Q1 2025 Standard Chartered PLC Earnings Call
Good morning, and good afternoon, everyone and welcome to our first quarter 2025 results presentation I'm joined here in London by Diego and as usual well first run through the presentation before taking your questions.
We have delivered a strong set of results for the first quarter of 2025 with income up 12% year on year, excluding notable items and earnings per share up 19%.
This was driven by strong performance across both solutions global markets and global banking continuing the positive trend in recent quarters.
This momentum has continued into Q2, particularly in global markets.
Our network business, which represents around 60% of our CIB income is highly diversified resilient and agile.
Clearly there've been geopolitical developments uncertainties since we last spoke to you notwithstanding some of the challenges which might rise.
Our confidence that our strategy and business is well positioned to face any headwinds in the current environment and into the future.
Our corporate strategy Codexis with clients and the world's most dynamic markets and are absolutely business is capturing the huge opportunity that we see in the structural trends bulk creation across our footprint.
Both of these core growth engines have tremendous potential that will last beyond any near term turbulence and position us well to benefit from structural changes should they arise.
As a result, we're confident in our trajectory and the long term prospects for the group whilst remaining watchful of the external environment.
And before I pass to Diego to run through the financial performance for the quarter I want to spend a couple of minutes talking about the network, including our cross border U S footprint.
And the opportunities that we see.
You'll recall in our last presentation. We showed you this chart of our cross border network income.
So that's creating trade war will impact global growth and our markets. We believe our network is a key distinctive and strategic advantage for the group.
Geographically the network is not overly reliant on any single bilateral trade relationship and only seven quarters generate network income greater than $100 million trend.
As a reminder, our network income is not just trade finance.
Facilitate the flow of goods and services for our clients generating income from transaction services global markets and global banking.
This network income of $7 $3 billion in 2024 has been growing strongly with a 9% CAGR since 2019, excluding the impact of rates.
Speaker Change: Our business is a very different bank to the one that I joined in 2015, it's far less capital intensive and is consequently higher returning.
Speaker Change: It's also less concentrated in any particular asset class and has higher quality credit exposures.
Speaker Change: We have materially increased our hedging to reduce interest rate sensitivity and the bulk of our balance sheet is short dated by nature.
Speaker Change: Well, if theres a possibility that a prolonged period of uncertainty could have a direct impact on growth in our markets. We entered the current period of global volatility from a position of strength.
Speaker Change: While there are many open questions regarding trade tariffs, it's very likely that our clients will continue to diversify their supply chains.
Speaker Change: Creating growing opportunities for us to serve those clients profitably.
Speaker Change: Our network is that job.
Speaker Change: We follow our clients and we offer them compelling capabilities and services across our footprint.
Speaker Change: We've continued to adapt as our clients' needs have evolved.
Speaker Change: Two examples of this would.
Speaker Change: It would be our recent investment acceleration in our affluent proposition and the shift in our CIB business towards financial institutions and large international corporates.
Speaker Change: I'd like to turn now to our U S related network income, which given recent events is understandably focused at the moment.
Speaker Change: Our U S network business is made up of both financial institutions and corporate clients.
Speaker Change: Institutions are primarily large banks and broker dealers given.
Speaker Change: Given the nature of cross border financial close we remain confident that this business will continue to be resilient.
Speaker Change: Turning to corporate clients.
Speaker Change: First if we focus on U S outbound, which is income generated from U S domiciled multinational corporates into countries within our footprint.
Speaker Change: This represents around $400 million of income for us.
Speaker Change: Second the income we generate from inbound flows from non U S corporates into the U S. The smaller at under $100 million.
Speaker Change: We would expect to serve these clients to a greater degree should manufacturing investments moved to the U S.
Speaker Change: Third we've reviewed the rest of our corporate clients, which do not have any inbound or outbound U S business thrust, but do themselves have more than 10% of their total sales from exports to the U S and sectors, which could be impacted by tariffs. For example, this would include a corporate which is based in India, where we bankers corporate on its intra Asia business.
Speaker Change: But they use another bad for the U S banking business. These clients represent around $400 million of income for us.
Speaker Change: Putting these groups together, we think around $900 million of network income is from corporate clients that may be exposed to the current turbulence.
Speaker Change: This income is diversified by product across cash trade global banking and global markets.
Speaker Change: Believe that there are both risks and opportunities to this income as trade patterns are reconfigured.
Speaker Change: And while the U S is an important contributor for us the large majority of our income sits outside of the U S.
Speaker Change: Despite potential headwinds, we think we're well positioned to capture opportunities across our footprint. So.
Speaker Change: So let me give you a few examples in our CIB business supply chain diversification.
Speaker Change: Could create new needs for our clients our supply chain has become more complex and or just globally. We expect corporates will continue to redesign their treasury operations since the beginning of 2024, we have on boarded 10, new regional Treasury centers dedicated teams for our corporate clients.
Speaker Change: For financial institutions, we see further opportunities in the deepening of international capital markets outside of the U S, including foreign exchange markets with.
Speaker Change: We've invested heavily in both hardware and software or FX platforms.
Speaker Change: W. R. B R International proposition will be increasingly attractive and relevant to clients in today's environment. We believe these clients will seek further diversification and sophisticated hedging and industrial products as markets remain volatile.
We've been investing in this space, having opened six new international wealth centers across five markets since the beginning of 2024.
Speaker Change: All of these opportunities reinforce our confidence in delivering on our ambitions.
Diego: So now Diego overview to take us through the Q1 2025 results in more detail.
Diego: Thank you Bill good morning, and good afternoon, everyone.
Diego: The remarks, I will be comparing year on year on an underlying basis and speaking to constant currency unless otherwise stated.
Diego: As a reminder, these results are now presented on the new basis as outlined in the press release, we published on the second of April.
Diego: First I will start with an overview of our Q1 performance and then go through each component in more detail.
Diego: The group delivered operating income of $5 $4 billion in the first quarter with a headline growth of 7% or 12%. Excluding the notable items of $234 million in the same period last year.
Diego: Operating expenses were up 5%.
Diego: And credit impairment was $219 million.
Diego: This resulted in profit before tax of $2 3 billion up 12% year on year and thanks to the reduction in our share count. This represented 19% growth in earnings per share.
Diego: Now, let's turn to each component in detail.
Diego: On a quarter on quarter basis, NII was down 5% due to a particularly strong Q4, which benefited from a circuit management a faster rate.
Diego: And the $147 million from deposit insurance reclassification as well as a $65 million impact from lower day count in Q1 2025.
