Good morning, everyone. Thank you for joining Barclays' first quarter 2026 results call.

In February, I shared our vision for 2028 and beyond, and this was to deliver a better run, more strongly performing, and higher returning Barclays. This represented an intensification of the strategy which we put in place in 2024.

The first quarter results demonstrate the benefits of the structural improvements that we have been making in the last two years. These improvements allowed us to capture opportunities within each of our five divisions, and particularly in the Investment Bank.

The diversification of our income, the strength of our client relationships, the ongoing delivery of operational efficiency, all underpin my confidence in achieving each of our 2026 and 2028 targets. We have delivered a group RoTE of 13.5% in the quarter.

This demonstrates resilience through a period of elevated volatility, and incorporates one-off impairments and charges. We grew the top line by 6% to £8.2 billion, supported by NII growth and strong activity across the Investment Bank.

We improved the cost:income ratio to 56%. RWAs in the Investment Bank increased modestly versus the fourth quarter to facilitate cyclical activity, with income surpassing £4 billion for the first time.

Consistent capital generation and a 14.1% CET1 ratio support our plan to return at least £15 billion to shareholders by 2028, including today's £500 million buyback announcement. While the external environment has changed, we remain true to our purpose, which is to work together with our clients for a better financial future.

We remain committed to deploying lending and risk-weighted assets in our UK businesses. We do not currently see any credit weakness in the UK, or in our US consumer business, nor in corporate lending.

UK household and corporate balance sheets remain robust, and clients are behaving rationally. Payment rates across customer cohorts in our US Consumer Bank remain stable.

However, as you would expect, we are vigilant about the inflationary impact of rising energy prices, and the consequent potential decline in consumption and growth. This quarter, we have provided additional disclosures on our exposure to private credit and non-bank financial institutions.

This is on slides 45 and 46 in the appendix. I am disappointed to recognise a £228 million single name charge in the first quarter.

This was in our Securitised Products business, and relates to a well-publicised, sophisticated fraud. This fraud, as with the one in Tricolor, indicates to us the importance of strong financial controls at borrowers, and the difficulty ex-ante of identifying fraud.

As such, we are constraining lending to certain structured finance counterparties who operate more vulnerable business models and cannot convince us of the quality and independence of their financial controls. These entities neither represent a material exposure nor a material source of forgone income, but their risk far outweighs any reward.

Separately, in view of increased macroeconomic and business uncertainties, we are reducing our exposure to more highly leveraged non-investment-grade corporates, which we believe could be vulnerable to a weakening economy. All divisions generated double-digit returns, including an RoTE around or above 20% in our UK businesses.

The US Consumer Bank and the Investment Bank delivered 18.8% and 15% RoTE respectively. We are achieving stronger structural returns while delivering operational improvements and better customer service.

In the first quarter, we achieved approximately £150 million of gross efficiency savings towards the £2 billion target over three years. This quarter, we have enabled all corporate banking clients on iPortal, which is our single management platform, and this replaces five previously separate platforms.

In the second quarter, we will launch Premier Wealth Management in Barclays UK app to provide human-led, digitally enabled planning and advice and support fee growth beyond 2028. The momentum of our progress underpins my confidence in delivering all our financial targets, including an RoTE of greater than 12% in 2026, and more than 14% in 2028.

Anna, over to you now to take us through the first quarter financials in more detail.

Thank you, Venkat, and good morning, everyone. Slide 4 summarises the financial highlights for the quarter.

Before going into the detail, I would remind you that the weaker US dollar versus Q1 '25 reduced our reported income, costs, and impairments. Return on tangible equity of 13.5% was lower year-on-year, with stronger absolute earnings offset by 8% growth in tangible equity.

Profit before impairment increased 8% as we grew income and delivered positive operating jaws. This was offset by higher impairment charges, with profit before tax up 3%.

Earnings per share increased by 8% to 14.1 pence, supported by share count reduction. Operational momentum continues, and we remain focused on execution.

