Q1 2022 Barclays PLC Earnings Call

April 28, 2022

[music].

Welcome to <unk> Q1, 'twenty, two analyst and Investor Conference call.

I'll now hand, JV Tcs, then Kathy Christian group, Chief Executive and <unk> Group Finance director. Good morning, I am pleased to report a strong first quarter for 2022 four bucket.

Our strategy is delivering and we saw income growth in all three of our operating businesses.

Group income was up 10% to $6 5 billion pounds for this quarter profit before tax was $2 2 billion pounds.

Group return on tangible equity was 11, 5%.

This comes after absorbing an increase in costs and that increase was driven in particular by the remediation of our legacy portfolio.

As well as an overall issuance of securities in the U S something which I will talk about in a moment.

Our group income has benefited from broadly improved performance consumer.

Consumer businesses Barclays UK in consumer cards and payments assisted by rising risks.

Mobile market has also performed well as we helped clients navigate the volatility of the first quarter.

Before and after the appalling envision of Ukraine.

Unsecured lending balances remained well below pre pandemic levels and impairment was 141 million pounds for the quarter.

We remain well capitalized with a <unk>.

One ratio of 13, 8% comfortably within our target range of 13% to 14%.

Before.

You're talking about the highlights of our quarterly performance, let me start by addressing two matters.

First is the over issuance of securities in the U S and the second is our exposure to Russia.

As part of our structured products business.

Barclays is a frequent issuer of structured notes and exchange traded notes and the U S as well as elsewhere.

In March we identified that the securities offered and sold under our U S shelf.

Distributions statement had exceeded the registered demand for a period of about a year.

As a result, we will be conducting a rescission offer.

Eligible purchases of these effective securities.

This will be published in due course.

The quantum of the pre tax loss due to this recession is about 500 million pounds.

And I will take you through the impact on our financial statement, including the allocation of these losses between 2021 and the first quarter of 2022.

This situation was entirely avoidable.

Deeply disappointed that it occurred.

The necessity of a strong controls culture has never been clearer to me.

In fact, we have made considerable progress improving our control since 2016.

And so the fact that this happened, particularly upsetting.

I have commissioned an external review of the matter with oil.

But aside from the board.

And this review is focused on what happened how it could have happened and where accountability lies.

At the same time I take some comfort from our response and our ability to absorb this issue financially.

The matter was escalated immediately both internally and to our regulators with whom we are cooperating constructively.

To date, we have.

Have not found any evidence of intestinal misconduct.

And having reviewed all of our other issuance program.

We note that they are all within applicable limits.

However, the fact that this over issuance occurred reflects the weakness in our control environment and we're taking steps to address this.

We're also enhancing the internal controls in relation to our debt securities issuance activities.

Extra safeguards.

In view of our ongoing discussions with the SEC concerning the impact of this issue.

The delay in the execution of our stock buyback until these discussions have concluded.

This is not a question.

We will be proceeding with this buyback.

But when we will be proceeding.

Our capital position is strong as reflected in the results. We have just received and we expect to be in a position to proceed with the buyback towards the end of the second quarter.

Let me now turn to Russia.

We have been witnessing a horrific human tragedy unfolding in Ukraine over the last few months.

The human element of the conflict is what we feel first and foremost.

We have also been leading the market repercussions.

Barclays itself has no onshore presence in Ukraine or Russia.

Following our exit there some years ago.

The exposure, we do have to Russia, it's principally through the facilitation of client activities in the corporate and investment bank.

As illustrated on the slide.

We reduced this exposure significantly through the quarter.

We have managed to control it carefully.

We know that we need to remain vigilant to protect the group from second third order risks.

Which includes private strengths.

We are of course, working closely with governments and regulators around the world to comply with sanctions.

Turning now to some of the highlights of the quarter I'd like to start first.

And talk briefly about the strong performance of our markets franchise.

Global markets income has been notably higher since 2020.

This has been driven by a number of factors, including what is happening externally in the marketplace.

As well as the result of a number of strategic decisions, which we have made over time.

To begin with the franchise is benefiting from the ongoing growth of the global capital markets themselves.

Our margins have also improved reflecting the higher level of market volatility that we've experienced since the start of the COVID-19 pandemic.

We have also benefited from competitor exists and some of the product areas, where we have made strategic investments.

Including in our equity financing business.

But many of the drivers of our success also results from the positioning of our business, including the investments, which we have made in our client offering and the digitization of our platforms.

As I mentioned at year end, we have also taken steps to diversify our income stream improving the consistency of our performance.

Especially if you are in changing market conditions.

We have grown our financing income by approximately 40%.

Between 2018.

The end of 2021.

And in fact in the first quarter of 2022 that income growth continued up around 10% on the previous quarter.

So our global markets business is growing in strength and capability.

However, as I've said to you in the previous quarter. This growth will not always be monitor likely in a straight line.

Our relative performance will be stronger in some quarters than in others.

For instance, in Q4 of 2021, we underperformed our competitors.

While in Q1 of 2022.

<unk> has been particularly strong versus our competitors.

This relative performance is determined by three things.

First is the businesses in which we engage the second is the <unk>.

Strength of our interaction with clients.

And the third.

His particular idiosyncratic opportunities.

Which we have helped clients manage their exposures.

In Q1 of 2000 22022, all these three factors contributed to increased revenue.

As I've already outlined our business mix means that we had relatively limited direct exposure to Russia.

And to the commodities market.

We have manage the exposure, which we do have proactively and dynamic.

Q1 also saw increased trading activity commencing with rising interest rates in January and February and decreasing after the invasion of Ukraine.

Thanks to the strength of our client franchise.

We were able to help many clients manage their risks and exposures. During this period responding to rising rates and fluctuating equity prices.

We were also able to help a number of important clients manage very large currency and debt exposures related to Russia.

In summary.

The investments we have made over the past few years in this business are now delivering positioning us to continue to serve our clients when they need us most.

Turning now to the economic environment.

Rising interest rates as both the short term and the long end of the yield curve are leading to higher net interest margins for the bank we are.

We're already starting to see some of the benefits from rises and the base rates flow through to our customer business and consumer businesses.

However, both the UK.

In the U S economy.

They are forecast to continue growing over the next three years.

It's a stretch from rising inflation.

One compensating aspect.

Unemployment in the U K and the U S remained at low levels.

We are very focused on the impact that higher prices are having on our customers and our clients.

Many of facing fall harvest.

The conditions this year as a result of inflation, particularly from supply chain difficulties and higher energy costs.

We will support those who bank with us to navigate this difficult period wherever we can and we will continue to support the wider economy, just as we did through the Covid crisis.

