Full Year 2024 Barclays Bank PLC Earnings Call and Business Update

Speaker Change: Good morning. It's good to see you all this year. Thank you for coming. And welcome to the first full year 2024 results and progress update presentation.

Speaker Change: You can see the agenda for the morning on this slide. We will go straight into results before turning to review progress in the first year of our three-year plan. And as usual, there will be an opportunity for those in the room to ask questions at the end.

Speaker Change: Note, we also include an update on key operational developments for each of our five divisions as an annex to today's presentation. We won't talk to these slides, but have included them in the spirit of transparency and to help you understand how we are delivering our plan.

Speaker Change: So, let me start with some performance highlights before handing over to Anna to take you through the financials. So, let me start with some performance highlights before handing over to Anna to take you through

Speaker Change: You know, at our investor update last February, we set out a three-year plan to deliver a better run, more strongly performing and higher returning Barclays.

Speaker Change: I'm encouraged by the progress which we have made during the first year. We are executing the plan in a disciplined way and have achieved all of our financial targets for 2024. And we are on track to achieve our 2026 targets.

Speaker Change: Last year, we delivered a return on tangible equity of 10.5% in line with our target greater than 10%.

Speaker Change: We also announced £3 billion of capital distributions, an important step towards our target to distribute at least £10 billion to shareholders by 2026.

Speaker Change: This includes £1.2 billion of dividends, enabling a 5% increase in our dividends per share to 8.4 pence.

Speaker Change: also 1.75 billion pounds in buybacks, 1 billion of which was announced today and which we expect to initiate in the coming days.

Speaker Change: We have made progress on deploying £30 billion of additional RWAs in our highest returning UK businesses, while keeping investment banking RWAs broadly stable.

Speaker Change: This has resulted in the investment bank falling from 58% to 56% of the group's RWAs, on its way to our 2026 target of circa 50%.

Speaker Change: And we remain well capitalized, ending the year with a CET1 ratio of 13.6% within our range of 13% to 14%.

Speaker Change: We are improving the quality of our income and the stability and durability of our returns. And we are making progress towards our approximately 30 billion pound income target in 2026.

Speaker Change: Our top line grew by 1.4 billion or 6% year-on-year during 2024 and we achieved our NII targets for the group and for Barclays UK.

Speaker Change: Our structural hedge provides a predictable and highly visible source of net interest income growth over several years.

Speaker Change: And our cost-to-income ratio for the full year, 24, was 62%, better than our guidance of circa 63%.

Speaker Change: Our credit performance was also strong, particularly in the UK, with a group loan loss rate of 46 basis points for the year, below our through-the-cycle 50 to 60 basis points target range.

Across Barclays, we are focused on execution.

Speaker Change: We delivered 300 million pounds of gross efficiency cost efficiency savings in the fourth quarter, enabling us to achieve our one billion pound target for all of 2024. We remain focused on improving our operational and financial performance across each of our five divisions.

Speaker Change: Anna will review our financial performance by division shortly, but let me first cover a few highlights.

Speaker Change: Barclays UK delivered a return on tangible equity of 23% for the year. And on the 1st of November, we completed the acquisition of Tesco Bank.

Speaker Change: Through this acquisition, we have gained a strategic relationship with the UK's largest retailer, supporting growth in our home market.

Speaker Change: We plan to leverage our expertise in partnership credit cards developed over years, decades in the U.S. to drive further growth and customer engagement.

Speaker Change: Across the rest of Barclays UK, deposit balances have continued to stabilize and lending trends are encouraging, resulting in organic balance sheet growth in the fourth quarter.

Speaker Change: UK corporate and the private bank and wealth management divisions also contributed to the group's balance sheet expansion.

Speaker Change: In the investment bank, our objective is to improve returns by regaining market share and improving our RWA productivity and cost efficiency.

Speaker Change: I'm broadly satisfied with how we have fared against these metrics, and of course I expect further significant progress in each of the next two years in order to deliver our targets.

Speaker Change: The 8.5% ROTE for the Investment Bank in 2024 is up 1.5% year-on-year, and it's a good step on our journey to deliver returns in line with the Group by 2026.

Speaker Change: And we expect the investment bank to deliver further progress on ROTE in the year ahead.

Speaker Change: Returns in the U.S. Consumer Bank improved to 9 percent from 4 percent as impairment charges normalized as expected and as we proactively improved our operational performance.

Speaker Change: We have also made good progress to simplify the bank by divesting the non-strategic businesses that we outlined at our Investor Update. This included the Italian mortgage portfolios in 2024 and the German consumer finance business completed last month.

Speaker Change: Before I hand over to Anna, I would like to make two broad points.

Speaker Change: The first is about the composition and quality of our businesses and of our results.

Anna: As I hope you see in our 2024 outcomes and in our 2025 outlook, we are aiming to construct a bank with a good mix of businesses which perform well individually and collectively.

Anna: We aim to achieve a healthy balance between consumer and wholesale activities, a sound revenue weighting among fees, interest and transactions.

Anna: and the geographical mix, which takes advantage of the full scope of our presence in the UK, the depth and breadth of our business in the US, and from both those locations, bridges to the important financial centers of the world.

Anna: Through this, we aim to deliver robust and reliable performance across interest rate and credit cycles.

Anna: That is the objective of the business strategy which we presented last year and which we continue to prosecute.

Speaker Change: My second broad point is that while Anna and I have the honor to present our results, this performance has been generated by over 90,000 colleagues at Barclays.

Speaker Change: They have helped implement the strategy so far and they are core to our achieving success over the next two years.

Speaker Change: And to further align their efforts with our shareholders' interests, our colleagues should be able to participate in the ultimate outcome of their work, which is the change in our share price.

Speaker Change: Therefore, we are announcing today a share grant of approximately 500 million pounds each for the vast majority of our colleagues, essentially all employees across all locations outside of managing directors and what we call material risk takers.

Speaker Change: I have long felt that this kind of alignment between shareholders and employees through broad-based equity participation strengthens business outcomes.

Speaker Change: Sadly, broad-based equity ownership has been declining. This represents our effort towards arresting and correcting this trend. So with that, I'll hand over to Ana.

Thank you, Venkat, and good morning, everyone.

Ana: Slide 6 summarises our financial highlights for the fourth quarter and full year.

Profit before tax was £8.1 billion and was up 24%.

Ana: This included a Q4 profit before tax of 1.7 billion up from 0.1 billion.

Ana: Before going into the detail, as always, I would note that our results are affected by FX rates.

Ana: The year-on-year performance in Q4 was impacted by a weaker U.S. dollars, which decreased our reported income, costs and impairments.

Ana: Conversely, the dollar strengthened from Q3 to Q4. And I'll call out these effects where appropriate.

Ana: Group's statutory ROTI was 10.5% for 2024 versus our target of greater than 10. This was against the previous year's ROTI of 9% which was impacted by 0.9 billion of structural cost actions in Q4.

Ana: Much of the improvement in ROTI reflected higher income, particularly in the Investment Bank, Barclays UK and Private Bank and Wealth Management.

Ana: This improvement occurred even as we grew tangible book value per share by 26 pence during the year to 357 pence.

Ana: Throughout the year, as you know, I've been looking for four things in our performance. Income stability, cost discipline and progress on efficiency savings, credit performance and a robust capital position. We delivered on all four.

Ana: I'll now cover these in more detail starting with income on slide 8.

Ana: Our income growth continues to be supported by the structural hedge and is now complemented by balance sheet growth.

Ana: Income in the investment bank, while seasonally lower in Q4, benefited from the execution of our initiatives to improve productivity and an increase in the industry wallet.

Ana: Together, this resulted in a 6% increase in total group income for the year to $26.8 billion. Excluding FX, income was up 7% year on year.

Ana: More stable income streams from retail, corporate and financing grew 3% year-on-year and together contributed 74% of group income.

Turning to NII.

Ana: Our Group Net Interest Income increased for the third consecutive year by 3% in FY24 to $11.3 billion.

Ana: Excluding Tesco, Group NII increased 2% to £11.2 billion and within this, Barclayshire UK rose 1% to £6.5 billion.

Ana: Both were in line with our guidance at Q3 and more favourable than our February guidance.

Ana: This reflected the benefit of higher-than-expected interest rates and faster deposit stabilisation on our NII, including as a result of higher reinvestment income from the structural hedge.

Ana: The structural hedge is designed to reduce income volatility and manage interest rate risk. The high proportion of balances hedged reduces our sensitivity to the short-term effect of rate cuts.

Ana: NII from the hedge increased $1.1 billion during the year to $4.7 billion.

Ana: Income provided by the hedge is significant and predictable. We've now locked in £9.1 billion of gross income over the next two years, up from £7.8 billion at Q3 and £4.8 billion a year ago.

Ana: This income will continue to build as we reinvest maturing assets at higher yields.

Ana: As consumer deposit behaviour has stabilised, the average duration of the hedge has increased modestly to around three years.

Moving on to costs.

Ana: We achieved a cost income ratio of 62% for the year, below our circa 63% target. This included a £90 million motor finance provision in Q4.

Ana: In line with our plan, we delivered $1 billion of gross efficiency savings during the year, including $0.3 billion during Q4.

These savings created capacity for investments and business growth.

Ana: We also took proactive steps to accelerate structural cost actions in a number of our divisions, giving the strong performance in the year, whilst importantly still delivering on our cost-income ratio target.

Ana: The costs of these measures, which will support our future returns and efficiency, came to £110 million in the quarter, or £273 million in total for 2024, well within our normal annual range.

Turning now to impairment.

