Q4 2025 Standard Chartered PLC Earnings Call

Speaker #1: Good morning and good afternoon, everyone, and welcome to our full-year 2025 results call. I'm joined here in London by Pete Burrow, our interim Group CFO, and Manos Castello, our Global Head of Investor Relations.

Bill Winters: Good morning, and good afternoon, everyone, and welcome to our full year 2025 results call. I'm joined here in London by Pete Burrill, our Interim Group CFO, and Manus Costello, our Global Head of Investor Relations. We'll take you through our results and outlook before opening up for questions. 2025 was an extraordinary year by any measure. It tested the resilience of the global system and the relevance of institutions operating within it. It was a year shaped by heightened geopolitical tension, tariff announcements, and periods of significant financial market volatility across multiple asset classes. It was also a year that demonstrated something fundamental, that global trade, capital flows, and economic connectivity endure and even thrive, and that institutions built to support them responsibly and at scale, matter more than ever.

Speaker #1: We'll take you through our results and outlook before opening up for questions. 2025 was an extraordinary year by any measure. It tested the resilience of the global system and the relevance of institutions operating within it.

Speaker #1: It was a year shaped by heightened geopolitical tension, tariff announcements, and periods of significant financial market volatility across multiple asset classes. But it was also a year that demonstrated something fundamental: that global trade, capital flows, and economic connectivity endure and even thrive, and that institutions built to support them responsibly and at scale matter more than ever.

Speaker #1: Now, when I spoke to you at our first quarter results in the immediate aftermath of the tariff announcements, I said that we were entering that period of global volatility from a position of strength.

Bill Winters: Now, when I spoke to you at our Q1 results, in the immediate aftermath of the tariff announcements, I said that we were entering that period of global volatility from a position of strength. Our results for 2025 demonstrate exactly what that strength looks like in practice. Our underlying return on tangible equity for the year was 14.7%. This is not just a financial outcome, it's evidence of a strategy that's working and a franchise that's delivering with consistency. We delivered record annual income of $20.9 billion, up 8% year-on-year. That growth was very broad-based. Global Markets and Global Banking both achieved double-digit growth for the year. Our Wealth Business grew by 24%, supported by record net new money of $52 billion.

Speaker #1: Our results for 2025 demonstrate exactly what that strength looks like in practice. Our underlying return on tangible equity for the year was 14.7%. This is not just a financial outcome; it's evidence of a strategy that's working and a franchise that's delivering with consistency.

Speaker #1: We delivered record annual income of $20.9 billion, up 8% year-on-year. That growth was very broad-based. Global Markets and Global Banking both achieved double-digit growth for the year.

Speaker #1: Our wealth business grew by 24%, supported by record net new money of $52 billion. Importantly, this growth was delivered despite interest rate headwinds and a softer fourth quarter for episodic income in markets.

Bill Winters: Importantly, this growth was delivered despite interest rate headwinds and a softer Q4 for episodic income in markets. It speaks to the depth of our client relationships, the relevance of our capabilities, and our ability to deploy them precisely where our clients need us most. Whilst it's early days, we're encouraged by the start of 2026 across the engines of non-NII growth, even against what was a strong Q1 last year. Our strong capital position allows us to grow while continuing to deliver attractive returns to shareholders. Today, we're announcing a further share buyback of GBP 1.5 billion, which will start imminently. We're also proposing a full-year dividend per share, up 65% year-over-year. As you'd expect, we're stepping up our shareholder distributions while maintaining a full investment program intended to build on the strong momentum in our business.

Speaker #1: It speaks to the depth of our client relationships, the relevance of our capabilities, and our ability to deploy them precisely where our clients need us most.

Speaker #1: And whilst it's early days, we're encouraged by the start of 2026 across the engines of non-NII growth, even against what was a strong first quarter last year.

Speaker #1: Our strong capital position allows us to grow while continuing to deliver attractive returns to shareholders. Today, we're announcing a further share buyback of $1.5 billion, which will start imminently.

Speaker #1: We're also proposing a full-year dividend per share, up 65% year-on-year. And, as you'd expect, we're stepping up our shareholder distributions while maintaining a full investment program intended to build on the strong momentum in our business.

Speaker #1: The outcomes we delivered in 2025 mean that, across income growth, return on tangible equity, and shareholder distributions, we've achieved the objectives of our three-year plan—and we've done so a year earlier than initially guided.

Bill Winters: The outcomes we delivered in 2025 mean that across income growth, return on tangible equity, and shareholder distributions, we've achieved the objectives of our 3-year plan. We've done so a year earlier than initially guided. Our 2025 underlying return on tangible equity was well above the target we set ourselves for 2026. Income met our 2026 guidance a year early. We did this while achieving strong underlying positive income to cost JOS in both 2024 and 2025. We've returned significant value to our shareholders by announcing distributions exceeding the $8 billion target since February 2024. These results highlight our strong financial performance and the success of our strategy. As we have exceeded our 2024 to 2026 group targets already, we're introducing new guidance for 2026, which we'll set out later.

Speaker #1: Our 2025 underlying return on tangible equity was well above the target we set ourselves for 2026, and income met our 2026 guidance a year early.

Speaker #1: And we did this while achieving strong underlying positive income-to-cost jaws in both 2024 and 2025. We've returned significant value to our shareholders by announcing distributions exceeding the $8 billion target since February 2024.

Speaker #1: These results highlight our strong financial performance and the success of our strategy. As we have exceeded our 2024 to 2026 group targets already, we're introducing new guidance for 2026, which we'll set out later.

Speaker #1: Additionally, going forward, we'll be presenting our results on a reported basis, shifting away from underlying financials. This move has been in the pipeline for some time.

Bill Winters: Additionally, going forward, we'll be presenting our results on a reported basis, shifting away from underlying financials. This move has been in the pipeline for some time. We intend for this to provide ever more focus on a single set of financial outcomes. We believe it will provide a clearer and more consistent framework for both our financial disclosures and future guidance. Our performance is the result of sustained execution over a long period of time. It reflects long-term strategic choices, disciplined focus, and an increasingly high-performance culture that prioritizes collaboration and delivery across markets, products, and sectors. This line was only ever a milestone for us. Reaching it sooner is significant because it encourages us to pursue our ambitions with even greater determination. I want to thank our clients for the trust they place in us.

Speaker #1: We intend for this to provide ever more focus on a single set of financial outcomes. We believe it will provide a clearer and more consistent framework for both our financial disclosures and future guidance.

Speaker #1: Our performance is the result of sustained execution over a long period of time. It reflects long-term strategic choices, disciplined focus, and an increasingly high-performance culture that prioritizes collaboration and delivery across markets, products, and sectors.

Speaker #1: But this plan was only ever a milestone for us. Reaching it sooner is significant because it encourages us to pursue our ambitions with even greater determination.

Speaker #1: I want to thank our clients for the trust they place in us. I also want to thank our partners for working with us in increasingly integrated ways.

Bill Winters: I want to thank our partners for working with us in increasingly integrated ways. I want to thank our colleagues across the group for their professionalism, resilience, and commitment. These results are a direct reflection of their efforts. 2025 marks our 5th consecutive year of improvement in both underlying and statutory return on tangible equity. We've taken advantage of a generally supportive business environment, with shifts in trade and investment flows working in our favor, and growth remaining strong in most of our key markets. We've amplified these long-term trends by growing our franchise in a focused, disciplined, and responsible way, by managing costs and capital rigorously, and by communicating clearly and transparently with all of our stakeholders. I am committed to maintaining that focus so that we continue to deliver sustainably higher shareholder value over the long term.

Speaker #1: And I want to thank our colleagues across the Group for their professionalism, resilience, and commitment. These results are a direct reflection of their efforts.

Speaker #1: 2025 marks our fifth consecutive year of improvement in both underlying and statutory return on tangible equity. We've taken advantage of a generally supportive business environment, with shifts in trade and investment flows working in our favor, and growth remaining strong in most of our key markets.

Speaker #1: But we've amplified these long-term trends by growing our franchise in a focused, disciplined, and responsible way, by managing costs and capital rigorously, and by communicating clearly and transparently with all of our stakeholders.

Speaker #1: I am committed to maintaining that focus so that we continue to deliver sustainably higher shareholder value over the long term. At ARVET, in May, I and our team will set out our strategy and associated medium-term targets in more detail.

Bill Winters: At our event in May, I and our team will set out our strategy and associated medium-term targets in more detail. We'll explain how we see the evolution of the global economy and trading systems, as I set out in the annual report. We'll discuss how these themes affect us and how we intend to build on the momentum that we have created, how Standard Chartered is playing an increasingly distinctive and valuable role in the global financial system, and we are doing so profitably. We'll discuss how our footprint and connectivity, our expertise, and our differentiated capabilities position us well, not just to perform, but to lead in the environment ahead. Pete will now take you through the 2025 performance in more detail and the outlook for 2026.

Speaker #1: We'll explain how we see the evolution of the global economy and trading systems, as I set out in the annual report. We'll discuss how these themes affect us, and how we intend to build on the momentum that we have created; how Standard Chartered is playing an increasingly distinctive and valuable role in the global financial system, and we are doing so profitably.

Speaker #1: We'll discuss how our footprint and connectivity, our expertise, and our differentiated capabilities position us well not just to perform, but to lead. In the environment ahead, people will now take you through the 2025 performance in more detail and the outlook for 2026.

Speaker #1: I'll then return to discuss how we continue to support our clients across our business segments, after which Pete Mannis and I will be happy to take your questions.

Bill Winters: I'll return to discuss how we continue to support our clients across our business segments, after which Pete, Manus, and I will be happy to take your questions. Pete, over to you.

Speaker #1: Pete, over to you.

Speaker #2: Thanks, Bill. Good morning and good afternoon, everyone. I will now take you through our 2025 fourth quarter and full-year results. In my remarks, I will be comparing underlying performance year on year at constant currency, unless otherwise stated.

Peter Burrill: Thanks, Bill. Good morning and good afternoon, everyone. I will now take you through our 2025 Q4 and full year results. In my remarks, I will be comparing underlying performance year-on-year at constant currency, unless otherwise stated. Our full year 2025 income was $20.9 billion, up 6% or 8%, excluding notable items. The performance was primarily attributable to our growth drivers of wealth solutions, global markets, and global banking. These areas delivered strong results, underlying our ability to capture opportunities in our targeted business segments. Q4 income was broadly flat due to weaker global markets, which I will talk about in more detail on the CIB slide. On a full year basis, costs were up 4%, and we delivered 4% positive income to cost jaws.

Speaker #2: Our full-year 2025 income was $20.9 billion, up 6%, or 8% excluding notable items. The performance was primarily attributable to our growth drivers of Wealth Solutions, Global Markets, and Global Banking.

Speaker #2: These areas delivered strong results, underlying our ability to capture opportunities in our targeted business segments. Q4 income was broadly flat due to weaker global markets, which I will talk about in more detail on the CIB slide.

Speaker #2: On a full-year basis, costs were up 4%, and we delivered 4% positive income-to-cost jaws. Profit before tax for the year was up 18% to $7.9 billion, and our underlying return on tangible equity was 14.7%, including around 70 basis points of FEOCI gains from ventures.

Peter Burrill: Profit before tax for the year was up 18% to $7.9 billion, and our underlying return on tangible equity was 14.7%, including around 70 basis points of FEOCI gains from ventures. Our reported profit before tax was up 18% to $7 billion in 2025, with a statutory return on tangible equity of 11.9%. Our earnings per share increase of 37% reflects the strong underlying performance and ongoing reduction in share count. Now, let's look at the performance components in detail. Q4 NII came in slightly higher than expected and was up around $200 million quarter-on-quarter. This was primarily due to that movement of HIBOR during the quarter, where we benefited from both improved CASA pass-through rates and treasure-related timing differences.

Speaker #2: Our reported profit before tax was up 18% to $7 billion in 2025, with a statutory return on tangible equity of 11.9%. Our earnings per share increased 37%, reflecting the strong underlying performance and ongoing reduction in share count.

Speaker #2: Now let's look at the performance components in detail. Fourth quarter NII came in slightly higher than expected, and was up around $200 million quarter-on-quarter.

Speaker #2: This was primarily due to the movement of highward during the quarter, where we benefited from both improved CASA pass-through rates and Treasury-related timing differences.

Speaker #2: As a result, our full-year NII was $11.2 billion, up 1%, with a negative impact from rates in WRB portfolio actions, offset by volume growth and mix improvement.

Peter Burrill: As a result, our full year NII was $11.2 billion, up 1%, with a negative impact from rates and WRB portfolio actions, offset by volume growth and mix improvement. In 2026, we expect NII to be broadly flat year on year based on several factors. First, as mentioned, NII in Q4 was higher than anticipated due to HIBOR increases. This has already reversed in Q1. Second, we outperformed on pass-through rates during 2025, but we expect these to normalize over time. Third, our currency weighted average rate outlook indicates a 44 basis point reduction in 2026, and consequently, we anticipate a continued headwind due to movements in interest rates throughout the year. Lastly, the impact from WRB portfolio actions is expected to be around a 2% headwind to NII this year.

Speaker #2: In 2026, we expect NII to be broadly flat year-on-year based on several factors. First, as mentioned, NII in Q4 was higher than anticipated due to higher increases.

Speaker #2: This has already reversed in Q1. Second, we outperformed on pass-through rates during 2025, but we expect these to normalize over time. Third, our currency-weighted average rate outlook indicates a 44-basis-point reduction in 2026, and consequently, we anticipate a continued headwind due to movements in interest rates throughout the year.

Speaker #2: Lastly, the impact from WRB portfolio actions is expected to be around a 2% headwind to NII this year. These impacts will be mitigated by volume growth, but the pace and extent of volume growth remain uncertain.

Peter Burrill: These impacts will be mitigated by volume growth, but the pace and extent of volume growth remains uncertain. Moving on to non-NII. In 2025, our non-NII increased 13% year-over-year, or 17%, excluding notable items. This robust growth was primarily driven by the strong performance in wealth solutions, global markets, and global banking. In addition, the year's performance benefited from gains realized on the Solv transaction. I'll talk to the product's performance in more detail when I come to the business segments. Now, turning to expenses. Q4 operating expenses were higher quarter-over-quarter, driven by a number of factors. First, we continued to invest in our people and businesses. Second, we took some regulatory charges related to a pension code change in India, and a PRA rule allowing accelerated vesting of shares.

Speaker #2: Moving on to non-NII, in 2025, our non-NII increased 13% year on year, or 17% excluding notable items. This robust growth was primarily driven by the strong performance in Wealth Solutions, Global Markets, and Global Banking.

Speaker #2: In addition, the year's performance benefited from gains realized on the Solve transaction. I'll talk to the product's performance in more detail when I come to the business segments.