We remain focused on our three strategic priorities, which are outlined at year end.

First to deliver next generation digitize consumer financial services.

Ken.

To produce sustainable growth in the corporate and investment bank.

And third capturing opportunities as we transition to a low carbon economy.

Across our Barclays UK in consumer cards and payments businesses.

We are continuing to invest in our digital capabilities to enable our customers and clients to transact and interact digitally.

We are building out more cost effective infrastructure using consumer data more effectively and we have invested to grow our payments business.

Within wholesale banking.

We are investing to sustain our position as the fifth ranked global investment bank.

Will allow us to continue to take advantage of the growth in capital markets.

And to help our clients manage risk as you have seen in the results this quarter.

As I've already touched on we have also sought to diversify our income in the corporate and investment bank, including by investments in more consistent annuity type financing businesses and global markets.

We are also targeting growth in transaction banking and our corporate banking offering in Europe .

Finally, our third priority is to recognize the scale of opportunity in climate related financing and to realize it.

We want Barclays to be able to benefit as we support our customers and our clients to transition their businesses and their activities.

Lower carbon emissions.

Helping finance this transition is a key part of our strategy to become a net zero bank by 2050.

We are well underway to reach our target to facilitate a 100 billion pounds of green financing by 2030, Hasnt already facilitated over 65 billion pounds.

We also recently announced important updates to our climate strategy targets and progress, including our work to reduce our finance emissions.

We have set 2030 reduction targets for four of the highest limiting factors in our portfolio.

And further tightened our restrictive policies with respect to the financing of thermal coal.

As part of our commitment to give shareholders a stay on climate.

Our offering our shareholders vote on our climate strategy targets and progress.

Our annual General meeting in Manchester next week.

In conclusion, we had a strong quarter.

This is despite the over issuance of securities in the U S, which was a disappointing controls matter and has impacted our costs.

We have maintained a double digit group return on tangible equity that was a feature of our performance throughout 2021.

And I am confident in our ability to sustain this on an ongoing basis and we continue to target an <unk> of greater than 10% in 2022.

And I've already mentioned, we will be proceeding with a planned 1 billion bond share buyback program and we expect it to be in a position to do so towards the end of the second quarter.

Thank you and over now to you Anna.

Thank you Venkat.

Good morning, everyone.

You will have seen our announcement about ever issuance of securities in the last few weeks ago.

At the time, we expected the Q1 results to reflect circa 5 billion litigation and conduct costs pre tax in respect of that.

Following subsequent discussions with regulators we have a portion.

With billions of these estimated costs for 2021.

We also have $2 billion of customer remediation relating to our legacy partner finance portfolio in CCP, which we weren't expecting at the time of our full year result.

I will highlight the effect these charges have on Q1 as we go through the presentation.

I'll start with a summary of our Q1 performance.

Overall, we continue to focus on delivery of our three targets.

Right.

Cost income ratio and CET one.

<unk> for the quarter was 11, 5% despite the impact of the litigation and conduct costs with banks Barclays International and Barclays UK delivering double digit returns.

Cost income ratio was 63%.

Elevated by the level of LNG cost in the quarter.

However, operating costs were broadly flat against income growth of 10% demonstrating the operating leverage of the businesses and our cost discipline.

The CET one ratio ended the quarter at 13, 8% comfortably above the midpoint of our target range.

This capital plan includes the impact of the $1 billion share buyback.

Program announced with full year results.

Overall, we delivered a PBT of $2 2 billion and $8 four of EPS.

I'm going to focus on income costs and impairment trends across the grid before I briefly summarize the results of the individual businesses.

Income was 10% higher than Q1 2021 with all the businesses contributing.

CIB delivered growth of 10% demonstrating the diversification within the CIB and its ability to deliver attractive returns in a variety of macroeconomic environment.

Markets income increased 26%.

This reflects the high level of activity by our clients as we help them reposition in the light of geopolitical uncertainty and rising rate.

FIC revenues were up 37%, reflecting increased volumes and attractive bid offer spreads in volatile markets.

Equities revenues were $1 billion up 13% year on year with particular strength in derivatives.

Quarterly comparisons of market income or.

Are affected by various factors and a key one year on year increase does benefit from our business mix.

But as we look at the development of our markets income over multiple quarters. We are pleased with the development of our franchises on a trend basis.

One example is financing activity, which performed well within FIC and equities with increased balances and healthy spreads.

Balances and equity Prime were up 14% year on year evident thing our successful expansion of that business over the last year.

Investment banking fees were down 25% year on year, reflecting lower primary issuance volume, particularly in equity capital market.

Debt capital markets income was down just 8% outperforming the market whilst advisory was up on the deal pipeline remains strong.

Income and CCT increased 10% reflecting growth across all three.

Paul.

In international cards U S balances grew by 13% or $2 6 billion.

Year on year.

Although there was of course, a seasonal decline during Q1.

Given this we are confident of delivering balanced and income growth in 2020 K.

Organically and with the acquisition of the gas portfolio, which is due to complete towards the end of TK.

However, the income effect of this balance growth will be dampened by the J curve effect, particularly from customer acquisition and growing portfolio like American Airlines and Jetblue.

In the payments business. Despite omicron related restrictions in January transactions, Karnataka was up 17% year on year contributing to an increase in income of 44%.

The private bank franchises, developing well with income up 20% year on year as client balances continued to grow in both banking and investment products.

Barclays UK.

Income by 5% predominantly.

Predominantly driven by personal banking, where income was up 11% year on year.

This reflected the strong origination of mortgages throughout 2021.

Continued into Q1 2022 with a further $1 billion of net balance Grace.

Whilst the mortgage market is always very competitive personal banking margins have increased overall due to the impact of rising rates on deposit income.

Barclaycard UK income fell by 12% year on year.

Although our spend levels have increased by 35%.

<unk> year on year and style.

$3 billion in Q1, because of seasonality and elevated repayment rates.

We do expect Q1 to be the low point for UK card balances, which spend recovery generating some growth in lending balances from here.

Although our recovery in interest, earning balances is expected to remain slower.

Finally to pull out some key income themes across the group.

Loans and advances have grown year on year by 7% more than matched by deposit growth of 10%.

Whilst the market environment for primary issuance has been challenging.

Same environment has driven high levels of client activity across based financing and trading in the CIB markets business.

Increased economic activity has driven transactional fees across consumer and corporate businesses.

And lastly of course, there is a tailwind from rising interest rates.

Product margins across our franchises, but also income from the structural hedge.

We expect this effect to be more meaningful in coming quarters, and you'll find our usual slide on sensitivity to rate increases in the appendix.

Looking now at cost.

The cost performance. This quarter is of course dominated by Alan fee charges.