Ana: The FY24 impairment charge of 2 billion equated to a loan loss rate of 46 basis points.

Ana: This included a Day 1 charge for Tesco Bank of £209 million, where accounting rules require balances to be brought on to our books at Stage 1.

Ana: The UK credit picture remains benign, with low and stable delinquencies in our consumer books and wholesale loan loss rates below our through-the-cycle expectations.

Ana: Specifically, the Barclays UK charge was £365 million including day one effects from Tesco resulting in a loan loss rate of 16 basis points for 2024.

Ana: The U.S. consumer bank impairment charge was down 10% year-on-year at $1.3 billion.

Delinquencies in USCB are developing in line with our expectations.

with 30 and 90 day delinquency stable.

Ana: As guided, impairment charges in this business were lower in 2024 versus the prior year and H2 was also lower than H1.

coverage ratios remain strong.

Ana: Looking ahead, we expect the loan loss rate in FY25 to be similar to FY24.

Ana: This includes the lagged effect of hard delinquencies in the past 12 to 18 months and the anticipated Day 1 effect of bringing the General Motors Partnership on board in Q3 2025.

Ana: I would also note that loan loss rates tend to be seasonally higher in Q1 given holiday spend in Q4.

Turning now to our UK growth.

This slide summarises key aspects of our organic growth.

Ana: Gross mortgage lending strengthened throughout the year, supported by a more active property market and higher loan-to-value lending.

Ana: 15% of our mortgage lending was to higher LTV borrowers, up from 9% in 2023.

Ana: We acquired 1 million new Barclaycard customers up 58% year-on-year as part of our strategy to regain market share in unsecured lending.

Ana: And in the corporate bank, we deployed around 3 billion of RWAs by extending client lending facilities to support future lending growth.

Ana: Clients have now started to draw down on these facilities, reflected in around 1 billion of net UK corporate loan growth in Q4.

Turning now to Barclays UK.

Ana: You can see financial highlights on slide 15, but I will talk to slide 16.

Ana: The acquisition of Tesco Bank in November complicates comparisons for Q4, so let me start by unpacking the moving parts.

Ana: First, there was a gain on acquisition of 0.6 billion and a day one impairment charge of 0.2 billion.

Ana: Together, these created a one-off benefit to Barclays UK statutory ROTI, which was 28% in the quarter. Excluding these Day 1 effects, Barclays UK ROTI was 19.1%.

Ana: Second, comparisons are affected by the inclusion of Tesco Bank's underlying earnings for two months since November. This included 101 million of NII and around 60 million of costs in line with our guidance for 30 million run rate costs per month.

Ana: We continue to expect circa 400 million of NII from Tesco in 2024-2025.

Ana: Whilst the Q4 run rate exceeded this level, we expect this to normalise in future quarters.

Ana: The inclusion of higher NIM balances from Tesco also explains around 11 of the 19 basis points increase in BUK-NIM versus Q3.

Ana: Excluding Tesco Bank, Barclays NII increased $48 million queue on queue. This reflected continued structural hedge momentum and a tailwind from balance sheet growth, partially offset by product repricing lags.

Ana: Non-NII was $244 million in Q4. The decline versus Q3 reflects the one-off effect of the Q4 securitization that we previously highlighted.

Ana: Going forward, we continue to expect a run rate above $250 million per quarter.

Ana: Q4 total costs increased by $209 million versus Q3 to $1.2 billion. This included around $60 million for Tesco Bank and a $36 million bank levy.

Ana: The remaining increase reflected investments to support growth and structural cost actions.

Moving on to the Barclays UK balance sheet.

In Q4, both loans and deposits grew organically.

Ana: The acquisition of Tesco Bank added a further £8 billion of loans and £7 billion of deposits.

Ana: On an organic basis, deposit balances grew by circa 1 billion.

Ana: Flows into savings accounts and current accounts were particularly strong ahead of the UK budget in October and customers have so far retained this liquidity.

Ana: Looking ahead, tax payments during Q1 typically lead to a seasonal reduction in customer deposit balances.

Ana: And, as I discussed earlier, stronger activity in mortgages and Barclaycard led to a £1 billion increase in Q4 lending before the effect of our securitisation in the quarter.

Moving on to the UK Corporate Bank.

Ana: UK Corporate Bank delivered a Q4 rotate of 12.3%. NII was up 31% year-on-year, reflecting deposit income growth and the non-repeat of adverse liquidity pull income in the prior year.

Ana: Non-NII was down 9% year-on-year and broadly flat to Q3. Whilst this line can be volatile, we expect investments in our digital and lending propositions to drive non-NII growth over time.

Ana: Investments to support this growth and to drive greater efficiency led to a 10% year-on-year increase in costs.

excluding the structural cost actions we took in Q4-23.

Ana: And our full year loan loss rate of 29 basis points was within our through the cycle guidance of circa 35 basis points.

Turning now to Private Bank and Wealth Management.

Q4 roti was 23.9%.

Ana: Client assets and liabilities grew £7 billion versus Q3 and £26 billion versus the prior year.

Ana: We also attracted net new assets under management of 0.7 billion in Q4 and 3.7 billion for the year. This is a new metric that we will disclose going forward.

Ana: This growth in volumes, as well as higher transactional activity, led to a 12% year-on-year increase in income.

Ana: Excluding Q4-23 structural cost actions, costs were up 15% year-on-year as we took further actions this quarter to optimise headcount and drive business growth.

Ana: As you heard at our deep dive in December, we will continue to prioritise investment in this business.

Turning now to the Investment Bank.

Ana: The Q4 ROTI was seasonally low at 3.4% with a full year ROTI of 8.5% both ahead of the prior year.

Ana: Q4 total income was up 28% year-on-year, while total costs rose 11%, excluding the Q4 structural cost actions.

This was the third consecutive quarter of Positive JAWS.

Ana: Adjusted for FX, total income was up 31% year-on-year and costs were up 12% year-on-year, excluding structural cost actions in the prior year.

Ana: Part of the increase in our Q4 costs reflected actions we took to improve future efficiency.

Ana: Period end RWAs of £199 billion were £5 billion higher versus Q3, with FX accounting for £6 billion of the increase.

Now, looking at the Q4 income in more detail.

Ana: Using the US dollar figures as usual to help comparison to US peers, markets income was up 36% year on year.

Ana: Macroeconomic conditions supported a 32% increase in FIC income driven by financing, credit, rates and the FX.

Ana: Equity's income was up 44%, aided by strong performance across cash, prime and derivatives.

Investment banking fees rose 22 percent.

Ana: For FY24 as a whole, our share of banking fees increased by 30 basis points to 3.3%. But we have more work to do to build on this improvement.

Ana: Within Q4, our ECM performance was strong, with income up 160% year-on-year.

Ana: Advisory fees were also up 12% with good momentum and a robust pipeline headed into 2025.

Whilst DCM was up 10% year-on-year, our performance was mixed.

Ana: In leverage finance, we increased market share by 70 basis points to 4.7% in a strong market.

Ana: This was offset by softer performance in investment grade, particularly in Q4, with a strong Asian wallet which we did not participate in given our limited presence in the region.

Ana: In addition, we were less active in event financing in the quarter, and this represents an opportunity as we further improve our advisory capabilities.

Ana: Importantly, we saw progress in areas of the investment bank that inherently have more stable revenues.

Ana: Financing income was up 34%, reflecting a strong increase in client balances. And international corporate bank income was up 22%.

Ana: US deposit balances grew by circa 90% year on year, which we see as a lead indicator of income growth.

U.S. consumer bank Roti was 11.2% in the quarter.

Ana: The improvement versus the prior year reflected lower impairment charges following the reserve build in H223.

Income was down 1% year-on-year or up 1% excluding FX.

Ana: This reflected a $0.9 billion increase in car balances to $33.1 billion on a reported basis.

Ana: From Q3 to Q4, NII increased 5% supported by seasonally stronger balances which also grew 5%.

Ana: NIM rose 28 basis points, partly reflecting the lagged benefit of our repricing actions earlier in the year.

Ana: The successful launch of our new tiered retail savings product in Q3 led to a 17% year-on-year growth in retail deposit funding with a $2 billion increase in Q4.

Ana: The proportion of core deposits rose 1% year-on-year to 64%, reflecting wholesale funding raised during Q4 to meet seasonal asset growth.

Ana: As seasonal spending eases, we should see a further increase in our share of funding from core deposits towards our target of 75% in 2026.

Ana: Excluding Q4 2023 structural cost actions, total costs were up 8% as we continue to invest in the growth of the business, driving a cost to income ratio of 51%.

Moving to Capital.

We ended the year with a CET1 ratio of 13.6%.

Ana: This included around 140 basis points of capital generation from profits, excluding the day one P&L benefit of the Tesco Bank acquisition.

Ana: We previously highlighted two inorganic transactions that would impact capital in the near term.

both of which have now completed.

Ana: The first was the circa 20 basis points of capital consumption from the acquisition of Tesco Bank in Q4.

Ana: The second is the circa 10 basis points accretion from the sale of the German consumer finance business Which was completed last month and will benefit the CET 1 ratio in Q1 25

Ana: The £1 billion share buyback we announced today will also lower the ratio by around 30 basis points in Q1.

Ana: Looking ahead, we maintain our guidance for between £19 and £26 billion of regulatory-driven RWA inflation.

Ana: The UK regulator's decision to postpone the implementation of Basel 3.1 to January 2027 may, however, alter the mix and phasing of this change.

Ana: Adopting IRB in the US consumer bank is still expected to increase RWAs by circa 16 billion.

