
The investments continue to be material as well as much to improve the efficiency and the quality of what we're doing as a as to make sure that were as productive as we could possibly be going forward, but we have other responsibilities as well I think as a as a corporation. We stakeholders are very keen for us to focus on the contributions we can make too.
Halting increasing global temperatures.
As a very important too to our colleagues and I'm really proud of the work that we've done it Senator chartered in terms of identifying the best ways to measure the impact of our business and our clients business on the environment.
Taking concrete steps to address some very specific targets.
In terms of the things that we won't do but even more importantly, the things that we will do $75 billion of financing that we've committed to support the the achievement of the sustainable development goals. The the $35 billion that we've committed to climate change related investments in particular, but of course. This is addressed in the bucket and the flip side.
All of those there's those commitments that were making are the things we won't do it. This is also one of the great opportunities of our lifetime.
There's gonna be something like 2.5 trillion dollars financing that the market that the world's can require per year to achieve the climate change targets that we've identified.
The bulk of the impacted markets are ours, the bulk of the of the transition expense or investment is gonna be in our markets and were very good at this. So this is an area that we will focus on we hope to have meaningful income stream. We do already we hope that that can grow steadily. So we can both soon certainly do are bit for for the world and do that.
And the way that's that's actually very good for our shareholders as well.
I talked a little bit of upfront about the incident people. This is something that I would like to come back to it.
With more metrics and measures of the kind of progress that we're making a it's a tremendous commitment we've made a and that's resonating very well with our colleagues and the focus is centered charter has always had on the contributing value to our community remains very strong we launched a future makers.
She is.
A.
Sort of a super set of activities to focus on our markets particular, helping people to learn to live and to grow particular focus on on young women and in a number those markets, but certainly not limited to that and and it seems into that the very long term if it we've had on treating and dealing with <unk>.
Well blindness pleasing is believing that this is that this is a large part of what makes center chartered special and it's when we get leasing right I know Eni and Jose and the rest of the board in the management team find it's much easier to hit the financial targets when you've got a workforce audits motivated to deliver some of these objectives as well.
A little bit a building on the comments that Andy has made I made at the beginning about the the outlook for 2020 sort to page 26 26.
We all know that the evolution of interest rates since we gave our refresh guidance a year ago has been substantially down with over 100 basis points with reduction in forward rates to that period out to 2021, we all know that the the outlook for global economic growth has reduced.
As we sit here today, it's it is decreasing sort of by by the day as the impact of the virus is fully digested course, we'll see how that plays out but as we sit here today.
The global economic outlook is less positive than it was a year ago and the Hong Kong outlook is substantially less positive than it was your goals with the combination of the global effect in Oh of course the.
Disruption in the in the second half of last year through through civil unrest.
<unk>.
Onto page 27, the bucks on the lower right.
Yes, I'll be curious to know what the impact on Senator dreams will be in a month by month and year by year from the current viruses the taxes, we don't know.
We know that we had a good start to 20.
We know that we see that that our operations are being disrupted in terms of our ability to to connect directly with clients or the for clients to connect directly to the itself.
And Oh, we know that.
By the same token they're getting back to work.
Our China colleagues are increasingly back in the office I think by next Monday, there will be substantially back in the office and probably in a week or two with the exception. If we have problems they'll be will be largely up and running along the way that they are they managed to keep our operation completely functional we're opening branches, we kept branches opened throughout.
Our core operational centers in Tianjin and Shenzhen.
We're never shut down so we never did not just one beat colleagues in Hong Kong worry about 70% of the branches are open course football is dramatically reduced but that will begin to normalize as people in Hong Kong stop working at home start going into a into their offices. So we're we're optimistic that we can get back in in our core markets.
We can get back to something closer to normal in the next few months.
But of course, we don't know how this is going to develop them, but we also don't know is how the virus spreading around the world I will impact global economic activity and global growth.
But we do expect that it'll it'll be a harder for us to hit the 10% Oh Gee target in 2021.
And then he said and as I've said.
We are not backing away from that that that objective at all we continue to think thats the right.
Return on equity for this back to be able to achieve the R&D.
That but for the.
Features on are these events on the previous slide interest rates global economic activity virus, we wouldn't be talking about delaying our cheapening of that target at all.