We manage our statutory call.

We're not going to adjust all our performance metrics to exclude LLC.

However, we do view this quarter's LLC as exceptional so.

So we focus particularly on the trends in operational costs.

These were broadly flat as we exercised good cost discipline and delivered strong positive jaws.

Thanks costs, which exclude structural cost actions and performance costs were up five 6 billion, mainly due to the <unk> 5 billion increase in Alan Tse.

The key one allocation of costs relating to the issuance of $3 billion is charged to the CIB.

And the key billion relating to our legacy partner finance portfolio is in CCP.

Looking now at the cost trajectory for the year.

When we set our guidance for base costs for the year, we didn't anticipate LNC costs of <unk> 5 billion in Q1.

There has also been some increase in expectation for inflation.

The dollar has strengthened further since full year results.

So we have seen some increase in our outlook for all in costs for the year.

Efficiency and cost discipline remains crucial and we continue to seek to balance capacity creation with investment for growth.

We are reviewing expenditure plans in the light of the expected costs of the LLC for the year.

The impact of base inflation and FX.

And may postpone some investment programs.

As we mentioned at full year based on current plans, we would expect structural cost actions to be materially lower than last year's total of $6 billion.

You will appreciate that there are a number of moving parts. This early in the year, but I am currently comfortable with the published market consensus.

<unk> 15 billion for OLED cost this year.

Moving on to impairment.

We reported a modest charge of $1 1 billion for the quarter. This is stage three impairments relating to net charge offs.

Some expected migrations through the impairment stages of economic activity with habits.

Delinquency rates and the businesses are stable.

Stable at low levels.

30 day arrears in U K cards at 1% in U S cards at one 6%.

Whilst we are seeing some recovery year on year in unsecured lending.

Balances are well below pre pandemic levels.

We are tracking customer and client behavior very carefully.

Including passions of spending in order to identify early signs of pressure from affordability.

So far we haven't seen any particular worrying indicators.

But we have specifically considered affordability risks and have broadly maintained coverage level with UK cards at 12, 8% in U S cards at 10, 4%.

Further details on coverage ratios are included in the appendix.

Turning now to the performance of our business.

The UK income increased 5%, while cost decreased 3%, reflecting lower operational costs plus efficiency savings, partially offset by increased investment spend.

We have started to implement the cost actions, we reflected in the Q4 results, but it will be a while before we see the full expected benefit given the timing and payback.

The B U K racy was 15, 6% and we're feeling good about the momentum in the business.

Finally, a few words on forward margin expectations for the U K.

The NIM for the quarter with 262 basis points up 13 basis points on Q4, principally reflecting the effective rate rises.

There is still a lot of variables, but given the pass through on the initial rate rises and the expectation of further rises.

Increasing our NIM guidance for the full year to 270 to 280 Bips.

That seems the UK base rate, which is 175% by the end of the year.

Turning now to Barclays International.

Fee income increased 10% to $4 8 billion, while costs increased as a result of the conduct and litigation charges.

Despite this strong business performance delivered a rate of 14, 8%.

Go into more detail on the next two slides beginning with the CIP.

Income was up 10% to $3 9 billion.

Excluding LLC operating costs increased by just 2% delivering strong positive jaws.

In title cost increased by 19%, reflecting the Q1 portion of the provision relating to the Azure issuance.

There was a $33 million net impairment release, reflecting unimproved C of the watch list.

Overall, the CIB generated our rates for the quarter of 17, 1%, despite the LNC charge, which impacted the rate by around three percentage points.

Turning now to consumer cards and payments.

Income in CCP increased 10%, reflecting growth across international cards payments and the private bank.

The increase in costs was largely due to the LNC charge of close to $200 million.

There was also an increase in investment and marketing spend relating to the expansion of the business, including preparations for the GAAP partnership.

The impairment charge was $134 million, reflecting the flight III delinquency in U S cards.

The <unk> was minus one 5%, but excluding the LNC charge the ratio would have been in double digits.

Turning now to head office.

The income of 23 million included a one off gain from the sale and leaseback of UK datacenters of $86 million.

Costs were broadly in line with the usual run rate and the loss before tax for the quarter was $73 million.

Before I move to capital a quick summary of our liquidity and funding.

We remained highly liquid and well funded with a liquidity coverage ratio of 159% and a light to deposit ratio of 68%.

Moving onto capital.

Sure.

The CET one ratio ended the quarter at 13, 8%.

Comfortably within our target range of 13% to 14%.

Our full year results, we flagged the effect of the buyback program and the regulatory changes, which took effect on one January .

These two elements reduced the year end ratio on a pro forma basis to 13, 9%.

The apportionment to key for a part of the charge relating to the ever issuance.

<unk> affect the headline year end ratio.

However, there was a further 19 basis points impact from the Q1 charges relating to the ever issuance and associated <unk> <unk> news and <unk>.

Six <unk>.

Headwinds from the fair value reserve movements, principally caused by the higher rate environment.

We would expect circa 12 specs of the ever issuance impact to reverse when the related hedges are no longer required.

Underlying capital generation was strong with 51, but accretion from profit.

This was partially offset by increased <unk> deployment as we would expect in Q1.

Looking at our capital requirements.

Our MDA hurdle is 11% so we have comfortable headwind at current levels.

There are a couple of factors affecting the <unk> ratio over the balance of the year, but I want to mention.

Firstly, our recent disposal of obsolete sheds us around 10 basis points to the capital ratio in Q2.

Secondly, we expect to go into the triangle pension valuation of that 30 September .

Surplus position.

From an IRS and funding point of view.

Given the recent announcement from the PRA on structured contributions we expect to unwind one <unk> $5 billion of contributions in Q4.

Which would otherwise have been spread over 2023, 24, and 25 from a capital point of view.

Absent other impacts from the triennial this could bring forward around 30 basis points reduction in the race yet.

I would note however that given the surplus position of the fund the element of our pillar two requirement for pension risk may reduce.

Going forward, we are confident in the organic capital generation politically.

We announced with our annual results in February that we would be launching a $1 billion buyback.

In view of our ongoing discussions with the SEC concerning the impact on last year's 20-F filing of the ever issuance of U S Securities, which we announced on <unk> in March we are delaying the execution of the buyback until we have concluded these matters.

To be clear.

This isn't a question of whether we will be proceeding with the buyback but when.

And we expect to be in a position to start towards the end of Q2.

As we said previously the board considers capital distributions regularly throughout the year.

It isn't just a matter for annual discussion as you saw in 2021.

Finally on leverage our spot leverage ratio was 5% and the average UK leverage was four 8%.

So to recap.