Income in Q1 increased 6% year-on-year to £8.2 billion. Stable income streams grew by 7%, reflecting 4% growth in the retail and corporate businesses, and a 23% increase in financing within Markets.

Overall Investment Bank income was up 4%. This top-line momentum increases our confidence in delivering the circa £31 billion group income target in '26.

Group NII, excluding IB and Head Office, increased for the eighth consecutive quarter and by 12% year-on-year, reflecting three factors: first, stable deposits across the group supported structural hedge growth at yields above our planning assumption; second, continued lending momentum; and third, improvements in US Consumer Bank's funding, mix, and pricing. We therefore remain confident in delivering full-year guidance for group NII of more than £13.5 billion, including £8.1 to £8.3 billion in Barclays UK.

As a reminder, the hedge is designed to reduce income volatility and manage interest rate risk. We have now locked in £18.3 billion of gross structural hedge income across '26 to '28, up from £16.8 billion at the end of '25.

The hedge notional increased by £6 billion versus Q4, reflecting stability and growth in our deposit franchises and equity. This improves long-term NII stability, but does not materially increase '26 income, given that unhedged balances were previously earning base rate.

We invested new and maturing hedge assets at around 3.9% in the quarter. This is above the circa 3.5% planning assumption that underpins half of the group income growth that we expect by '28.

Whilst persistently higher swap rates would support additional income growth, any benefit would build progressively, noting that 95% of '26 hedge income is already locked in. Moving on to costs.

The group cost:income ratio improved to 56% from 57% a year earlier. We delivered circa £150 million of gross efficiency savings, on track for the circa £2 billion target over three years.

Investment costs increased by around £100 million year-on-year, consistent with our plan. Q1 costs also included a £105 million motor finance provision.

This is booked in Head Office, given that we exited this business in 2019. Our £430 million cumulative provision is based on a single scenario aligned to the FCA's revised industry-wide redress scheme.

This assumes a greater number of eligible cases versus the previous probability-weighted estimates, and a higher cost per claim following increases to the compensatory interest rate. Inclusive of the motor finance provision, we remain well positioned to deliver the high-50s cost:income ratio target in '26.

Turning to impairment. The Q1 group impairment charge of £823 million equated to a loan loss rate of 74 basis points.

This includes the £228 million well-publicised single name charge in the Investment Bank, which Venkat discussed. As a result, we now expect a group loan loss rate around the top of the 50 to 60 basis point through-the-cycle guidance in 2026.

UK and US consumer and corporate balance sheets are robust, with low and stable delinquencies and rational borrower behaviour. The overwhelming majority of the Investment Bank's wholesale clients are performing as we expected.

As an accounting matter, IFRS 9 models are procyclical and sensitive to changes in consensus economic expectations. In the quarter, we have made three post-model adjustments that amount to a net £20 million increase for the group.

First, we released the post-model adjustment for US tariff uncertainty from Q1 '25 in the Investment Bank and US Consumer Bank. Second, we made a post-model adjustment in the Investment Bank to recognise downside bias due to uncertainty.

Third, we adjusted UK and US consumer impairment model inputs to reflect a more prudent view of consensus economic forecasts, including 5.3% UK unemployment versus 5.2% previously. The Barclays UK loan loss rate was nevertheless in line with the circa 30 bps guidance we gave in Q4.

Focusing on the US Consumer Bank, where consumer behaviour remains resilient, as we show on slide 42 in the appendix. 30-day and 90-day delinquencies increased modestly to 3.1% and 1.7% respectively, mainly due to the seasoning of the General Motors portfolio, which will normalise in future quarters.

Looking ahead, we expect the American Airlines portfolio exit in Q2 to increase 30-day and 90-day delinquency rates by circa 30 bps and 20 bps respectively. The Q1 loan loss rate fell to 491 basis points, reflecting better-than-expected credit quality of the GM portfolio and the net PMA release.