But do you think that and I agree we are realistically, saying.
Every decision we take.
Continues to be focused on on hitting that target.
Every incremental capital allocation every lever that we can pull is focused on maintaining that target not backing away from the target. We're just questioning the timing.
The.
Just to sum up rate really quickly before we go to Q Nay Oh, we continue to think and believe based on the evidence of what we delivered in 2019 that we're operating in the right market.
That we've got the right strategy, we're making good progress on every single element to that strategy.
But we've got the right people.
We've got the right clients the clients are recognizing the value that we're adding through their activity with us and then through the debt and surveys that we could so attractive.
So we're going to continue.
To stay the course, we're continuing to invest substantially and we are continuing to maintain the level of discipline that we demonstrated over the past three or four years. Both in terms of our approach to risk, but also our approach to a two expenses.
The extent that that the environment remains more difficult we demonstrated that were not reluctant to pull the various others that we can to improve profitability and that will continue to be the case.
But.
Well it seems we recognize that many of these things that if the buffeted us and the market are likely to be transitory and a and we're building. This bank for the medium to long term and we'll continue to focus on those investments that can help us deliver that kind of value. So that I think we will.
Head into Q, and Andy we're doing well.
Take your questions.
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Right.
Huh.
Good morning.
From Goldman Sachs.
My name I have read.
Disruption.
My result.
Yeah, I'm thinking about buttons.
Oh, yeah that was weather.
As expected.
My job.
In Asia.
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Oh Im Oh briefing.
Uh huh.
Revenues.
You know.
Your revenue guidance for.
As Bob.
Internationally.
It was just wondering what is driving that.
Yes.
From.
As monitoring organization, which you know something last year or.
Maybe moving on interest rate assumption underlying logistics business before.
Right.
First it was a deep revenue.
Hi.
Finally in terms of college.
Yeah.
Well it into food.
Which was Uh huh.
If we just.
These brands.
Yeah. So in terms of what you're going to niceties would seem that.
Uh huh.
And with it.
This potentially lightbridge hospitals, where are you willing to them. So.
Uh huh.
Thanks.
Yeah, Let me just give a high level answer on the current to impact, but we don't know I mean, I I appreciate your giving a little bit of color on what the expected scenario is and I I hope I hope you're right that that's the expected scenario.
We can you gotta by couple of things are we know that that there was an impact on our growth in Hong Kong as a result at the of the civil unrest in the second half of last year, we managed to turn out a good performance and Hong Kong, but obviously that the virus. It's not just on it it's that's the whole world essentially.
The and we know that we had a good couple of months as of 2020, which was impacted by the buyer although that could be the bulk of the impact is almost certainly to come in terms of Ah of going back to record a number on it because it's it's it.
Cat, we can't estimate and the.
The impact specifically because the the expected case is actually a very very very broad ranch possible outcomes and we're seeing that that change every day.
Well, we are saying is that its they are particularly important for us.
Remained very strong see this so we're pretty happy that were coming into this this period of turmoil and uncertainty with a strong capital position for the strong liquidity position.
Good underlying earnings and good underlying earnings momentum. So we've got we've got some buffers.
And.
Our engineers to as to whether this particular storm and then come out and resume growth at that ideally.
A higher level based on the fact that that we should be a little bit less disrupted than perhaps others, who are less prepared for this.
I, just maybe pickup on the capital levels soon 13% to 14% range was still very comfortable with.
Frequency of reviews that the board looks that obviously from time to time when we have ended up in the high rents are the range as witnessed last year, we acted with somebody like last year, we've got towards the high run now we have again acted on that so we'll be so.
Oh, well could trends going forwards tomorrow, I guess has the potential further we will see when we get to that point in time or whether there was sort of potential on that front and you know, it's it's something that sweet we're pretty comfortable with where we are in the range is now.
Uh huh.
What makes you move.
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Yes.
Yes.
It was project.
Yeah.
Yes.
Wow.
Just.
I think it's difficult to comment relative to others colon free what we've said is the five to seven this year is probably going to be tough to achieve I think the underlying momentum the business through call. Some of the numbers the fourth quarter. The financial markets growth was very strong the wealth management growth. It was very strong.