Ana: Whilst uncertainty around the size and the mix of the portfolio at the time of implementation has increased, this remains our best estimate for now.

Ana: In the meantime, there are a few changes in the regulatory landscape.

Ana: Prior to implementing IRB for US cards, our Pillar 2A requirement will increase by 0.1% from Q1 2025.

Ana: We expect this Pillar 2A capital to be removed when the IRB model is implemented in 2026 or 2027, when the 16 billion RWA increase is reflected in Pillar 1.

Ana: Consequently, our Maximum Distributable Amount Ratio, or MDA, is expected to rise to 12.2% from Q1 2025.

Ana: We previously expected that this would reduce following the implementation of Basel III in January 2026, but this will now be delayed to January 2027.

Ana: Reflecting this, you should continue to expect us to operate towards the upper half of our 13-14% target CET1 range as we have been doing.

Naturally, our distribution expectations remain unchanged.

Turning now to recent RWA developments.

RWAs increased £18 billion from Q3 to £358 billion.

Ana: Tesco Bank added seven and a further seven was driven by FX in the Investment Bank and the US Consumer Bank.

Ana: As usual, a brief word on our overall capital and liquidity on slide 30. We maintain a well capitalised and liquid balance sheet, with diverse sources of funding and a significant excess of deposits over loans.

Ana: TNAV per share increased by 6p in the quarter and by 26p during 2024 to 357p.

Ana: Attributable Profit added 6 pence per share during Q4, whilst our share buyback and other movements added 1 pence and 3 pence, respectively.

Ana: These were partially offset by a more negative cash flow hedge reserve which reduced TNAV by 4 pence per share.

Ana: This is the fourth quarter in the 12 quarter plan we laid out in February.

Ana: Today, we are reiterating our group targets for 2026 and providing additional guidance for 2025, including a further improvement in group ROTI to around 11%.

Ana: I'll come back to discuss the building blocks of this guidance in more detail with you.

Venkat: But first, I would like to hand back to Venkat to take you through some reflections on progress during the first year of our plan.

Thank you, Anna.

Venkat: So, almost a year ago, today, we set three key priorities for Barclays by 2026.

Venkat: to improve our returns, to distribute more to shareholders, and to rebalance our RWAs.

Venkat: We also set 2020 interim milestones for 2024, which we have delivered.

Venkat: together with our diversified business model, allowed us effectively to navigate market, macro, and regulatory conditions throughout the year.

So what were these?

Venkat: UK deposits have stabilized faster and the investment banking wallet has been stronger than we expected.

Venkat: Fixed income FEC which is traditionally an area of strength for us performed slightly weaker than we had expected in 2024.

Venkat: but our strong performance in equities, where we have taken market share, partially compensated for this, rebalancing our overall markets business.

Venkat: And the economic environment has been more supportive, with interest rates remaining higher, alongside more benign unemployment and inflation in our main UK and US markets.

Venkat: Last year, I described the important reset of our financial performance and shareholder returns since 2021.

Venkat: I also told you that this improvement was not sufficient and that our shareholder experience needed to be better.

Venkat: We are making progress on our plan and we are generating growth.

Venkat: Notably, we have achieved our fifth consecutive year of TNAV per-share growth of 8% during 2024 and 7% annually since 2019.

Venkat: This positive outcome reflects improvements in our returns and growth of our earnings per share, including by 30 percent year-on-year during 2024, to the highest level in a decade.

Venkat: This enabled a 5% increase in total distributions, including progressive growth in our dividend per share.

Venkat: For the group as a whole, we look to generate higher returns in two ways.

Venkat: First, by allocating more capital to our higher returning UK businesses, which I'll come on to discuss.

Venkat: And second, by improving returns in the lower returning businesses, namely the Investment Bank and the U.S. Consumer Bank.

Venkat: That was true last year when we set out our strategy, and it remains true today.

Venkat: We are making progress, including in target growth areas of the investment bank, but further improvements are needed to achieve our ROTE target of greater than 12%.

Venkat: And in the U.S. Consumer Bank, too, we remain focused on rebuilding returns towards the mid-teens ROTE beyond 2026.

Venkat: A reduction of impairments in line with our expectations as well as other operational improvements enabled a 9% ROTE in 2024 versus 4% in 2023.

Venkat: Let me now discuss the allocation of capital to high-returning divisions in more detail.

Venkat: At our investor update, we outlined a plan to create a more balanced group.

Venkat: To do this, we plan to allocate £30 billion of additional RWAs to our three highest returning businesses – Barclays UK, the UK Corporate Bank and Private Banking and Wealth Management.

Venkat: As we expected, actions that we took during the year began to generate organic balance sheet growth towards the end of the year.

Venkat: including the acquisition of Tesco Bank, RWAs and our highest returning UK businesses increased by 13 billion pounds due to business growth and by 15 billion pounds overall in 2024.

Venkat: And, as Anna has discussed earlier, lead indicators of growth across our UK businesses are encouraging.

Venkat: Given this, we expect a step up in our organic RWA deployment during the year with further momentum in 2026.

Venkat: We are committed to keeping investment bank RWAs relatively stable at 2023 levels and this is the third consecutive year in which this division has operated with this level of capital.

Venkat: We continue to expect investment banking RWAs to fall proportionately to about 50% of the group by 2026, from 56% today as we grow the three UK businesses.

Venkat: Taking a closer look at the Tesco Bank acquisition, which we are thinking about in three stages, acquire, integrate, and improve.

Venkat: The first stage was completed on the 1st of November, 24.

Venkat: The acquisition has added £8 billion to our unsecured balances, moving our waiting and credit cards and personal loans towards our 2019 position.

And the profile of Tesco Bank's customers is attractive.

Venkat: As we show in our operational data pack on slide 57, Tesco Bank's customers have a higher spend per card than the market average.

Venkat: Tesco's position as the UK's largest retailer, with strong customer satisfaction and more than 20 million Tesco club card holders, provides a significant customer growth opportunity.

Venkat: We've also gained an additional brand to operate with and an open market lending capability.

Venkat: The second stage is to integrate Tesco Bank, which we intend to do during 2025 and 2026.

Venkat: And this involves onboarding Tesco customers to Barclays' platform in 2026 to reduce duplication of systems and processes while maintaining a strong customer experience.

Venkat: The integration will require some upfront investment, but the realization of synergies will reduce the run rate cost.

Venkat: These actions are factored into our plan and we continue to target a circa 50% cost-income ratio for Barclays UK in 2026, following an increase in 2025 given the costs associated with the Tesco Bank.

Venkat: The third stage is to improve the business, which we expect to gain momentum after 2027. This will involve further growing customer balances supported by better access to funding and to capital.

Venkat: This increased scale will enable greater efficiency as fixed costs are spread over a larger customer base.

Turning now to the U.S. Consumer Bank.

Venkat: We've made meaningful progress in 2024, improving ROTE to 9% from 4% and achieving a cost-income ratio of 49%.

Venkat: We also announced that our American Airlines partnership will not be renewed beyond 2026.

Venkat: American Airlines has been a card partner in our business for seven years as part of a dual issuer model and we valued our long relationship with them.

Venkat: we knew that the partnership could transition to a single-issue model.

Venkat: That happened last year, and we chose not to participate on that basis.

Venkat: The ending of our partnership provides a short-term gain on sale in 2026 and releases capital that we intend to use to diversify the business.

Venkat: We expect the overall credit mix of the portfolio to change, still prime, but with less weighting to super-prime balances.

Venkat: And all things being equal, this will lead to a higher net interest margin and loan loss rate, and a higher risk adjusted margin for the portfolio.

Venkat: Our 2026 targets are unchanged, including an ROTE of greater than 12% in line with the group as the gain on sale offsets lower profitability due to the loss of the receivables.

Venkat: We are confident in our ability to grow card balances to achieve necessary scale in the U.S. consumer bank.

Venkat: In line with our broader group strategy, the plan is organic and organic growth has driven around 85% of our increase, of the increase in our net card receivables since 2011. And looking ahead, we'll drive two-thirds of our plan growth.

Venkat: We have a strong foundation for such growth, given that over 80% of our card receivables are under contract at least until 2029.

Venkat: Our success in accelerating balance growth for partners also translates into significant loyalty with a historical partnership renewal rate of around 90%.

Venkat: In 2024, notable renewals included Hawaiian and RCI, and at the start of 2025, we have also renewed our partnership with Wyndham.

Venkat: In addition to being a longstanding top 5 partner for us, Windham is also a long term investment banking client.

Venkat: This provides a good demonstration of how collaboration across the Barclays group can drive successful outcomes.

Venkat: While organic growth is at the heart of the plan, opportunities for inorganic growth in the market are also significant.

Venkat: For instance, 15 relevant deals and $1 billion of balances were tendered annually on average in the market during the past five years.

Venkat: We remain confident in our ability to win new partners, given the strength of our offering and our ability to increase customer engagement and balances.

Venkat: And this was evidenced by recent wins, including Breeze in 2023 and General Motors in 2024.

Venkat: The General Motors card portfolio, which we will onboard in the third quarter of 25, will offset about a quarter of the balances we expect to lose from American airlines.

Venkat: Overall, we remain focused on achieving scale beyond 2026 and driving improved efficiency to deliver mid-teens ROTE for this business.

Turning now to the investment bank.

Venkat: Last year, we shared our plan to increase returns in the investment bank to greater than 12% by 2026, in line with our group target.

Venkat: While competitive and industry dynamics are creating opportunities and challenges for individual businesses, our overall progress is as expected and we continue to run our own race.