Speaker #2: Now, turning to expenses. Q4 operating expenses were higher quarter-on-quarter, driven by a number of factors. First, we continued to invest in our people and businesses.

Speaker #2: Second, we took some regulatory charges related to a pension code change in India, and a PRA rule allowing accelerated vesting of shares. Lastly, during the quarter, we had an increase due to the rise in our share price and the associated impact on deferred compensation costs.

Peter Burrill: Lastly, during the quarter, we had an increase due to the rise in our share price and the associated impact on deferred compensation costs. In some of our markets, regulatory restrictions, such as exchange controls, prevent us from settling deferred compensation in the form of shares. In such instances, we settle those awards in cash, and therefore, the material increase in the share price witnessed in 2025, and especially in the last two months of the year, impacted deferred compensation costs. As a result, full year 2025 operating expenses were up 4%, with the increase from business growth and inflation, partly offset by Fit for Growth savings. We delivered 4% positive income to cost jaws, excluding notable items, and our underlying cost income ratio improved 80 basis points to 59%.

Speaker #2: In some of our markets, regulatory restrictions, such as exchange controls, prevent us from settling deferred compensation in the form of shares. In such instances, we settle those awards in cash, and therefore the material increase in the share price witnessed in 2025, and especially in the last two months of the year, impacted deferred compensation costs.

Speaker #2: As a result, full-year 2025 operating expenses were up 4%, with the increase from business growth and inflation partly offset by fit-for-growth savings. We delivered 4% positive income-to-cost jaws, excluding notable items, and our underlying cost-income ratio improved 80 basis points to 59%.

Speaker #2: Our Fit-for-Growth program continued to progress, with over 300 initiatives driving simplification, standardization, and digitization. We have spent close to $700 million in cost-to-achieve, or CTA, since inception, and have achieved over $700 million in run-rate savings.

Peter Burrill: Our Fit for Growth program continued to progress with over 300 initiatives driving simplification, standardization, and digitization. We have spent close to $700 million in cost to achieve, or CTA, since its inception, and have achieved over $700 million in run rate savings. As we have been explicit in the past, we have remained disciplined on how we spend the CTA, ensuring that we deliver one-for-one return on investment in FFG and finish the program in 2026. As we enter the final year of the FFG program, and we reflect on the broader investment opportunities across our business, some of which were not visible at the outset of the program, we have revised our estimates of both CTA and savings from FFG.

Speaker #2: As we have been explicit in the past, we have remained disciplined on how we spend the CTA, ensuring that we deliver one-for-one return on investment in FFG and finish the program in 2026.

Speaker #2: As we entered the final year of the FFG program, and we reflect on the broader investment opportunities across our business—some of which were not visible at the outset of the program—we have revised our estimates of both CTA and savings from FFG.

Speaker #2: We now expect FFG savings and total CTA to be around $1.3 billion, rather than our initial expectation of $1.5 billion. As a reminder, from 2026, all financial results and guidance will be based on reported figures.

Peter Burrill: We now expect FFG savings and total CTA to be around $1.3 billion, rather than our initial expectation of $1.5 billion. As a reminder, from 2026, all financial results and guidance will be based on reported figures. However, to clarify how our costs will evolve this year, we have shown on this page that our 2026 underlying costs would have been $12.6 billion in constant currency, compared to the $12.3 billion in the previous plan. Two things drive the increase. Our business has demonstrated strong performance, consistently exceeding our established targets, including significantly positive income to cost jaws. That gives us confidence to invest into initiatives which will deliver both productivity and growth benefits in the years ahead, such as data infrastructure and AI enablement. This represents the majority of the difference.

Speaker #2: However, to clarify how our costs will evolve this year, we have shown on this page that our 2026 underlying costs would have been $12.6 billion at constant currency, compared to the $12.3 billion in the previous plan.

Speaker #2: Two things drive the increase. Our businesses demonstrated strong performance, consistently exceeding our established targets, including significantly positive income-to-cost jaws. That gives us confidence to invest into initiatives which will deliver both productivity and growth benefits in the years ahead, such as data infrastructure and AI enablement.

Speaker #2: This represents the majority of the difference. The remainder is due to higher performance-rated costs—for example, the need to pay our relationship managers for exceptional performance in Affluent.

Peter Burrill: The remainder is due to higher performance-rated costs. For example, the need to pay our relationship managers for exceptional performance in affluent. As we move toward a reported basis this year, we are now targeting costs to be broadly flat in 2026 at constant currency, which would mean around $13.3 billion. Credit impairment for 2025 was $676 million, up around $100 million, as 2024 included significant net recoveries in CIB. The level of impairment in WRB improved year-over-year, reflecting the impact of portfolio optimization actions, while CIB impairment remained benign at $4 million. Our overall loan loss rate of 19 basis points was broadly flat year-over-year. We expect this to normalize towards the historical through the cycle, 30 to 35 basis points over time.

Speaker #2: As we move toward a reported basis this year, we are now targeting costs to be broadly flat in 2026 at constant currency, which would mean around $13.3 billion.

Speaker #2: Credit impairment for 2025 was 676 million dollars, up around 100 million dollars as 2024 included significant net recoveries in CIB. The level of impairment in WRB improved year on year, reflecting the impact of portfolio optimization actions, while CIB impairment remained benign at $4 million dollars.

Speaker #2: Our overall loan loss rate of 19 basis points was broadly flat year-on-year. We expect this to normalize towards the historical through-the-cycle 30 to 35 basis points over time.

Speaker #2: Asset quality remained resilient in the face of a volatile environment, and our high-risk assets were down $1 billion quarter on quarter. The $1.5 billion reduction in early alerts was due to a combination of client upgrades, repayments, and a sovereign downgrade from early alerts into stage three.

Peter Burrill: Asset quality remained resilient in the face of a volatile environment, and our high-risk assets were down $1 billion quarter-on-quarter. The $1.5 billion reduction in early alerts was due to a combination of client upgrades, repayments, and a sovereign downgrade from early alerts into Stage 3. We continued to monitor our credit portfolio closely, and we are not seeing any significant signs of new stress emerging across the group. Moving on to the balance sheet. Underlying customer deposits were up 12% in the year, with growth in cost and term deposits across WRB and CIB. Turning now to capital. Risk-weighted assets were $258 billion, up 4% in 2025.

Speaker #2: We continued to monitor our credit portfolio closely, and we are not seeing any significant signs of new stress emerging across the Group. Moving on to the balance sheet.

Speaker #2: Underlying customer deposits were up 12% in the year, with growth in CASA and term deposits across WRB and CIB. Turning now to capital. Risk-weighted assets were $258 billion, up 4% in 2025.

Speaker #2: As previously guided, we took the annual increase in operational risk RWA in the fourth quarter, which we would usually have taken in the first quarter of the following year.

Peter Burrill: As previously guided, we took the annual increase in operational risk RWA in Q4, which we would usually have taken in Q1 of the following year. This has resulted in two increases in operational risk RWA in 2025. Going forward, this will be taken every Q4. We closed the year with a CET1 ratio of 14.1%, and as Bill mentioned, we are announcing a new $1.5 billion share buyback, which will take our pro forma CET1 ratio to 13.5%. Since the beginning of 2024, we have announced $9.1 billion of shareholder distributions, including the buyback and dividends announced today. This exceeds our three-year target of at least $8 billion ahead of schedule.

Speaker #2: This has resulted in two increases in operational risk RWA in 2025. Going forward, this will be taken every fourth quarter. We closed the year with a CET1 ratio of 14.1%, and as Bill mentioned, we are announcing a new $1.5 billion share buyback, which will take our pro forma CET1 ratio to 13.5%.

Speaker #2: Since the beginning of 2024, we have announced $9.1 billion of shareholder distributions, including the buyback and dividends announced today. This exceeds our three-year target of at least $8 billion ahead of schedule.

Speaker #2: On a per-share basis, we have increased our full-year dividend and tangible book value by 65% and 12%, respectively. Now, let's take a look at our business segments.

Peter Burrill: On a per-share basis, we have increased our full-year dividend and tangible book value by 65% and 12%, respectively. Let's take a look at our business segments. CIB income for the year was $12.4 billion, up 4%. Global banking was up 15%, driven by strong growth in both origination and distribution. The 7% decline in transaction services was a result of lower rates. Global markets was up 12%, as we delivered consistent growth in flow income above our long-term trajectory. Episodic income was a small negative in Q4 and down significantly from last year. This was due to the timing of large client deals and broad-based market movements across a range of asset classes, which impacted inventory held for client activity towards the end of the year.

Speaker #2: CIB income for the year was $12.4 billion, up 4%. Global Banking was up 15%, driven by strong growth in both origination and distribution.

Speaker #2: The 7% decline in Transaction Services was a result of lower rates. Global Markets was up 12%, as we delivered consistent growth and flow income above our long-term trajectory.

Speaker #2: Episodic income was a small negative in Q4, and down significantly from last year. This was due to the timing of large client deals and broad-based market movements across a range of asset classes, which impacted inventory held for client activity towards the end of the year.

Speaker #2: As we've noted in the past, episodic income is less predictable and can be volatile from quarter to quarter, but on a 12-month rolling basis, it continues to be within its historical range and remains a meaningful contributor to our global markets income.

Peter Burrill: As we've noted in the past, episodic income is less predictable and can be volatile from quarter-to-quarter, but on a 12-month rolling basis, it continues to be within its historical range and remains a meaningful contributor to our global markets income. Moving to WRB. 2025 income of $8.5 billion was up 6%, driven by consistent strong growth in wealth solutions, up 24%. During Q4, we generated $10 billion in affluent net new money. This contributed to a cumulative total of $52 billion in net new money for 2025, equivalent to 14% growth in affluent AUM, reflecting excellent momentum in the affluent segment. We onboarded 275,000 new-to-bank affluent clients in the year and uptiered over 300,000 individual clients across the continuum.

Speaker #2: Moving to WRB. 2025 income of $8.5 billion was up 6%, driven by consistent strong growth in wealth solutions, up 24%. During Q4, we generated $10 billion in affluent net new money.

Speaker #2: This contributed to a cumulative total of $52 billion in net new money for 2025, equivalent to 14% growth in affluent AUM, reflecting excellent momentum in the affluent segment.

Speaker #2: We onboarded 275,000 new-to-bank affluent clients in the year and up-tiered over 300,000 individual clients across the continuum. As I mentioned earlier, we will be making some changes to our financial disclosures, effective from the first quarter of 2026.

Peter Burrill: As I mentioned earlier, we'll be making some changes to our financial disclosures, effective from the Q1 2026. We will be moving away from presenting our financials on an underlying basis by allocating, restructuring, and other items from below the line to above the line. We are also going to report our digital banks within WRB, and SC Ventures will be reported within the Central and Other segment. We'll publish a data pack showing the representation of financial data on this basis prior to our Q1 results. To conclude, we expect 2026 year-on-year income growth to be around the bottom end of our historical 5% to 7% range at constant currency, with adjusted NII expected to be broadly flat. Our reported costs for 2026 are expected to be broadly flat at constant currency. We will no longer provide underlying cost disclosures.

Speaker #2: We will be moving away from presenting our financials on an underlying basis by allocating restructuring and other items from below the line to above the line.

Speaker #2: We are also going to report our digital banks within WRB, and SE Ventures will be reported within the Central and Other segment. We will publish a data pack showing the re-presentation of financial data on this basis prior to our Q1 results.

Speaker #2: So, to conclude, we expect 2026 year-on-year income growth to be around the bottom end of our historical 5% to 7% range at constant currency, with adjusted NII expected to be broadly flat.

Speaker #2: Our reported costs for 2026 are expected to be broadly flat at constant currency. We will no longer provide underlying cost disclosures, and we are now targeting a statutory return on tangible equity of greater than 12% in 2026.

Peter Burrill: We are now targeting a statutory return on tangible equity of greater than 12% in 2026. A medium-term financial framework will be provided at our investor event in May. With that, I will hand back to Bill to give you an update on our strategic progress. Over to you, Bill.

Speaker #2: A medium-term financial framework will be provided at our investor event in May. With that, I will hand back to Bill to give you an update on our strategic progress.

Speaker #2: Over to you, Bill.

Speaker #1: Thank you, Pete. First, let me talk about CIB. At Q1, we told you that our network business, which represents around 60% of our CIB income, is highly diversified, resilient, and agile.

Bill Winters: Thank you, Pete. First, let me talk about CIB. At Q1, we told you that our network business, which represents around 60% of our CIB income, is highly diversified, resilient, and agile, and that has continued to be the case. Our strength in providing network services in and around China, payments, FX, financing, et cetera, has been a key part of our outperformance as Chinese and international corporates diversify manufacturing and ship their supply chains. We often play a central role in those shifts, as demonstrated in our China corridors to markets across ASEAN, South Asia, and the Middle East and Africa. Trade and investment flows are also picking up pace as regions seek elements of self-sufficiency in search for more resilient middle power status.

Speaker #1: And that has continued to be the case. Our strength in providing network services in and around China—payments, FX, financing, etc.—has been a key part of our outperformance as Chinese and international corporates diversify manufacturing and shift their supply chains.

Speaker #1: We often play a central role in those shifts, as demonstrated in our China corridors to markets across ASEAN, South Asia, the Middle East, and Africa.

Speaker #1: Trade and investment flows are also picking up pace as regions seek elements of self-sufficiency, in search of more resilient middle power status. Regional and bilateral trade pacts in South Asia, the Middle East, Africa, and ASEAN will support growth in trade and investments across our footprint markets, playing to our core cross-border strengths.

Bill Winters: Regional and bilateral trade pacts in South Asia, the Middle East, Africa, and ASEAN will support growth in trade and investments across our footprint markets, playing to our core cross-border strengths. As you can see, our network income remains diversified by product. It's not just trade, and despite interest rate headwinds in transaction banking, our network business has continued to grow. We also have continued to see growth in income from financial institution clients, and we've made further progress towards our 60% medium-term target. The financial institutions client segment, which generally delivers a higher return on risk-weighted assets, remains an attractive area for Standard Chartered. We stand out in serving financial institution clients due to our differentiated products, extensive local market and global networks, and specialized capabilities in areas like security services, financial markets, and financing.

Speaker #1: Now, as you can see, our network income remains diversified by product. It's not just trade. And despite interest rate headwinds in transaction banking, our network business has continued to grow.

Speaker #1: We have also continued to see growth in income from financial institution clients, and we've made further progress towards our 60% medium-term target. The financial institutions client segment, which generally delivers a higher return on risk-weighted assets, remains an attractive area for Standard Chartered.

Speaker #1: We stand out in serving financial institution clients due to our differentiated products, extensive local market and global networks, and specialized capabilities in areas like security services, financial markets, and financing.