Diego: You will see on slide 19, with our currency weighted average interest rate outlook for 2025 is now 82 basis points lower than 2024 and down six basis points compared to when we last reported you will also note that the 2026 headwind has increased by 31 basis points to 59 basis points.
Diego: Versus 2025.
Diego: And as highlighted in Q4, we expect there will be some reduction in deposit pass through rates in 2025 and around 1% headwind to NII from the WR because formation.
Diego: Hence our guidance remains that we think NII will be challenging to grow in 2025.
Speaker Change: No no no yes. It continues to be a strong growth driver and is up 7% or 18%. Excluding the notable items of $234 million in Q1 2024.
Speaker Change: This was largely driven by good momentum in both wealth solutions and global markets, which on a total income basis were up 28% and 14% respectively.
Speaker Change: Obviously these products in more detail when I cover the business segments performance.
Speaker Change: Now turning to expenses.
Speaker Change: Operating expenses were up 5% year on year. This was driven by inflation and business growth initiatives to support our higher returning businesses, including frontline hires and the investments in technology.
Speaker Change: There was also a $49 million of deposit insurance book this quarter and as you may recall, we highlighted that the deposit insurance costs is expected to be around $200 million each year with an offset in NII.
Speaker Change: The fit for growth program has continued to progress well with annualized savings of around $400 million from actions executed since the start of the program.
Speaker Change: We have incurred in the $73 million of fit for growth restructuring charges in the quarter. We will continue to execute on this program, albeit the phasing of the cost to achieve that can be hard to predict.
Speaker Change: We are still confident that 2026 total expenses will be below $12 $3 billion on a constant currency basis, including the deposit insurance costs and around $100 million of UK Bank Levy.
Speaker Change: A highlight in Q4.
Speaker Change: Credit impairment was $219 million in the quarter with the W. R. B charge of $179 million broadly in line with the prior quarters.
Speaker Change: CIB had a $30 million charge the first quarterly net charge off for a while following significant recoveries recorded over the past few quarters, our credit grade 12 balances increased this quarter due to the downgrade of some corporates within stage two from early alerts.
Speaker Change: Weather overall higher risk assets were down around half a billion dollars quarter encore.
Speaker Change: Impairment in the venture segment was down $4 million quarter on quarter and down $80 million a year on year, mainly from reduced delinquency rate in marks.
Q1, we increased the weighting of our tariff related downside scenario, which led to a modest charge for the group in the quarter.
Speaker Change: Our Q1 loan loss rate of 25 basis points continued to benefit from low impairment levels in CIB.
Speaker Change: Which as previously highlighted we do not expect to be repeated in the coming years. We are therefore, maintaining our guidance for loan loss rate to normalize towards the historical through the cycle 30 to 35 basis points.
Speaker Change: While this would imply a pickup from current levels, our key risk indicators over the last 10 years have continued to improve.
Speaker Change: The proportion of our CIB corporate exposures that are investment grade has increased from 42% to 74%, reflecting the strength of our balance sheet and the group's measured approach to risk.
Speaker Change: <unk> the portfolio has remained broadly resilient with 83% of exposures fully secured.
Speaker Change: Given the recent news flow on targets I want to emphasize that our exposure to other markets. Excluding Singapore is less than 4% of group exposures, 37% of which is to cooperate with 68% being investment grade.
Speaker Change: Underlying loans and advances to customers were up 3% in the quarter, mainly from global banking origination activity and some growth in secured lending in <unk>.
Speaker Change: Underlying customer deposits were up 5% in the quarter.
Speaker Change: Mainly driven by the reversal of outflows in CIB deposits in Q4, as well as an increase from W. R. B term deposits.
Speaker Change: Turning now to our WAM capital.
Speaker Change: Risk weighted assets were up around $7 million in the quarter was credit risk weighted assets went down due to optimization activities. We saw an 8 billion dollar increase in market risk risk weighted assets as we helped our clients capture.
Speaker Change: <unk> market opportunities, we expect market risk <unk> to reduce thank you too.
Speaker Change: Operational risk RW, a which is mechanically calculated from the previous three years. The income also added $3 billion towards <unk> in the quarter.
This is the usual one off increase in the year.
Speaker Change: We continue to deliver strong capital accretion with a CET one ratio of 13, 8% in Q1.
Speaker Change: Translates to an increase of 21 basis points quarter on quarter. After adjusting for the 61 basis points impact of the share buyback announced in February 2025 of which around 43% is now complete.
Speaker Change: Our <unk> per share was up 20% quarter on quarter and up 171 year on year. This includes the full deduction of the $1 $5 billion buyback from equity, but only the shares bought back. Thank you Juan.
Speaker Change: Now, let's take a look at our business segments performance.
Speaker Change: So you had the income for the quarter was $3 $3 billion up 4% global markets income was up 14% driven by strong double digit growth employee income, which makes up around two thirds of our global markets business disposals.
Speaker Change: This was as a result of increased client activity supported by our strategic initiatives and investments.
Speaker Change: Other income was up 7% mainly from higher levels of volatility.
Speaker Change: Global banking income was up 17% from increased capital markets activity from higher bond issuance and the execution.
Speaker Change: International services income was down 4% as growth in trade and Securities services was offset by a rate driven margin compression.
Speaker Change: Q2 has started positively in CIB with momentum in client flows continuing from increased volatility, albeit high levels of uncertainty may delay pipeline execution.
Speaker Change: To remind you we will be hosting an investor seminar on the 15th of May where we will provide you a detailed update on our CRB segment.
Speaker Change: Turning to wealth and retail banking.
Speaker Change: Q1 income was up 12% to $2 1 billion with another strong quarter in <unk> solutions, which was up 28%.
Speaker Change: The 33% growth in investment products income was mainly driven by structured products.
Speaker Change: There has also been continued strong double digit growth in bank assurance, which was up 15%.
Speaker Change: Our key leading indicators in affluent remains strong with 72000, new to bank client Onboarding in Q1.
Speaker Change: We also had $13 billion of affluent than net new money in the quarter with around 60% from west.
Speaker Change: Lastly, Q2 has started well for wet solutions income and net new money has been positive so far in the quarter, but it is too soon to say, how our recent volatility could impact customer behavior going forward.
Speaker Change: Conclusion, we have delivered another strong set of results in Q1.
Speaker Change: Our guidance for 2025, and 2026 remains unchanged, although as Bill said, we remain watchful of the external environment with that I will hand back to the operator, and bill and I will take your questions. Thank you.