We reported statutory earnings per share of $8 four P for Q1 and generated an 11, 5% ROE despite.

The litigation and conduct charges.

The business performance is robust.

We're focused on delivering our target of double digit rates this year and on a sustainable basis going forward.

We have an income tailwind from expected balance growth and rate rises in the consumer businesses.

On the CIB franchise is in good shape after an excellent Q1 performance.

Given the $5 billion of litigation and conduct <unk> take the increase in expectations for inflation and the strengthening of the dollar we have seen some increase.

For costs for this year.

But we will continue to review our expenditure plan.

Early in the year.

Overall, we're comfortable with the current consensus of around $15 billion for all in cost.

Reflecting macroeconomic uncertainty we have maintained strong coverage ratios and expect a run rate for impairment to be below the pre pandemic levels over the coming quarters.

Our capital ratios remained strong despite the Q1 LNC charges and we remain confident of delivering attractive capital returns to shareholders.

Whilst also investing for future growth.

Thank you and we will now take your questions and as usual I would ask that you limit yourself to two per person. So we get a chance to get around to everyone.

If you wish to ask a question. Please press star followed by one on just how to think keypad. If you change your mind unless to remove your question. Please press star followed by Kim.

Glenda. Thank you ask a question. Please ensure that your phone is Amit lately.

To confirm that staff by one to ask a question.

Our first question comes from Jonathan Pierce from Numis. Your line is now open. Please go ahead.

Hello.

Two questions. The first one is.

Number one the hedge income looks like it could be pushing 2 billion pounds.

Random by the time, we get towards the end of the year. So can I just invite you to maybe tell us how much of that is actually in Barclays UK as opposed to CIB.

Please think about withheld.

Second question is amongst Florida, what mummy's buybacks.

For the clarity.

It's a question of when notes not tips, but.

Could you maybe just touch out presume it will detail what exactly needs to be done in the coming weeks to get the billion pound gun or is it purely the refiling of the 20th.

Is there anything that's more around fuel.

We control that we should be thinking about I'm sorry.

Supplementary.

Just maybe jumping the gun a set tops.

Consequently accretion over the rest of the year organic maybe simply should be pretty good as the optimist in the last nine months.

Just wondering whether you think there's any scope given what's happened in the last couple of months when there's any scope for the buyback we popped up.

Later, this year, which I think may have been your intention as full year results. Thanks Paul.

Okay, Thanks, gentlemen, and I will take both.

And in terms of the structural hedge income approximately 60% of it sits in the UK and so hopefully that is quite straightforward.

In relation to the other Mount sack.

And.

Sorry.

As a UK maps that we have completed and I agreed with our auditor.

And the UK regulators that there is no need for us to re file either BB PFC or the plc in the UK.

We are still in ongoing discussions with the FTC.

In relation to a requirement to potentially or possibly re fall.

The plc and we have completed that we will resolve the BPL state.

Youre right it relate directly to that.

And until we have concluded that.

We have decided so it's a <unk> decision.

We will delay the commencement of the buyback while I would say Jonathan is that we are.

We are well progressed in our preparation and in fact the thing.

This does that restatement is what we've actually printed today.

Attributions back into FY 'twenty one.

And.

Really constructive.

Discussions with the SEC.

So that's why we've positioned that as we have either as a when rather than an X.

And you're right, we're really pleased with the capital trends.

In the first quarter and we feel like there's.

Momentum in the business and actually across all three businesses.

So we'll continue to consider our <unk>.

Distribution plans.

For the rest of the year, but we would expect to accrete capital.

We guided today that we are still continuing to target double digit about 150 basis points.

We've delivered.

51 from <unk> in the first quarter. So it does feel like the momentum is that but it's something that we'll discuss.

With the board.

<unk>.

Typically we discussed that throughout the year isn't just a matter for the year and you saw that last year.

I wouldn't believe it would be different this year.

Okay, that's really helpful.

To be clear that once the 'twenty.

One would have been re files.

Buy back stock, we're not waiting to see what the FCC is going to do with regard to the potential fines or remedial action and the control pumps. It literally just the 20-F.

Correct.

Great. Thanks, a lot. Thank you next question please.

Our next question comes from Joseph Dickerson from Jefferies. Your line is now open. Please go ahead.

Hi, Good morning. Thank you for taking my question just a question on the provisioning I guess.

When you look at the card coverage in the U K, that's a 13%.

This is like almost an adverse outcome.

Stress testing is what's driving that level of conservatism, given where we are on unemployment rate.

Household indebtedness and so forth.

More broadly.

Do you think that you.

Youre taking enough risk.

In unsecured.

So two topics on on unsecured.

And then also on the same staying in the same area.

Could you just comment in terms of what Youre seeing in terms of some of the higher frequency spend data I mean your own monthly.

Barclaycard survey shows areas such as non essential spending are up like 17% on March of 2019 at some point you think some of this is going to turn into revolve balances, particularly in travel picks up as that is that a correct assumption.

Yes.

Thanks, Joe.

I'll take the provisioning.

I am sure that bank how has the view on.

On risk and then I'll revert back on the high frequency data say.

When we were at the year end, we were we were cautious.

And we were cautious about a few things we would clearly cautious because we were at.

What would appear to be.

And across.

Variants.

We were cautious also power and pending inflationary and affordability pressures.

I would say that since the year end all concerns about Covid has abated somewhat.

And but the tragic events in Ukraine, and the ongoing impact of inflation around the world and how that plays into affordability has totally changed that concern I will let Paul that.

So we've been cautious Joe.

And that's why we've maintained coverage youre right unemployment forecast online.

But the way I think about unemployment and we use it in the model as a shorthand for disposable income.

So, even though unemployment forecast a lag.

Absolutely certainly nothing affordability pressure is out there.

Therefore, we will see some pressure on monthly disposable income that's why we've taken the position that we have.

What about <unk> positioning.

Positions.

Joe you're absolutely right.

That that first of all.

Credit conditions, otherwise are relatively benign obviously with these inflation cost of living pressures.

Interest rates rises consequently, coming from central banks there is.

Great. It sounds today than there was even three or four months ago that growth gets affected on the employment gets affected later on this year, having said all of that.

Especially in unsecured.

I would characterize this as a demand problem and not a supply problem we have.

<unk>.

We have abundant risk appetite to lend unsecured both in the UK and in the U S.

Obviously, we will do it where supportable.

Customers and where it makes sense from a credit risk point of view, but credit risk is benign. So we are very much open for business I would like to say.

And.

And I think what you're seeing is a demand issue and we are also anticipating in the UK that as discretionary spending on non essential spending rises into the summer with holidays as we would see balance growth.

The UK is a little behind the U S and that.