Speaker #1: These strengths enable us to meet the diverse needs of a wide range of clients, including banks and broker-dealers, investors, sponsors, insurers, and sovereign wealth funds.

Bill Winters: These strengths enable us to meet the diverse needs of a wide range of clients, including banks and broker-dealers, investors, sponsors, insurers, and sovereign wealth funds. Meanwhile, we've remained disciplined in managing resources within CIB to make sure that we're focusing on serving our top-tier clients and doing so more effectively. These are the ones where we can provide more value. In 2024, we spoke about how we were planning to exit around 3,000 clients by the end of 2025, and I can confirm that we've hit this target with minimal loss to income. Our focus on optimization does not end here, and we continue to manage our RWAs in order to maximize the returns for shareholders and invest to serve our client needs.

Speaker #1: Meanwhile, we've remained disciplined in managing resources within CIB, to make sure that we are focusing on serving our top-tier clients and doing so more effectively.

Speaker #1: These are the ones where we can provide more value. In 2024, we spoke about how we were planning to exit around $3,000 clients by the end of 2025, and I can confirm that we have hit this target with minimal loss to income.

Speaker #1: Our focus on optimization does not end here, and we continue to manage our RWAs in order to maximize the returns for shareholders and invest to serve our client needs.

Speaker #1: Now, if I can shift to our Wealth and Retail business, we announced just over a year ago that we were targeting $200 billion of net new money over five years.

Bill Winters: Now, if I can shift to our wealth and retail business, we announced just over a year ago that we were targeting $200 billion of net new money over 5 years. In the 1st year, we've been ahead of that pace, delivering $52 billion, which is equivalent to 14% growth of AUM and makes us the fastest-growing wealth manager in Asia. We also now rank as the number 3 wealth manager overall across Asia, with affluent AUM of $447 billion. Our wealth solutions income continues to grow strongly across asset classes. Our product innovation and advisory capabilities, including initiatives in AI, put us in a great position to capture market opportunities and cater to changing client preferences.

Speaker #1: In the first year, we've been ahead of that pace, delivering $52 billion, which is equivalent to 14% growth of AUM, and makes us the fastest-growing wealth manager in Asia.

Speaker #1: We also now rank as the number three wealth manager overall across Asia, with affluent AUM of $447 billion. Our wealth solutions income continues to grow strongly across asset classes.

Speaker #1: Our product innovation and advisory capabilities, including initiatives in AI, put us in a great position to capture market opportunities and cater to changing client preferences.

Speaker #1: The growth in wealth solutions, combined with the decisions we've made to exit single-product relationships and the entirety of our retail operations in certain markets, have helped us drive affluent to 70% of WRB income.

Bill Winters: The growth in wealth solutions, combined with the decisions we've made to exit single-product relationships and the entirety of our retail operations in certain markets, have helped us drive affluent to 70% of WRB income. This is great progress towards our 75% medium-term target. Turning to ventures, we have made strong progress across the digital banks. In 2025, Mox continued its strong growth trajectory, achieving a 15% year-on-year increase in customer base and reaching around 750,000 customers. Trust Bank also continued its momentum, with customer numbers up 15% year-on-year, reaching over 1 million customers and taking its share of the adult population of Singapore beyond 20%.

Speaker #1: This is great progress towards our 75% medium-term target. Turning to Ventures, we have made strong progress across the digital banks. In 2025, Mox continued its strong growth trajectory, achieving a 15% year-on-year increase in customer base, and reaching around 750,000 customers.

Speaker #1: TrustBank also continued its momentum, with customer numbers up 15% year-on-year, reaching over 1 million customers, and taking its share of the belt population of Singapore beyond 20%.

Speaker #1: Within our SE Ventures portfolio, we're building ecosystems in areas of the future of finance, including digital assets, tokenization, and blockchain settlements, as well as data and technology capabilities that will serve our bank and our clients well in future years.

Bill Winters: Within our SC Ventures portfolio, we're building ecosystems in areas of the future of finance, including digital assets, tokenization, and blockchain settlements, as well as data and technology capabilities that will serve our bank and our clients well in future years. We actively manage the portfolio, building ongoing momentum across a number of fronts. You'll recall that we had a successful merger of Solv India into Jumbotail in the first half of 2025. We've also seen unrealized gains, particularly from our stakes in Ripple and Toss, which have contributed around 70 basis points to our underlying ROTE in 2025. Now, as Pete mentioned earlier, this is the final quarter that we're reporting the venture segment separately.

Speaker #1: We actively manage the portfolio, building ongoing momentum across a number of fronts. You'll recall that we had a successful merger of Solve India into Jumbo Tail in the first half of 2025.

Speaker #1: We've also seen unrealized gains, particularly from our stakes in Ripple and Toss, which have contributed around 70 basis points to our underlying ROTE in 2025.

Speaker #1: Now, as Pete mentioned earlier, this is the final quarter that we're reporting the venture segment separately. We'll be reporting digital banks as a product within WRB, reflecting how they're managed within the group and the increasing synergy we see between the digital banks and the rest of our WRB business.

Bill Winters: We'll be reporting digital banks as a product within WRB, reflecting how they're managed within the group and the increasing synergy we see between the digital banks and the rest of our WRB business. Given the maturity of the portfolio of investments, SC Ventures will be reported as part of Central and Other going forward, but we'll continue to call out key investments, gains, and disposals as and when they occur. Now, if you only listen to the noise in the markets, you might think that sustainable and transition finance was going the way of the dodo. This could not be further from the truth. Our clients are sticking with their commitments, and our capabilities continue to improve. We've exceeded our income target of at least $1 billion in 2025 and see further growth from here.

Speaker #1: Given the maturity of the portfolio of investments, SE Ventures will be reported as part of Central and Other going forward. But we'll continue to call out key investments, gains, and disposals as and when they occur.

Speaker #1: Now, if you only listen to the noise in the markets, you might think that sustainable and transition finance was going the way of the dodo.

Speaker #1: This could not be further from the truth. Our clients are sticking with their commitments, and our capabilities continue to improve. We've exceeded our income target of at least $1 billion in 2025, and see further growth from here.

Speaker #1: With $157 billion mobilized in sustainable finance since the beginning of 2021, we're over halfway towards our commitment to mobilize $300 billion by 2030.

Bill Winters: With $157 billion mobilized in sustainable finance since the beginning of 2021, we're over halfway towards our commitment to mobilize $300 billion by 2030. Highlights from the year include our EUR 1 billion inaugural green senior bond. We're proud to be ranked first in the Global Bank Climate Adaptation Assessment 2025, ranking the world's 50 largest commercial banks on their adaptation maturity. Bottom line, we're committed to our sustainable finance agenda, seeking to do the right thing and earn good returns doing that. To conclude, 2025, including Q4, was very strong for us, and we're delighted with the outcome, even with some noise in the Q4.

Speaker #1: Highlights in the year include our €1 billion inaugural Green Senior Bond, and we're proud to be ranked first in the Global Bank Climate Adaptation Assessment Than 2025, ranking the world's 50 largest commercial banks on their adaptation maturity.

Speaker #1: Bottom line, we're committed to our sustainable finance agenda, seeking to do the right thing and earn good returns. Doing that.

Speaker #1: So, to conclude, 2025, including Q4, was very strong for us and we're delighted with the outcome. Even with some noise in the fourth quarter.

Speaker #1: We completed our three year plan in just two years , which speaks to our discipline , execution and momentum . We started the first quarter of 2026 strongly , particularly across our growth engines and CIB and RHB , where we see continued client activity and opportunity .

Bill Winters: We completed our 3-year plan in just 2 years, which speaks to our discipline, execution, and momentum. We've started the Q1 of 2026 strongly, particularly across our growth engines in CIB and WRB, where we see continued client activity and opportunity. We're announcing a new $1.5 billion share buyback and a 65% increase in full-year dividend per share. This is a clear signal of confidence in our performance today and in the strength of our outlook. We're targeting a statutory ROTE of over 12% in 2026. Before we move to questions, I want to lift the lens and look ahead a bit. As mentioned earlier and in the annual report, we see a number of major structural trends, long-term shifts that are reshaping global trade, capital flows, and growth. These are not short cycle opportunities.

Speaker #1: We're announcing a new $1.5 billion share buyback and a 65% increase in full-year dividend per share. This is a clear signal of confidence in our performance today and in the strength of our outlook.

Speaker #1: We're targeting a statutory ROE of over 12% in 2026 . Before we move to questions , I want to lift the lens and look ahead a bit As mentioned earlier and in the annual report , we see a number of major structural trends long term shifts that are reshaping global trade , capital flows and growth .

Speaker #1: These are not short-cycle opportunities. There are powerful forces that will play out over many years and will play directly to our strengths. We've already positioned against those trends and, importantly, we continue to invest in and sharpen our focus on our critical and relevant competitive advantages.

Bill Winters: They're powerful forces that will play out over many years and will play directly to our strengths. We've already positioned against those trends. Importantly, we continue to invest in and sharpen our focus on our critical and relevant competitive advantages. Our ambition is clear: to create an ever more distinctive, exciting and high-performing Standard Chartered, one that delivers growth across every dimension that matters for our clients, for our communities, for our top line, our bottom line, and of course, for our shareholders. We'll go into this in much greater detail in May, but the direction of travel is clear. The momentum is real, and we're building a business that is set up for sustained, high quality growth. With that, I'm going to hand you over to the operator, and Pete, Manus and I can take your questions.

Speaker #1: Our ambition is clear to create an ever more distinctive , exciting and high performing Standard Chartered , one that delivers growth across every dimension that matters for our clients , for our communities , for our top line , our bottom line , and of course , for our shareholders .

Speaker #1: We'll go into this in much greater detail in May , but the direction of travel is clear . The momentum is real , and we're building a business that is set up for sustained , high quality growth .

Speaker #1: And with that , I'm going to hand you over to the operator . And Pete and I can take your questions .

Speaker #2: Thank you . Dear participants , as a reminder , if you wish to ask a question , please press star one one on your telephone keypad and wait for your name to be announced .

Operator: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one one one again. Alternatively, you can submit your questions via the webcast. Please stand by. We'll compile the Q&A queue. This will take a few moments. Now we're going to take our first question on audio line, and it comes to line of Joseph Dickerson from Jefferies. Your line is open. Please ask your question.

Speaker #2: To withdraw a question , please press star one on one again . Alternatively , you can submit your questions via the webcast . Please stand by .

Speaker #2: We'll compile the SHARQ. This will take a few moments. And now we're going to take our first question on the audio line. And it comes to the line of Joseph Dickinson from Jefferies. Your line is open.

Speaker #2: Please ask your question

Speaker #3: Hi . Good morning . Thank you for taking my question Two , questions , if I may The first on the the investments that you're making in the business , I guess , is the 60,000 per quarter of accounts that you open in wealth .

Joseph Dickerson: Hi, good morning. Thank you for taking my question. Two questions, if I may. The first on the investments that you're making in the business. I guess, is the 60,000 per quarter of accounts that you open in wealth, is that capacity constrained? And if so, are some of the investments that you intend to make or are making designed to remove processing constraints and effectively increase account opening capacity on the wealth side? Secondly, if I can invite you to comment further on the start to the year on wealth, is this coming from the deposit side of the equation, or is the investments side of the equation, or both?

Speaker #3: Is that capacity constrained? And if so, are some of the investments that you intend to make, or are making, designed to remove processing constraints and effectively increase account opening?

Speaker #3: Capacity on the wealth side . And then secondly , on the if I can invite you to comment further on the on the start to the year on wealth , is this is this coming from the deposit side of the equation or the investments side of the equation , or both ?

Speaker #3: And I guess , is there do you have an outlook for this year on the on the deposit side , given there's a fair amount of maturities on the mainland that will be happening this year , that could send further flow your direction in Hong Kong ?

Joseph Dickerson: I guess, do you have an outlook for this year on the deposit side, given there's a fair amount of maturities on the mainland that will be happening this year that could send a further flow your direction in Hong Kong? Thanks.

Speaker #3: Thanks .

Bill Winters: Great. Thanks for the question, Joe. I'm going to start it off, and I'm going to pass to Manus for some color. First of all, it's a pleasure for me to be sitting here with Manus and Pete. Just call that out, because it's not the same as last time. First on the investment of the business. Of course, we're delivering the 60,000 of clients with the current capacity, so it's not something that we're experiencing any particular constraints. We're significantly adding both tech and RMs.

Speaker #1: Great . Thanks for the question , Joe . I'm going to start it off . I'm going to pass to Manus for some color .

Speaker #1: First of all, it's a pleasure for me to be sitting here with Madison. And I just want to call that out because it's not the same as last time.

Speaker #1: So first , on the investment in the business . Of course , we're delivering the 60 K of of clients with the current capacity .

Speaker #1: So it's not something that , that , that , that we're experiencing any , any particular constraints . We're significantly adding both tech and rmbs .

Speaker #1: That's the $1.5 billion program that we announced last year that we're well on the way to deploying. And I think we will continue to make those investments, which should not so much increase capacity.

Bill Winters: That's the $1.5 billion program that we announced last year, that we're well on the way to deploying, and I think we will continue to make those investments, which should not so much increase capacity, it will, of course, but remove bottlenecks along the way. We still have a largely RM-driven business model, and we're increasingly supporting those RMs with technologies, AI, and otherwise, which is going really well for us. We see the RMs as a critical part of the future and as they are an essential part of the present. You know, any capacity constraints that we've got are bottlenecks, we are going to remove. Anyway, it's not a constraint today.

Speaker #1: It will , of course , but remove bottlenecks along the way We still have a largely arm driven business model , and we're increasingly supporting those with technologies and AI and otherwise , which is going really well for us .

Speaker #1: But we we see the arms as a critical part of the future . And they are an essential part of the present . And , you know , any capacity that we've got or bottlenecks we are going to remove anyway .

Speaker #1: It's not a constraint today The start of the of the year in in wealth has been broad based . It's as we've seen , a reasonably predictable now migration from from deposit products into into wealth products .

Bill Winters: The start of the year in wealth has been broad-based. As we've seen, a reasonably predictable now migration from deposit products into wealth products. We're seeing that continue into the first part of this year. I won't get too much more detail, because obviously we're just, you know, 7 weeks in or something like that. The start of the year is both substantial in quantity but also quality. Manus?

Speaker #1: And we're seeing that continue into the first part of this year . I won't give too much too much more detail because obviously we're just , you know , seven weeks in or something like that .

Speaker #1: But the start of the year is both substantial in quantity, but also quality that matters.

Speaker #4: Thanks , Bill , and thanks for the question . Yeah , I'll note that in the fourth quarter , we actually delivered 72,000 new clients into into the affluent segment .