Speaker Change: Thank you Dear participants as a reminder, if you wish to ask a question over the phone. Please press star one one telephone keypad and Lakeland name to be announced should we draw a question. Please press star one again.
Speaker Change: You can submit your questions via the webcast Mr. Baber composite General studies will take a few moments.
Speaker Change: And now we'll go and take our first question.
Speaker Change: And this comes from the line of Joseph Dickerson from Jefferies. Your line is open. Please ask your question.
Joseph Dickerson: Hi, Thank you for taking my question.
Speaker Change: Just a quick one on the risk weighted asset. So currently the aggregate number I think was some.
Joseph Dickerson: About ballpark with where we were thinking.
Joseph Dickerson: But you've had a nice contraction on the credit.
Joseph Dickerson: Number of just under 5 billion quarter on quarter can you discuss some of the optimization effects that you're seeing coming from the <unk>.
Joseph Dickerson: I'd still because I know this has been an ongoing area of improvement and I guess how much.
Joseph Dickerson: Further optimization.
Joseph Dickerson: And then in terms of the market.
Joseph Dickerson: WH.
Joseph Dickerson: Certainly in the other direction and the magnitude was large and it sounds like it's coming back down.
Joseph Dickerson: In Q2, but I guess, what's the do you have kind of an optimal level and the mix of overall <unk>.
Joseph Dickerson: Market risk consumer insights about 14%.
Joseph Dickerson: And Q1 is there kind of an optimal mix or is it really dependent on opportunities.
Joseph Dickerson: Yes.
Joseph Dickerson: At any given time in the call.
Joseph Dickerson: Footprint. Thanks.
Speaker Change: Thanks, very much for the question John and thanks, everyone for joining us. This morning, we know it's a busy morning, so what we're trying to be sharp.
Speaker Change: General answer to the question is we're entirely returns driven.
Speaker Change: The increase in markets related contributions reflects a substantial increase in activity.
Speaker Change: Head of the eventual drop your tariffs.
Speaker Change: Obviously as we indicated that carried on through through Q2, but I.
Speaker Change: <unk> seen a weighted square.
Speaker Change: Physicians, which is why we can be.
Speaker Change: <unk>.
Speaker Change: The art of the right number is not necessarily linear.
Speaker Change: Overall, our optimization efforts ongoing.
Speaker Change: You target in terms of optimal.
Speaker Change: <unk> or any other version of <unk>.
Speaker Change: We don't think we're overweight in any.
Speaker Change: Category.
Speaker Change: So that we would we would call it out.
Speaker Change: And as a results were just focus on optimizing returns Diego <unk>.
Speaker Change: Just two very minor additions you know we are nimble in how we do it you've seen it in previous quarters, we have the other markets.
Speaker Change: Our risk weighted asset biophysicist sweat the assets and we've taken them away.
Speaker Change: We have multiple ways of growing our market business and you've seen the great results in the past quarter, 17%.
Speaker Change: In our flow business in ways that sometimes require risk weighted asset sometimes don't.
Speaker Change: We can do it in other ways and we do it we do its market from that point of view lastly.
Speaker Change: Let's never forget a little touch ox seasonality I mean, Q1 is really a seasonally strong quarter.
Speaker Change: Got it.
Speaker Change: Thank you Joe.
Speaker Change: Thanks.
Speaker Change: Yeah.
Speaker Change: Now we're going to take over next question.
Speaker Change: And the question comes from the line of Quinn Peng from Chinese Securities. Your line is open. Please ask your question.
Speaker Change: Thank you on NPA beyond Diego Thank you.
Speaker Change: <unk> just now I fully understand.
Speaker Change: The diversification, let's touch on that.
Speaker Change: Bye.
Speaker Change: It's very you've got general increase channels globally.
Speaker Change: There are some negative consequences.
Speaker Change: But also in Panama.
Speaker Change: So.
Speaker Change: I'm wondering if perhaps.
Speaker Change: No.
Speaker Change: Jess additional points.
Speaker Change: Scenarios.
Speaker Change: Share with us.
Speaker Change: The pro forma opex.
Speaker Change: Thanks, Ken.
Speaker Change: The one was little bit scratchy, but I think we got the question.
Speaker Change: Thanks for joining so.
Speaker Change: Obviously, we're all watching that the tariff question real time.
Speaker Change: And it's a multifaceted problem.
Speaker Change: We're encouraged by the the suggestion that there are some some very healthy negotiations going on and then there is the prospect for a significant reduction.
Speaker Change: Sure.
Speaker Change: Any further questions.
Speaker Change: No no. Thank you.
Speaker Change: Thank you.
Speaker Change: Now we're going to take our next question.
Speaker Change: And the question comes from the line of Andrew Coombs from Citi. Your line is open. Please ask your question.
Speaker Change: Okay.
Speaker Change: I'll stay on the same theme if I may say three parts are related to tariffs.
Speaker Change: The first thing is <unk>.
Speaker Change: HSBC talked about okay.
Speaker Change: Or was it more low single digit impact revenues.
Speaker Change: Just on future downside risks or anything you can say around the revenue outlook and cash.
Speaker Change: Okay. The current set of events would be useful.
Speaker Change: Secondly.
Speaker Change: Just elaborate a bit more on what youre seeing in terms of client activity.
Speaker Change: Based on the corporate side on the mobile banking side.
Speaker Change: And then finally on your <unk> assumptions.
Speaker Change: <unk> taken a volume.
Speaker Change: <unk> going to change in your downside.
Speaker Change: Yes.
Speaker Change: We've taken much larger adjustments, it's early to say what was the rationale both practices behind that thank you.
Speaker Change: Okay.
Speaker Change: Great Operator next question please.
And Jason.
Speaker Change: Can you repeat your question repeat your question.
Speaker Change: I think operator, we're waiting for that.
Speaker Change: Sure.
Speaker Change: Can you hear me.
Speaker Change: Yes, we can.
Speaker Change: Okay.
Speaker Change: Can you repeat the question Andrew.
Speaker Change: Yes.
Speaker Change: Great.
Speaker Change: And the fastest way.
Speaker Change: Hey.
Speaker Change: Made some revenue guidance based on the possible downside scenario.
Speaker Change: The kind of environment.
Speaker Change: The impact on revenue say anything you'd like to add that Q2 revenue outlook based on the range.
Speaker Change: It would be appreciated.
Speaker Change: Second and complete today, you talk a bit more about what you're seeing.
Speaker Change: Particularly around the corporate client base and also your private banking clients.
Speaker Change: And then a question is on the on <unk> nine.
Speaker Change: You've taken a five percentage point change in the weighting.