I completely agree with that Joe.

If we look at our high frequency spend data, we can see purchases up in credit cards.

In the U K, we can see.

Actually payment volumes up.

Our payments business payment volumes are.

<unk>.

The turnover was 17% up year on year and actually when we look back to 2019, which is the last year pre COVID-19 .

Yeah.

Purchase volumes are up versus that as well.

Recovery in spending we continue to see elevated levels of repayments and cards in both the UK and the U S actually which is probably some.

On reflection basis consumer confidence.

A large liability balances that we've seen.

Create the kind of the period.

I think that will.

That will probably fall a little bit of a dumping angled price, but essentially what is happening is what we expected to happen, which is we're seeing purchases as a strong lead indicator.

Great to see balanced growth from India, and absolutely lending growth will probably follow that.

Okay. That's great that's very clear thank you Bob.

Thanks, Steve next question please.

Our next question comes from Rohit Chandra Rajan from Bank of America. Your line is now open. Please go ahead.

Hi, Good morning, I had a couple please one on the CIP and one on costs.

I mean, obviously, a great quarter for the CIP in Q1 and congratulations on that.

But as Venkat mentioned, the CIB doesn't move in a straight line. So I was just wondering what the sort of market environment.

We're sort of baking in to support that 10%.

For the full year, particularly for the <unk>.

On the CRB side market environment for the CIB.

And then linked to that just in terms of the controls review is that.

Is that specifically around the structured products business or is it is it broad based than that.

And then the secondary would just be I wonder if you could just provide a little bit more detail and how you're thinking on costs has changed.

6% to 700 million increase in cost expectations for this year relative to previous guidance, how much is incremental litigation and conduct.

How much was inflation how much is performance related how much is FX. So if you could provide any clarity around that that would be really helpful. Thank you.

Yes.

Thanks.

I will begin with the CIB and then our corporate costs.

I think the market environment.

We will continue to be one characterized by volatility both in interest rates and credit spreads and equities.

Obviously, Paul and don't anticipate that there will be the kind of severe shock to the system that the Russian invasion of Ukraine created.

Separately.

But I am thinking about it more like the environment that prevailed lets say in January up to the Russia and Ukraine.

And that is probably prevailing right now now that that shock is abated. So if there's one characterized by high volatility and I think.

I think investors and clients.

Mr Clients and corporation will continue to have to.

We will continue to have to reposition their portfolios.

Dealing with that volatility and form views.

That's how they want to take the risk profile, what they want to assume the risk profile going forward, which is not an easy thing.

More broadly I think.

You are beginning to see a little bit of deal activity come back into the market obviously the elong.

<unk> acquisition of Twitter for which we were an advisor and finance.

Reported.

Have idiosyncratic elements to it.

It is.

We think a harbinger of some improved deal activity and Thats, what the banking side as far as the control review itself goes.

No.

What's going on externally, which is focused very much on this particular incident.

And from everything we've seen so far there was no intentional misconduct and it seems to be a relatively specific matter.

Having said that.

As I've said before I take a control of Scotia, and our risk management culture extremely extremely seriously and I am very disappointed when I see.

This is like this.

So we will do whatever we need to do to ensure that we don't face such the practice.

And.

And if that means.

Looking internally at other things, we will but it is the most important thing to emphasize is no surprise culture and learning from it when it happens.

And I'll turn it off.

Okay. Thanks, Ron Yes.

Correct, we guided to 15 1 billion all in cost.

Morning.

Let's be clear about that.

Statutory number so the knees meant that you are seeing is predominantly Orion se.

500, I would say.

And that's really what's changed here.

We're clearly disappointed by that.

Let me help you understand how I think that costs I think permanent layers us working across three different factors.

The first is what we invest to underpin the growth of the business.

The second.

How do we drive efficiency programs through the business and then the third is how.

We are managing headwinds from inflation and indeed from FX.

Different again is that that pressured the ramped up third element off certainly.

Higher than they were although I would remind you that while FX might be a headwind to costs.

Tailwind to the P&L overall.

Sure.

Typically what we try and do is.

Bring that the net impact to phase III is placed analogy concept, Greg can drop to the bottom line got hit harder in the current environment, which is why we've given that guidance around all in we do have leave aside.

You've seen us be really disciplined in the first quarter. So what we've got.

Revenue growth of 10% with golf.

<unk> costs by six 1% and we got positive jaws in all three of the businesses. So you should expect us to continue to be thoughtful and disciplined.

Thank you could I could I just follow up on the other in terms of the leave us I mean, presumably that inflationary pressure builds as we go into next year.

So I think you talked about the potential deferral of investment spending would that be the key lever that you pull to manage a more inflationary environment for a year or two.

Yes, I think there is a few leases and desktop phases phasing of investments that clearly will prioritize the investments that we think is strategically important as the right thing for the business, but we may push out decisions that are a bit more marginal.

And the second one would say driving efficiency harder.

Clearly sets off in Q4 of 2021 .

UK transformations rig counts fall, that's not really going to deliver a highlighted 20% U K.

Beyond that simply because of the timing of when those investments start.

From 2003 onwards, you'd expect ups coming say, so obviously driving efficiency really hard.

Then the third thing is just the timing and extent of any structural cost actions that we may choose to take.

<unk>.

Guided to being nice being down materially year on year.

And as we take them we are thoughtful about the returns in the business at that point in time, So I think of us pulling those three levers.

Okay.

Okay. Thank you very much.

Okay. Thank you next question please.

Our next question comes from Alexander <unk> Serrano from Morgan Stanley . Please go ahead.

Good morning.

Just a couple of questions one on again on the trucks notes issue.

<unk>.

Really from the regulators.

Apart from the refining what do you think the potential range of outcomes could be and in particular.

I am thinking if they do ask you to reinforce controls.

Is this a material source of cost inflation.

We should potentially sort of have to.

Think about it.

And the other sort of question.

The consumer end.

Im thinking the U K, but.

If there is any relevant commerce in the U S.

You're very welcome as well as obviously balances, it's not taking off yet.

And the outlook, obviously, you now have the so the uptick in utility bills and potentially more in later in the year.

Without you're still confident.

Grow what drives that confidence.

And what do you think.

Sort of just travel the bigger sort of still might pick up in trouble too. So what makes you confident on that despite all the consumer squeeze I'm thinking obviously more in terms of demand in.

And balanced growth for the next few quarters.

Thank you.

Thanks, Hi, Oliver So let me begin with some on the structured notes side and then I'll cover the consumer balances.

<unk>.

So look first of all on the cost estimate that we've given you. We've given you our best estimate at this point.

Which is primarily related to the rescission offer itself.

And the financial risks around it.