Manus Costello: Thanks, Bill. Thanks, Joe, for the question. I'll note that in Q4, we actually delivered 72,000 new clients into WRB, into the affluent segment. It was actually a very good end to the year, and that momentum has continued into Q1, as Bill said. I think if we look forward, you'll see that in Q4, we actually delivered a slightly higher mix of wealth versus deposits than we did in Q4 of last year. We have said that over time, we do think that we will continue to grow that wealth business as quickly as possible and likely ahead of the deposit piece. We're continuing that momentum.

Speaker #4: So it was actually a very good end to the year . And that momentum has continued into Q1 . As Bill said , I think if we look forward , you'll see that in the fourth quarter , we actually delivered a slightly higher mix of wealth versus deposits than we did in the fourth quarter of last year .

Speaker #4: And we have said that, over time, we do think that we will continue to grow that wealth business as quickly as possible.

Speaker #4: And likely ahead of the deposit piece . So we're continuing that momentum . It will change quarter by quarter . Obviously , but we're confident in how we ended last year and how we've started this year .

Manus Costello: It will change quarter by quarter, obviously, but we're confident in how we ended last year and how we started this year.

Speaker #3: Great. That's helpful. Thanks, both.

Joseph Dickerson: Great. That's helpful. Thanks, Bill.

Speaker #2: Thank you . Now we're going to take our next question . And the question comes line of Jason Napier from UBS . Your line is open .

Operator: Thank you. Now we're going to take our next question. The question comes line of Jason Napier from UBS. Your line is open. Please ask your question.

Speaker #2: Please ask a question .

Speaker #5: Good morning, Bill, Pete. And thanks for taking my questions. The first one is just on episodic income. Quite clearly, I think the fourth quarter print was disappointing relative to the bank's expectations, sort of as shared earlier in the fourth quarter.

Jason Napier: Good morning, Bill, Pete and Manus. Thanks for taking my questions. The first one, just on episodic income. Quite clearly, I think the Q4 print disappointing relative to the bank's expectations, sort of as shared earlier in the Q4. I wonder whether you can just provide additional color on what happened there and, you know, whether it actually means anything for the business model or for the approach going forward, what it says about the business as it's being conducted. Secondly, somewhat inevitably, I'm sorry, it's regretful, the move to stated costs in 2026 has prompted some questions from investors as to whether this gives you room to spend more in 2027.

Speaker #5: I wonder whether you could just provide additional color on what happened there, and, you know, whether it actually means anything for the business model or for the approach going forward.

Speaker #5: What it says about about the the business as , as it's being conducted . And then secondly , somewhat inevitably , and I'm sorry , it's a it's regretful , but the move to stated costs in 26 has prompted some questions from investors as to whether this gives you room to to spend more .

Speaker #5: In 27 . You know , if you if you in consensus have restructuring expenses going from 800 million to 227 , whether you are actually going to deliver an absolute decline in costs in 27 .

Jason Napier: You know, if you, in consensus, have restructuring expenses going from $800 million to $227 million, whether you are actually going to deliver an absolute decline in costs in 2027. Without putting too fine a point on it, I wonder whether you could just talk about, you know, without Fit for Growth continuing, whether it would be your expectation that costs could be flat or perhaps slightly down in 2027, in line with existing consensus. Thank you.

Speaker #5: So, without putting too fine a point on it, I wonder whether you could just talk about, you know, where that fit for growth.

Speaker #5: Continuing, would it be your expectation that costs could be flat or perhaps slightly down in '27, in line with existing consensus?

Speaker #5: Thank you

Speaker #1: Great . Thanks very much , Jason . I'll take the the the question and move to Pete for the for the cost question .

Bill Winters: Great. Thanks very much, Jason. I'll take the FM question and move to Pete for the cost question. As we said, a few times as we, as we sat up here, we do break out our income between episodic and flow. The flow, it tends to be transactions that are ordinary course coming from our, from our clients, frequently, but not exclusively, coming from our transaction banking franchise broadly. They tend to be operating flows. That flow income has been growing at a pretty steady 10%, ± just a little bit, as was the case in Q4 as well, you know, as we are starting off well in Q1 of 2026. The episodic is really comprised of two things.

Speaker #1: So as we said a few times , as we as we set up here , we do break out our income between episodic and flow .

Speaker #1: The , the flow is it tends to be transactions that are ordinary course coming from our from our clients frequently but not exclusively coming from our transaction banking franchise broadly .

Speaker #1: But they tend to be operating flows, and flow income has been growing at a pretty steady 10%, plus or minus just a little bit, as was the case in the fourth quarter as well.

Speaker #1: And as we are starting off well in in Q1 of 2026 , the episodic is really comprised of two things . First is , is large customer transactions .

Bill Winters: First is large customer transactions. The kind of things that we've called out are deal-contingent forwards, where there's a possibility for higher profitability, higher returns. There's also the possibility that you could lose money in some cases. The Q4 for us in client, in these large client transactions was weak. The first three quarters of the year were strong. The first half in particular, very strong. Overall, the episodic income for the year is good. The second component, though, of episodic, is gains or losses on risk positions. You know, we play a very important role in the markets in which we operate, in particular in the emerging markets with less developed underlying currency and hedging instruments.

Speaker #1: The kind of things that we've called out are deal contingent forwards where where there's a possibility for for higher profitability , higher returns .

Speaker #1: There's also the possibility that you could lose money in some cases. The fourth quarter for us in client, these large client transactions, was weak.

Speaker #1: The first three quarters of the year were strong. The first half in particular was very strong. So overall, the episodic income for the year is good.

Speaker #1: The the second component , though of of episodic is gains or losses on risk positions . So we play a very important role in the markets in which we operate , in particular in the in the emerging markets with less developed underlying currency and hedging instruments .

Speaker #1: And when we get delivered, customer transactions, we warehouse that risk until we can work it out over a period of time.

Bill Winters: When we get delivered customer transactions, we warehouse that risk until we can work it out over a period of time. While we had no large losses in Q4, we had no gains either, small losses, some small gains, it netted out to approximately zero, so, you know, minus $16 million. Change in business model? Absolutely not. We're super happy with the growth of our FM business. Good, strong growth year-on-year. Yeah, Q4 was weak, but this is not a quarter-to-quarter business. We've been building a franchise for the very long term. We have delivered that substantial increase, both in profitability levels, but both income and bottom line returns, it comes from being able to warehouse risk in these markets on behalf of our clients. That's what we're doing. We do it well.

Speaker #1: And while we had no large losses in Q4 , we had no gains either . And small losses , some small gains . It netted out to approximately zero .

Speaker #1: So, minus $16 million. Change in business model? Absolutely not. We're super happy with the growth of our FM business. Good.

Speaker #1: Strong growth year on year . Yeah . Fourth quarter was weak . But this is not a quarter to quarter business . We've been building a franchise for the very long term .

Speaker #1: We have delivered that substantial increase both in profitability levels, both income and bottom line returns. And it comes from being able to warehouse risk in these.

Speaker #1: On behalf of our clients . That's what we're doing . We do it well . 2025 was a good year . 2026 is starting off very well , both in flow income and episodic .

Bill Winters: 2025 was a good year. 2026 is starting off very well, both in flow income and episodic. Absolutely no discomfort with the business model. I can tell you, we have an A team. The financial markets team that we are running today is as good as any I've seen, and I've been doing this stuff one way or another for 3 decades. It is an excellent team. Very differentiated positions on our markets, doesn't mean you get it right on every trade in every market, but overall, we're super happy with 25. Pete, you want to take the cost question?

Speaker #1: Absolutely no discomfort with the business model . I can tell you we have a team . The financial markets team that we are running today is as good as any I've seen .

Speaker #1: And I've been doing this stuff one way or another for three decades . Is an excellent , excellent team , very differentiated positions in our markets .

Speaker #1: Doesn't mean you get it right on every trade , in every market . But overall , we're super happy with 25 . Pete , take the cost question .

Speaker #6: Thanks , Bill . Thanks , Jason , for the question . Thinking about cost maybe a couple a couple thoughts here . First , zooming back on the change from underlying to reported .

Peter Burrill: Thanks, Bill. Thanks, Jason, for the question. Thinking about cost, maybe a couple thoughts here. First, zooming back on the change from underlying to reported, and I know you, in the way you phrased your question, you're asking if it gives us more room. We're doing this because this is what shareholders have been asking for. We think it's a positive. The benefit of being able to focus on one set of numbers, both internally and externally, we think is a big benefit. What we tried to do is, on slide 11, give you the component parts, as you've pointed out, on how to think about costs. We provide kind of a one-time bridge on an old underlying basis, and you can see the moving pieces that we've got there.

Speaker #6: And I know you, and the way you phrased your question, you're asking if it gives us more room. We're doing this because this is what shareholders have been asking for.

Speaker #6: We think it's a positive . The benefit of being able to focus on one set of numbers , both internally and externally , we think is is is a big benefit .

Speaker #6: What we tried to do was on slide 11 , give you the component parts as you've pointed out , on how to think about costs .

Speaker #6: So we provide kind of a one-time bridge on an underlying basis. And you can see the moving pieces that we've got there.

Speaker #6: To your point, in '27. Well, I'm not going to comment on the specific direction of travel. You should think that yes, we will continue to invest in business growth as we see the opportunities in front of us that Bill's already spoken about.

Peter Burrill: To your point in 2027, while I'm not going to comment on specific direction of travel, you should think that, yes, we will continue to invest in business growth as we see the opportunities in front of us that Bill's already spoken about. The FFG CTA will go away. There's usually some level of other restructuring, which obviously we'll only call out if and when it's material. But I do want to leave two thoughts. We maintain focus on positive JOS. We maintain focus on improving our cost-income ratio, and we maintain focus on productivity. Don't read too much into the move to statutory. We think it's just an overall benefit and something our investors have been asking for.

Speaker #6: The FFG , CTA will go away . There's usually some level of other restructuring , which obviously will only call out if and when it's material , but I do want to leave two two thoughts .

Speaker #6: We maintain focused on positive jaws . We maintain focused on improving our cost income ratio , and we maintain focus on productivity . So don't read too much into the move to statutory .

Speaker #6: We think it's just an overall benefit and something our investors have been asking for , and we've tried to give you as much transparency as we can about how we think about costs .

Peter Burrill: We've tried to give you as much transparency as we can about how we think about costs, but any guidance beyond 2026, you're gonna have to wait for our discussions in May. Thanks.

Speaker #6: But any guidance beyond 2026 , you're going to have to wait for our discussions in May . Thanks .

Speaker #1: I just want to give a little color on this, on the accounting change, the presentation change. I'm going to find it.

Bill Winters: I just want to give a little color on this, on the accounting change, the presentation change. I'm gonna find it, we're gonna find it really useful to have a single set of numbers that our team focuses on. You know, the idea that there was the above the line, below the line, the suggestion, which was never the way we operated, but nevertheless, you wonder, is somebody thinking that below the line doesn't count, or I get a freebie, or it's not going to affect my bonus pool? Wasn't in my LTIP. That... In theory, I was incentivized to jam stuff below the line, as was the previous CFO. The new CFO will not be incentivized that way, because we've just got a single measure. It is above the line. Everything's above the line.

Speaker #1: We're going to find it really useful to have a single set of numbers that our team focuses on . And the idea that there was above the line , below the line , you know , the suggestion , which was never the way we operated , but nevertheless , you wonder , is somebody thinking that below the line doesn't count or I get a freebie or it's not going to affect my bonus pool wasn't in my ltip that that .

Speaker #1: So in theory , I was incentivized to jam stuff below the line , as was the previous CFO . The new CFO will not be incentivized that way , because we've just got a single measure .

Speaker #1: It is above the line . Everything's above the line . I just think we're going to get focus . And of course , that's what you shareholders , analysts have been encouraging us to do as well .

Bill Winters: I just think we're gonna get focus, and of course, that's what you shareholders, analysts have been encouraging us to do as well. I'm glad that we got there. On Fit for Growth as well, I want to say, yeah, that program was a success, right? I mean, we've deployed GBP 1.3 billion of capital in an accelerated way. Extremely rigorous at the outset in terms of defining the benefit cases, and extremely rigorous in terms of tracking whether those benefits are coming through. Two years into the program, I think we all looked at that and said, Yeah, first of all, we constrained ourselves in terms of the productivity investments that we're making around a particular set of program guidelines.

Speaker #1: So I'm glad that we got there. And on Fit for Growth as well, I want to say that program was a success.

Speaker #1: I mean, we've deployed $1.3 billion of capital in an accelerated way, extremely rigorous at the outset in terms of defining the benefit cases.

Speaker #1: And extremely rigorous in terms of tracking whether those benefits are coming through . Two years into the program , I think we all looked at that and said , yeah , first of all , we constrained ourselves in terms of the productivity investments that we're making around a particular set of program guidelines .

Speaker #1: We don't need to have those guardrails in place anymore. We do need to internalize completely that discipline in terms of the way that we both measure.

Bill Winters: We don't need to have that, those guardrails in place anymore." We do need to internalize completely that discipline, in terms of the way that we, both measure and then track our investments. I think that we can safely say that that is now BAU for us. As Pete said, the productivity gains that we've generated through the Fit for Growth program, we would expect to generate in an accelerating way with future investments into our business. With that, we'll go back to the operator for the next question.

Speaker #1: And then track our investments . And I think that we can safely say that that is now BAU for us . So , as Pete said , the productivity gains that we've generated through the fit for growth program , we would expect to generate in an accelerating way with future investments into our business .

Speaker #1: But with that, we'll go back to the operator for the next question.

Speaker #2: Yes, of course. And now we're going to take our next question, and it comes from the line of Andrew Coombs from Citi. Line is open.

Operator: Yes, of course. Now we'll go and take our next question. It comes the line of Andrew Coombs from Citigroup. Your line is open. Please ask your question.

Speaker #2: Please ask a question

Andrew Coombs: Morning. If I could just start with net interest income. You talk about timing benefit in treasury income and how also the move in the HIBOR temporarily improved your pass-through metrics. Perhaps you can just elaborate there on the magnitude of the temporary benefit across both factors. Linked to that, are you kind of alluding to the fact that Q4 is not an appropriate jumping off point from which we should extrapolate, we should be more thinking Q3 rather than Q4? The second question is the more specific one. I was slightly surprised that you called out Ripple and Toss as being a 70 basis points benefit. I think previously you talked about GBP 72 million unrealized gain on that in the first half.

Speaker #7: Morning. So I’ll start with net interest income. You talk about timing benefit in treasury income, and how also the move in HIBOR temporarily improved your pass-through metrics.

Speaker #7: Perhaps you can just elaborate . There on the magnitude of the temporary benefit across both factors and link to that . Are you kind of alluding to the fact that Q4 is not an appropriate jumping off point from which we should extrapolate ?