As a reminder, we expect a circa 550 basis point loan loss rate in 2026. Turning now to UK lending.

UK lending grew 5% year-on-year, consistent with the '25 exit rate and the more than 5% CAGR we expect from '25 to '28. We remain on track to deploy circa £30 billion of UK business growth RWAs by the end of '26, having deployed £22 billion since '24.

We grew mortgage lending by £1.7 billion. Completions moderated versus last year's elevated level in the run-up to stamp duty changes in April '25.

Application volumes increased materially as customers sought to lock in rates in a volatile environment, facilitated by broker platform improvements and Kensington. We also added 364,000 new card customers in the quarter and grew balances 8% year-on-year.

Core Business Banking grew for a fifth consecutive quarter, while UK Corporate loans grew for a sixth consecutive quarter and by 15% year-on-year, split evenly between new and existing clients. Turning to Barclays UK in more detail.

You can see financial highlights on slide 13, but I will talk to slide 14. RoTE increased year-on-year to 19.7%.

NII of £2 billion increased 9% year-on-year and fell 1% quarter-on-quarter, as guided. This mainly reflected two fewer days in Q1 versus Q4, with NIM stable.

Lower product margins reflect deposit mix and pricing, and part of the circa £100 million headwind that we guided to at full year. We now expect NII to increase quarter-on-quarter from Q2, with year-on-year growth in every quarter.

The Q2 product margin impact will be broadly similar to Q1, and I expect additional structural hedge income following the increase in notional that I referenced earlier. Non-NII increased to £272 million, with the Q2 level expected to be around £250 million following a securitisation in April.

Costs of £1.2 billion increased 5% year-on-year due to structural cost actions, which we expect to be weighted to H1, in contrast to last year. We expect H2 costs to be below H1, supporting lower costs in '26 versus '25, and a low-50s cost:income ratio.

Moving on to the Barclays UK balance sheet. Deposit balances were seasonally lower versus Q4.

Wage growth supported stable current account balances despite seasonality. We took share in ISAs, pricing selectively in a competitive market, including to attract and deepen premier customer relationships.

Lending grew for the seventh consecutive quarter and by 4% year-on-year. Moving to the UK Corporate Bank.

Q1 RoTE increased to 19.9%. Income grew by 10% and costs fell 2%, and the cost:income ratio improved to 48%.

NII increased 15%, driven by volume growth and additional structural hedge income, with the fall versus Q4 mainly due to day count. Strong lending momentum continued and supported deposit growth of 3% year-on-year, and a loan-to-deposit ratio of 35%, up 4 percentage points versus Q1 '25.

As Venkat referenced, all UK corporate clients are now enabled on iPortal, with full migration expected during 2026. This will improve efficiency over time and broaden product usage, supporting fee growth beyond 2028.

Turning to Private Bank and Wealth Management. Q1 RoTE was 25.5%.

Income was broadly stable, while costs increased 9% year-on-year as we accelerated investment, which we expect to build quarter-on-quarter through '26. We added £1.5 billion of net new AUM in the quarter.

Despite adverse market valuation effects in Q1, AUM increased by 8% year-on-year, and client assets and liabilities grew 5%. We expect new capabilities and products, such as the Premier Wealth Management service launch in Q2, to drive growth over time.

Turning now to the Investment Bank. Our strategy in this division is to drive consistent returns through RWA discipline, income stability, and operating leverage.

That remains unchanged. We have now delivered eight consecutive quarters of year-on-year income growth, RWA productivity improvements, and positive operating jaws.

Targeted investments have improved the diversification of our income, which I will return to. We are increasing the durability of returns by growing more stable income streams in Financing and International Corporate Bank.

These structural improvements enabled the IB to participate in stronger seasonal and cyclical activity in Q1. We grew RWAs by 3% versus Q4 to support this activity.

We did this in a disciplined way, with income to average RWAs increasing to 8% and no increase in risk appetite, as we show on slide 38 in the appendix. Investment Bank RoTE was 15% in Q1.