The benefit so the legal entity restructuring you refer to those progress as we build out. So that's just something which we have got which is maybe a little bit unique to us, but how long and how deep. The current of ours impact is it was but let's just say is really difficult to tell.
Okay.
Oh.
Thanks is a gossiping squeeze on baby.
Two questions. The first just on asset quality.
And just sitting in for water CG 12, which on the screen. It sounds like I was entirely driven by the so no rich, but the idea, though it's Rob I think 20%.
10% in Q3 appreciate and I'm, just doing pretty small, but can you give any color around what's going on that.
The second question was on ought to be gains, which I don't think about pointed in the fourth quarter.
Looks like that might be notably efficiencies driving parts, where there's some seasonality as well. So if you could give us a breakdown as to what I tried to be beautiful.
Well might reverse in Q.
Yes, So let me take credit quality, a difficult one I think to monitor strictly quarterback who took over periods of time, it's sort of ebbs and flows and I think more hopeful to chart shows it was that over a period of time in the aggregate it's remained relatively constant.
You're right in the C.G. told movement was more about the sovereign downgrades.
The early alerts were little bit higher, but remember the alerts the majority of those do not end up being problem.
The minority too, but the majority do not so they just ones were paying on time, but the smaller indicators, but maybe we just need to be a little bit careful about so not concerned by that clearly at this point in time with the current as far as monitoring very Kathleen, particularly in Hong Kong and China, just where we are on sort of pain.
From customers on and so on and we'd expect to little bit softness that for a period of time, but I think that is in the overall scheme of things for the group, it's not it's not a huge issue.
Ultimate delays.
So this time last year said sort of two things the gross in the growth in the underlying auto body is probably trending sort of with income as we grow the business, but offsetting that two things one continuing focus on efficiency opportunities and secondly, when promoter completes.
That will take other who got $9 billion on the balance sheet environment automobile is so the fact weve coming this year at 2% is very consistent with that it's not for years. So we'll see benefited from water, but hopefully we'll come this year and we will continue to grow underway asked efficiencies over periods of time and as you've seen.
In the numbers so last year that has provided some relief from the group's inquiries.
Hi, just minutes.
From autonomous.
Right right.
It seems that despite the difficult environment the threshold.
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Okay.
Do you think it's fair to change your enthusiasm.
To try to deliberate.
Great question Madness, [laughter] I'm I'm happy to report and I can do Sunday have any [laughter] we're checking.
[laughter] we're enthusiastic.
And were completely focused on delivering during this package Wright medical affairs as it really interesting question in the context of aggregate levels of favorable relative to.
Almost any other measures. So yeah of course, it's there or is it a.
Whatever yeah, that's fine.
The it and it's not going to change at all the way we refer to the business. So the fact is that that 10% target that 10% plus it's the right target for business, a there's always going to be questions about timing, we know that there'll be periods. When it's easier in period. When it's harder right now we're seeing is gonna be harder.
I can imagine scenarios, where it gets easier and if we do believe the the fed dot plot and if you believe what I need fewer people are now, saying this is going to be a sharp be in terms of the they're trying to buy a recovery, although even a week ago not moving at the first after this does that get people are thinking that if he was entirely possible things could get better and we could weaken and that's surprising on the upside.
Right now, we're sitting here and we're indicating caution and so Ah yes. How management then of course is not just a it's just not just mean NDS our whole team.
I would get rewarded is by by creating a great company that we cannot be here enjoying your from now.
Right.
A question.
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The question is trying to keep going from Citi grilled.
That has a notch and liquid balance sheet.
So why did push in second half of 19.
Uh huh.
Excuse me.
And I am looking backwards liquidity than a year ago Willis corporate accounts push continue well now.
In.
I'm, sorry, let me pick that one up overall liquidity levels in the business, we're very comfortable with.
We will continue to focus upon the balance between the more expenses and the <unk> expenses sources of liquidity.
We have push more on the operating accounts those tends to be fairly sticky balances. The rights on days below todays will pay on time deposits. We have done some rebalancing within the second half of the year, which as I said earlier should see some benefits as we call into this year with a high levels of the OPUC.