Venkat: Our objective is to generate higher and more stable income and returns by improving RWA productivity and rebalancing resources in the business while only modestly increasing costs.

Venkat: We delivered 7 percent year-on-year income growth in 2024, broadly on track with our high single-digit annualized growth target from 23 to 26.

Venkat: And as a reminder, more than half of our planned growth in the investment bank comes from initiatives which we control, with the remainder coming from growth in the industry wallet.

Venkat: So we expect these initiatives to add £1.8 billion to our income by 2026, and in the first year of our plan, we achieved around a third of this planned improvement.

Venkat: In investment banking, we have increased share across most products. This included strong performance in ECM, where we increased fee share by about 100 basis points, and in leveraged finance, where we increased share by 70 basis points.

Venkat: And across the three focused businesses and markets, we've made progress within equity derivatives and securitized products. And while progress in European rates has been slower, we saw a recovery in the fourth quarter.

Venkat: Across our markets business we now rank top five with 56 of our top 100 clients up seven from a year ago and versus our target of 70 by the end of 2026.

Venkat: Our capital productivity has also improved, with income to RWAs increasing by 30 basis points year-on-year to 5.8%.

Venkat: And we achieved positive JAWS with income up 7% from 23 versus a 4% increase in cost.

Venkat: And this enabled a year-on-year improvement in our cost-income ratio to 67%.

Venkat: And we are focused on making further progress on this cost-income ratio in 2025 towards delivery of our high-safeties target for 2026 full year.

Venkat: I'd like to highlight two areas of progress during the past year that helped to position the investment bank to perform in a range of scenarios.

Venkat: First, as Anna said, we continue to prioritize growth in stable income during 2024, particularly within financing.

Venkat: Growing financing income enhances the durability of our returns and we now have financing relationships with 98 of our top 100 clients.

Venkat: Second, our banking fee share has increased by 30 basis points year-on-year to 3.3%, with the wallet also higher.

Venkat: And we remain particularly positioned, well positioned to benefit from stronger activity in the U.S. where we generate 68% of our total banking fees.

Venkat: At the same time, our market share in global markets declined 20 basis points in the year, reflecting lower share in fixed income, the larger of our market's businesses.

Venkat: And so, while we are pleased with our direction of travel, we recognize that there's further work to do to deliver the full extent of our ambition.

Venkat: Let me now hand over to Anna for the final installment of today's update.

Thank you.

Thank you.

Speaker Change: Thank you Venkat. At our investor update last February, we outlined a plan.

to deliver ambitious financial targets and meaningfully higher shareholder distributions.

Speaker Change: We are confident that we can deliver consistent returns in a range of scenarios underpinning our ambition.

I'll now go through what supports these targets.

Speaker Change: The diversification of our business model by income, by geography, helps support return in a range of economic environments.

Speaker Change: This has contributed to more stable returns in the last four years.

Speaker Change: As Venkat mentioned, the external environment in 2024 was generally more supportive than we expected.

Speaker Change: But in executing our plan, we remain focused on what we can control.

Our plan continues to be based on realistic assumptions.

Speaker Change: These include 4 UK base rate cuts during 2025 and a bank rate of 3.5% by the end of 2026.

Speaker Change: We also assume a five-year swap rate of around 3.5% for the purpose of our structural hedge reinvestment, although I acknowledge that current market rates are higher.

Speaker Change: And we are not relying on a recovery in the investment banking wallet to deliver our plan, with our assumptions unchanged from those we outlined last year.

Speaker Change: The next few slides describe how our drive towards higher and more predictable returns come together for our shareholders.

Speaker Change: Our 2026 targets are unchanged, including our North Star of a rating above 12%. Our foundation is strong, having delivered 10.5% last year, and we expect further improvement in 2025 to around 11%.

Speaker Change: Crucially, we expect income growth to provide a roaty tailwind in 2025, with NII accounting for more than half of this.

Speaker Change: We will maintain cost discipline as we grow, we expect our cost income ratio to fall in 2025 and we expect further cost efficiency savings and income momentum into 2026.

This combination will support a roti of more than 12%.

Speaker Change: I'll now explain the drivers of our income and costs in turn.

Speaker Change: We continue to target around 30 billion of income in 2026.

Speaker Change: This means a further 3 billion of income growth over the next two years having delivered 1.4 billion in 2024.

Speaker Change: The drivers of our growth are within our control. First, the strong NIR tailwind.

Speaker Change: For 2025, we expect a 0.9 billion increase in Group NII, of which 0.8 is from Barclays UK.

Speaker Change: Our confidence in delivering this reflects the predictable tailwind from the structural hedge underpinned by realistic assumptions about rates and reinvestment yields.

Speaker Change: And this tailwind lasts beyond 25, with the structural hedge driving around half of our expected increase in total group income over the next two years.

Speaker Change: In addition, we expect balance sheet and earnings momentum from the deployment of RWAs in our three high returning UK businesses. This momentum was apparent in Q4 and we expect it to continue and to be visible in our 2025 performance.

Second, non-NII, mainly coming from the investment bank.

Speaker Change: We expect to deliver a high single-digit CAGR income growth over the life of our three-year plan and are broadly on track, having delivered 7% in 2024.

Speaker Change: Overall year-on-year growth of 0.8 billion in the IB included 0.2 billion from wallet growth.

Importantly, the biggest share of this increase of 0.6%

Speaker Change: came from the execution of our management initiatives or a third of the 1.8 billion total we expect by 2026.

Speaker Change: This leaves a further $1.2 billion of growth from management actions over the next two years.

Speaker Change: As was the case last year, we are not relying on wallet growth to meet our target. In fact, our assumptions are unchanged from a year ago with a lower banking wallet in both 25 and 26 versus 24.

Speaker Change: And should the recovery continue, our business is strongly positioned to participate in a rebound in deal activity, particularly in the US, where we generate around two-thirds of our banking fees.

Moving on to costs.

Speaker Change: Managing costs is at the heart of what we can control. We showed this in 2024, achieving a 62% cost to income ratio.

Speaker Change: This improvement versus 2023 was supported by the delivery of a billion of gross efficiency savings in the year.

Speaker Change: These savings reflected targeted actions in respect of people, property and infrastructure.

Speaker Change: For example, in the past year, we decommissioned around 200 legacy applications as part of our plan to exit between 450 and 500 by 2026.

Speaker Change: We increased our digitally active customers in Barclays UK by 700,000 and rationalised our branch network by more than 25%.

Speaker Change: And in markets, our actions during the last two years have driven a 20% reduction in the number of trade capture and risk pricing systems supporting our efficiency and operational resilience.

Speaker Change: Looking forward, there are three drivers of cost change in 2025 and 2026.

Speaker Change: First, efficiency savings. We expect a further £1 billion in gross efficiency savings split broadly evenly across the next two years.

Speaker Change: Around one third of these savings come from plans to simplify customer journeys, with the rest driven by actions to streamline businesses, including the optimisation of people and technology.

Speaker Change: Second, inflation, which we expect to be more meaningful in 2025 versus 2026.

Speaker Change: This is because inflation impacts us on a lagged basis, so 25 reflects some of the headline inflation pressure we've observed recently.

Speaker Change: It also includes a £50 million increase in national insurance contributions following the UK budget.

Speaker Change: And third, greater investment in our highest returning businesses in 2025.

Speaker Change: Specifically, I would call out the annualisation of investment costs, which have increased during 2024, and additional Tesco Bank costs, including integration.

Speaker Change: In 2025, incremental investment and inflation are expected to exceed efficiency savings, resulting in an increase in our costs.

Speaker Change: In 2026, we expect costs to be broadly stable, if not down a little year on year, as incremental investment and inflation moderate and are offset by efficiency savings.

Speaker Change: Given this cost profile and planned income growth, we expect our cost-to-income ratio to fall by 1% in 2025 to circa 61% and to fall more significantly to a high 50% in 2026.

Speaker Change: Given our 2026 income target of £30 billion, our high-fifties cost-to-income target would be consistent with around £17 billion of costs.

Speaker Change: We will drive further efficiency beyond that in each of our businesses and for the group as a whole.

Speaker Change: Barclays UK, an investment bank, represents some 70% of our planned cost efficiency savings.

Speaker Change: Work to reduce duplicate systems and processes for Tesco Banks should reduce the cost run rate from circa 30 million per month currently as synergies are realised.

Speaker Change: And across Barclays UK, we remain focused on streamlining and digitizing the business to improve our efficiency.

Speaker Change: And in the investment bank, we invested significantly between 2021 and 2023 to sustain and grow future income.

Speaker Change: We expect these actions to result in greater productivity and a high 50s cost-income ratio in the investment bank by 2026, with further efficiencies expected beyond.

Speaker Change: Put differently, 2026 does not represent the full extent of our ambition.

Turning now to Capital and Capital Generation.

Speaker Change: As we grow returns in line with our plan, we expect to generate around 170 basis points of capital during 2025, rising to more than 200 basis points in 2026.

Speaker Change: We have a clear hierarchy for capital allocation, in order of priority. First, to hold a prudent level of capital, with an expectation that we will continue to operate towards the upper half of our 13-14% CET1 target range.

taking into account regulatory requirements.

Speaker Change: By doing this, we deliver for our investors, customers, clients and colleagues, regardless of the environment.

Speaker Change: Second, to distribute capital to our shareholders, and third, to invest selectively in our highest returning divisions, resulting in a more profitable RWA mix and a better bank for all our stakeholders.

Speaker Change: We set a high bar for investment returns given the importance we place on shareholder distributions overall.