Lower returns versus last year reflect the £228 million single name impairment charge, and two fair value moves in the corporate lending line: £105 million gain on leveraged finance last Q1 versus £40 million of marks this Q1. Operational performance was as we would have expected, given the environment, with income growing by 4% year-on-year.

We performed well in areas of historic strength, with investments supporting growth and diversification, as we planned. This includes growth in Advisory and ECM, with around three-quarters of fees in the quarter earned in the US, and Equities, which account for 28% of income versus 22% in '23.

In the International Corporate Bank, US dollar deposits grew by 21% year-on-year, and we continue to expect the ICB to become a larger part of the IB by '28, reflecting ongoing investment in transaction banking. Using the US dollar figures, Markets income was up 13% year-on-year.

Equities and FICC grew 23% and 8% respectively. We saw particular strength in Equity Derivatives and Prime, alongside strong credit and securitised product trading in FICC.

Intermediation activity grew 6% year-on-year, while Financing income grew 31%, and for the seventh consecutive quarter. This reflected growth in client balances, particularly in Prime, including strong growth in Asia.

Investment banking fees increased 25%. The strong pipeline we discussed at the full year and improved deal economics supported 89% advisory fee growth.

We took leading positions in three of the four largest global deals in Q1, and the M&A pipeline remains robust, with the share of announced deal volumes due to complete in 2026 increasing year-on-year. ECM fees increased 38%, and we have a solid IPO pipeline for the rest of the year.

Turning to the US Consumer Bank. Operational performance is on track, and we expect further progress following portfolio changes in Q2.

We grew receivables by 9% year-on-year. Half of this was organic, with the remainder from the addition of GM, rebalancing the mix of assets towards retail.

While the accounting changes I outlined at the full year explain most of the increase in NIM versus Q4, pricing, asset mix, and funding continue to drive improvements. We are pleased with the ongoing pace of retail deposit gathering, where balances increased 8% quarter-on-quarter and 52% since end-'23.

The improvement in RoTE to 18.8% reflected this operational progress. Returns also benefited from a full quarter of income from the AA portfolio without the associated marketing costs.

In US dollar terms, income grew 21% and costs were broadly flat. We continue to expect a mid-40s cost:income ratio in '26.

Given portfolio changes in Q2, let me help with some modelling points. The exit of AA, which we completed on 24th April, will increase NIM to more than 13% for FY '26, approaching 14% in H2.

This will more than offset an expected increase in the loan loss rate to circa 550 basis points for '26, as guided last quarter. Total income in Q1 provides a good starting point for the rest of the year, with the loss of AA income largely offset by the addition of Best Egg and some business growth.

Income in Q2 will include a circa $300 million gain on sale, less than prior guidance of circa $400 million, given lower balances at the point of sale. In addition, we expect incremental monthly costs of circa $45 million from Best Egg, which we expect to complete in early May.

All-in, we continue to expect a circa 12% RoTE for '26, excluding the AA gain on sale. We ended the quarter with a robust CET1 ratio of 14.1%, consistent with our intention to operate around the top of our 13% to 14% CET1 range.

Strong organic capital generation of 53 basis points was in line with expectations, supporting distributions and balance sheet flexibility to invest in market opportunities. The £500 million share buyback for Q1 and £500 million accrual towards this year's £2 billion dividend are both as planned.

RWAs increased £8 billion quarter-on-quarter, including £2.7 billion of growth in the three UK businesses. Excluding FX, Investment Bank RWAs increased £3.3 billion to support the stronger activity that I referenced earlier.

As usual, a word on our overall liquidity and funding on slide 29. We have strong and diverse funding, including a 75% LDR and an NSFR of 135%, and we are highly liquid across currencies with an LCR of 165%.

These measures reflect purposeful and prudent management of our balance sheet, delivering resilience, thus ensuring we have capacity to support customers in a range of economic environments. TNAV per share decreased 4 pence in the quarter, but increased 33 pence year-on-year to 405 pence.