Hedged.

The.

Broader issue of <unk> controls.

It's early for me to say I think we are doing this externally review as I said there is no.

What we've seen there has been no intentional misconduct and it appears to be an isolated matter. We of course will internally as I said in answer to a previous question I hate surprises.

And when surprises happen.

I'd like to look more broadly.

But we have spent a lot of time and money.

Improving the control concerns us back since 2016.

And.

And we've done a lot and if you look there's been financial risks or other risks that have been hitting the industry over the last many years.

There are many things, which we have appointed so I feel good about what we have accomplished obviously, we did not achieve perfection otherwise this would not have happened.

So this is offsetting that has happened.

But I take some comfort in everything that we have done so far and we will continue to look.

As you have two after one of these things happen.

But my hope and expectation is that this is a very specific metrics.

Okay, all right I'll take I'll take the question on cost balances.

The U K and the U S.

They are different.

So let me throw that out so in the UK. We are still confident the reason for that is because of the trajectory in purchase activity that we see.

And Youre right the mix within that we might expect to tend towards.

Travel as we head into the summer.

The other thing.

Just to remember is that.

As we went into Covid.

We were our risk off we were conservative we were cautious as we mentioned.

<unk>.

And.

That decision.

Decisions that we took at the time, but since then.

Yes.

Back towards consumer risk in the UK as Frank outlined previously we are doing so in a thoughtful way given the environment.

Time.

Back into the market to acquire cards.

Will feed through into higher balanced aesthetic it's.

It's partly around purchasing behavior, but it's also that flywheel effect.

Stepping back into the market the U S is completely different.

So in the U S to see balanced described by $2 6 billion in the year they are up 17%.

That's nearly all organic.

We're seeing heightened purchase activity that changed.

So that gives us.

Confidence in terms of the organic growth.

Effects, we already have borrowing on the card.

And then of course, we have strong acquisition.

At the backend of 2021.

And you're starting to see that now.

Coming on.

See what you say lifestyle right and obviously culture income of that that will again C. III Valerie.

And then inorganically.

We've got gas coming on board at the end of Q2 in the U S.

We construct chairman back to U K after you asked for different reasons.

But.

We'd expect balances go ahead. Thanks.

Yeah.

Thank you very much.

Okay. Thanks Your next question.

Our next question comes from Chris Cant from Autonomous. Please go ahead. Your line is now <unk> 10.

Good morning, Thank you for taking my questions. If I could just come back on the shelf issuance.

Okay.

First could you explain a bit more detail.

To size the potential impact here in terms of the provision taken presumably these instruments changed hands. Several times do you have any obligation to compensate.

Yes.

The instrument so just the current holders.

I note that in today's release, we've indicated an unquantifiable contingent liability.

On a subset of the Etfs. So when do you think youll be in a position to quantify that potential risk.

And then secondly is the risk of some regulate reclined.

Appreciate that you've indicated this was basically yes.

I'm intentional era.

It's not sort of a risk culture issue.

You have lost your well seasoned issuer status in the U S into 2017 them pay defined so I guess you were already on the <unk>.

<unk> step to want to go back to term could that be a factor in how the regulator views the recent of Russian proppant.

Yes.

Okay.

Thanks, Chris.

And what we've put in the.

Financial statements at this time.

Is it.

It's our best estimate at this stage.

Right.

It's focused on the structured notes rather than the Etfs.

Got worse.

Just calling out that within the 15 billion the Etfs, so $2 billion.

And of that answer is Shannon.

And our comp accounts go into detail on that.

The way we've constructed the position well I would say is that.

Differences in the products and the way that the products trade in the market. The underlying the reason why we have three system.

Right.

In the way that we called out so.

We are not able to determine if or what any liability with <unk>, whereas with the expertise structured notes and they.

They perform differently in the market and therefore that.

That's relatively clear.

As it relates to.

Further discussions with the regulator that Kathryn.

I think the broad framework on the.

And obviously, we can't we can't forecast exactly what will happen, but I think are two three things importantly to keep in mind.

Number one.

As we see it at all times to have Frank open harmonious relationships with our regulators and that way.

This issue has been escalated immediately to them was escalated immediately to them. We have regular discussions and we are working constructively to resolve it.

We have not and the external review found any evidence yet of internal misconduct.

Misconduct.

I think all of those are contributory.

And what the ultimate outcome is.

Hope is to resolve this matter.

Appropriately offering derived remedies under law to those who have been affected and working constructively with our regulators.

The meta.

Okay. Thank you.

Thank you next question please.

Our next question comes from Mark Heenan from Credit Suisse. Your line is now open.

Good morning, everybody. Thank you very much for taking the questions I've got one market question.

And one thought because you came in plush structural hedge question.

So just Tom on market. So you talked about improved margins from historically low levels.

An environment of persistent volatility.

And I understand that picture for pigs.

I can see that 'twenty two.

Likely to be quite good for the premise can choice whether to last year.

Especially given the normalization of rates, we had last year.

Trying to understand how you think the equities business will behave specifically and how volatility dependent.

Thank Barclays equities franchises.

Just directionally.

I'm, just trying to understand the likelihood that those businesses.

Performing together as they did in the first quarter.

And then my second question is.

Just on Barclays UK NIM guidance.

Just.

Give us some color around the specific assumptions behind.

The revised NIM guidance I think if we.

Think about the number of bank of England rate hikes and now in the base I.

I think its probably around 30 to 40 bps on average something like that is that fair.

And just on a question related to the structural hedge.

Just wanted to how much you're thinking about.

How to manage the structural hedge given the shape of the yield curve and what you're expecting.

Right. So I'm just wondering if.

The bias is going to be for yields to heads up.

Whether you would be tempted to.

Shorten the duration a bit without suffering on the yield to increase your <unk> full rate sensitivity.

Thank you.

Yeah, Hey, Thanks, Omar let me begin with the markets questions and.

Then both the NIM infrastructural hedge.

I'll turn it over to Anna to answer.

On the market side.

You've asked about both FIC and equities, let me say two things first one fig.

There is higher volatility on the trading side on the equity side as well I think there has been a period since last year.

It's been slightly different things, but it's been increased volatility in the equity market since last year at the start of year. If you remember it was very it is a graphic single stock movements that means stock they call them.

Has become more broad based now with higher interest rates and greater volatility indices.

And I think one way to think about it for us.

We have strong cash and a strong derivatives franchise.

Derivatives franchise tends to benefit from increased volatility.

And the one thing I'd like you to also keep in mind, both for fixed income and equity.

Is how much we have been making progress.

I would call financing and financing based revenues.

Our.

So a little subject to volatility, but a much more stable fee income.