Speaker #7: We should be more thinking . Q3 rather than Q4 ? And then the second question , just a more specific one . I was slightly surprised that you called out ripple and Toss as being a 70 basis points benefit .

Speaker #7: I think previously you talked about 72 million unrealized gain on that in the first half . So can you just help us how you get to the 70 basis points ?

Andrew Coombs: Can you just help us how you get to the 70 basis points? Thank you.

Speaker #7: Thank you .

Speaker #1: Hey great Andy . Thanks . I'm going to turn to to for both of those a couple of headline comments for me . First is the we're really quite happy that the combination of assertive pass through rate management and volume growth has allowed us to keep our NII in the zone of flat , including 26 guidance , despite some obvious headwinds that we consider that to be a good outcome .

Bill Winters: Hey, great, Andy. Thanks. I'm going to turn to Manus for both of those. Just a couple of headline comments from me. First is, we're really quite happy that the combination of the sort of pass-through rate management and volume growth has allowed us to keep our NII in the zone of flat, including 26 guidance, despite some obvious headwinds. That we consider that to be a good outcome. Second, the, of course, the 70 basis point ROT benefit of Ripple and Toss is part of the 14.7 percent ROT outturn, which is a really good number as far as we're concerned. Yeah, I mean, we want to call out anything that's specific. As we get into...

Speaker #1: And second , the the of course , the 70 basis point rate benefit of ripple and toss is part of the 14.7 , 14.7% ROE outturn , which is a really good number as far as as far as we're concerned .

Speaker #1: But yeah , I mean , we want to call out anything that's specific . And as we get into I know this wasn't your question , but as we get into the separation of what the venture segment into RB for the for the digital bank stocks and trust and the central and other for the rest of SC ventures , we will continue to call out these kinds of things so that you get the same color that you're getting now , while it's separately reported .

Bill Winters: I know this wasn't your question, but as we get into the separation of what the venture segment into WRB for the digital banks, Mox and Trust Bank, and the central and other for the rest of SC Ventures, we will continue to call out these kinds of things so that you get the same color that you're getting now while it's separately reported. Manus, please.

Speaker #1: But but please .

Speaker #4: Thanks , Bill . Yeah . On the NII move and the impact of highball , you should assume that the majority of the increase quarter on quarter was the result of that highball move .

Manus Costello: Thanks, Bill. Yeah, on the NII move, and the impact of high ball, you should assume that the majority of the increase quarter-on-quarter was the result of that high ball move. It was split between treasury, as you point out, where there were some timing differences between repricing of liabilities and assets, and some of it came through in retail within our deposit and mortgages line, as we delivered strong PTRs in that quarter. As you think about where we go to 26, we're using 2025 as a full year as the base, because there were a number of different moves in high during the course of 2025 in different directions. Taking any given quarter as a jump-off point, certainly Q4 would not be the right approach.

Speaker #4: It was split between Treasury, as you point out, where there were some timing differences between repricing of liabilities and assets. And some of it came through in Retail within our deposit.

Speaker #4: And mortgages line . As we delivered strong Peters in that quarter . As you think about where we go to 26 , we're using 2025 as a full year as the base because there were a number of different moves in highball during the course of 2025 , in different directions .

Speaker #4: So taking any given quarter as a jump off point , certainly the fourth quarter would not be the right approach , which is why when you think about how to roll forward NII using our guidance that we provided for you , you should really take the full year 25 and then apply the different metrics that we've given you there .

Manus Costello: Which is why when you think about how to roll forward NII, using our guidance that we've provided for you, you should really take the full year 2025, and then apply the different metrics that we've given you there. Hopefully that gives you a bit more color, Andy.

Speaker #4: So hopefully that gives you a bit more color. Andy.

Speaker #1: Do you want to comment on the 70 basis points from Ripple and Toss?

Bill Winters: Do you want to comment on the 70 basis points from Ripple and Toss?

Manus Costello: It's included within the way that we report the underlying ROT, as we've stated before in the past. It is not included in the statutory ROT in the way that we talk about it. Clearly, we will continue to call out any gains that we have in the future, but it's not included in the measure of statutory ROT that we put in for 2025 or that we're guiding to in 2026.

Speaker #4: It is included within the way that we report the underlying RoCE. As we've stated before, in the past, it is not included in the statutory RoCE in the way that we talk about it.

Speaker #4: And clearly, we will continue to call out any gains that we have in the future. But it's not included in the measure of statutory royalty that we put in for '25 or that we're guiding to in '26.

Bill Winters: Maybe it's worth noting that while Ripple has observable market prices, we're not fully marked to the last transaction. We form a judgment based on a combination of broker quotes, actual traded volumes in that company, and we have positioned historically, conservatively, against whatever the last price is. Obviously, cryptocurrencies and XRP in particular, have dropped quite a bit since the last valuation. We still think we're appropriately valued at this point. Toss is a private company, Toss Bank, in which we have, you know, we helped create that bank in Korea. It's an outstanding bank. It does have a peer that's public, which is KakaoBank, yeah, but Toss Bank is performing extremely well. Again, very little observable volume in terms of share transactions.

Speaker #1: Maybe it's worth noting that that while ripple has observable market prices , we're not fully marked to the last transaction . We form a judgment based on a combination of broker quotes , actual traded volumes in that company , and we have positioned historically conservatively against whatever the last price is .

Speaker #1: Obviously, cryptocurrencies, and XRP in particular, have dropped quite a bit since the last valuation. We still think we're appropriately valued at this point.

Speaker #1: Toss is a private company; Toss Bank, in which we have—we helped create that bank in Korea. It's an outstanding bank.

Speaker #1: It does have a peer that's public , which is Kakao Bank . And but Bank is performing extremely well . And again , very little observable volume in terms of of of of share share transactions .

Speaker #1: So these are both judgment calls. I think you've come to understand that we're quite conservative in terms of the way that we assess these things, where there's judgment required.

Bill Winters: These are, these are both judgment calls. I think you've come to understand that we're quite conservative in terms of the way that we assess these things, where there's judgment required.

Speaker #2: Thank you. And now we're going to take our next question. The question comes from the line of Perlman from Bank of America.

Operator: Thank you. Now we're going to take our next question. The question comes the line of Perlie Mong from Bank of America. Your line is open, please ask your question.

Speaker #2: Your line is open. Please ask a question.

Speaker #8: Hello. Good morning. I'm just trying to understand the guidance a little bit better. So the income guidance is at the bottom end of the 5 to 7% range, I suppose.

Andrew Coombs: Hello, good morning. I'm just trying to understand the guidance a little bit better. The income guidance is bottom end of the 5% to 7% range. I suppose firstly, what would make it higher versus lower? Within that, because NII is relatively flat in the year in 2026, and that would imply that Non-Interest Income is probably double-digit, and obviously with the sale of India in 2025. If you strip that out, it's probably going closer to 14%, 15%. I would just love to hear about how you're thinking about the different business lines. Episodic, a little bit weaker in Q4, but slow income is still up 15%. Would you expect something similar?

Speaker #8: Firstly, what would make it higher versus lower? And then within that, because we're near relatively flat in the year in '26, that would imply that non-interest income is probably double digit.

Speaker #8: And obviously, we'll solve India in '25. So if you strip that out, it's probably going closer to 1,415%. And I would just love to hear about how you're thinking about the different business lines.

Speaker #8: So episodic clearly a bit weaker in Q4. But flow, flow income is obviously percent. So would you expect something similar? Is it 15% across?

Andrew Coombs: Is it 15% across the majority of the main business lines, or are you expecting something closer to, say, 20% for wealth, given your comment on how strong the front-end flows are, and maybe a little more conservative on banking and markets, just because of the natural volatility in those lines? That's number one, and then number two, just quickly on distribution. Dividend is one of the big beats of the day, and is now looking at about 30% payout ratio to reported ETF. Is that roughly right? Would you expect that to be something that you would continue doing, and do more dividends versus buyback?

Speaker #8: You know , the majority of the main business lines , or are you expecting something closer to say , 20% for wealth , given your comments on how strong the the front end flows are and maybe a little bit more conservative on on banking and markets just because of the natural volatility in both lines ?

Speaker #8: So that's number one. And number two, just quickly on distributions. Dividend is one of the big beats of the day.

Speaker #8: And it's now looking at about 30% payout ratio to reported EPs . Is that is that roughly right . Is that what you expect that to be something that you would you would continue doing and do more dividends versus buyback ?

Speaker #1: A great thanks for the question . For some reason , your your audio quality was quite poor . So I'm not sure we got everything correct .

Bill Winters: Great. Perlie, thanks for the question. For some reason, your audio quality was quite poor, so I'm not sure we got everything correct. I'll try to repeat some of the questions, 'cause I'm not sure that others on the line could hear either. I think your first question was on guidance. I'm gonna turn it to Manus in a moment. We're at the lower end of the 5% to 7% range. You note, with NII roughly flat, that must mean double-digit growth in the non-NII. That is mathematically correct. Of course, that's what we've been doing for some time, is really strong double-digit growth in non-NII.

Speaker #1: I'll try to repeat some of the questions, because I'm not sure that others on the line could hear either. I think your first question was on guidance.

Speaker #1: I'm going to turn it to to madness in a moment . We're at the lower end of the 5 to 7% range . You note with NII , roughly flat , that must mean double digit growth in in the Nonii .

Speaker #1: That is mathematically correct . And of course , that's what we've been doing for for some time is is really strong double digit growth in Nonii and maybe to one of your subsequent questions .

Bill Winters: Maybe to one of your subsequent questions, yes, the early part of the year also supports the early part of 2026, supports that trend, and we're extremely happy with that progress. You meant... I mean, I'll go to Manus. Just quickly running through the questions, is, your second was around episodic, which was weaker in Q4. For sure, I commented on that earlier. I'm not sure I mentioned or repeated what we said in the past, which is that the episodic will tend to vary between 0% of income, where we came out in Q4, and 50%. Was up by $16 million, at the bottom end, it was 0, because obviously we lost a little bit of money.

Speaker #1: Yes . The early part of the year also supports the early part of 26 , supports that that trend . And we're extremely happy with that progress .

Speaker #1: I'll go to just quickly running through the questions . Your second was around episodic , which was weaker in Q4 for sure . I commented on that earlier .

Speaker #1: I'm not sure I mentioned or repeated what what we've said in the past , which is that the episodic will tend to to vary between 0% of income , where we come out in Q4 and and 50% .

Speaker #1: I was off by $16 million at the bottom end; it was zero because, obviously, we lost a little bit of money. Maybe we'll be off up by $16 million in some future quarter.

Bill Winters: Maybe we'll be off, up by GBP 16 million in some future quarter, I don't know, at the top end. It is volatile. It's a decreasing percentage of our overall FM income. You can see from page 29 in the deck, the steady progression, this sort of 10% compound rate in flow income. Not quite a straight line, but pretty close, with the episodic on a rolling 12-month basis being more volatile. A shrinking percentage, but still a meaningful contributor to our business, extremely important for facilitating customer flows. Yeah, we're very happy with the overall mix.

Speaker #1: I don't know , at the top end , but the but it is volatile . But it's it's a it's a decreasing percentage of our overall income .

Speaker #1: And you can see from page 29 in the deck , the steady progression this sort of 10% compound rate in flow income , not quite a straight line , but pretty close with the episodic on a rolling 12 month basis being being more volatile .

Speaker #1: A shrinking percentage, but still a meaningful contributor to our business and extremely important for facilitating customer flows. So we're very happy with the overall mix.

Speaker #1: And then

Perlie Mong: Yeah, sorry about that. Can you hear me better now? I don't know what happened with my headset.

Speaker #8: Can you hear me better now? I don't know what happened with my headset.

Speaker #1: We can hear you better now.

Bill Winters: We can hear you better now?

Perlie Mong: Yeah. No, I was just gonna say, with implied Non-Interest Income looking to be up maybe 15% if you exclude South India, where is that gonna come from? Is it more wealth versus more markets and banking? Episodic was a bit weaker, but obviously flows are very strong, still about +15% year-on-year. Are we thinking about maybe 15% across markets as well as wealth, or are we going to see a bit more from wealth, maybe closer to 20%, and maybe a little bit less on markets, given the natural volatility in that business?

Speaker #8: Sorry , I was just going to say with implied non-interest income , looking to be up maybe 15% if you exclude South India , where is that going to come from ?

Speaker #8: Is it more Wealth versus more Markets and Banking? Episodic was a bit weaker, but obviously flows are still very strong—still about plus 15% year on year.

Speaker #8: So are we thinking about maybe 15% across markets as well as wealth . Or are we going to see a bit more from wealth , maybe closer to 20% and maybe a little bit less on markets , given the volatility in that business ?

Speaker #1: Well, I'm going to let you take the detail of the question. I think you're right in terms of the sources of growth.

Bill Winters: Well, I'm going to let Manus take the details of the question. I think you're right in terms of the sources of growth. I mean, the good news is, in 2025, wealth, banking, financial markets, and key elements of transaction banking, especially when you strip out the interest rates impact, we're all firing. In fact, our bank is firing on all strategic cylinders. While we had a weak Q4 in episodic income, flow is firing across the board, and financial markets year-on-year, for the full year is very strong. That has continued into 2026. Manus, you fill in the gaps?

Speaker #1: The good news is in 2025 , wealth banking , financial markets and and key elements of transaction banking , especially when you when you strip out the interest rate impact , we're all firing and you know in fact , our bank is firing on all cylinders .

Speaker #1: And while we had a weak fourth quarter in episodic income, flow is firing across the board, and financial markets year on year for the full year is very strong.

Speaker #1: So and that that has continued into 20 into 26 . As you fill in the gaps

Manus Costello: Yeah, to carry on from where you left off, though, I mean, we had a very strong year in 2025. Wealth was up 24%, markets was up 12%, banking was up 15%. As you know, the majority of those businesses is Non-Interest Income, we're saying that we started the year well. What we're really trying to say is across all of those three engines, as Bill said, they're all firing, they're all doing well, we're comfortable of broad-based growth across all of them. What you should not take away is that there's anything hidden or any kind of individual element which is driving that guidance for 2026.

Speaker #4: To carry on from where you left off though , I mean , we had a very strong year in 2025 . Wealth was up 24% , markets was up 12% , banking was up 15% .

Speaker #4: As you know , the majority of those businesses is non-interest income . And we're saying that we started the year well , but we're really trying to say is across all of those three engines , as Bill said , they're all firing .

Speaker #4: They're all doing well. And we're comfortable with broad-based growth across all of them. What you should not take away is that there's anything hidden or any kind of individual element which is driving that guidance for 2026.