Attributable profit added 14 pence per share in Q1. This was partially offset by the 6 pence final dividend paid on 31 March versus April in prior years.

Higher interest rates reduced the cash flow hedge reserve, driving an 11 pence reduction in TNAV versus Q4. This is a timing matter, and will unwind positively through to 2028, or if interest rates revert to lower levels.

TNAV per share growth from Q2 will be overwhelmingly driven by earnings, assuming broadly stable long-term interest rates from here. To summarise, operational progress since '23 provides a strong foundation to deliver all group targets in '26 and '28 in a range of environments.

Over to you, Venkat, for concluding remarks.

The momentum of operational improvements which we have delivered during the first two years of our plan have continued during the first quarter of 2026. While the environment has become more uncertain, the strength of our businesses and the diversification that they provide allows us to navigate volatility while delivering our plan and targets.

I'll now open to questions and answers. As ever, please limit yourself to two questions per person, we can get around as many of you as possible.

Please also introduce yourself as you ask your questions. If you wish to ask a question, please press star followed by 1 on your telephone keypad.

If you change your mind and wish to remove your question, please press star followed by 2.

Good morning. Alvaro Serrano from Morgan Stanley.

Thanks for taking my questions. Venkat, maybe this one's starting for you, you made the comments that you've reduced the risk appetite or pulled back—I can't remember exact words you used—on slightly higher leverage and some structured products.

Can you give us a bit more colour of the concrete measures you've taken and maybe speak to slide 45, and thanks very much for that disclosure, in which areas you've pulled back a bit? Should we think about any impact on revenues from that sort of reduced risk appetite?

The second question is on the UK, or broadly, NII outlook. Obviously, rates are higher now, and you've locked in, in the outer years, extra sort of hedge income as you've disclosed and spoken to.

When you think about the high yields versus potentially slowdown in loan growth and volume growth, do you think there's upside to NII if you were to mark to market sort of the current curves, or maybe you're more up to date in thinking on flexing your NII guidance? Thank you.

Yeah.

Hey, Alvaro, good morning. Let me start with your first question, and I'll hand it over to Anna for the second question.

We said in the statement that the impact is not material either today or of forgone income in the future. Where it would be on slide 45 is basically in that third box which says other commercial and consumer.

That's where you're likely to see—the £17 billion—that's where you're likely to see lending to business models that are basically themselves asset-backed lenders, and who are more vulnerable business models, and where we may not find the strength of financial controls we'd like to see them demonstrate. That's really the place where in the structured financing exposure, we would expect to see some limitations.

As I said in the prepared remarks, it's not material now as a source of income, nor forgone income in the future. Anna?

Thank you. Thanks, Alvaro, for the question.

Given the experience that we've had in Q1, we are more confident now on NII than we were at the full year, because the actual experience that we've had in Q1 is either positive or neutral. I'm very comfortable with consensus for '26, both for the group and for Barclays UK.

As I look a little further out into '27 and '28, that consensus looks light. We said the same at full year.

It looks very light in 2028. What we've observed in Q1 is actually a good deposit performance.

Current accounts in BUK have been broadly flat. Ordinarily, we would see a seasonal decline in Q1.

We've had a good ISA season, where we grew faster than the market. You can see good lending growth across the piece: 5%, pretty much on the target that we've given you.

Our USCB NIM is a little higher than we guided to, at 12.8%. Of course, as I said, we've topped up the hedge by £6 billion, and we've rolled it in the quarter at around 3.9%.

Now, this change in rates is really about the future years. We are still basing the guidance that we're giving you on 3.5%.

To the extent that we see rates remaining higher, obviously that will build through time, and you'll see the impact a little further out. I just remind you that our hedging income for 2026 is at 95% locked in already.

Our confidence is really coming from the real factors that we see in both deposits and in lending. To your point about slowdown in lending, we have not seen a slowdown in lending.