Speaker Change: <unk> sides.
Speaker Change: Which is less than what some of the data.
Speaker Change: What was the rationale and then any.
Speaker Change: Slightly changing the weighting on the downside. Thank you.
Speaker Change: Thanks for the question.
Speaker Change: As you would imagine we're thinking continuously about different scenarios that could play out.
Speaker Change: There are thousands of permutations and they are quite different and we keep on coming back to the core point, which is that a secular increase in tariffs in any sort of across the board.
Speaker Change: We would have an impact on.
Speaker Change: On the economic environment and that would impact us.
Speaker Change: We're we're we're very thankful that we find ourselves in a position of having a super strong credit book and.
Speaker Change: In our reported numbers and then of course, it's not an accident.
Speaker Change: Steady improvement in credit quality over a period of time that feels it feels to us like that protect us in that sort of economic growth scenario should that be the one that comes through.
Speaker Change: Did you ask about the client behavior.
Speaker Change: We're very encouraged by what we've seen so far is perhaps not a surprise.
Speaker Change: Client activity through the first quarter and then into the early.
Speaker Change: April versus Q2 to date.
Speaker Change: Has been very strong and end markets and.
Speaker Change: But I think it is.
Speaker Change: Good time to reflect on how much our markets businesses evolved over the past six seven years.
Speaker Change: As we now have a really fully well established and top tier financial markets business across FX rates.
Speaker Change: Associated options credit and commodities all of which have performed well through this period with a dramatic increase in the amount of flow completely inconsistent with our increase in bar in other words. This is not risk related.
Speaker Change: Income to any material degree at all.
Speaker Change: So again, perhaps not surprising in this kind of an environment and you have heard similar things from other people, although I guess when we reflect you'll see that we've done pretty well.
Speaker Change: Perhaps more surprising is just talk about what clients have been so by all the metrics into the early part of Q2 that we see new clients new money and income are performing.
Speaker Change: Performing with the kind of momentum that we saw in Q1 and.
Speaker Change: We also saw throughout 2024, and that's encouraging because frequently in these kind of exogenous market shocks Chuck events clients go to the sidelines.
Speaker Change: And we're seeing less of that in this case and how much of that is clients that are choosing to do disproportionately with standard chartered.
Speaker Change: And how much is the market time will tell as we as we reflect and digest everybody's earnings note that youll be doing that as well, but it feels pretty good to us right now.
Speaker Change: That's up through and including today so.
Speaker Change: So that is encouraging.
Speaker Change: Got comments on all three of the questions in but you can pick up specifically the first my question for sure.
Speaker Change: First one thing on your first point in terms of how to think about the about the numbers in different scenarios, because as bill said that it seems to us to think of a single point central case.
Speaker Change: Okay. It seems to be quite elusive and could change on a day to day basis. So what we have instead. The aim to do is to give you all of the moving pieces that are necessary for you to sensitize our numbers in the way that you will be.
Speaker Change: The necessary and so we have given you I think.
Speaker Change: <unk> network analysis, we've given you in particular zooming into the exposures to the United States of America catheter in very different ways and being particularly expansive in terms of what corporate right. Then when we think.
Speaker Change: In some ways.
Speaker Change: Brian Your sensitivity then of course like every quarter, we give you our update at the time.
Speaker Change: Wait that forward curve. So that you can do the same to the net interest income as for the ISR.
Speaker Change: The assumption set.
Speaker Change: Okay. You can that you have all of the details of course in our annual report you can look at the numbers.
Speaker Change: <unk> is a very very severe scenario so in the context.
Speaker Change: A lot of different scenarios that we put on in the way that we felt was consistent with that particularly.
Speaker Change: Great type of scenario and we came to a solution that's as you know.
Speaker Change: We always aim to look behind the coronary in thinking of the kind of things and overlays and other ways.
Speaker Change: Embedding into our numbers the potential sources of volatility for the months to come.
Speaker Change: Andy.
Andy: Great. Thank you and thanks, Congrats Mike for as well.
Mike: Thank you Andy.
Speaker Change: Thank you.
Speaker Change: Now we're going to take our next question Jessica This amendment.
Speaker Change: And the next question comes from the line of James <unk> from Redburn Atlantic. Your line is open. Please ask your question.
James <unk>: Hi, Good morning, gentlemen, good morning, Diego I was wondering if you could just give us your thoughts around loan growth will unfold over the rest of the year. Please.
Speaker Change: I know, there's a lot of macro turbulence at the moment, but I was also just lets you think in your appendix you talked about building some liabilities from the pipeline. So does that mean you go.
James <unk>: Bit more growth coming in.
James <unk>: Might otherwise be expecting.
James <unk>: Yeah.
James <unk>: Okay.
James <unk>: So.
James <unk>: If you have no other questions, Jason I would think.
James <unk>: So let me answer this way first quarter, so far so very good 3% top customer loans and advances there is clearly a good place where it will be mostly.
James <unk>: Mostly in banking.
James <unk>: And also a little bit in wealth lending as we pointed out now as you look forward from that.
James <unk>: Got it.
James <unk>: For more or less these kind of growth right and the reality is we have two competing forces here on one hand, we have the fact that the interest rate decline lower dollar all point in the direction that normally you would expect that that would be a philips to credit growth in our footprint, but on the other hand, the reason why these things.
James <unk>: Are happening at <unk>.
James <unk>: Against it and as a consequence do we remain confident of our guidance, yes, definitely particularly given the stronger start to the year how.
James <unk>: Actually it unfolds over the next few quarters. Unfortunately remains it remains a question Mark I would just the harpoon was something that bill said that in the <unk>.
Speaker Change: Responses to Andy before which is when you really think about what our clients are really doing they are being very active on a lot of tactical things.
Speaker Change: They react to the cost of the unfolding situation and so far we continue to see that and implementing strategic projects because those strategic projects were decided months and quarters in advance how that unfolds and that will definitely into credit growth, we will have to see a little bit with the unfolding of the environment. Thank you James.
Speaker Change: Understood.
Okay.
Speaker Change: Operator next question, Yes of course, and I will go and take our next question.
Speaker Change: And the question comes from the line of Amit <unk> from major Bank. Your line is open. Please ask your question.
Speaker Change: Alright, thank you.
Speaker Change: Hey, good morning.
Speaker Change: Just a couple of them.
Speaker Change: Got it thank you follow up.
Speaker Change: One is.
Speaker Change: So I guess is the right way to understand the potential impact from tariffs more kind of a volume thing rather than domestic quality issue given the structure of <unk>.