Speaker #4: It just speaks, really, to our confidence in how we ended last year, how we're coming into this year, and how we're set up for the business going forwards.

Manus Costello: It just speaks really to our confidence, in how we ended last year and how we're coming into this year and how we're set up for the business, going forwards.

Speaker #8: Understood. And my second question was just on distribution because the dividend was a lot higher than expected, about a 30% payout ratio. Is that something that you would expect to continue?

Perlie Mong: Understood. My second question was just on distribution, because dividend was a lot higher than expected, about 30% payout ratio. Is that something that you would expect to continue? Given, you know, share price has done very well in the last 12, 18 months, would you expect to do more dividends versus buyback, or how are you thinking about distributions?

Speaker #8: And given , you know , share price has done very well in the last 12 , 18 months , would you expect to do more dividends versus buyback , or how are you thinking about distributions ?

Speaker #1: Look, I'll thank you again. I'll start on this one and let me finish up. Obviously, we've got quite a healthy buyback as well.

Bill Winters: Okay, thanks again, Pearly. I'll start on this and let Manus finish up. Obviously, we've got quite a healthy buyback as well, at $1.5 billion. I think it's a little bit higher than what the market was probably expecting, with a substantial increase in the dividend. Now, we think getting to something like a 30% payout ratio in this environment makes sense, and we have every intention of continuing to grow our earnings and continuing to grow our dividend. We'll give a little bit more color on the way we're thinking about capital allocation in the capital markets event in May.

Speaker #1: $1.5 billion—I think that's a little bit higher than what the market was expecting, with the substantial increase in the dividend. And we think we're getting to something like a 30% payout ratio in this environment.

Speaker #1: Makes sense. And we have every intention of continuing to grow our earnings and continuing to grow our dividend. We'll give a little bit more color on the way.

Speaker #1: We're thinking about capital allocation in the capital markets event in May , but clearly we've had a substantial increase in dividends , which I think positions us well from a number of in a number of regards , together with with a big , big , substantial share buyback .

Bill Winters: Clearly, we've had a substantial increase in dividends, which I think positions us well in a number of regards, together with a big, substantial share buyback, after completing a very robust aggregate investment program in our business. The organic investments have been at record levels for our bank. Yeah, we're really not scrimping on anything at the moment. Manus, anything to add?

Speaker #1: After completing a very robust aggregate investment program in our business, the organic investments have been at record levels for our bank. So we're really not scrimping on anything at the moment.

Speaker #1: But anything to add .

Manus Costello: Just, as you say, we'll talk about it in more detail in May, obviously, about our, our capital allocation priority, Pearly. I think you should just see the increase that we've delivered so far in, in total distributions, both dividends and buybacks, as evidence of our confidence in our ability to generate capital and as evidence of our discipline in distributing that capital when we're not using it. We're a business that can deliver strong top-line growth and distribute plenty of capital at the same time, and we'll update you more on that in May.

Speaker #4: Just as you say , we'll talk about it in more detail in May . Obviously , about our capital allocation priority . Pearly , I think you should just see the increase that we've delivered so far in total distributions , both dividends and buybacks , as evidence of our confidence in our ability to generate capital and as evidence of our discipline in distributing that capital .

Speaker #4: When we're not using it, we're a business that can deliver strong top-line growth and distribute plenty of capital at the same time.

Speaker #4: And we'll update you more on that in May.

Speaker #8: Thank you .

Perlie Mong: Thank you.

Speaker #2: Thank you so much. Now we're going to take our next question, and the question comes from Omar Raqqa from Barclays. Your line is open.

Operator: Thank you so much. Now we're going to take our next question. The question comes in over from Aman Rakkar from Barclays. Your line is open. Please ask your question.

Speaker #2: Please ask your question .

Speaker #9: Good morning . Gents . Hopefully you can hear me . Fine . Thanks very much for the opportunity to take questions . Ask questions .

Aman Rakkar: Good morning, gents. Hopefully, you can hear me fine. Thanks very much for the opportunity to take questions, ask questions. I had 2.5 questions I'm gonna try. On net interest income, could you just help us with? You've referenced this deposit beta catch-up or kind of normalization of pass-through rates for a number of quarters now, you know, primarily on the CIB, but now presumably in the retail business as well. Could you help us kind of put numbers on this? I know you've given us sensitivities before about 1%. You shifted pass-throughs, assuming a 100 basis point cut. Can you just kind of quantify the range of potential outcomes here on this deposit beta catch up, please?

Speaker #9: I had two and a half questions . I'm gonna try on net interest income . Could you just help us with you've you've referenced this deposit beta catch up or kind of normalization and pass through rates for a number of quarters .

Speaker #9: Now you know, primarily on the CIB, but now presumably in the retail business as well. Could you help us kind of put numbers on this?

Speaker #9: I know you've given us sensitivities before , about 1% . Shift in pass through , assuming 100 , but can you just kind of quantify the range of potential outcomes here on this , on this deposit beta catch up please .

Speaker #9: Because it just feels like big source of uncertainty that that's very hard to quantify . The related question on net interest income , the deposit growth , 12% deposit growth , we actually completely glossed over it in the presentation .

Aman Rakkar: Because I, it just feels like a big source of uncertainty that's very hard to quantify. The related question on the interest income, the 12% deposit growth, we actually completely glossed over it. It's in the presentation. It's a standout number. I'm struggling to work out what to do with this data point, because it doesn't really seem to be informing any confidence around the NII outlook. I'm not really sure why. I mean, it's presumably 'cause you're investing in markets, and some of it's gonna go into wealth, but can you help us kind of think about quantifying the forward look on this deposit base? How sustainable is that as a growth rate going forward, and what's the benefit to your P&L from deposits?

Speaker #9: It's a standout number, and I'm struggling to work out what to do with this data point because it doesn't really seem to be informing any confidence around the NII outlook, and I'm not really sure why.

Speaker #9: I mean , it's presumably because you're investing in markets and some of it's going to go into wealth , but can you help us kind of think about quantifying the forward look on on this deposit deposit piece , how sustainable is that as a growth rate going forward ?

Speaker #9: And what's the benefit to your P&L from deposits? This is a major driver of net interest income. And I'm struggling to work out what to do with that.

Aman Rakkar: This is a major driver of net interest income, and I'm struggling to work out what to do with that. There was a question on costs, around Fit for Growth. I was just kind of reviewing the 2023 full year results update when Diego kind of announced the Fit for Growth plan, and there's a lot of talk around needing to address the inherent complexity and inefficiency in the business. It is kind of curious that there was an investment envelope that we're not actually putting fully to work.

Speaker #9: There was a question on costs around fit for growth . I was just kind of reviewing the 2023 full year results update , when Diego kind of announced the fit for growth plan , and there was a lot of talk around needing to address the inherent complexity and inefficiency in the business .

Speaker #9: So, it is kind of curious that there was an investment envelope that we're not actually putting fully to work. And I'm just taking a step back from the numbers.

Aman Rakkar: I'm just taking a step back from the numbers, I just kind of, I'm interested in your take around, you know, what is it, what is it you're telling us about how efficient Standard Chartered is from here that actually, you know, we tried to spend this money, but we couldn't, 'cause we're actually, you know, we're very efficient or whatever. It'd be good to kind of hear about the kind of approach and philosophy to the kind of the operational makeup of the business. My half question was just on ventures, the GBP 200 million of cumulative losses. I think you've basically done something like GBP 170 million to date.

Speaker #9: I just kind of was interested in your take around what is it ? What is it you're telling us about ? How efficient Standard Chartered is from here that actually that , you know , we tried to spend this money , but we couldn't because we're actually , you know , we're very efficient or whatever .

Speaker #9: It'd be good to kind of hear about the kind of approach and philosophy to , to the kind of operational makeup of the business and my , my half question was just on ventures .

Speaker #9: The 200 million of cumulative losses . I think you've basically done something like 170 million to date . So does that mean there's not much coming from here on in or it's going to be very hard for us to kind of assess that going forward .

Aman Rakkar: Does that mean there's not much coming from here on in, or it's going to be very hard for us to kind of assess that going forward? If you could just kind of update us on that, that would be great. Thank you very much.

Speaker #9: So if you could just update us on that, that would be great. Thank you very much.

Speaker #1: Super . Just give a couple of editorial comments . And I may come back with some color at the end . I think you're two and a half questions was actually three and a half , but that's okay .

Bill Winters: Super. I just give a couple of editorial comments up front. I may come back with some color at the end. I think your 2 and a half questions was actually 3 and a half, that's okay. You use terms like feeling uncertain, lacking confidence. I'm gonna say, what feels uncertain to you, just feels good to us. The lacking confidence, we hope is a track record that can be evidenced through time, so that you can feel very confident about the quality of the business that we're generating, in particular on the deposit side. I'm going to turn to Manus on the NII, Pete on the cost, and then maybe I'll have some color on the end.

Speaker #1: And you use terms like 'feeling uncertain', 'lacking confidence'. I'm going to say, what feels uncertain to you just feels good to us.

Speaker #1: And the lacking confidence, we hope, is a track record that is, that can be evidenced through time, so that you can feel very confident about the quality of the business that we're generating.

Speaker #1: In particular on the deposit side . But I'm going to turn to Matisse on the NII , Pete on the cost , and then maybe I'll have some some color on the end .

Speaker #1: I can comment on Fit for Growth as well, if they don't cover it. Matisse.

Bill Winters: I can comment on Fit for Growth as well, if, if they don't cover it. Manus?

Speaker #4: Thanks . So on the NII , on the the deposit beta , as you call it . Ahmed . First of all , it's primarily in the CIB segment that we're talking about this .

Manus Costello: Thanks. On the NII, on the PTR, the deposit beta, as you call it, Armin, first of all, it's primarily in the CIB segment that we're talking about this. You're right that we've said that we are above the ranges that we've guided to in the past, the CIB of 60% to 75%, and we expect that to normalize again through 2026. The truth is that the market is quite conducive. It's been conducive for a while for us to maintain those PTRs at very disciplined levels. We obviously hope that could continue, but we think it's conservative and prudent for us to assume that we come back within the longer term ranges that we've seen in the past. I'm not going to quantify it exactly.

Speaker #4: And you're right that we've said that we are above the ranges that we've guided to in the past for CIB, of 60 to 75%.

Speaker #4: And we expect that to normalize again through 2026. The truth is that the market is quite conducive. It's been conducive for a while for us to maintain those at very disciplined levels.

Speaker #4: We obviously hope that could continue, but we think it's conservative and prudent for us to assume that we come back within the longer-term ranges that we've seen in the past.

Speaker #4: I'm not going to quantify it exactly . If you go through the maths of the guidance , we've given , you can kind of work out where you think the the gap will be , that Peters would fill .

Manus Costello: If you go through the maths of the guidance we've given, you can kind of work out where you think the gap will be that PTRs would fill. Of course, there's give and take about different parts of that guidance. What I would say on that, as well, over time, longer term, and this links to your first, your second question, actually, is that we continue to improve the quality of our liabilities, both in CIB, where we're focusing on operating accounts, and across the bank as a whole, where our deposit growth, to segue into that, as you point out, was 12%, for the year. The majority of that or a lot of that was driven actually in the WRB business.

Speaker #4: But of course there's give and take about different parts of that guidance . And what I would say on that as well , over time , longer term and this links to your first , your second question actually is that we continue to improve the quality of our liabilities both in CIB , where we're focusing on operating accounts and across the bank as a whole , where our deposit growth to to segue into that , as you point out , was 12% for the year .

Speaker #4: And the majority of that, or a lot of that, was driven actually in the business. I don't think that that necessarily speaks to directly a correlation with NII into the course of 2026.

Manus Costello: I don't think that that necessarily speaks to directly a correlation with NII into the course of 2026. A lot of that deposit growth in wealth is obviously driven as future wealth flows. A lot of money comes into the bank through deposits, which is then converted into wealth. I do think it speaks about the improving liability mix of the bank overall, that we're continuing to attract these deposits, and there could be benefits from a mix perspective going forward. All of these, you have to place against the backdrop, of course, of the fact that we do have headwinds within NII from the rate environment, as we've called out, that 44 basis points.

Speaker #4: A lot of that deposit growth in wealth is obviously driven as future wealth flows. A lot of money comes into the bank through deposits, which is then converted into wealth.

Speaker #4: But I do think it speaks about the improving liability mix of the bank overall that we're continuing to attract these deposits. And there could be benefits from a mix perspective, going forward.

Speaker #4: But all of these you have to place against the backdrop , of course , of the fact that we do have headwinds within from the rate environment , as we've called out , that 44 basis points .

Speaker #4: And we do also have a couple of percentage points of headwind from the actions we're taking in. So it all goes into the mix.

Manus Costello: We do also have a couple of percentage points of headwind from the actions we're taking in WRB. It all goes into the mix, but with an underlying story of a longer term improvement in liability, Armin.

Speaker #4: But with an underlying story of a longer-term improvement in liability, Almond.

Speaker #1: Super Pete .

Bill Winters: Super. Pete?

Speaker #6: And to pick up on your questions on FFG and costs , I guess a few things . FFG was always intended to simplify , standardize and digitize the bank , and we're really happy with the progress that we've made to date .

Peter Burrill: To pick up on your questions on FFG in costs, I guess a few things. FFG was always intended to simplify, standardize, and digitize the bank, and we're really happy with the progress that we've made to date. You can see we've got over 300 initiatives in flight, delivering a broad range of benefits. That's really been the focus that we've had. When it comes to the spending, we were focused on productive spending, and that we could keep the one-to-one ratio of spend to save, and we also didn't want it to be an everlasting program.

Speaker #6: You can see we've got over 300 initiatives in flight, delivering a broad range of benefits, and that's really been the focus that we've had when it comes to the spending.

Speaker #6: We we wanted to ensure that we kept to a kind of we we were focused on productive spending and that we could keep the 1 to 1 ratio spend to save .

Speaker #6: And we also didn't want it to be an everlasting program . So it was important to us that that FFG as a program and as a series of programs comes to a conclusion in 2026 , we will continue to invest in productivity initiatives to simplify the bank from an ongoing basis .

Peter Burrill: It was important to us that FFG, as a program and as a series of programs, comes to a conclusion in 2026. We will continue to invest in productivity initiatives to simplify the bank from an ongoing basis, and again, made some really good progress. We've got some of our mortgage platforms, the turnaround times have gone from 14 days to 5 days in some of our largest markets. We've significantly reduced the number of applications that we have within the bank. We've taken third-party risk systems from 10 system to 1 system, so a lot of really productive investments. We're happy with where it is. I wouldn't take it that we couldn't spend it. I think it was just about discipline and looking beyond 2026 as far as future opportunities.