We

Speaker Change: We announced 3 billion of capital distributions in respect of FY24. These distributions represent an important step in our target to return at least 10 billion to shareholders during the life of our plan.

Speaker Change: We expect a progressive increase in our total payout during 2025.

Speaker Change: And as a reminder, we plan to keep the total dividend broadly stable at 1.2 billion per year, growing our dividend per share progressively through lower share count.

Speaker Change: Bringing this together, we are reiterating our group targets for 2026 and are providing additional guidance for 2025.

Speaker Change: This includes 2025 ROTI guidance of circa 11% and a progressive increase in our total payout versus £3 billion per year in the past two years.

Speaker Change: The expected increase in ROTI will be supported by group NII growth to around 12.2 billion including an increase in Barclays UK to around 7.4 billion.

Speaker Change: We expect to improve the cost group cost income ratio to circa 61%.

Speaker Change: Our progress during 2024 provides a solid foundation for these milestones.

Speaker Change: We continue to deliver against our plan to achieve a ROTI greater than 12% by focusing on structural actions that are within our control to improve income and efficiency.

Over to Venkat for final remarks.

Thanks again, Anna.

Venkat: So, one year into the three-year plan, we are pleased with our progress, but we recognize that there's still work to be done to deliver our 2026 targets.

Venkat: And we are working hard to deliver sustainable operational and financial improvement across our businesses. And this in turn, we expect, will drive higher group returns and shareholder distributions.

Speaker Change: I'll now open to questions and answers. Please limit yourself to two questions per person so that we can get around as many of you as possible. I will begin. I'll borrow with you.

Thank you, Alvaro Serrano from Morgan Stanley.

Two questions, please.

Speaker Change: One on your income assumptions, I've noted that you expect the size of Wallet to come down, but I'll focus on BUK because I guess we'll have a view on that. On BUK...

Speaker Change: The guidance for 2025 looks on my numbers for an underlying 2% growth versus the run rate in Q4, which sounds...

Speaker Change: quite conservative given the volume growth and given the hedge contribution should be increasing. Are you just being conservative or are we missing any moving parts around more competition in asset product like mortgage? Is there anything we're missing there?

Speaker Change: was just being out of conservatism. And the second question on capital, if we take out obviously the buyback and German cards.

Speaker Change: It will come down and you want to operate at the higher end.

Speaker Change: the 13 to 14 percent. Do you have any sort of RWA efficiency measures that you can call out? And I'm thinking, obviously, that there's been a Twitter sale, sounds like a couple of blocks there, and these are very high risk-weighted sort of kind of positions, over to 50 percent, if memory serves me right.

Speaker Change: It will have a significant impact that will help you sort of reallocate the capital to growth areas.

Alvaro: Thank you Alvaro. I'll take both of those. So let me start with a question that you didn't ask, but you sort of asked.

Alvaro: which was about the banking wallet. So I want to be really clear here, we're assuming or we have an assumption that the banking wallet remains as we had it last year. You shouldn't take from that that if the opportunities are greater in the market that we would seek.

Alvaro: To monetize those as we have done in Q4 and indeed all the way through 2024. So I just call out that distinction Relating to Barclays UK. We're guiding to NII next year or in 25 of 7.4 billion

Alvaro: As I think about that number, I reflect back on 2024 and actually what we've seen in successive quarters is strong NII growth and we expect that to continue in 2025 and into 2026.

The UK NII is not near its peak.

Alvaro: As I take the 7.4, I think of it in a number of building blocks.

Alvaro: So the first is take the Q4 run rate, X Tesco, multiply that by 4.

Then add on 400 million for Tesco.

Alvaro: add on the impact of maturing structural hedge this year. Now we are assuming a reinvestment rate of 3.5% in that calculation and then take off the impact of four base rate reductions.

Alvaro: the year. As I put those building blocks together you will get to around 7.4 billion.

Alvaro: In addition to that there's two further things for you to consider. The first, as you note, we have got good momentum in the business and you can see that in Q4, you can see that in cards and in mortgages. We expect that to continue.

Alvaro: In our calculation, what we're assuming here is that there is some offset in margin.

I wouldn't call anything out in particular.

Alvaro: I would just say, particularly in liability margins, we expect a continuation of migration.

Alvaro: Nothing more than we've seen, so I'm not expecting it to accelerate, but I'm just assuming that those two things are somewhat offsetting within the year.

Alvaro: You may have different expectations for those macro assumptions or indeed the swap rate, but we're trying to route this plan within factors that we can control.

Alvaro: and we believe that we've made realistic assumptions that underpin that number. But I'd just highlight we're expecting continued income momentum in BUK into 2025 and beyond.

Alvaro: In terms of your capital number, I mean, I'm not going to speak about any client positions as you would expect.

Alvaro: Our focus here is on executing the plan as it is elsewhere. We'd expect the investment bank to operate within the framework we've given it for for RWAs so you should expect those RWAs to be broadly flat.

The thing that you didn't call out, actually, was organic.

capital generation, that's what we're confident in here.

Alvaro: So, throughout Q1, remember Q1 is a seasonally strong quarter for us.

Alvaro: We deploy RWAs into the business, but seasonally it is very strong for us in terms of...

Alvaro: investment banking and markets activity and you know as we've called out in the presentation our expectation is that organic capital generation will continue to develop both in 25 and in 26.

Alvaro: And the kind of capital range that we talked about today is no different from where you've seen us operate actually over the last two to three years.

Alvaro: So, I'll come to you in a second, Perli, but just if I may emphasize one thing, which is behind the spirit of what we did last year and what we're doing this year, is given you our slides, we've given you an operational data pack, we've been very clear with our assumptions.

Alvaro: Right, and I think not just on NII, but other aspects. I think that's our approach, which is to tell you what we think structurally we're trying to achieve.

Alvaro: our cyclical assumptions or our macro assumptions and allow you, therefore, to impose your view if you'd like.

Right. Really?

Speaker Change: Hello. Thank you, Ankit. Thank you, Anna, for taking my question. So I guess the first one is on 26 targets. I guess the share price reaction this morning maybe reflects the fact that people were expecting a little bit more. And as you noted that, well, you know, the environment is probably better than what...

Speaker Change: what you were sitting on a year ago when you put out the targets for the first time across every metric you could think of, pretty much. So I guess, why did you not upgrade 26 targets a bit more? I mean, I know, you know, it's greater than 12 percent, so, but would you, for example, like, invite us to put more focus on the greater than, for example, and

Speaker Change: Any color you could give on that would be really helpful. Just, you know, if you were to come up with a plan today, wouldn't you be more optimistic than you were a year ago? I guess that's the first question. The second question is on U.S. cards. Just the direction of the business as the AA book phases out. So do you still see it as a growth business? Because a few years ago, that was...

Speaker Change: just an area of growth that we all looked at. And then, I guess more operationally, what does the exit of AA mean? So, you know, what I'm thinking is that, well, maybe receivables growth will be a bit slower in the next couple of years as the book comes to an end. And then as you take on new books, well, there will be more J-curve impact and more day one impairments, et cetera. So how does that going to impact the roti? Because I know that you haven't changed the guidance on that either.

Speaker Change: I'll let Anna take the first part and then I'll come in for the second part. Yeah, sure.

Speaker Change: Our focus is management, Pearlie. What you should expect us to do is to execute the operational plan and deliver the financials without surprises. That is our objective.

Speaker Change: And so our focus is on executing the plan that we've given you and I would emphasise the greater than 12 and the at least 10 billion.

Speaker Change: But our primary focus really is on executing that plan. You know, we're pleased with the progress that we've made in 2024. We've hit all of the targets and guidance that we gave you and we feel we've set the business up really well for momentum in 2025 and 2026.

Speaker Change: And I just call out that difference that I highlighted before. We are planning on realistic assumptions because we want as much of this plan within our control as is possible.

Speaker Change: However, if the market environment allows, whether that be interest rates, swap rates or the banking wallet, you should expect us to monetise that opportunity.

Speaker Change: Yeah, look, I'll emphasize that as well, which is that it's a realistic plan. It's a confident plan, right? It's a confident plan, which is based on strong structural progress.

Speaker Change: across the things which we can control and then taking advantage of cyclical opportunities as we did last year and we expect to as they come up. On the US cards business

Speaker Change: We remain confident for a couple of reasons. First of all, we gave you the statistic of the number of accounts and the volume of receivables that come up for bid.

Second, which is...

Speaker Change: 40 billion in this thing. Second is that we have a locked up around 90 percent of our 85 percent of our net receivables outside of American through to twenty twenty nine.

third we have a retention rate of 90% renewal rate.

Speaker Change: able to grow their balances and increase customer engagement. And so just like General Motors came in this year, we will continue to look for these opportunities. I'm fairly confident we'll land them because when we participate in these, we know what we provide very valuably into the market.

Um...

Speaker Change: And then on the operational side you know we will continue to come back to your point on Jacob. First of all if a lot of the book 85 percent of the book is locked through 2029. Yeah there will be a Jacob for new things.

Speaker Change: Right, but as a proportion of the business, it's smaller. Would you add anything?

Speaker Change: Yes, I'll just reflect back on the plan that we set out last year. It's a plan of many parts. It's an executional plan that actually goes all the way through the P&L and the balance sheet. Clearly revenue growth is important, but it's not the only thing that we're working on to improve the roti of the business.

Speaker Change: So, you know, we're working very hard on mitigating the impacts of regulatory headwinds. So you saw that transaction in Q1 of this year. We're working very hard in terms of the cost efficiency of this business.