So obviously equity prime has been a growth area and we sort of call the talcott on slides with the.

40% growth over a four year period, ending in 2021, but even at 10% growth in the first quarter of this year and then fixed income financing of which we are a leading participant in the market.

Three if not talk too.

Has been.

Low absolute revenues for the past number of years with rates being very low spreads being very low rate more than spreads are all being very low, but it's starting to pick up with widening.

Widening credit spreads and higher interest rates, so I think that combination of financing revenue across equity and fixed income or something.

Have been strong and we continue to invest in and it does feel like income but in markets like this I would anticipate.

That continues and some of it is really quite independent of market franchise revenues.

Thanks for the question.

So Barclays UK NIM guidance, we guided.

Today, we expect to be between $2 70, and 280 fixed for the year a key assumption. There is we are assuming that we exit the year with us with a base rate of 175.

<unk>.

And I would say the assumptions within that let me, let me tell you that while I think leave us all.

The first is clearly that base rate needs.

We've seen today.

I would say.

We'll pass to our low levels of pass today.

I would expect cost 3% increased as rates continue to rise because it's difficult to call specifics.

We have not been on this pathway in the U K for quite some time.

But in general I would expect pass through rate increased somewhat from here.

The second thing is obviously, the structural hedge and I'll come back to that I know, it's a bit more detail obviously the structural hedge.

We'll increase in income tax over time and that adds to that filled in.

In our NIM.

And then there's <unk>.

One which is a bit more of adapt narrow which is obviously what we're seeing.

In terms of mortgage margins.

The mortgage margins are definitely very competitive.

And whilst we liked the business.

I'm pleased with our price.

And just the mix effect.

That will have a dampening effect on obviously a positive impact on NII in cash terms.

The wildcard is really what happens in card balances, so that one's a little bit.

More difficult to call.

The thing I'll, just say about base right before I go on to structural hedges.

Whilst we're calling them we are using a 175% exit rate.

The rise in Q3, and Q4 that really have that much effect from 'twenty to 'twenty, two but because of the timing and obviously we are assuming.

<unk> posture as we go along.

Just coming to the structural hedge and the.

The structural hedge is that downturn the volatile, let's say from interest rates in the UK.

These statements generally fulfill banking product.

<unk> expression.

We see a at that rate.

And to that extent.

When we move that had direct typically what were doing is were extending it.

To reflect higher deposit we are not.

Anything else.

We are not intending to change it.

In terms of generation at this point.

<unk> hundred 60, <unk> of it will be priced every estimate them.

And so just to reiterate that.

All of those things together with guiding our wholesale because all of those things.

All of those things net net benefit to the to the Andrew income of the UK.

If I could just ask a quick follow up questions.

You've kept your rate guidance to $75 million for 'twenty.

Should we take that as a signal that.

That will be the rate sensitivity for the next time.

And that's.

That's a more general disclosure and all of that.

It's difficult to be specific about any particular rate hike.

Do you not.

It's quite dynamic because.

Not just the timing of them. So it depends where you are on the curve for example, but it's also because we're making multiple decisions across different businesses different co protects U K et cetera.

I don't think of that as an expression of <unk>.

It's a sensitivity.

Okay. That's great. Thank you okay. Thank you next question.

Sure.

Our next question comes from Ed Firth from <unk>. Please go ahead. Your line is now 18.

Yes, good morning, everybody.

Two questions. Please the first one was really about credit.

I hear what you say about sort of conservatism and caution on the outlook, but if I look on page 18, you have got your variables that you that you used for your expected loss computation.

And in that U K GDP in your base case and web growing five 7% this year until next.

Next year.

If you look at the probability.

Cable for load that you've actually got a probability weighting to do better than that.

And yet I think consensus is.

2% below that for this year and even low again for next year. It seems to me it will be quite aggressive in your expected loss assumptions I guess my first question would be my reading right. What is the sensitivity around if you were to put more of a sort of consensus view of growth expectations in Europe .

Mexico now.

How how much that how might that affect your your.

<unk> loss computation, so that'd be my first question.

The second one was really wants a bank really a broader strategy question Venkat because.

Yes.

Now you've had a bit of time in place.

What are the frustration that I have with Barclays is if you look at your CIB business I mean, he's just smashed expectations again and again.

Again this quarter you have 40%, 50% ahead of what everybody was thinking and yet.

Look at the market reaction again today, so everybody shrugged shoulders.

Yeah.

Is it going to be looking at a fresh.

Craig is there anything you can do about this do you think now you're looking at how can you get people to start giving you value for the performance in that business and I think.

<unk> talked in the past about.

Some of it off can you split it up and give us more visibility on the sort of stable on logarithmic.

It must be immensely frustration frustrating for you and for everybody who works at these earnings basically ignored.

Okay.

Alright, Thanks for your question.

Thanks, Ed.

First question on that.

I'll hand over to Venkat.

On your question around macroeconomic variables, we didn't update that in the quarter. We brought that forward from Q4, which is what which is what you're seeing.

And they clearly are.

<unk> changed towards the backend of the quarter around to be specific.

<unk>.

Since this change towards the backend of the quarter and we didn't update for that but we don't think that significant the reason I say that is GDP is not a big driver of ECL models, the one that really matters.

The unemployment rate.

And actually if anything if you look at unemployment metrics that we are feeding into the mobile say are on the conservative side.

And really much of the conservatism that we are pacing here relates to our past model adjustments and you can see that in the disclosure and actually see that.

In the way that they need.

And the way that the coverage ratios.

That's why the stage two coverage ratio is elevated because that's where the PNA set so.

Yes, the macroeconomic variables are important.

And some of them are more important than others.

I'd say the unemployment is the one you should really watch.

But our PMA.

Mexican.

Of our past model I'm, sorry of our non defaulted stock.

<unk>.

Level.

Yes.

Pretty comfortable with it.

Thanks.

Sorry can I just have one quick follow up on that I mean, you're talking about are.

You still got a 47% probability waiting for an upside and only a 20% weighting to a downside I mean sure.

Should we expect that to be a bit more cautious as we go through the year.

So the probability weighting is actually on model.

And then we can spend a bit more time with you on this side of AIG.

But essentially it's mathematically derived.

From the divergence between the scenario.

So further apart.

The more the lower the probability in simple terms.

So it's not it's not an active decision we think it's actually a mathematical.

All right.

To that in a bit more detail.

Okay that'd be great. Thank you okay.

Thanks for the second question it.

So first of all in what I would like to say is if you take a.

5% to 60 or perspective on the bank going.

Going back there were two questions about bucket on the CIB. One was should we have the CIB and the second is.

If we had a CIB would we be any good at it.