The low levels all time deposit so it's all part of managing beautiful progression on margins.
Correct.
Hi, I came from credit Suisse.
Please just.
On the revenue out like you mentioned you should presuming from the exit rates in key Fool GE think April and I can be contribute to revenue growth year on year.
Between <unk> question, and then a follow up on Bcl sensitivity.
My name detailed but you do you have distillation annual reports around and laundry downside scenarios.
Great.
Well he stated the next Gen 400 million impairment.
Thank you know extreme downsize cheaply.
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But how should we think about a 400 million in the context of sake.
Extend into <unk>.
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Became so let me take the NIM say, we ended last year at war on 64 in the fourth quarter move on 62 to the around Britain. It's clearly an area that is quite difficult to forecast accurately. We're doing this of course 60 markets. We've built in front of ours, we put everything that's going on.
Well, that's who says that we would see in Twentytwenty also being somewhere above the Q4 level, but it would probably be optimistic to think we'd be actually at the 2019 overall levels. So I'd hope that that pool.
The in that sort of range difficult to put it to predict with precision.
On the you see on sensitivities look you can run a million award and different scenarios for a bank and we hope to see published a particular snow or with a particular citizens temperatures.
Well, we have not done on the others have it's sort of put a number on the E. C. L impactful to crunchy bars, we think movement, if he's really difficult to do that with any degree of precision. We've had a fairly good January February March will be affected by the borrowers when we get to reporting out will differ.
That's cool so we will have a few more weeks of knowledge and at that point in time I think we will have a slight Pete best places to putting some numbers on it obviously, we'll have to put numbers on it for all the cool thing that just as of now I just think it's a very difficult area to give you any precision.
Sure.
On the name I appreciate it and we may not get back to the average.
Absolutely a 90 that do you think.
You can get to top line.
Yeah.
We certainly are things that we can have a positive growth on income jewel in the Twentytwenty I'm, just you sold to see side of it which is reasonable.
Actually it's what happened in financial markets with wealth management Bakken crude comfortably lost I.
I think the net interest Swan, we'd hope that we can be sort of there or thereabouts on last years numbers, but again, it's quite difficult ones predict particularly current environment.
<unk>.
Oh, hi in Golden Investec sister cannot so it's good to comment on your views on helicopters money and firstly in terms of water use you got express with monetary authorities and secondly, your view of what the potential impact might be a new business.
And secondly on tax and the other thing you guided us to circa 30% going forward would it be reasonable to assume some geographic mix benefit as well as the payback.
Touched when do you want them build.
So is it a helicopter among the attitude has gone from from a hypothesis to reality and Hong Kong. So we'll see what it does in terms of bringing they.
The Hong Kong citizen out to start spending again.
Obviously the.
Our comments and buffeted by two by too.
And so they've got a lot of the shops and all that hasn't kept them from shopping.
Central shifts to a two online.
But.
Yeah.
If it's obviously a an extension of other quantitative easing type a person monetary policy, it's definitely going to increase consumer spending. The question is whether it kicks arts and economy and.
And and generate some growth in sustainable I have is an interesting experiment I think the Hong Kong and important can afford it many many times over so we'll we'll see if they can get a real pixart timing is probably about right. Because people are certainly from our colleagues and ready to get back out again, they're feeling safer about the environment and the health.
Measures that a that the authorities have taken in Hong Kong had been very substantial and it would appear effective say the same thing about China certainly outside of her province, where obviously that the response was I was later than anybody would have hoped but the had the response has been very very very aggressive I I'm unemployed, Singapore and that as well, although Singapore came a little bit later.
Just because of the geography or are we encouraged that that into these markets can get back to normal in relatively short of or yeah. We are encouraged.
A little bit helicopter money will help liver get things in Hong Kong.
Tonight I'll take the second departments are supposed to fulfill its going to pick up the tax issue.
And the they say to participate if that's right we have seen into low services for a period of time Oh, we are just a shade under 34 29 teen and what we said it's sort of somewhere around 30, I think over the next two or three is probably where we should be heading possibly a fraction above five to 20 different.