We see it growing strongly, both in BUK across the products, also in corporates, and for the first time, we're seeing some really good signs of growth within Business Banking. That's driven by our own actions; we're not relying on the market.

At this point, I wouldn't say that we would adjust our NII guidance for any change in lending. It's more the experience that we've had in Q1 just gives us greater confidence to deliver those consensus numbers.

Thank you

for the question. Thank you very much.

Perhaps we can go to the next question, please?

Hello, good morning. A couple of more questions on NII, please.

The product margins side of things, can I just dig a little bit deeper in that? I think previously you said that the mortgage compression from the COVID-era mortgages rolling off would be about £100 million.

How far are we in that, because presumably, as you said, some of the volumes that might be rolling off in Q2 probably got pulled forward in Q1? Then with swap rates volatility, can you comment on what you're seeing in terms of front-end margins as well?

Then on the deposit side, I suppose the competition has been maybe a little bit higher, partly reflecting seasonality as well. When you said that you expect product margin to be similar next quarter, is that more mortgage, or is it more deposit?

If you could just help us understand that a little bit better. Then on the USCB as well, you commented that margins were quite high this quarter, there's a big improvement.

Obviously, there'll be some mechanical improvements further from the American Airlines exit, but how much more sort of underlying improvement can we expect from pricing and from deposit mix, etc.?

Thank you, Perlie. I'll take both of those.

Our product margin impacts in Q1 are as we guided, and they're in line with our expectations. I'm going to merge your two NII questions, if I may, Perlie, because actually that product dilution is coming from both mortgages and from deposits.

In mortgages, we are seeing the impacts that we called out at the full year, and that's the maturation of the COVID-era loans coming through as expected. Somewhat offsetting that, we're seeing better performance from more recent vintages, where we are seeing better retention.

That's a slight positive impact in mortgages. We are seeing the impact of deposit margin compression coming through in there.

I expect it to be broadly similar in Q2, Perlie, with all of those factors continuing. That's simply because of the timing of the maturity of mortgages, but also, very importantly, remember deposit competition in the UK tends to be concentrated in Q1 and Q2 because of the ISA season.

Thereafter, we would expect that product margin compression to ease off a little. What's different from when I spoke to you at the full year is we now do expect NII growth in Q2.

We expected it to be broadly flat previously; now we expect growth into Q2, and then to continue growing quarterly thereafter, and to grow year-on-year in every single quarter of the year. When I think about what's happening in the mortgage market, we have seen a pull-forward of applications, but they have not yet completed.

March was a very, very large month for applications, and I think that just speaks to the volatility in the rate environment and customers seeking to lock in. To give you an idea, for our June maturity, we've seen roughly double the number of customers lock in by this stage than we would ordinarily do.

That hasn't completed yet; it's going to complete through Q2 and Q3. Margins remain fairly robust.

Clearly, rates are moving around, but so are swaps, and they tend to move in alignment with one another. That's what's happening in terms of UK NII.

In terms of USCB, look, the net interest income there is a little higher than we anticipated, but not significantly so, and I wouldn't call out anything in particular. The repricing impacts have worked their way through now, but we will continue to see ongoing beneficial both NIM impacts and net risk-adjusted margin impacts from continuing to rebalance the book from just travel and entertainment towards a bit more retail.

You're obviously going to see a step change over the next quarter, but that will be an ongoing impact. I'd just call out here also our progress in deposits.

Really pleased with that. Our retail deposits are now 76% of our overall funding.

That's higher than the target that we gave you of 75% by the end of 2026, and that has been disproportionately driven by some of the partnerships. You're going to continue to see margin accretion, but obviously it'll be more pronounced over the next quarter or so.

Thank you

for the questions. Understood.

Thank you. Can we go to the next question, please?

Hi, thank you. Two questions for me.

One was just back on BUK, but just on the cost piece. Appreciate there was slightly different phasing of investment this quarter versus last year.