Speaker Change: And your relationships and the exposures that you have.
Speaker Change: And within that.
Speaker Change: Appreciate that.
Speaker Change: The color in terms of network.
Speaker Change: Since 2009 changed so the 9%.
Speaker Change: I'm just kind of curious then within the 5% to 7%.
Speaker Change: Kind of revenue growth target, what kind of network conquer how did you kind of factored in and how are you thinking about that.
Speaker Change: This year and in the next.
Speaker Change: A couple of years.
Speaker Change: And then.
Speaker Change: Outside of that I was just kind of curious just on the net interest income I know you said, obviously it would be challenging.
Speaker Change: To get to the level that you achieved last year I think consensus for Scott I guess.
Speaker Change: Very smooth.
Speaker Change: <unk>.
Speaker Change: Just wanted to check that that you're kind of comfortable.
Speaker Change: With the with the kind of $11 billion I'll say that.
Speaker Change: Consensus is perfect for this year. Thank you.
Speaker Change: Thanks for the question.
Speaker Change: Yes.
Speaker Change: Mentioned as we all know theres lots of moving pieces.
Speaker Change: On the tariff.
Speaker Change: Dynamic and there are lots of different outcomes.
Speaker Change: The question of whether its volume or creditors can depend on.
Speaker Change: On the path, we will follow up.
Speaker Change: Generally as we've said the higher tariffs as is.
Speaker Change: So we're economy.
Speaker Change: But.
Speaker Change: Turf differentials between markets is also reconfiguring their supply chains.
Speaker Change: So we're kind of me obviously lead to lower volumes I think in our case given the.
Speaker Change: <unk>.
Speaker Change: Strong credit quality that we demonstrated in the <unk>.
Speaker Change: Early assessment of credit impact.
Speaker Change: <unk> is a volume issue rather than a credit issue.
Speaker Change: Honestly.
Speaker Change: More extreme scenarios, we can begin the secret attention.
Speaker Change: But we don't see that.
Speaker Change: And the.
Speaker Change: The kinds of.
Speaker Change: Outcomes that the market is talking about right now.
Speaker Change: In the medium term the reconfiguring their supply chains.
Speaker Change: Well.
Speaker Change: Very likely for us to drive volumes the other way.
Speaker Change: We'll be we'll be picking up share as companies invest into the U S into into other ASEAN and South Asian countries to diversify their manufacturing base and their underlying supply chain. These are our own.
Speaker Change: Markets. These are fast growing markets. These are.
Speaker Change: Markets, where we have a high market share and obviously along with the investment itself comes a whole associated stream of.
Credit and interest rate risk management, and ongoing local funding supporting local suppliers as well.
Speaker Change: <unk> changed our reconfigured, which plays to our strength so.
Speaker Change: We think the tariff impact in the short term.
Speaker Change: More.
Economy related possibly some volumes if theres an outright reduction in trade, although it's hard to see that purchasing as long as various economies around the world have consumers who are still buying.
Speaker Change: And in the medium term, it's much more about the relationships between countries and relative tariff levels and how supply chains get reconfigured.
Speaker Change: It's important for us.
Speaker Change: I think the I think the other two questions. So on the on the specific assumptions all network income growth. While we always stated that our network income of course has historically grown at higher than the rate that the range that we are indicating for our growth for 2026 that will give you quite a bit more color about.
Speaker Change: After the CIB seminar.
Speaker Change: On the 16th of May So please stay tuned.
Speaker Change: Stay tuned for that in the meantime, well I would.
Speaker Change: And colleges to always remember is that within that the network income that we have both.
Speaker Change: We have a lot of non NII, but we also have NII right I mean networking company is very well diversified.
Speaker Change: But it includes a large portion of course, the transaction services and some of that.
Speaker Change: Yeah, I mean, if we bought the debt that you said NII.
Speaker Change: Influence on.
Speaker Change: NII per se I don't think that there is any change to what we are saying we told people challenge integral it stays challenging to get all the changes that we're indicating in our currency weight and forward curves tell you that the situation has worsened the headwind has worsened by six basis points.
Speaker Change: For this year to 82 basis points and that has warranted send the buy quite a bit more in 2026.
Speaker Change: 59 basis points at 425, we will see how the situation unfolds.
Speaker Change: It's true that the generally speaking and it goes to guidance on the 5% to 7%, which I'd remind you for this year, we are guiding below that.
Speaker Change: That range.
Speaker Change: At the end for NII and for NII does start to the year is very encouraging in April has been good but the uncertainty is high.
Speaker Change: Thank you thank you Amit.
Speaker Change: Operator next question.
Speaker Change: Thank you Dear participants as a reminder, if you wish to ask a question over the phone. Please press star one telephone keypad. Alternatively, you can submit your questions via the webcast.
Speaker Change: And now we're going to take our next question.
Speaker Change: And the question comes from the line of.
Speaker Change: From Bank of America. Your line is open please ask your question.
Speaker Change: Well good morning, good morning, Diego I'm, so sorry to be a housing yet another tariff related questions, you're probably bored of them.
Speaker Change: So just on the scenario that you talked about the I think it says it is called the global trade tensions and all right. I think you said it is very severe but what type of in plain English what does that sound like.
Speaker Change: And because I guess the reason I also just because unlike a lot of other banks. There's a downside one downside scenario you haven't done that so I'm just trying to understand like what what does that scenario looking at I guess HFC. She talks about a possible downside being one that is Washington, where we are but equally.
Speaker Change: Equally I guess, one could also make that would make the argument that with a 100% Harrow of some U S. China is already pretty severe so just.
Speaker Change: What is that scenario capturing it is the.
Speaker Change: Number one question and secondly, as a follow up to the NII question.
Speaker Change: So I guess pass through rates.
Speaker Change: Again stayed relatively strong this quarter. We are now looking at maybe three bold bright cuts this year.
Speaker Change: U S. Dollar so just wondering any expectation as to how that might change.
Speaker Change: Off the back of that I know, you've given our medium term guidance.
Speaker Change: Through the cycle, but just wondering sort of maybe in the next six months in the near term cuts what are we expecting.
Speaker Change: Thank you Charlie.
Charlie: So look.
Speaker Change: Look on the on what we call the global trade and geopolitical tensions that downside scenario.
Speaker Change: I don't have it in front of me, but from memory. We are talking about some very severe decreases of the GDP in the order all four or five 6% for the large regions of the world one year forward from here.
Speaker Change: For you to decide whether you think that that is in line with what is currently happening or not I would note as bill says that obviously there has been a constant throwing back because of the extreme scenario that is being contemplated by the market, but we will.