But there was there about the fact is a bit lower is in part due to geographic mix. Some of the businesses are becoming more profitable it depends a little tax rates are in those countries and when you put into the makes absolutely consequence, all but separate that out from the bank Levy, which is not in the effective tax rates the bank that because separate as I think your was the bank but.
At the moment is charge on the critical balance sheet in two years time, we will have that based on the UK balance sheet.
What is that for sort of 300, and we'll see huge cost should be sort of hungry also cost. So you know an important contributor as we take the routine upwards going forwards from every line on the Pan out and that hopefully will go on.
Things that might you to exit from KBW I'm, just trying to understand that more you're pushing on revenue because.
Highlighted that year to date or less few weeks I think he said at the here you're running at full set.
Pretty much in line with what you did last year.
Okay, and you say the although your body language. You said you expect the impact to be we should be transitory I think is that when you used.
And you any 1% light on your and your target anyway. So he is just like a sort of general joined the crowd everybody's courses, we should be courses time stepped back from those targets or was there something really tangible that you could highlight to us that that gives you. This this portion of this expectation that actually we're going to see it looks like.
So I guess that that was much checking my second question I'm doing the weighted on.
Okay.
[laughter] I guess the second question was then just on the margin could you just in terms of your comment you just made on it.
Especially on the margin what what are your expectation are you factoring in things like interest rate cuts in the U.S. and high performing attach it to justice system.
The question on a an income is a interest rates are lower than we've had a.
20 basis point move and tenure its it which is gonna just gone to the curve. So that's that that impacts on our sensitivity is less that's as we've indicated and the material that we so now it's less than it was a year ago, but it's so we have we are sensitive to.
Lower interest rates a trade flows are down and trading activity is down substantially as we've seen.
The propensity to invest.
And capital projects is at least being delayed I think this will all get caught up but it may not get caught up until who we may pick up in the second half of the year or whenever this thing passes.
Activity that we Miss in the first half of your that's going to in fact, our growth in 2020.
The consumer sentiment is down so the propensity to spend is that we're seeing that in terms of economic impact and certainly the affected markets.
As I say there has been a big shift from from from physical purchases to online purchases of course is part of a much longer larger trend. So it's it's the Mt shopping malls that that you see because of in Hong Kong, Singapore, and <unk> and China are not the whole story, but nevertheless, it's down a and I could probably go on with with other things that happened when.
People get nervous or in terms of in terms of activity that for us it's been a little bit offset so far by Ah people focusing on risk management. So nothing aftermarket business has done very well through this period because people are more concerned about recent they haven't plenty of indicators that and Ah, yes, it's not to say that we would expect that financial markets.
If you do to fall off as soon as people get comfortable that that the declines can survive.
Well.
There's every possibility that that we have things that are but I was saying to me.
Maybe we're being too cautious I really hope of being too cautious, but I think there's good reasons to two I expect that there's some real headwinds this year.
On the name a as let's say it was a lot of new thing Paul it's not easy want to accurately forecast as we all know.
If you look at food codes. This makes it a little bit more downward pressure on interest rates, but actually the majority of that late what's happened in the last few months the things that we're doing on the rebalancing of the liabilities is repricing of the legal entity restructuring. We think those will be all sits and all hope is that we can come out this.
She has a bit better than we did in Q4 last year, but time will tell.
So.
Thank you is terminated from you missed let's not similar question to aid although it was gonna do ask why you know more cautious perhaps on on revenue, but [laughter]. It looks at it looks fairly obvious why the interest rate pressure mix et cetera that you're going to do well to show any clarity.
Net interest income this year nothing would be fairly good outcome and it seems consistent with what you've said and there was now just given a few points of and why that noninterest income may also be more difficult certainly for the next year. One thing you Didnt mention and I may have any cisco that a bit like apologies, but at the start of the leaching Easter.
Sustainability of some of the financial markets revenues in particularly in Q4 is it like I said he launched number in corporate institutional sort of see like 43 million, which wasn't sure what well that was just wondered if you could talk a little bit about sustainability of the financial markets to revenues going forward as well. Please thanks.
I I give it to the color Andy Andy can and can come in as well the a number of things could change in our financial market business I'd say for starters.
We've shifted the orientation of the bank to a much more active credit flow through business underwriting in distributing I'd, rather than buying and holding.