Do you mind just giving a bit more colour on how different was the investment versus last year, just so we can see the kind of the cleaner piece there? Then secondly, just on the USCB net receivables, saw after several quarters of increase, there was a slight reduction.

I don't know if that was related to the AA portfolio, but basically, I'm just curious if US players are being a bit more aggressive, anticipating reductions in capital demand, and so whether that's a reason why net receivables came down, or if actually there is a little bit of a reduction in that market? Thank you.

Amit. I will take both of those.

In BUK, I can see as I look at operating costs as a slight miss to consensus. I think that's only timing.

Particularly when I look at where that is, it's in BUK. BUK's got a slightly different profile of investment, and actually efficiency delivery this year from previous years.

I'm not going to give you numbers, but let me help you think about it. Probably the structural cost actions will be a little more forward phased than last year, and that's simply because some of the things that we're doing around Tesco, as well as the underlying business, whereas the opposite is true of efficiencies.

You're going to see them build through the year. I still believe that BUK costs are going to be down in absolute terms year-on-year.

Clearly, given that they've been up in the first quarter, you should be expecting them to fall in absolute terms towards the second half, and for the cost:income ratio to be in the low-50s. That's exactly as we expected, and it's just some of the movements around timing and other investments.

On USCB, the change in card levels, typically we see a seasonal change in Q1. I don't believe it's any more than that, Amit.

As I look at our performance in terms of purchases and the other factors that we would expect to see as lead indicators, they are no different from the broader peer set. Thank you for the questions.

Thank you.

Thank you. Can we go to the next question, please?

Hello, good morning. I was going to ask you about share awards, but I nearly fell off my chair when you made the comment on 2028 net interest income, I'll actually go with that, if it's okay.

Just to clarify, 2028, you're talking about consensus being very light at the group level, just checking I caught that properly. Is that comment made in the context of where the yield curve is today, or are you saying that consensus was very light even ahead of the moving of the yield curve?

I don't know whether you can give us a bit of colour as to where you think we're wrong at a divisional level. Tying into that, just a quick question on the hedge.

Are you taking advantage of the fact that the yield curve is markedly higher today? A one-year forward starting seven-year is offering you 4.4% today.

I'm just wondering if you're pre-hedging maybe a bit more of your future maturities than you might have done in the past? Thanks.

Jonathan, I will take both of those. I made the same comments at the full year, it doesn't relate to the movement in the yield curve, and the guidance that we are giving you is still based on a 3.5% reinvestment rate.

We have not changed that number. It's the group number that I'm referring to as I look at that.

This is no change from what we've said before. If I can point you to where I think the difference is, I think it arises in two areas.

The first is UK Corporate Bank. We see considerable momentum in UK Corporate Bank.

We've seen it for consistent quarters now. It has grown its lending in the first quarter by 15%, and it continues to make great progress even before we land the capabilities that we are due to land through this year in iPortal.

That's the first thing I would call out. I think we don't discuss it a great deal on these calls.

The second thing would be US Consumer Bank, where you've really got three things starting to come together here. You've got card balances which are up 10% year-on-year in the first quarter.

We will in the next few days complete the purchase of a top-five unsecured direct-to-consumer loans business in the US, and that gives us the opportunity to take that capability directly to our customers and to our corporate clients. Then the third piece is our deposits, which, as I said, are now at 76%.

A meaningful part of that growth has come from our partnership with AARP. We are really learning in this business about how we can take the full suite of products to our partner base, and that's what gives us the confidence in that business's ability to grow.

Venkat, anything you would add on USCB in particular?

You asked about NII, Jonathan, and Anna's given you the various dimensions of it. In the USCB, in addition, what you see is continued improvement in digitisation, continued improvement in costs, leading to the higher RoTEs that we've shown this quarter: 18, 18-plus percent.