Speaker #6: And again , made some really good progress . We've got some of our mortgage platforms . The turnaround times have gone from 14 days to five days , and some of our largest markets , we've significantly reduced the number of applications that we have within the bank .

Speaker #6: We've taken third party risk systems from ten system to one system . So a lot of really productive investments . We're happy with where it is .

Speaker #6: I wouldn’t take it that we couldn’t spend it. I think it was just about discipline and looking beyond 2026 as far as future opportunities.

Speaker #1: Yeah, we're very happy with Fit for Growth, the progress that we've made, and while that program is going to stop at $1.3 billion, we have some big executions still to do in 2026.

Bill Winters: Yeah, we're very happy with Fit for Growth, the progress that we've made. While that program is gonna stop at GBP 1.3 billion, we have some big executions still to do in 2026. We've got plenty of other programs for creating productivity in the bank, including, you know, things that are much longer term in duration, so outside of the scope of Fit for Growth. We also, since the time that we announced this program, or started conceiving it two and a half years ago or so, we have had, you know, plenty of new information about the things that we should be deploying our shareholder dollars into.

Speaker #1: We've got plenty of other programs for for creating productivity in the bank , including things that are that are much longer term in duration .

Speaker #1: So , so outside of the scope of fit for growth , we also since the time that we announced this program or started conceiving it two and a half years ago or so , we have had plenty of new information about the things that we should be deploying our shareholder dollars into , and whether that's into some other longer term productivity opportunities , whether it's related to AI or other things where we've got some super interesting and exciting projects underway that will produce productivity type returns , that that match anything that we could be doing otherwise within a more constrained heavily .

Bill Winters: Whether that's into some other longer term productivity opportunities, whether it's related to AI or other things, where we've got some super interesting and exciting projects underway that will produce productivity type returns that match anything that we could be doing otherwise within a more constrained, heavily guardrailed Fit for Growth project. We just said this is the right time to complete the first phase of this productivity agenda, bring all of that into our business as usual for continuous improvement, and then obviously shift some of our resources on the margin to these other longer term or other projects that will make us much more productive through time.

Speaker #1: Guardrails fit for growth project. We just said this is the right time to complete the first phase of this productivity agenda. Bring all of that into our business as usual for continuous improvement.

Speaker #1: And then obviously shift some of our resources on the margin to these other, longer-term, or other projects that will make us much more productive through time.

Speaker #1: So no , no big story here , but I think you would expect us to to reflect and adjust our , our business approach as circumstances change .

Bill Winters: No, no big story here, but I think you would expect us to reflect and adjust our business approach as circumstances change. This one is a success, and we're onto the next one. The last question you asked, the last half question was on SC Ventures and $200 million of losses. Yeah, obviously, the bulk of the venture segment has been the digital bank. That's been the biggest single component, and those have always been managed by the WRB management chain, so go up into Judy Hsu. We're increasingly looking at and acting on the opportunities between the digital banks and the main banks. The distinction became a little bit more artificial than has been the case, and those banks are mature.

Speaker #1: This one is a success . We're on to the next one . The the last question you asked the last half question was on SC ventures and $200 million of of losses .

Speaker #1: Obviously, the bulk of the venture segment has been the digital bank. It's been the biggest single component. And those have always been managed by the management change up into Judy Chu.

Speaker #1: We're increasingly looking at, and acting on, the opportunities between the digital banks and the main banks. So the distinction became a little bit more artificial than has been the case.

Speaker #1: And those banks are mature. They're doing very well. And we will continue to evolve those. And you'll see them in terms of the breakout within the presentations.

Bill Winters: They're doing very well, we will continue to evolve those, and you'll see them in terms of the breakout within the WRB presentations. The rest of SC Ventures is a collection of things, including stakes, as we mentioned earlier, companies like Toss and Ripple, including ventures that we built, like Solve, which we merged into Jumbotail, but continue to have a stake in the resulting company, and our digital assets businesses, Zodia Markets, Zodia Custody, Libeara, et cetera. As we reposition that into central and other, of course, we'll continue to call out anything that's of any note. You would want us and expect us to invest in things that are leveraging the key strengths that we've got.

Speaker #1: The rest of of SC ventures is a collection of of things , including stakes and as we mentioned earlier , companies like Toss and Ripple , including ventures that we built like solve , which we merged into Jumbo Tail but continued to have a stake in the resulting company .

Speaker #1: And our digital assets businesses . Zodia markets , Zodia custody , Libera , etc. . And as we reposition that into central another , of course , we'll continue to call out anything that's of any note , but you would want us and expect us to invest in things that are leveraging the key strengths that we've got .

Speaker #1: And you would want us and you would expect us to manage that portfolio actively . So , so cutting out either things that aren't working out , which we do regularly , and we've had thousands of ideas that have been killed at different points of gestation , hundreds , hundreds that we put more than $20,000 into that we've killed .

Bill Winters: You would want us, and you would expect us to manage that portfolio actively. Cutting out either things that aren't working out, which we do regularly, and we've had thousands of ideas that have been killed at different points of gestation. Hundreds that we put more than $20,000 into that we've killed. Of course, the ones that have succeeded, we've run with. The constraint, I mean, the $200 million is fine. We'll be within that level with almost any measure. The value of calling that out as a specific metric is just not so relevant anymore.

Speaker #1: And of course , the ones that have succeeded , we've run with . So they constraint , I mean , the 200 million is fine .

Speaker #1: We'll be within that . That level with by almost any measure . But the , the value of calling that out as a specific metric is just not so relevant anymore So take the next question .

Edward Firth: Thank you.

Bill Winters: We'll take the next question.

Speaker #2: Thank you . Dear participants . As a reminder , if you wish to ask a question over the phone , please press star one one and wait for your name to be announced .

Operator: Thank you. Dear participants, as a reminder, if you wish to ask a question over the phone, please press star one one and wait for your name to be announced. Alternatively, you can submit your questions via the webcast. Now we're going to take our next question on audio line, and it comes line of Ed Firth from KBW. Your line is open. Please ask a question.

Speaker #2: Alternatively, you can submit your questions via the webcast. And I will go and take our next question on the audio line. And it comes line of adverse from CCB.

Speaker #2: Your line is open . Please ask a question .

Speaker #10: Yeah . Morning , everybody . Thanks . Thanks very much . Yeah , I had two questions , actually . I mean , the first one was in Q4 .

Edward Firth: Good morning, everybody. Thanks. Thanks very much. Yeah, I have two questions on cost, actually. I mean, the first one was in Q4. I just wondered what the costs were related to episodic income, because you call that out on the revenue line, but there doesn't seem to be any mention of it in the cost line. I just thought it would have a highly variable cost base related to that. I just wondered why that's not the case, or could you give us some quantum of the sort of costs that go with that revenue and whether or not it is variable? That would be my first question. Second question was perhaps to Jason, and a question about the beginning.

Speaker #10: I just wondered what the costs were related to episodic income, because you've pulled that out on the revenue line, but it doesn't seem to be any mention of it in the cost line.

Speaker #10: I would have thought it would have a highly variable cost base related to that. So I just wondered why that's not the case, or could you give us some quantum of the sort of costs that go with that revenue, and whether or not it is variable?

Speaker #10: That would be my first question . And the second question was back to Jason . Question at the beginning . If I look at slide ten , looking at your fit for growth , it looks to me I know you're going to want to talk about this more in May , but I guess we have to fill in numbers before then .

Edward Firth: If I look at slide 10, looking at your Fit for Growth, it looks to me, I know you're gonna want to talk about this more in May, but I guess we have to fill in numbers before then. You've broadly got about GBP 600 million of CTA costs dropping away and about GBP 300 million of savings next year.

Speaker #10: You've broadly got about 600 million of CTA costs dropping away , and about 300 million of savings next year . So am I right that when I look at my 27 cost base to start with , the sort of lumpiness should take up just short of a billion out of the cost base , and that other than that , it should just be , you know , there's no other lumpiness that we should know about or think about when we look at 27 costs and beyond .

Edward Firth: Am I right that when I look at my 2027 cost base to start with, the sort of lumpiness should take just short of GBP 1 billion out of the cost base, and that other than that, it should just be, you know, there's no other lumpiness that we should know about or think about when we look at 2027 costs and beyond, that that is the sort of right base level, somewhere around GBP 1 billion below GBP 13.3 billion, I think you said, for this year? Thanks so much.

Speaker #10: But that is the sort of right base level Somewhere a billion below the 13.3 . I think you said for this year , thanks very much .

Speaker #1: Well , again , I'll make a couple comments upfront on hand to Pete for for both questions on the on the on the the cost associated with episodic .

Bill Winters: Well, yeah, again, I'll make a couple comments up front. I'll hand to Pete for both questions. On the very, on the costs associated with episodic, it's not really the way we run the business. I think what you might have in mind is that, you know, traders get paid bonuses that are a function of results, and if they don't make money in trading, their bonuses will go down. That's true. That is a truism, in fact. The cost base, the cost, the resources supporting the episodic income are the cost of financial markets. We don't allocate the cost between what's slow and what's episodic in any macro way. Pete, you can offer some more color on that if you have it.

Speaker #1: It's not really the way we run the business . I think what you might have in mind is that traders get paid bonuses that are a function of results , and if they don't make money in trading , their bonuses will go down .

Speaker #1: That's true . That is that is a truism . In fact . But the cost base , the cost , the resources supporting the episodic income are the costs of financial markets .

Speaker #1: We don't allocate the the cost between what's flowing and what's episodic in any in any macro way . Pete , you can you can offer some more color on that if you have it .

Speaker #1: And then on the on the fit for growth . I mean , we're running a business here . And while the productivity investments and then associated savings coming in current in the later periods are material associated with fit for growth , we will continue to be investing in productivity related initiatives , which will continue to produce savings and expense , and also produce income in terms of revenue .

Bill Winters: On the Fit for Growth, I mean, we're running a business here, and while the productivity investments and then associated savings coming in current and the later periods are material associated with Fit for Growth, we will continue to be investing in productivity-related initiatives, which will continue to produce savings and expense and also produce income in terms of revenue. I'm definitely not guiding to $1 billion out of the cost base, but Pete?

Speaker #1: So I'm definitely not guiding to $1 billion out of the cost base. But Pete, thanks.

Operator: Thanks, Phil.

Speaker #6: Bill . When thinking of Bill covered most of this when it comes to any costs related to episodic , and when we do look at markets , we look at it on a whole year basis rather than a particular quarter on quarter .

Peter Burrill: When taking Bill covered most of this when it comes to any cost-related episodic. When we do look at markets, we look at it on a whole year basis rather than a particular quarter-on-quarter. Markets had a very strong year in 2025. I wouldn't read anything into quarterly volatility in that number and no direct read across to the cost base. When it comes to your question on how to think about 2027 costs, you noted all the downs, and I noticed you kind of somewhat skipped the ups on slide 11. There's two areas to think about, right? Which is we've called out, you called out the FFG CTA going away and the ongoing savings. We will invest and continue to invest in business growth.

Speaker #6: And markets had a very strong year in 2025 . So I wouldn't read anything into quarterly volatility in that number in no direct read across to the cost base when it comes to your question on how to think about 2027 costs , you noted all the downs , and I notice you kind of somewhat skipped the ups on slide 11 .

Speaker #6: So there's there's two areas to think about , right ? Which is we've called out you called out the FFG , CTA going away and the ongoing savings .

Speaker #6: We will invest and continue to invest in business growth . We see great opportunities . And we're going to make sure that we invest into those and lean into those , not least of which in our affluent and wealth space .

Peter Burrill: We see great opportunities, and we're going to make sure that we invest into those and lean into those, not least of which in our affluent and wealth space. Secondly, the what we've termed other restructuring in there is kind of our historical run rate of other stuff we don't have below the line anymore, so that'll be above the line. I just want to make sure you're thinking about all the various components, rather than just the FFG specific CTA and savings in 2027. Hope that helps.

Speaker #6: And secondly , the what we've termed other restructuring in there is kind of our historical run rate of of other stuff . We don't have below the line anymore .

Speaker #6: So that will be above the line. But I just want to make sure you're thinking about all the various components, rather than just the FFG-specific CTA and savings in 2027, so hope that helps.

Speaker #1: Lest anybody think we've got a sorry, please carry on.

Bill Winters: Less anybody think we've got...

Manus Costello: Thanks so much. Yeah.

Bill Winters: Sorry, Ed. Please carry on.

Speaker #11: No , I said it was very thanks very much .

Manus Costello: No, I said it was very helpful. Thanks so much.

Speaker #1: Thank you . Know , I was just going to say let's anybody think otherwise . We're still very focused on generating positive jobs .

Bill Winters: Oh, thank you. No, I was just gonna say, less anybody think otherwise, we're still very focused on generating positive jobs.

Speaker #11: Sure .

Manus Costello: Sure.

Speaker #2: Thank you . Now we're going to take our next question And the question comes line of Alastair from Autonomous Research . Your line is open .

Operator: Thank you. Now we're going to take our next question. The question comes line of Alastair Ryan from Autonomous Research. Your line is open. Please ask your question.

Speaker #2: Please ask a question

Speaker #12: Morning guys . Thanks for making time for us . Just a couple of busy , detailed questions . Really . Could you just say sticking with this cost point ?

Alastair Ryan: Morning, guys. Thanks for making time for us. Just a couple of busy detail questions, really. Could you just say, sticking with this cost point, was there anything you actually pulled the plug on in the Fit for Growth? In programs you've been working on, lots of granular stuff you flagged before in the last year or two. Is there anything that dropped off the list? Just on a couple of things on asset quality. Could you add any color, anything on the outlook, in relation to that sovereign downgrade? Anything we should be extrapolating or be concerned about, or just one lump?

Speaker #12: Was there anything you actually pulled the plug on in the in the fit for growth program ? Was programs you've been working on .

Speaker #12: Lots of granular stuff you've flagged before in the last year or two. Is there anything that dropped off the list? And then, just a couple of things on asset quality—could you add any color or anything on the outlook in relation to that sovereign downgrade?

Speaker #12: Anything we should be extrapolating or be concerned about , or just one lamp . And finally , a couple of your peers in Singapore , Bank of East Asia , saw some movement on Hong Kong property , something you have called out a little bit before .

Alastair Ryan: Finally, a couple of your peers in Singapore, Bank of East Asia, saw some movement on Hong Kong property, something you have called out a little bit before, but not this time. Is that just nothing to report here as a topic? Thank you.

Speaker #12: But but not this time . Is that just a nothing to report here ? As a topic ? Thank you .

Speaker #1: That's great . Thanks . I'm going to turn to Pete for all of those . Certainly the headline on the second set of questions is nothing .