Speaker Change: But we will have to see in simple terms.
Speaker Change: That scenario entails.
Speaker Change: In terms of the NII and the pass through rates look we've said very clearly in Q4 that our peso rates.
Speaker Change: Where we had managed our pathway, particularly aggressively and assertively and if we were above the ranges that we long indicate that in terms of all the what do we think that the past rate goes through the cycle. We said that we would we felt that we would move it inside the.
Speaker Change: The Ranger, we have moved inside that range, we do continue to manage them assertively and.
While the one thing that I would really say here as you all are thinking about your modems and as you all think about what the impact.
Speaker Change: The currency weighted forward curves and the pass through and about the rates that he is going to be is that a I don't envy you because the volatility of those rates is extremely high in just the month of April we've had something like 100 basis points of swings in terms of the forecast.
Speaker Change: The forward curve is always we make no assumptions about why don't we use forward curves.
Speaker Change: The in the in the forwards for 'twenty five 'twenty six.
Speaker Change: The range is 100 basis points in a month, which is extreme of course, so clearly an uncertain scenario, but but the rates are good within the range and we continue to manage them appropriately.
Speaker Change: Thank you pardon me.
Speaker Change: Next question operator.
Speaker Change: Yeah.
Speaker Change: And the question comes from the line of Nick <unk> from Morgan Stanley. Your line is open. Please ask your question.
Nick: Okay. Thank you very much and good morning, Bill and Diego two questions from me. The first is just back on tariffs and two questions.
Speaker Change: The first is I mean.
Nick: <unk>, obviously about to see.
Nick: Splits of your network income.
Nick: And a large chunk about is China to Hong Kong, and obviously sounds rossiya on China, Charlestown and things like that have you done any work to estimate how much that could be impacted or how much of that sort of flow is related to products that are sent to the U S and.
Nick: Destination, and therefore, what may happen to those lines, so a little bit more detail about just.
Nick: The other thing is you've pulled out on your credit quality slide.
Nick: <unk> percent exposure to Singapore.
Nick: Singapore, just less than 4% I'm sorry.
Nick: Just any reason why you've pulled that out as an area of particular concern are why you might be concerned.
Nick: And then finally just on well.
Nick: I Wonder if you could just give us any indication as to what's happening in terms of product mix and wealth and therefore, if we are seeing.
Nick: Some pressure on the sort of margins is essentially about you having wealth as a result of product mix changes.
Nick: <unk>.
Nick: Great. Thanks for the questions.
Nick: Some comments, Steve will have comments as well.
Nick: Keeping in mind that the income that we're showing on slide four.
Nick: Our income and that relates with the flow of goods and our role in the flow of goods to refinance and associated as well as the flow of money.
Nick: Sure.
Nick: A big chunk of China, Hong Kong for example.
Nick: It relates to the fact that we're the leading cross border payments Bank RMB between Hong Kong, and China, where they were the first foreign bank participant and ships the first bank to have.
Nick: The capabilities in both Hong Kong, and China offshore and onshore.
Nick: And in a very very major player in all things RMB related in terms of FX risk management rates trading et cetera.
Nick: Each of those quarters is influenced both by the flow of goods, but also bye bye bye financial close and obviously there is a correlation between goods and financial close over some period of time, but as the RMB continues to be.
Nick: Opened up as China continues to open up its capital markets, which is most certainly doing in response amongst many other things to the geopolitical tensions that are present.
Nick: The opportunities for us increase.
Nick: Independent of the flow of goods just to I think you already fully understand that but just to make it clear that there's a lot going on in terms of the flows.
Nick: We have no particular concerns we just note that the number of ASEAN countries.
Nick: We're at the top end of the list in terms of the tariffs that were set back on April 2nd now where that settles out we'll see.
Nick: As I mentioned earlier.
Nick: The fact that there are negotiations.
Nick: The reports are constructive.
Nick: Sure.
Speaker Change: Does that perhaps you don't need to be as concerned as we might be in any case, our exposure is very small.
Nick: Daryl.
Daryl: Couple of things.
Daryl: The very first question aside from the high level.
Daryl: Overview that bill has given it.
Daryl: The answer to your question is on page four in the sense that the the third of the building blocks of what we gave you of those $900 million of revenues, which is besides a very diversified and many of them have you started to business as usual type of activities that we do with people. So it's difficult to see them being impacted in particular by these particular situations, but the $400 million.
Daryl: That's the third block or these sorts of exactly two clients that are non U S corporate debt to do business with us elsewhere, but to have a lot of a lot of say, it's over 10% of their sales in the United States of America. So that's an attempt at thinking about those if you wish Nick second level effect.
Daryl: Of these changes.
Daryl: Nothing to add the two of them.
Daryl: First few days, that's prompted us to want.
Daryl: To put that in let me spend just a couple of minutes more on maybe on the Wednesday. So we.
Daryl: We you really shouldnt read anything from the return on average assets management slight decrease that we have had in Q1, because you will remember that we had a very large increase in assets under management due to the shift from custody to assets under management of a handful of clients.
Daryl: Our private bank during Q4.
Daryl: Temporarily and we had indicated that in Q4 that temporarily reduce the mix. It is not affected the margins are not affected there.
Daryl: Remember that the majority of our revenues without fluence come from the majority of our revenues in wealth management come from affluent.
Daryl: Those affluent customers are very long term savers very long term investors encore around the life insurance mortgages and investment products within the investment products. There has been a rotation more towards defensive product, but those do not carry a differential margin impact on us.
Speaker Change: Thank you Nick.
Daryl: Operator next question.
Daryl: Now we'll proceed with our next question.
Daryl: And the question comes from the line of Alistair Charles Schwab from Autonomous Research. Your line is open. Please ask your question.
Speaker Change: Good morning, Dan morning, Jay Congratulations on the results just wanted to quickly return to some of the asset quality lead indicators you touched on in the presentation you kind of.
Speaker Change: $950 million bump in stage III stuff the higher risk credits in Ci Biosimilars are looking at $800 million increase in the credit grade 12 could you just give a bit more color on what sort of sectors that are coming from what you think the outlook could be.
Speaker Change: Absolutely I think that's why I'm, so first of all I'm really.
Speaker Change: Really nothing to be seen in terms of.
Speaker Change: The stage two in the sense that those $800 million are really a handful.
Speaker Change: The CIB clients are there is no ECL consequence that and they are fully baked inside of our guidance.
Speaker Change: No issues there in terms of the I would first point out that in terms of the high risk that we have gone down.