So our credit structuring distribution group has added materially to profits that should continue to grow not that is one of those things that deal activity will will drop during periods of a concern obviously by market issuances is gonna be down since their loans, what will be down in the short term the underlying.
Allocations within their need for financing hasn't gone away those will come back as a question of timing, but that's the there's been a structural increase and there will continue to be structural increases and our ability to make money originating distributing and treating credit.
The at the other end of the spectrum, a I would say the that we've done we've had good results in our rates trading and in our currency trading business, that's very dependent on on underlying market volatility and and concerns or where I'd, rather pie and the cycle by by most measures in those two areas.
But despite the the underlying.
The logical volatility those businesses, we have been steadily improving our capabilities and we're now regularly regarded as I always a top 10, sometimes a top five FX player in June three currencies and in our local markets where regularly number one number two would have been for sometime.
Those markets are growing.
So those are our erotic, but but they're growing.
And then it's not something between I would say is.
Is the the ongoing focus that we've had on I'm, providing more customized solutions to customers.
Center chartered has tended to be color plain vanilla house in years gone by and we still are predominantly.
Now, we're definitely going back to a they go go days of 10 years ago, but senator charters is becoming a much more creative and innovative place and added that to the degree that we can solve our clients problems and more creative ways.
Always focus on getting the right result for the client that's a secular and structural area of growth as well. So is it sustainable yes or will it be will be volatile.
Hasn't been to volatile, but but we'll be perspective, there you have to say, yes, because we know that that the design that will change.
But this is the fact that that this is a business line. That's got its legs and and can continue to grow is the fact that we with the that because as a as long as attack.
Hi, it's a Nelson from JP Morgan can I have two please.
Last several years to slow down there was obviously quite a lot of cost pressures on the business because you have to invest.
This time around I think you're quite confident about hitting positive jaws, but I was interested in order. The areas you you can potentially squeeze.
To hit that puts to Joe's artisan does that actually makes sense.
Given.
The amount of investments you continuous didnt need to make within the business. So the question really is whether you're stepping away from from an investment perspective I'm worried prioritizing.
And then the second one is on virtual bank in Hong Kong Oh.
Obviously, we've seen only one example of that and it looks like quite a high cost you know deposit model board or your thoughts about that likely shape of your offering and are you going to change based on what you're seeing in terms of customer behavior things yeah.
In terms of investment.
The of course, we have we have a bedrock of things attendees is regularly called out which we're gonna do in any case, who either the required for regulation or.
Many having centers or whatever.
So they're very little flexibility, there, maybe a bit of flexibility entirely theirs.
Frankly, now a large block of our investment are things that are discretionary and it tends to generate a either fundamental improvements in our process or or income for both and.
We have a number of levers that we can pull there what we can we can delay the timing on things. If we look at environment and say, it's just not as attractive for particular area of investment because the economy is gonna be slower because markets of receded or because of client segment is under pressure or whatever then obviously, we can we can target those investments, we're very reluctant to pull back on the investments that we're making because this is clearly how we get the growth engine fully up.
Running.
Good enough that we have and we are many levers for I would say, but but another interesting lever is that.
Kevin we've become quite good at a at deciding whether we want our investments to be offer on that were in partnerships and to the extent of course when you enter into a partnership the do it because you think that that the partner is going to bring some value. It's also waste afraid of cost upfront or or to spread your risk or put your put your unionism rented the.
The had to the extent that we had some really exciting opportunities or we don't want to come back, but we don't feel it we can afford it we can either push into more partnership models or we can shift to the economics of the partnership so that.
They were pretty much cash and then and a and perhaps adding value elsewhere or just taking a lower resulting stake in the profit. So I think we've got plenty lever support without deviating from from from the core strategic thrust and that's what are these things are very focused on on penetrating the are they the mass market in markets, where we have a press.
But where we are sub scale and.
The the easiest way to do that is through through partnerships with that with various new economy players.
We should be in a position.
Relevant importantly in fact, we've we've signed our first commercial contracts on our partnership in Indonesia, We'll get a position to an outside the next few weeks so against that.
That.
We will get us access to tens of millions of customers for full range of banking services in a new technology platform that we built a that we're rolling out with one platform person would warrant rollout through others.