Speaker Change: The cost-income ratio is now below 50% in this business. It's fallen for the last consecutive four years.

And remember, we're targeting to get it to mid 40s.

So there's a big digitization push in this business.

Speaker Change: The third thing is we continue to work on the net interest margin of the business.

start to accumulate and then them over time.

Speaker Change: And the second thing is really reducing our funding costs by driving up the proportion of retail deposits. Again, I spoke about that in my prepared remarks.

Speaker Change: So, Venkat's absolutely right, there are opportunities here to grow volume, but our ROTI delivery is volume, capital efficiency, cost efficiency, and NEM.

Speaker Change: Ben Thomas from RBC, thanks for taking my questions. There's been a lot of discussion over the last month around the government going softer on regulation.

Ben Thomas: for example, changes in LTV restrictions. Do any of the changes that are being put forward actually have the potential to be material tailwinds? And how useful would it be to Barclays if there was a leveling of the playing field on ring fencing so you could use the first $35 billion of your deposits?

Ben Thomas: to fund other parts of the group. And I guess tied to this, does the messaging around risk attitude for M&A in the UK have the potential to cause you to rethink your low tolerance to material transactions? Thank you.

Ben Thomas: go both to what might happen on prudential regulation as well as consumer regulation.

Ben Thomas: We do think that obviously regulation is very important and it's important to the City of London. We also think it's important to have a balanced regulatory outlook and one that is commensurate across the globe. So in the U.S. you're seeing a rethinking on Basel, on the base of Basel, as well as stress testing.

Ben Thomas: the PRA has postponed its own decisions till 2027. We would always want, we've always advocated for consistency in total capital requirements. That means base capital in Basel as well as stress testing.

Ben Thomas: And that's what we'd like to see, but it's too soon for me to say one way or the other what the results are going to be. So you've seen the plan that we've given you with the assumptions we have.

On the consumer side,

Obviously there has been volatility that's come in.

because

Ben Thomas: of you know impact of regulations impact of court cases worries about retrospective application of these things and you've seen it in in in the charges that that people have taken and we took a provision on motor finance. What I'm very happy about on that is that we were small in the business and we exited the business in 2019.

Ben Thomas: right and and so you know you've got to risk manage the situation you should always expect us to do that and then as far as M&A look this is an organic plan

Ben Thomas: right and what you're seeing us do is to present what we what we aim to do for this bank in an organic way and that is what we intend to be absolutely focused on

Ben Thomas: I might just add on, because I think you asked about mortgages also Ben, there are three things I think being talked about. The first is...

Ben Thomas: some reduction in the restrictions around loan-to-income and also affordability stress-testing.

Ben Thomas: think our perception would be the second is probably more meaningful in the current environment just because of the interest rate environment that affordability test is probably the one that that restrains the market a little bit more and then the third thing is around

Ben Thomas: you know, potentially reducing RWA weightings in higher loan-to-value mortgages. We're an IRB bank, so any change to the standardisation, standardised rules wouldn't impact Barclays. They would impact Kensington.

Ben Thomas: but not the Barclays lending, not the larger part of the group.

Yeah, Andy.

Good morning.

Speaker Change: If I could just start with costs. Thank you for slide 47. I'm just going to rephrase the slide, I guess, essentially. 16.7 billion of costs in 2024. If we're thinking about this in absolute cost terms rather than cost income,

given that you've got the UK, Tesco, Double Run.

investment in corporate and PBWM.

Speaker Change: You've got FX translation, presumably what you're essentially saying is you're expecting the cost base to grow to in excess of $17 billion in 2025 before then fading back to around $17 billion in 2026, but just wanted to make sure that understanding was correct.

Speaker Change: And then the second question on the U.S. Consumer Bank, you've specifically drawn out on slide 39 that there is going to be a gain on the sale of the AA portfolio, and that seems to be included.

Speaker Change: within the target. So does that mean that come 2027 the ROTE fades again before it then recovers thereafter within that division?

Speaker Change: Go ahead. Yeah. I'll go ahead. So, let's just look at slide 47, please.

The answer is yes.

Speaker Change: So we're expecting our costs to go up in 2025 because of the annualisation of Tesco, because of the integration costs of Tesco and because of those inflation headwinds that I talked about in my prepared remarks.

Speaker Change: But underneath all of this you've got a continued focus in growth efficiency So that's going to be continuing in 25

Speaker Change: Inflation and investment outweigh the efficiency, in 2026 it's the other way round. So actually I'm expecting costs to go above 17 billion. Actually I think consensus is not in a bad place.

and then drop back.

Speaker Change: So that's my expectation. In terms of U.S. Consumer Bank, you know, in 2026 you're going to have those two offsetting effects. As Venkat said, you're going to have a gain on sale.

Speaker Change: and you're going to have a more immediate impact from loss of volume. I'm not going to guide you to a 2027 ROTI at this point, I'll just make a few points.

Speaker Change: Firstly, we're confident in our ability to regain volume, both organically and inorganically.

Speaker Change: Secondly, I just remind you of what Venkat said in his remarks where he talked about, you know, American Airline was an incredibly important partner for us, but in terms of risk adjusted returns.

it's a lower part of our portfolio.

Speaker Change: And we will continue to really focus on the things that I talked about in terms of cost efficiency, in terms of capital efficiency, in terms of NIMS. So let me give you an example on cost efficiency.

Speaker Change: So the digitization, if you like, of U.S. cards, so as customers interact with us in a retail business, clearly we want a large portion of that to be digital. In U.S. cards, that's low 90s.

Speaker Change: If I compare that to either BUK or indeed the German cards business that we've just sold, that was high 90s. So we do feel we've got good opportunities here to continue to streamline the business.

Yeah. Yeah.

Jason Napier from UBS. Two questions on...

Speaker Change: Firstly on cars and then secondly on the Tesco Bank acquisition, there's a lot of focus on cars and where the Barclays is.

Speaker Change: the right owner for the asset given the differential in capital loading that you are going to be having at some point.

Speaker Change: So, one of the benefits is that the IBE carries less capital because of the stress losses that the card business helps protect the unit from. Can you give us some concrete sense as to how much of a saving that is? I think it's a really important part of the debate.

Um...

Speaker Change: helped not only by what it means for you, but also by the excitement about easier stress tests in the US at some point. We'll see how that goes. Secondly, on Tesco Bank, it came in at about a 90% indicator cost income ratio, and it looks like from slide 47...

Speaker Change: If I'm reading it correctly, it doesn't actually contribute to a lower...

Speaker Change: Cost income ratio to the end of 26. Is that right or is that part of the efficiency gains?

Speaker Change: And maybe you could just talk about how much pre-provision profit do you think?

Anna: it can make, there was a deployment of capital, it felt like a cost take out story in the beginning. It's no longer that. If you could just talk about how much profit you think it might generate once you're done. Thank you. I'll take the first one and let Anna take the second one.

I think the easiest way for you to see it.

Anna: obviously it's under current rules, is to look at the CCAR results of the top banks in the U.S.

and look both at...

our initial level of capital.

Anna: which we keep and look at the drawdown and compare it to banks who don't have that kind of a credit card or retail consumer portfolio.

Anna: the mix. Now scenarios vary from year to year and so on so you have to look at it for a few years but you will get a sense of the benefit and I think it is an important

Anna: regulatory benefit for us to have it in the stress test. It's under current rules.

Right.

Speaker Change: Thanks Jason, I'll take the second one. So you're right, Tesco's got a high cost income ratio, around 90%, and I think that reflects in and of itself its lack of scale as a standalone business.

So, I think our view is as follows, this is...

Speaker Change: It actually still is a cost take out story, but this is a complex integration.

it's it's it's not like a portfolio in asset runoff.

Speaker Change: It's a growing business, an active business, and credit cards have a daily and digital interaction with the customers, so actually it's quite a complex piece of work.

Speaker Change: But we are confident that we can do it and we're confident that we can execute it well.

Speaker Change: But it doesn't happen as quickly as if, for example, we bought a mortgage portfolio. And that's really what you're seeing here. Our expectation that this is roti-accretive to be UK, and indeed the group, hasn't changed. Typically I would expect...

Speaker Change: the cost-income ratio of an unsecured business to be relatively low. Certainly lower than the UK as a whole. And if you want a good indication, look at where we're trying to get the USCB business to.

Speaker Change: So hopefully that gives you some indication, but you know you're going to see an increase in 25 both from the...

Speaker Change: the operational cost, if you like, the dual running, some investment in integration. You'll start to see some efficiencies flow through in 2026, but as Venkat said, the real scaling.

Speaker Change: the real unlocking of that value will come somewhat beyond 26. But that's included in all of the targets that we have given you for BUK and for the group.

Thanks.

Thank you.

Speaker Change: Yeah, two questions. The first one is regarding the fixed income business. You discussed around the market share gains and equities and I just want to understand a little bit where you are on the market share gains on fixed income, if you can talk a little bit about

what has to happen for that to come through.

Speaker Change: And then secondly, just getting back to Tesco Bank, I mean, for me, what's more interesting is actually the customers that you gain.

Speaker Change: So, can you talk a little bit about the 3 million roughly active customers in terms of overlap, but also the 20 million club card customers? What is really the opportunity in terms of data that you're getting in the long term?

Speaker Change: Let me take the first one and I can take the second one.

So...

Speaker Change: within fixed income we've had three focus we've had two focus areas one was securitized products the other was European rates

Speaker Change: And I think it's fair to say Securitize products did well through the year.

Speaker Change: credit which has been a historical great strength of ours was a smaller part of the overall wallet last year as spreads remained both subdued and tight.