On the first question of should we have a CIB I think.

The argument, which we made in 2016 was that it was an important source of diversification for the bank.

And I think the events through 2020 in 'twenty one in fact early 'twenty two.

<unk> shown that that was true.

I think that question of should we Havent CIB sort of I think off the table.

But equally because of that the corollary is that we very much wanted to be part of what this business is about what Buckley at bank of Nevada.

Second question.

If you were if you hadn't CIB would you be any good at it I think your own kind words, describing our performance.

I would take as evidenced that that question should should be moving off the table.

Because I think we are showing that we're actually reasonably good at it.

So.

Then the broader strategy question is the question Youre, asking as well, but you don't seem to be getting credit for it in the share price.

But it has the salutary effect of making me a more patient human being but beyond that I think the.

<unk> really is conversion.

Of earning into buybacks at the capital return.

And clearly the events of this quarter.

Glenn that satisfaction just a bit.

And the second is consistency.

I think what you should expect from us from a strategic point of view is to keep to the diversification to keep to try and producing good earnings to keep the trial with our objective of a decent return of capital to shareholders.

And then the story will find its acceptance.

But sorry, if I could just come back with just one question I mean, there must be some elements of that business, which is what I call the sort of core recurring business I mean.

I'll be honest I've seen no idea what bought CIB revenue is going to be this year.

And I guess.

You probably don't either.

So.

But it does make it very difficult for investors to put any value to it in a meaningful manner, but I guess within the business. The bus surely be a sort of underlying revenue, which which we do know what it's going to make this year in which we could could perhaps highlighting some why is that.

Is there something in that or not.

Yes. So I think there is let me try to do it for you in a qualitative way without giving you numbers.

First of all you've heard us talk a lot about financing.

Which equity financing in fixed income financing equity financing is what we call. Our prime business. This is where we have balances from investors around the world who want to borrow against stock.

And or borrow against bonds and they keep balances with us.

Shown you that Bryan balances in our businesses have grown.

Tremendously, 40% I think 18 to 21, another 10% in the first quarter of this year and what that.

The franchise relationships that endure.

And they've happened because we've invested in that business and we've had some competitors have exited that business and we've been able to gain some market share from it.

That is one part of the business that is.

Relatively repeatable when.

When you think broadly inside the CIB in capital markets, both debt capital markets and equity capital markets again.

Ultimately its a bit quarter to quarter, but the size of the capital market has been growing and we expect that to continue to grow expect us to get a certain share, which we hope is an increasing share of that issuance market.

<unk> been always historically very strong in that and are getting stronger and equity and you expect to see back and associated revenues.

And then there's the part about trading where again I think you should expect a certain base demand, which will come every day because portfolio of needs to be rebalanced people take new positions and people.

And people have to trade and rebalance with people on Wall Street.

And on top of that there is an element which comes from either a very special situations like the ones. We spoke about earlier today.

Or because of higher volatility in the markets, which means people need to rebalance their portfolios more than they normally do because it's moved because of market movements or because they are taking position, we're seeing a bit of back now.

I anticipate that this year.

We'll have a higher level of that volatility simply because of rising interest rates and the adjustments people need to make in their fixed income portfolios and their equity portfolios because of equity volatility I expect that to be higher. This year can I tell you what that is three years from now.

Sure.

Okay. That's very helpful. Thank you.

Okay. Thank you next question. Please and the next question will be the last one for today. Thank you.

The final question, we have time for today comes from Martin might get from Goldman Sachs. Please go ahead Martin.

Yes. Good morning. Thank you. Thank you for taking my question and also congratulations on the strong print today just quickly two follow up questions. One on U K cost in blood on the CIB.

And I was just wondering on the on the UK cost. If there is anything specifically to call out for Barclays' performance does it seems like the market share in terms of credit card balances in the UK keeps dropping lower even though there has been comments about a year ago about your intention to move back into the recovery.

Regain some market share loss, but I was just wondering.

How shall we think about Costco.

Couple of questions balances going forward should it be in line with market that youre, roughly combined different kind of a market share of around 15% or.

Or would you also see an ambition to regain some of the market share in U K cups.

And secondly on the CFPB I was just wondering.

You called out share gains in client financing I was just wondering if you could comment how you see the competitive landscape evolving are there still opportunities out there for further share gains or could you actually see some of that reversing some of some of the European banks pushing back.

In terms for revenue ambitions. Thank you.

Okay. Thanks.

Thank you Martin I'll take the first and then and then talk to think cat.

And.

So your question is about U K cards and Barclays.

Perfect performance I think the first thing to say is that we are.

In cards and actually nowhere else exactly the same.

We are not.

We are not targeting a specific market share that is not part of our app.

A lot to say.

Our performance I think reflects.

And the fact that we did step back from risk, we actually stepped back from risk post Brexit.

We step back at the beginning of the pandemic.

And therefore as we step back in the response is not an immediate one it takes a while for the customer.

Customers to join us to start tomorrow.

And so on so I think.

We would hope that we'll see balances grow.

Over time from stepping back into that market, but it's not instantaneous.

I think thats what were seeing now.

I think the other thing I would just say it is our intention over time that we will reshape that business then you're seeing evidence of us doing that now.

So.

<unk> that we've got products that are focused on spend lend so.

<unk> products launched in February .

Too early to talk about specific numbers, but we're pleased with how the skylake.

I think the card business of the future isn't going to be a replica of the cards business of the past.

Quite a few reasons.

Yes.

And Martin Thanks for the question look.

<unk>, we take them extremely seriously we respect them, they're all strong professional bags.

And many of them bigger than us.

What I would say to you is market share gains.

Come in two ways, one as competitors exited a particular area, which has happened with certain products and certain banks.

And then the second is.

More sustainably how you how you continue to deal with your clients.

The services you provide the investments you're making your capabilities and the continuity, which you'll have and strategy and client facilitation.

We have been on this journey for a number of years with the consistent investment.

<unk> approach to the strategy.

We our footprint has remained relatively consistent which is.

Concentrated in the U S and Europe , and Asia building it out slowly.

Trading centers in Hong Kong, Singapore.

In India, and is serving China and an offshore basis.

There are things, which we do there are things, which we don't do what we do we try to do really well and we tried to offer enough to customers and deal with them and in a product that they keep coming back to us.

I am very hopeful that.

With the team, which we have and the investments we make and the consistency in the strategy that we will continue to get customers coming back to us leaving.

Leading I believe to market share.

Thank you very much.

Okay.

Thanks to everybody.

Look forward to seeing many of.

And the next.

A few weeks.

In the meantime take cash.

This presentation has now ended.

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This presentation has now ended.

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[music].

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