Yes, you negotiate these transactions theres always a negotiation, whose picking up the their development costs, you know who's picking up the marketing spend and who the income that comes off the back of the initiative.
We can move those things around depending on what are what our appetite is at a point in time, but we've got a U.S. rather than the on virtual back.
The one guy that's a that's in a.
I would call it sort of that's alpha testing right now has offered at 6% interest rate or second half or something like that for a very short period of time to a very small number of clients. So obviously they accomplished what they wanted to accomplish which was to get a headline.
Right.
What we intend to deliver and we should be in a position to deliver that relatively quickly is a it's a differentiated customer proposition that's what we're not.
Going in to compete on price of course, our price with the competitive I mean, that's.
On consumers are ours rate sensitive as anybody up but what we're really competing on this is a differentiated proposition than what we're building we're quite excited about.
Just couple of.
Question on line.
And then.
Right.
Question is from I might have somebody.
Hi.
Youre talking to 14% Todd.
Hi.
Yes.
Down employees are trapped capital into footprint elevated stressed drawdown.
Secondly, shall we expect to step up 22, I'd have to I believe it's part of that do you still expect <unk>, 10% I definitely inflation.
He has indicated watching down into.
[noise] when do you want to comment on our token buyback.
[laughter] only half a billion.
Let me take let me say Synta and so you see 113% to 14% obviously, it's a number of factors educate that warm the is ready to minimum wall is peak to trough on stress tests war on his capital requirements within the system operating so 70 countries and put all that together so seems 14% for Ross so.
Teams they sent spoke space to be and we are comfortable with that we're operating within it and the source <unk> rig is happy we're happy with it. So that is is a range. We're comfortable with all of the view I use its really a repeat of what we said last year. So we do so we can keep the growth in the Autoclaves blades right.
Inflation at all rate of increase income, let's put it that way I'm also when that goes we'll take but a big chunk out all the groups all delays and on Paul's all three or four or whatever it is somewhere in the 5% to 10% range. Its best estimate it is still an estimate because there is still quite a lot of detailed needs to clarify.
And the UK, obviously needs to form its own viewed irrespective of Europe on the exact application or some of that and like most banks eagerly await more definition and more clarity.
Last question I think.
Yeah.
Hi sensor hub from Redburn answer that a couple of questions I'm just on the margin just.
But apparently how much the tuna sooner million came through in Q4's order because all of it coming through 2020 create any benefit from a tool.
Funding synergies and on all the way just a follow on from the on your question Your Street <unk> billion of credit migration.
In that 490, I'm, assuming all of that was Hong Kong related. Please correct me if I'm wrong and have you assumed any credit migration or how she's thinking about credit migration, considering what's happening in the ground in twentytwenty and Youre ought to do is less an income guidance, it's not ex <unk> or the wood from office are you taking money away.
Turning to see me pretty migration is it realistic the Audrey ways, I mean will be growing lessening gum thinking it was like a two part question three or four [laughter] Ah. Okay. So in terms old eat benefit to our NIM, although legal entity restructuring, which I think was your first question, we said that will progress.
Yes, it really build a two to three year period. So we retire existing exposures replaced them with a better funding sources well location of sources that will come through so there is little bit of impact to that in 29 to one but it will be more in this year and then more in the off the the three and often in the credit there is.
Migration there is some clearly this is in Hong Kong, absolutely sure and then the rest is sort of spread around the place the keeping the overall ought to do a growth below the rate of income was sort of aggregate to comment which does incorporate the assumptions that promoter would be going at some point during that time.
And hurt.
My races in general.
<unk>.
Right.
Yeah.
Oh, well, it's it's probably talked quite a lot back into the current of ours sort of issue. You know we will see just how that pans out not just in terms with direct but didn't direct consequence is we are well aware and we'll keep it close on a massive as a moment you know the warmer to sort of smallest stresses but nothing.
It's going to Nichols put and takes but clearly as we all know it will depend upon how long its law school and how many countries it impacts.
Yeah.
Okay. Thank you very much as it starts to snow outside.
Cautionary telltale signs when thank you very much for the coming and I currently but thanks.
[noise].
Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now disconnect.
[music].
[music].
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