Speaker Change: We have decreased.
Speaker Change: So that is part of the careful risk management in general and particular in the heightened uncertainty scenario that we are in and in terms of the CG 12.
Speaker Change: Down from the early alerts are it's a handful of clients.
Speaker Change: It'll be towards the Hong Kong commercial real estate and a few other exposures, but again without any meaningful concentration risk or anything else that makes us want to shut our shout out for them.
Alastair: Thank you Alastair.
Speaker Change: Operator next question.
Alastair: Yes of course.
Alastair: Do you have participants just as a reminder, if you would like to ask a question over the phone. Please press star one bond on the telephone keypad attentively you can submit your questions why the webcast.
And now we're going to take over next question.
Alastair: And the question comes from the line of.
Speaker Change: <unk> from Barclays. Your line is open please ask your question.
Speaker Change: Good morning, Bill Good morning, JJ. Thank you very much for the presentation of disclosures for the chance to ask a question.
Speaker Change: I had two questions. Please one was on the outlook for deposit.
Speaker Change: I was.
Speaker Change: Interested in.
Speaker Change: Your best guess.
Speaker Change: On.
Speaker Change: The outlook for deposits here Theres multiple crosscurrents, I guess washing through your business I think.
Speaker Change: We're seeing.
Speaker Change: Pretty decent liquidity formation.
Speaker Change: Of your key markets, most nights pretty places like Hong Kong.
Speaker Change: But I guess I'm also interested if you think your corporate customers appetite for liquidity you might be a bit different from.
Speaker Change: Yeah.
Speaker Change: So it's a complex question, but I was just interested in.
Speaker Change: What's your best guess was on the kind of outlook for deposit.
Speaker Change: Perhaps whether you think it could grow even if lending is subdued from here.
Speaker Change: Second question.
Speaker Change: As to call on capital.
Speaker Change: Is around.
Speaker Change: <unk> Pro cyclicality I Wonder this year is that something that youre anticipating from credit migration perhaps.
Speaker Change: If we.
Speaker Change: We do get some kind of.
Speaker Change: Crystallizing.
Speaker Change: Economic concerns across your footprint.
And related to that then are you inclined to operate any differently around capital. So could we expect you to operate.
Speaker Change: Of the top end of your target range through a period of economic uncertainty.
Speaker Change: Im thinking specifically in relation to.
Speaker Change: Buybacks I think most people are probably expecting it to come back to the market.
Speaker Change: Each one with a decent buyback I'm just interested in.
Speaker Change: Hi.
Speaker Change: It might affect your thinking there.
Speaker Change: Thanks, so much.
Speaker Change: That's great. Thanks, very much for the questions just a couple of reflections before I hand over to Diego.
Speaker Change: Of course, the market generally.
Speaker Change: I suppose like anyone are exposed to two downgrades that could come through as a result of either slower economic growth or the direct or indirect consequences of wherever we sent a lot of interest so we know that.
Speaker Change: Including some of the highest rated.
Speaker Change: Countries in the world are subject to downgrade and in addition, some of the lowest rated countries in our portfolio.
Speaker Change: Which were which have been improving.
Speaker Change: And we think will continue to improve nevertheless, there are scenarios, where there could be there could be hurt in terms of the tariff outcomes leading to downgrades.
Speaker Change: Is that pro cyclical or is that just through responsive to in terms of they are down.
Speaker Change: This reflects in the market I'm not sure but of course, there is some possibility of slower economic growth and adverse tariff outcomes impacting the.
Speaker Change: Ratings, and therefore globally, our ws that we carry.
Speaker Change: I pushed it to capital is unchanged, but we're very happy operating throughout the 13% to 14% range.
Speaker Change: Very comfortable at the moment, we can call it probably closer to peak uncertainty in the tariff debate.
Speaker Change: But also with some uncertainty around the economic equation.
Speaker Change: We're comfortable being towards the top end of that range.
Speaker Change: But our.
Speaker Change: Our appetite to operated throughout the full range doesn't change and we would expect that if the.
Speaker Change: This scenario, where the U S and other countries are making relatively constant nurses about resolving the.
Speaker Change: The open issues around tariffs and it doesn't mean, taking everything back to to the extent of school antebellum.
Speaker Change: But nevertheless.
Speaker Change: That level of certainty would give us even more confidence to operate within that full range, but Jacob.
Speaker Change: So nothing to add on the on the capital other than one maybe one small clarification, which is on the stress var metrics et cetera et cetera. We obviously are not seeing we're not seeing anything in particular, he has volatility spiked a bit at the very beginning of this so those are just a few data points I really don't think that I would see anything in particular also from that side that would lead me to <unk>.
Speaker Change: That there is any headwind that goes outside of our guidance.
Speaker Change: Nothing to add to that from human capital, Let me, let me maybe spend a few minutes on the outlook for the policy because as you say, it's a very broad ranging question, but let me give you a little bit of color that you can incorporate into your thinking.
Thanks first of all we had flagged that there has been movement in deposits towards the end a substantial movement assembled substantial movement in the CIB movement of deposits at the end of Q4 and those that had three bars, but you will have seen that our pass that to TD ratios are down by one or two person.
Tentage point very much within the expectations and the reason that the I am flagging it because I want to make sure that you always remember in.
Speaker Change: How you look at the debt.
Speaker Change: That has obviously has a rate component, but the important thing is that our time deposits in wealth or the entry points for a lot of our capital or so don't over read the swings of one or two percentage points in debt ratio in a quarter because they are very well within the manageability and they reflect oh.
Speaker Change: Dynamic that is ultimately very positive for us having said that I would think that caused that has the opportunity to continue to increase the bolsa in CIB and the in wealth and retail because among the body is affected that bill pointed out too there is one off.
Speaker Change: We received a flight to safety in times of a relatively high volatility, which in certain parts of our all parts of our network, we benefit from that in certain parts of our network, we benefit, particularly from that type of upper section and therefore as a consequence to your overarching question could the deposits continue to grow even if the.
Speaker Change: None that do not grow the answer is yes, but we will obviously manage it carefully because we want to make sure that whatever we collect that we then deploy into our high return on risk weighted assets, because it's been said that running an efficient and optimized balance sheet that you've got the heart of our business model and we've taken great care in.
Speaker Change: That direction, while obviously cultivate illiquid.
Speaker Change: Thank you for the questions.
Speaker Change: Operator next question.
Speaker Change: Yes of course, and now we're going to take the question from the line of control again from CIBC. Your line is open. Please ask your question.
Speaker Change: Well, thank you for taking my questions.