Bill Winters: That is great. Thanks, Al. We're going to turn to Pete for all of those. Certainly the headline on the second set of questions is nothing to call out. We're just in good shape all around, and the sovereign downgrade is what it is. It's a sovereign downgrade that you've seen, not associated with any material ECL. You can fill in the blanks there. Pete?

Speaker #1: Nothing to call out . We're just in good shape . All around . And the sovereign downgrade is what it is . It's a sovereign downgrade .

Speaker #1: But you've seen not associated with any material ACL . You can you can fill in the blanks there . Pete .

Speaker #6: Thanks . So focusing on the first one on FFG . Yes , of course . I mean it was a dynamic portfolio . I think important if you look at the types of areas that we've laid out on slide ten , those are broadly the similar proportion as what we laid out originally that we thought we had a hypothesis , but of course , you test and learn try some .

Peter Burrill: Thanks. Focusing on the first one on FFG, yes, of course. I mean, it was a dynamic portfolio. I think important, if you look at the types of areas that we've laid out on slide 10, those are broadly the similar proportion as what we laid out originally, that we thought we had a hypothesis. Of course, you test and learn, and you try some, they don't work out, and you stop them. Yes, it was a very dynamic portfolio, 343 initiatives, currently in the pipeline that we're focused on executing in 2026. Yes, there were some that came in and out of that portfolio over time. On asset quality, I mean, Bill gave the headlines.

Speaker #6: They don't work out and you stop them . So yes , it was a very dynamic portfolio . 343 initiatives currently in the pipeline that we're focused on executing in 2026 .

Speaker #6: But yes , there were some that came in and out of that portfolio over time . On asset quality . I mean , Bill , bill gave the headlines .

Speaker #6: We've provided a bit more detail in some of our slides with regards to Hong Kong and China, where the overall view is things have gotten slightly better.

Peter Burrill: We've provided a bit more detail in some of our slides with regards to Hong Kong and China CRE, where the overall view is things have gotten slightly better. It's not a major issue. We've still got overlays, so feel quite comfortable with that. When it comes to the sovereign downgrade, as Bill mentioned, no significant ECL in Q4 as a result of that downgrade. It, it moves the numbers as far as the what we call high-risk accounts, but we feel quite comfortable and confident and no significant areas to point out that we're concerned about heading into 2026. Thanks for the question.

Speaker #6: It's not a major issue . We've still got overlays , so feel quite comfortable with that when it comes to downgrade . As Bill no significant ECL in Q4 .

Speaker #6: As a result of that downgrade . So it moves the numbers as far as the what we call high risk accounts . But we feel quite comfortable and confident in no significant areas to point out that we're concerned about heading into 2026 .

Speaker #6: Thanks for the question

Speaker #2: Thank you . Now we're going to take our next question Just give us a moment and the next question comes from line of Amit .

Operator: Thank you. Now we're going to take our next question. Just give us a moment. The next question comes the line of Amit Goyal from Banca Mediolanum. Your line is open. Please ask your question.

Speaker #2: Goal from your line is open . Please ask a question .

Speaker #5: Hi . Thank you . So two kind of follow ups from me . firstly income guidance for 26 to be around the bottom end of the kind of 5 to 7% growth range .

Amit Goyal: Hi, thank you. Two kind of follow-ups from me. Firstly, just on the income guidance for 2026, to be around the bottom end of the kind of 5% to 7% growth range, just want to double-check, is 5% kind of like the floor? You would expect to be, you know, 5% or better, or are you thinking that, you know, the income, depending on obviously external variables, it could actually be a touch below the 5, as well as being potentially above the 5? Secondly, again, just following up on the costs. Obviously a large part of the delta was the investment into initiatives in terms of costs for 2026 underlying.

Speaker #5: Just want to double check is 5% . Kind of like the floor . So you would expect to be , you know , 5% or better or are you thinking that , you know , the income depending on obviously external variables , you know , it could actually be a touch below the five , as well as being potentially above the five .

Speaker #5: And then secondly , again , just following up on on the costs , it's obviously a large part of the Delta was the investment into initiatives in terms of costs for 26 underlying do you mind just give me a little bit more color in terms of what those investments initiatives were and how that will help productivity and growth in the future .

Amit Goyal: Do you mind just giving me a little bit more color in terms of what those investments initiatives were and how that will help productivity and growth in the future? What's the kind of payoff or what exactly have you invested in there? Thank you.

Speaker #5: So what's the kind of pay off or what exactly have you invested in there ? Thank you .

Speaker #1: Great . I'll turn to Pete . Sorry to menace on the guidance question . And Pete on cost , but let me just say I I'm pretty sure that our bankers Ms. .

Bill Winters: Great. I'll, I'll turn to Pete. Sorry, to, to Manus on the, on the guidance question and Pete on cost. Let me just say, I, I, I'm pretty sure that our, our bankers, RMs, traders, don't pay a lot of attention to the guidance that we're discussing on this call. They, they, they don't shoot for 5.0, and then, you know, take the rest of the day off. These guys are, all of them, ladies and gentlemen, are very focused on generating growth. Super excited about the growth that we've generated so far, which has been well ahead of the guidance that we set out, and I can tell you, every undertaking will be to continue to do the same.

Speaker #1: Traders don't pay a lot of attention to the guidance that we're discussing on this call . They don't shoot for 5.0 and then and then take the rest of the day off .

Speaker #1: These guys are all of them . Ladies and gentlemen , are very focused on generating growth . Super excited about the growth that we've generated so far , which has been well ahead of the guidance that we set out .

Speaker #1: And I can tell you , every undertaking will be to continue to do the same . Then we get into into levels of precision that are probably not so meaningful given what's going on in the rest of the world .

Bill Winters: We get into levels of precision that are probably, you know, not so meaningful, given what's going on in the rest of the world. Manus?

Speaker #1: But

Speaker #4: Yeah, no, I'm not going to add those levels of precision either. I would just say the guidance is around 5%.

Manus Costello: Yeah, no, I'm, I'm not gonna add those levels of precision either. I would just say the guidance is around 5%. It's neither a floor nor a ceiling. It's how we see things at the moment. We'll obviously update you during the course of the year on how that progresses, but you shouldn't take it as either a floor or a ceiling specifically on it.

Speaker #4: It's neither a floor nor a ceiling . It's how we see things at the moment . We'll obviously update you during the course of the year on how that progresses , but but you shouldn't take it as either a floor or a ceiling .

Speaker #4: Specifically . Amit .

Bill Winters: Pete, do you want to talk about the, the change in investments?

Speaker #1: Do you want to talk about the change in investments ?

Speaker #6: Yeah , thanks for the question . When looking at 26 and the business investments , it's a variety of things . As you pointed out , both productivity and growth oriented .

Peter Burrill: Yeah. Thanks for the question. We're looking at 26 and the business investments. It's a variety of things, as you pointed out, both productivity and growth-oriented. On the growth side, we've been talking about our investments into wealth management and affluent, and those we want to continue. Those are a key component of that. On the productivity and growth side, you've got enabling technologies as well as data infrastructure and AI initiatives to really take advantage, both to grow as well as to become more efficient. That's a few types of examples of the things that we're leaning into in 2026 with the confidence that we've got in the business momentum. Thanks for the question.

Speaker #6: So, on the growth side, we've been talking about our investments into wealth management affluent. And those—those we want to continue.

Speaker #6: And so those are a key component of that . On the productivity and growth side , you've got enabling technologies as well as data infrastructure in AI initiatives to really take advantage both to grow as well as to become more efficient .

Speaker #6: So that's a few types of examples of the things that we're leaning into in 2026 . With the confidence that we've got in the business momentum .

Speaker #6: Thanks for the question Thank you .

Operator: Thank you. Now we're going to take our, our final question for today. It comes to line of Chen Li from CSC Financial. Your line is open. Please ask your question.

Speaker #2: And now we're going to take our our final question for today And it comes line of Chen Li from China Securities . Your line is open .

Speaker #2: Please ask your question morning .

Chen Li: Morning, BNP. This is Chen Li from CSC Financial. Thank you for letting me ask the questions. The first question about the credit cost, although through the cycle, credit costs are 30 to 35 bps, but it has remained at around 20 bps in the past few years. What is your outlook for the credit cost trend in 2026? The second question is about global markets. Since global market revenue tends to fluctuate significantly with market conditions, what about the trend of net managing interest come with about the global markets in 2026? Thanks.

Speaker #13: This is Kelly from China Securities . Thank you all for letting me ask a questions . The first question is about credit cost .

Speaker #13: And although through the through through the cycle , credit costs are 30 to 35 . But it have remained at around 20 bips in the past few years .

Speaker #13: So what is your outlook for the credit cost trend in 2026 ? And the second question is about global markets . Since global markets revenue tends to fluctuate significantly with market conditions .

Speaker #13: So, what about the trend of the non-interest, with regard to the global markets in 2026? Thanks.

Speaker #1: Great . Thanks for the question , Jamie . I'm going to turn to Pete on the credit question . But I'll just again give a little bit of a high level first pass .

Bill Winters: Good. Thanks for the question, Chen Li. I'm going to turn to Pete on the credit question, but I'll just, again, just give a little bit of a high-level first pass. The 30 to 35 basis points is what we estimate are through-the-cycle credit costs to be. Of course, we've not been operating at that level for some time, and we see nothing in the portfolio today that gives us any particular cause for concern. We've also, you know, substantially improved the credit quality of the portfolio over the past, call it 10 years, but I think continuing over the past, you know, call it the post-COVID environment, with over 70% of our portfolio being investment grade, et cetera, with much lower concentrations than we've had at times in the past.

Speaker #1: The 30 to 35 basis points is what we estimate are through the through the cycle credit cost to be . Of course , we've not been operating at that level for some time .

Speaker #1: And we see nothing in the portfolio today that gives us any particular cause for concern . We've also substantially improved the credit quality of the portfolio over the past .

Speaker #1: Call it ten years , but but I think continuing over the past , call it the post-Covid environment with over 70% of our portfolio being investment grade , etc.

Speaker #1: , with much lower concentrations than we've had at times in the past . So none of this is to say that that our guidance of 30 to 35 basis points is inaccurate .

Bill Winters: None of this is to say that our guidance of 30 to 35 basis points is inaccurate. It's just we haven't been tested in a down credit cycle with our current portfolio. I guess kind of it's a truism, but I will say that I think we've managed our capital allocation quite carefully. I would hope that we can demonstrate an outperformance relative to the guidance that we've given, but we can't prudently suggest anything other than what our data analysis would suggest we should be prudently guiding towards. I think we've commented before on the financial markets, the flow income is not that volatile. It's actually quite steady.

Speaker #1: It's just we haven't been tested in a down credit cycle with our current portfolio . It's kind of it's a truism , but I will say that that I think we've we've managed our capital allocation quite carefully .

Speaker #1: So I would I would hope that we can that we can demonstrate an outperformance relative to the guidance that we've given . But we we can't prudently suggest anything other than than what our , what our data analysis would suggest .

Speaker #1: We should be prudently towards . And I think we've covered before on , on , on the financial markets , the , the flow income is , is not that volatile .

Speaker #1: It's actually quite steady. It's been growing 10% year after year after year after year after year, including 2025 and into the start of 2026.

Bill Winters: It's been growing 10% year after year, after year, after year, after year, including 2025 and into the start of 2026. That's, you know, 70 pushing to 75 or possibly over some period of time, 80% of, of financial markets income. The remainder is volatile, but it's tended to be volatile above zero. I... You know, you, you can give us a big old knock for being $16 million negative in, in the Q4 of, of 2025. Still a good overall episodic year for the full year 2025. But volatile, but positive, and with, with the, the underlying core of the business being very stable and growing quite nicely. But, Pete, do you want to add anything on either of those?

Speaker #1: That's 70 pushing to 75, or possibly over some period of time, 80% of financial markets income. The remainder is volatile, but it's tended to be volatile above zero.

Speaker #1: And , you know , you can give us a big old knock for being 16 million negative in the fourth quarter of 2025 .

Speaker #1: Still a good overall episodic year for the full year 2025 . But volatile . But positive . And with the underlying core of the business being very stable and growing quite nicely , the PG want to add anything on either either of those .

Speaker #6: Just I think you covered the global markets on the on the credit costs . Just a couple a couple data points . If you look at our CIB portfolio , we actually had $4 million .

Peter Burrill: I think you covered the global markets. On the credit costs, just a couple data points. If you look at our CIB portfolio, we actually had $4 million, only $4 million of credit costs this year and a net recovery last year. We don't see anything concerning on the radar screen, we're just cautious that expecting net recoveries or virtually zero, we want to be aware that situations can change. Read into that along through the cycle, rather than anything specific, looking at 2026. Feel comfortable with where we are there.

Speaker #6: Only $4 million of credit costs this year . And a net recovery last year . We don't see anything concerning on the radar screen , but we're just cautious that expecting net recoveries or virtually zero , we want to be aware that situations can change , but read into that along through the cycle rather than anything specific .

Speaker #6: Looking at 2026 . So feel feel comfortable with where we are . There .

Speaker #1: Good . Well I think we've we've exhausted the questions for this morning . Thank you enormously for the time that you spent with us .

Bill Winters: Good. Well, I think we've exhausted the questions for this morning. Thank you enormously for the time that you spent with us. I know it's been a long earnings season, and no doubt you've got a lot to do for the rest of the week, but really appreciate the focus and attention. Just a couple of parting thoughts from me, just in case you didn't pick it up from our earlier answers or presentation. We feel super good about the franchise right now. It is firing on all cylinders. Really, anything that matters strategically, we're doing well. We're investing in the things that are producing those kinds of results.

Speaker #1: I know it's been a long earnings season and no doubt you've got a lot to do for the rest of the week . But really appreciate the focus and attention .

Speaker #1: Just a couple of parting thoughts for me , just in case you didn't pick it up from our earlier answers or presentation , we feel super good about the franchise right now .

Speaker #1: It is firing on all cylinders . Really . Anything that matters strategically , we're doing well . We're investing in the things that are producing those kinds of results .

Speaker #1: We have an excellent team . Of course , starting with the gentlemen on either side of me . But the rest of the management team , as I said , is as good as any team .

Bill Winters: We have an excellent team, of course, starting with the, the gentleman on either side of me, but the rest of the management team, as I've said, is as good as any team, or I'll say better than any team I've ever worked with. That's the team that's generated these results. We are full speed ahead. I personally am full speed ahead. I may not look like it, but I definitely am. I look forward to future outings where we can continue to talk about the great progress that we're making on our cross-border and affluent strategy. Thanks.

Speaker #1: Or I'll say , better than any team I've ever worked with . And that's the team that's generated these results . So we are full speed ahead .

Speaker #1: I personally am full speed ahead . It may not look like it , but I definitely am . And I look forward to future outings where we can continue to talk about the great progress that we're making on our cross-border and effluent strategy .