Speaker Change: And then the third thing is that European rates started picking up only later in the year, as did macro overall.

So

Speaker Change: When we look and we give you the market share, there are two ways we look at it. One is the market share number which we give, which is we take us and the top nine other banks, ten banks total, and look at what our proportion was.

Speaker Change: And that's always a little bit of noise in it because we are not in commodities. That's part of the number. There are certain regional exposures we don't have, especially in Asia.

But the other number which we look at.

Speaker Change: our penetration of our top hundred clients. So we are a number six markets business and number six investment bank. So we ask off that top hundred, how many of them are we number five with? Right, so one step higher.

and in that

Speaker Change: That number, which we began at 49 and 23 and want to be at 70 by 26, we've moved from 49 to 56.

Speaker Change: So I take comfort from looking at that data with those clients in the things we do. But of course, I want to see a broader improvement in fixed income. I'm confident, as I said earlier, because I think this is our strength.

Speaker Change: And we have strong structural presence, and cyclicality, when it comes to our strengths, will help us.

Speaker Change: On Tesco, I think we'd agree with you it's an exciting opportunity and I think that comes in a number of parts.

you know, when we look at the customers obviously with

Speaker Change: 20 million club card customers, that's broadly the scale that we have in our UK retail bank. It's inevitable, given the population of the UK, that there will be some overlap between them. That said, we see the opportunity to build and grow this business.

Speaker Change: What's interesting here is our ability to use more than one brand.

in these markets that we haven't previously done.

Speaker Change: to target different demographics and launch different products so you know we're very thoughtful of that but

Speaker Change: I'd encourage you to think about Tesco a bit more holistically than just those customers and what we can do with them, because it speaks to a much bigger part of the BUK strategy, which is one which is more multi-brands, more partnership led.

Speaker Change: So, you know, we talked when we bought Tesco about leveraging the capability that we have from U.S. cards and bringing it to the U.K. You're now seeing that both in terms of Avios.

and Tesco and Amazon.

Speaker Change: But also more broadly across the bank, you know, we've always operated as a single brand now We've got Kensington now. We've got Tesco etc, etc. So it's much more holistic

Speaker Change: The other thing I would say is that in buying Tesco we've actually acquired some very good capability that we can take back into the core BUK business.

Speaker Change: And one of the things I'd really call out there is an open market loans capability that we didn't really have and actually Tesco does extremely well. So there are multiple points of leverage here.

Yeah.

Sorry, yeah.

Speaker Change: Yeah, good morning, both. It's Jonathan Pierce from Jeffress. Can I ask two questions, maybe one for each of you? Anna, the base rate sensitivity table on slide 71 is helpful. Thank you.

Speaker Change: splitting out the impact of base rate cuts or moves in the curve more generally into swaps and managed margin.

Speaker Change: The managed margin piece though is extremely small. I mean I think we could work that out from the previous disclosure. Year one at 30 million I'm assuming that's you know 20 million of gapping negative.

Speaker Change: But then we you know move to 10 million pound as a sort of ongoing hit from a 25 base point rate cut Why is it so small? And maybe you could tell us what the pass-through assumption is behind that 10 million that that would be question one

Question two, a slightly longer term one for Venkat.

Speaker Change: Where do you see the return on tangible equity going in this business in the medium term? I note in the report and accounts today that the second year on the trot we've got a 14% ROTE target to hit the top end of your LTIP awards.

Speaker Change: That's now average across 26, 27. Is that where you sort of see this business potentially going?

Speaker Change: in the medium term and sorry a part 2 to question 2 the dividend, your dividend has been sub 10p for you know nearly two decades now the payout ratio on your target on your targets next year is going to be sub 20 percent

Speaker Change: Are we looking at a dramatic increase in the dividend payout ratio into 2027 please

Speaker Change: Thank you. Do you want to take the first and the third and I'll come back in the middle? Okay. Why not? Okay. Can we go to slide 71, please?

Speaker Change: Okay, so just for those of you who haven't got that far on the pack.

Speaker Change: We've split out, and I hope it is helpful, the impact of a 25 basis point parallel shift in the curve between two impacts. The top is the swap rates.

Speaker Change: for that thing, the impact in structural hedge, that's why it builds.

Speaker Change: over many years and then the bottom is the base rate.

Speaker Change: And there what you have is two impacts. In year one you have a timing impact and then on a longer term basis you have a pass-through impact, which is what Jonathan's asking about. The reason that the numbers on the bottom there are so small is because of the proportion that we hedge.

Speaker Change: And actually, if you compare this version to the version that we had earlier in the year, you'll see that our sensitivity has increased, and the reason it's increased is obviously because we've reduced the scale of the hedge as the year has progressed.

Speaker Change: So that is increasing our relative, our absolute sensitivity, but we think that we are still relatively insensitive just because of the proportion that we hedge. Now, what we don't call out is a pass-through assumption, but I would...

Speaker Change: guide you that by using this assumption and by using the split that we've given you on on BUK deposits you could probably come up with a reasonable approximation.

Speaker Change: Thank you. Dividend? Yep. No, you go next. Okay, fine. All right. Okay.

Speaker Change: So first of all I think as we've said on twenty twenty six.

Speaker Change: is not an endpoint, it's sort of a waypoint on the journey.

So when you look at the business beyond 2026.

Speaker Change: businesses, the lower returning businesses, such as the investment bank and the U.S. gold business at 12% and we maintain

Speaker Change: the higher return businesses at their roughly 20 percentage range for Barclays UK and the corporate banks a little less private banking wealth is a little more and we continue to grow them that proportionate mix.

Speaker Change: would have a play into ultimately what the ROT of the business should be.

Speaker Change: which I would hope is higher not just because it would allow me to get more of my compensation plan as you mentioned but because I think that you know takes advantage of the full potential of the business.

Speaker Change: It's a calculation which we will, you know, have to come back to because right now we're focused on 2026.

Speaker Change: Right. But I do think and I would hope that what we are building is a bank.

Speaker Change: that's much more strongly performing, well beyond 2026, that this is not a limit of our ambition, our ambition grows, and for what we achieve for ourselves, for our customers, and for you, our shareholders.

So let me take the third point. I think I'm.

Speaker Change: I'll start by just reiterating what Venkat said at the beginning, which is how important we realise shareholder return is.

Speaker Change: reflect on our capital priorities which are regulation first, distribution second, investment in our businesses third. The way we think about it and the conversations that we certainly had with our shareholders

are really about total return and that's our current focus.

Speaker Change: We're pleased to see that total return go up by 5% year on year. As you can imagine, we do have conversations with our investors about this, and we're committed to the greater than 10, but at this point in time, it feels like the right formulation.

Speaker Change: Good morning, it's Chris Kent from Autonomous. Thanks for taking my questions. I had a couple on RWAs, please, and then one on head office. So on slide 45 you present your...

Speaker Change: ROTE bridge, and you gave us the similar slide last year, you've got a 1.3% headwind in there over the two-year period from RWA growth, but obviously some of the regulatory impacts have been pushed back.

Speaker Change: your American Airlines card book is coming out and essentially, I think you're probably going to undershoot your RWA growth target for US cards

Speaker Change: Why hasn't that RWA headwind come down relative to where you were last year? So in the equivalent bridge, 24 to 26 a year ago, you said greater than 1% headwind from RWAs.

Speaker Change: Now you're saying less than, I think it's less than 1.3% if I add those together. So it seems to have gone up despite the fact the RWA growth.

Speaker Change: outlook looks better? What's going on there? Are we missing something? Because the reg headwinds have been pushed further into the future.

Speaker Change: So it's now a 1.3% reduction here from RWAs in the ROTI bridge.

Speaker Change: and it was greater than 1% a year ago. So it looks like it's got worse despite the fact the RWA growth should be less. So if you could speak to that and sort of related on the deregulatory point.

Speaker Change: FRTB, I don't think you've ever given us a number. A lot of your wholesale banking peers in Europe do give us a number now.

Speaker Change: Obviously, that's an area that may never happen so if you could give us a sense of

Speaker Change: that that would be helpful to understand the RWA trajectory. And then the general one is head office. It's been incredibly difficult to model because there's been so much going on. It feels like it's a bit cleaner this year. I think it's a big driver of the range we see in your consensus.

Speaker Change: could you give us an indication of what you think that looks like and I completely appreciate it's always a mess because there's always odds and sods in there but

Speaker Change: Putting those to one side. What do you think sort of underlying head office income and costs are to help us? Corral consensus onto something more sensible. Thank you

Shall I do FRTB and you do the rest?

Speaker Change: OK. But you can start. OK. So on your RWA points, you know, our expectation is no different really around RWAs. There's a timing point clearly in terms of the timing of Basel.

Speaker Change: you know this chart is based on our plans to deploy 30 billion of RWAs in the UK and hold the investment bank flat. So I think if there are more technical questions we can we can come back to you on it and I'll ask Marina to pick up after the event.

Speaker Change: banker FRTB yeah look you're right that there are some people who have given it we are looking at

Speaker Change: the UK implementation what we think we have already done in market risk capital calculations. And so we don't have the specific information right now to be able to make a judgment. But we think as we've said for 24 to 26 you know the overall we're keeping investment banking RWA flat.

Speaker Change: In that, we said last year that there would be an absorption of about 15 to 16 billion pounds of RWAs that came from a variety of things, including FRTB.

All right, we are not changing from that view.