Speaker Change: My question is about our wealth management I noticed that the income growth from that business remain strong and also a quite strong new customer growth.
Speaker Change: Could you. Please elaborate on the reasons behind this and whether the drivers can be sustained in the future do you see the complex geopolitical environment is a headwind to this business or Tony Thank you.
Tony: So thanks for the question Kendra I think the headline.
Tony: The reasons are good underlying wealth accumulation across our markets.
Tony: With an increasing proportion of the <unk>.
Tony: Savings in our clients or prospective new clients are generating.
Tony: Being invested in diverse and global portfolios.
Tony: I think.
Tony: That we see as an extra golf courses.
Tony: The appetite for different types of.
Tony: Investment product.
Tony: Horizon Paul.
Tony: We've got a very diverse portfolio of offerings, including a meaningful bank assurance component, which has done very well.
Tony: And then a full range of fixed income equity public and private funds, which.
Tony: All of which have had performed reasonably well to the truth. So.
Tony: I think it is.
Tony: <unk> will trend then theres the particulars to US which is we've made very heavy investments, we're continuing to make heavy investments in quality and RMS and technology.
Tony: We continue to be open or open architecture, and we continue to be a very attractive distribution outlet for the world's best asset managers and that has positioned.
Tony: <unk> is an extremely good place to take market share.
Tony: Which we have done and will continue to do we think for for the industrial future because we're actually stepping up our investment in that area.
Tony: Are the geopolitical tensions that headwind or tailwind.
Tony: It's both.
Tony: Clearly during periods of certainly during a bear market and it's harder to make money.
Tony: Wealth clients tend to be less active.
Tony: Share prices are going down.
We've been encouraged by the start of volatility is that our clients have stayed very engaged and they stay very engaged with us.
Tony: And that's obviously a good sign.
Tony: We do have a diverse portfolio of products. So.
Tony: And in a period of stress and equity markets. For example, we would expect to rotation into other products that we offer.
Tony: But the flip side of his script as geopolitical tensions are evident our clients, whether they are coming out of Asia, or South Asia Middle East Africa et cetera.
Tony: Once.
Tony: A colony advisor and they want diversification in their portfolio.
Tony: Probably want that diversification internationally and that's exactly what we all hope so.
Tony: I can't say that in every scenario, it's good for quarter to quarter wealth management come back that would obviously not be the case, but I think.
The structural trends are very much in our favor and the geopolitical headwinds can be as much of a positive or negative depending on how it plays out.
Yes.
Speaker Change: Thank you very much thanks for taking my question.
Chris: We are now moving to all the final question today and it comes from the line of Chris <unk> from Goldman Sachs. Your line is open. Please ask your question good morning, everybody and thanks for taking my questions. Just two first on the modeling side.
Chris: This restructuring charge of $73 million in the quarter, how should we think about the phasing through the rest of the year and then perhaps just to check in on the balance between 25 and 26 and then secondly.
Chris: And a bit more broadly on client perspective, clearly obviously, we've talked about this a lot of elevated uncertainty on the macro side.
Chris: A little bit less out of it because in a couple of weeks ago, clearly so how that works into the quarter.
Chris: Just interested to hear how consistent is the mood or the feedback from your corporate clients in terms of how they're reacting to the situations. So if you think about all the conversations you've had with <unk> over the past few weeks is that a reasonably consistent.
Chris: Picture a message or are you starting to see some nuances emerge either by industry type or by geography. Thank you.
Chris: Let me take the first and dig it will come back and I know that's a recipe for growth, but I have also had some views on the second because we are both very actively involved externally.
Chris: I was actually in Asia during I got back yesterday.
Chris: Then throughout the region.
Chris: Before during and after the tariff news.
Chris: So sort of watching and spending a lot of time with clients with government officials regulators.
Chris: Et cetera.
Chris: And it's definitely involves since April so I think there was a lot of confusion well there was a lot of complacency I would say going into April 2nd So people knew something was coming but they will relax they were not changing their plans in any material way.
Chris: I think there was a big upsurge or focus on.
What the eventual trade settlement might look like.
Chris: The assumption most of there in many cases would be a need to step up investment in the United States.
Chris: I think those plans were being developed in any case.
Chris: Totally accelerating and I think we can expect to see a step up of investments in the US This obviously is a long term long term trend and it takes a long long time to play out.
Chris: And it's not new but it is happening and I think it will happen.
Chris: I assume a concrete part of the settlements that are reached.
Secondly, there has been for probably over the past seven years and focus on supply chain diversification and that has clearly accelerated and third.
Chris: Assumption that there will be various undertakings as part of these settlements to.
Chris: To reduce non tariff barriers and home markets and to find ways to to acquire more goods from United States.
Chris: And.
Chris: None of those are new issues, but I think theres, a new resolve on each of those fronts I'll say that each one of those as a.
Chris: As sort of opportunities for us.
Chris: Been very encouraged by that.
No.
Chris: Now as time has gone by I would say that the confusion has morphed into a reasonable conviction that there will be some decent outcomes decent doesn't mean zero tariffs.
Chris: It's something that's manageable and that can be worked around so.
Chris: That's.
Speaker Change: So that I think that kind of color you were looking for I hope, Chris Jacob I know, you've had similar conversations or others.
Speaker Change: Address the FMC question, then we'll wrap up.
Speaker Change: Very extensive view on all of the all of the aspects on question two so I'll be very quick on fit for growth yes.
Speaker Change: Yes, you should expect the spending to accelerate its a matter of phasing. It's a program that contains a ton of different projects that as you know and as a consequence, whether one folds one side or the other of the quarter Ken's weighing against those numbers so expect that.
Speaker Change: On your question on the $25 26, and no change it but we do monitor very carefully the way we spend is to ensure that we would spend this money very strategically.
Speaker Change: So the the phasing, albeit the night change slightly but there is.
Speaker Change: Nothing much to read that into it right and of course, we're still committed to the $12 3 billion.
Speaker Change: Aggregate expenses in 2026.
Speaker Change: Here, we are on time on budget. Thank you very much for for some great questions and engagement as always really appreciate the interest you have shown the support and.
Speaker Change: Look forward to it.
Speaker Change: Continuing with some good stories about how our cross border business is developing well our wealth management businesses throughout the world who are costs were under control coupled with good 8 billion plus with distributions what is.
Speaker Change: Is there not too long, but thank you again.
Speaker Change: Thank you.
Speaker Change: This.
Speaker Change: Today's conference call. Thank you for participating you may now all disconnect have a nice day.
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