Speaker Change: I think it's gone off. I was back. In terms of the 3 to 10 billion range on Basel 3.1, is that 7 FRTB, is a big chunk of that variance FRTB, or is that residual uncertainty? Because I would have thought you've now got final rules in the UK.

what drives the range.

Speaker Change: So you've got final rules in the UK you don't have a date yet of course but it's also there's a little bit of modeling uncertainty and just you know and implementation on the portfolio so you I wouldn't say all of it is FRTB.

Yeah, don't assume that the seven billion is a...

Speaker Change: FRTB in or out variants. As Venkat said, it's much more reflective of, you know, we continue to refine our modeling, Chris.

Speaker Change: So, you know, at this point in time, we're reacting to the rules that we have and expect to implement them in full and the 3 to 10 reflects that. Just coming back to head office, so, I recognize the fact it's been very difficult to, I mean,

Speaker Change: interpret and model as we've gone through 2025, 2024. I mean, you've had German cards.

Speaker Change: coming out, well going in and then coming out, same with Italian mortgages, so it has been very complex, I appreciate that.

Speaker Change: evergreen, at least for the foreseeable future. So within there, you've got the costs that truly relate to the group.

Speaker Change: And you've got some costs that relate to some legacy treasury funding.

Speaker Change: For the moment, we also have our merchant acquiring business in there.

Those three things are going to be relatively stable.

throughout the period.

then

Speaker Change: there are things in there which are inherently more volatile and in part that's why they're there.

So the first of those is hedge accounting.

Speaker Change: So that's essentially where, you know, we're offsetting the fair value of a hedged item with the fair value of the hedge itself.

Speaker Change: Sometimes they don't entirely offset and where there's leakage it goes to P&L. Actually that was quite significant in Q4 and it probably explains the income swing between Q3 and Q4. It's broadly neutral over time, it's just timing but it can be volatile.

Speaker Change: The second thing that you do see in there is where we've got any marks on our principal investments.

Speaker Change: that tends to be a bit smaller. And then the third thing in there will be if we are carrying any litigation or conduct that relates to a business that we are no longer active in. So that's why motor finance is in there.

Speaker Change: So, as this settles down, Chris will talk to you more about it, but at the moment that's the sort of broad guidance I would give you.

anymore.

Yeah.

Speaker Change: Hello, it's Elise from KBW. Thank you for taking my questions. I've got two, both on IB numbers, if that's okay. So first is risk-weighted assets, which decreased to 56% of the group from 58, and that includes Tesco acquisitions. So in terms of the target,

Speaker Change: How should we think about the evolution to 50% by the end of 26?

Speaker Change: What exactly is the step down here? And then just in terms of modeling, is the 199 billion the new level of numbers we should be using going forward, or are we expecting it back to, say, 23 level, which is 197?

Speaker Change: billion and that's my first question just with two parts and second is ROTI so to hit the ROTI expectation which is in line with the group more than 12%

Speaker Change: It needs to improve earning by about 23% without more capital. I'm just wondering how exactly are you going to achieve that? I know Anna you mentioned more stabilised revenue and disciplined costs.

Speaker Change: But are there any other areas that you're focused on that we should be aware of? Thank you. You want to take the first one, I'll take the second one.

Speaker Change: yeah and I can add the second one if you wish and so on the

On the capital number, so...

Speaker Change: Getting to 50% is as we set out last year at least. So we expect the IB to be broadly stable.

Speaker Change: I would say FX is going to move that around as you've seen from Q2 to Q3 to Q4 but broadly stable around that 200 billion mark. Remember that about 50 to 60% of our

Speaker Change: IB revenues are in US dollars, so FX does make that number move around, but just to remind you, you then got earnings and RWAs moving together, so even though those RWAs are going up and down with FX, I wouldn't expect that to have an impact on capital generation.

Speaker Change: So that that would be the first piece in terms of the overall sort of trajectory to 50%

Speaker Change: It's holding that piece stable and continuing to grow in those three focus UK businesses. I mean, you've seen us come out of 2024 with some degree of acceleration. You should expect that to accelerate over the period. So you might see slightly more in 26 than you see in 25.

Speaker Change: But we'll report to you as we have done along the way with the equivalent of slide 14 so you can see that progression.

Speaker Change: Why don't I start with some maths and then I'll hand over to Venkat. Just in terms of the IB ROTI, I mean simplistically it's gone from 7 to 8.5, so it's gone up by 1.5. We recognise the 3.5 at least to go, so we're very conscious of that.

Speaker Change: and that comes in a number of parts. The first is clearly revenue and Venkat talked about having delivered 0.6 billion of our 1.8 billion around our focus businesses.

Speaker Change: So, revenue growth is important here and we're very focused on the things that we can control and those areas of focus not only within markets but the IB.

Speaker Change: The second is revenue stability and the reason this is important is we want an IB here which can deliver in lots of different environments so we think of financing and we think of the ICB as ballast.

Speaker Change: within that investment banking revenue so that's also important. If you take those two together

Speaker Change: The third thing that's important is capital discipline. So for the third year in a row, we've got broadly flat RWAs in the IB. So we're generating revenue consistently, we're holding that capital flat consistently, and that's why the revenue over RWAs has gone up.

Speaker Change: And then the thing that is most in our control, and I'm talking about it last, but it's not least.

is costs and cost efficiency.

So, the IB CIR is down by 3 percentage points.

You're on air. It's delivered.

Speaker Change: positive jaws in three quarters out of the last four, it needs to continue to do so. It's not going to do so every quarter.

Speaker Change: But you'd expect it to do it more often than not because we want to get this business to a high 50s cost-income ratio. But even then, even in 26, it's not going to be top quartile. So it will have more opportunity in terms of efficiency from that point.

Speaker Change: Thank you. I cannot improve on that answer. I'll just say one thing which is that I said last year that this is the hardest part of our journey. What we do with the investment bank. Because as you said what we are trying to do is increase revenue.

reduce cost.

improve capital efficiency while keeping capital roughly flat.

Speaker Change: Right, that we have done it in 2024, we are very pleased about and it gives us the confidence to continue to do it. And that confidence is what Anna stated in her numbers.

I think that was it.

Speaker Change: Ahmet, right at the back. Oh, sorry, I didn't see you, Ahmet.

Speaker Change: Hi, thank you, it's Amit Goel here from Mediabanker. So two questions, one again just coming back to broader strategy, but I guess just...

Speaker Change: Just just thinking about the world as it is today versus how it was maybe 12 months ago when you were putting the plan together And the kind of opportunity set that you see

Speaker Change: You know, it looks like there's perhaps a bit more opportunity in the US.

Speaker Change: you know, maybe regulations a bit slower, you know, discussion about growth in the UK relative. So I appreciate your executing against the plan that you've laid out.

Speaker Change: you know just around 12 months ago. But curious if you were to read rethink about it or think about where you would position capital. You know if you're looking at it today if there are any changes or anything else you would consider or think about.

Speaker Change: And then secondly, maybe a bit more kind of detail, but

Speaker Change: Think on the on the road to the group delivered for the year this year that the 10.5

Speaker Change: think you know Q3 that was kind of guided to so I think the environment was a bit better in Q4 from a from an FX and IB trading standpoint maybe a slightly bigger gain on Tesco so just curious if there are any other factors that worked

slightly in the other way that you saw. Thank you.

Speaker Change: So, let me cover the U.S. first and then Anna can cover the second part on ROTI.

So you're right.

Speaker Change: We we there is a lot of opportunity potentially in the U.S. We certainly have it in trading and we could have it in banking We've had some through the last year and it may continue

Speaker Change: So two things. First of all as we've said we have a fairly big U.S. presence. The firm itself makes about 40 percent of its revenue in U.S. dollars.

Speaker Change: The investment banking side makes about two thirds of its revenue 68 percent in the US. So we've got a huge presence there. There is enough.

willingness and capital availability and flexibility within the investment bank.

and four U.S. cards to be able to deploy it.

Speaker Change: in those attractive opportunities and in fact if you take U.S. cards to begin with we've already said that what American, the non-renewal side of American, what it does is that it gives us capital which we looked at.

Speaker Change: for higher risk returning businesses and to diversify our portfolio. The similar opportunity exists.

Speaker Change: inside the investment bank and you've seen it in the deals we've taken in the U.S. as well as the strength of our equities franchise which is very heavily U.S. based as well. So we'll deploy it and we'll adjust.

On your second question in terms of ROTI...

Speaker Change: As you would expect, we manage a number of puts and takes in the delivery of our financials.

Speaker Change: So you're right, there are a number of these things that were certainly better, I'd call out rates, obviously better than our assumptions, the investment banking wallet was better, we performed well in equities.

Speaker Change: you know, deposits stabilised faster, so all of those things gave us a tailwind.

Speaker Change: But we talked about some of the headwinds here too, some of which were quite evident in the fourth quarter.

Speaker Change: you know being weaker in the year and that's important because it's a big business for us. We also saw some unforeseen inflation not just in the fourth quarter but throughout the year. I'd call out the Bank of England levy in Q1, I'd call out motor finance in Q4 and of course in the fourth quarter as I said in my remarks.

Speaker Change: We actively, deliberately took some actions in Q4 to manage within the guidance that we'd given you to actually accelerate some of our efficiency plans to really secure those costs in the outer years.

Speaker Change: So, from our perspective, we're encouraged by what we delivered, you know, we're managing actively within the plan to deliver it with no surprises.

Speaker Change: Well, thank you very much, everybody. We appreciate your time, your engagement.

Your questions?

Speaker Change: and we welcome this participation. So thank you again for joining us. I think there might still be coffee outside.

and we'll come and see you outside. Thank you.