What I would say is, to broaden the statement that Anna has made across every part of the business, you're seeing performance in the way we said we would demonstrate it 2.5 years ago, and reiterated three months ago. In terms of top line, in terms of operating efficiency, in terms of jaws, in terms of deposit growth, in terms of lending growth in the Corporate Bank, in terms of the returns improvement in the US Consumer Bank, returns improvement in the Investment Bank, etc., etc.

I could go on. I think that's the picture we would like to emphasise.

Okay. Jonathan, let me come back to your second question, which was on hedge yield.

The simple answer is no. We roll the hedge systematically.

We roll it mechanistically. It is not our opportunity to speculate or determine what rates might be.

We roll it irrespective of that environment. The thing that we are very focused on, however, is deposit behaviour.

The increase in notional reflects observed deposit behaviour over a number of quarters. It doesn't relate to just the quarter passed or expectations forward.

We actually observe what's going on in the hedge, and then we will choose to extend it or indeed contract it. That's all that's going on there.

We're not responding to a change in the yield curve.

Brilliant. Thank you.

Thanks. Thank you.

Can I go to the next question, please?

Hi, good morning. Just to follow up there, just to come back to the hedge, just to follow up on Jonathan's questions.

It was a meaningful uptick, I guess, in Q1 of £6 billion also in the notional. Just trying to understand where that's landing, because it doesn't look like there was a big move in deposits in the UK, is that sort of landing outside of the UK, the IB perhaps?

I guess, a reflection of the stickiness, I suppose, of those deposits, and how you see them going forward, rather than, as you say, taking advantage of the curve in any way. Also just to clarify, in terms of pre-hedging the hedge, you say you don't do any pre-hedging the hedge when you talk about what's locked in from here?

That was really the first question. Then the second one was just around ECLs, reasonably flat in aggregate on the performing loan book.

Just want to understand the move in the management adjustment, which came down from 369 to 265 in the quarter. It's quite a big move.

I think that largely just relates to the GM book, which now filters directly into the models rather than needing an overlay, I'm not sure if that explains the entire move, but any colour there would be helpful. Thank you.

Thank you, Guy. I will take both of those.

Look, the movement in the hedge upwards over time in notional is going to reflect our, as I say, a long-term view of deposits. It's quite difficult for you to tie quarter-on-quarter movements in deposits to sort of changes in the hedge, because what we're trying to identify here is rate-insensitive balances, and obviously we want to observe that for several, several quarters before we make the change.

You're going to see it outside of the UK as well as inside. Obviously, over time, as the equity in the firm continues to rise, you're going to see us hedging more of the equity position as well.

I wouldn't call anything in particular out. If we do any pre-hedging, it's very limited, and it's under very strict risk limits.

Those have not changed over time, and certainly would not explain anything near the portion that I've called out today. That £6 billion is the observation of deposits.

In terms of your second question about post-model adjustments, appreciate this is quite difficult to tell because we only give you the full disclosure at half year. Just for the rest of you, what Guy is referring to is slide 40, and he's basically calling out the fact that the management adjustments have dropped from Q4 into Q1.

Just to remind you, Guy, we do these post-management adjustments for two reasons. The first is where we're doing some work on the models, and to anticipate what that model work will show, we very often take a PMA.

Then the other reason that we take a PMA is when we are faced with a degree of economic uncertainty, and we feel like consensus may not be effective. The point that you're talking about here is the former.

Actually what's happened is, prior to this quarter, the GM, the General Motors impairment was not modelled. We were essentially using our expectation and our existing portfolios to anticipate what that was going to be, and we put it in as a post-model adjustments.

Now what's happened is we've updated the model, and so General Motors is a modelled number. You're not going to see any change in the total number; it just jumps from being in the PMA to being in the modelled number.

The real changes in PMAs that we've done, and the ones we've spoken to you about, really speak to economic uncertainty, and relate to US cards, UK cards, and the IB. Okay?

That's clear. Thank you.

Thank you. Perhaps we can go to the next question, please?

Hi there. If I could just pivot the conversation to capital.

Just intrigued on two things. One, there's been a lot of press coverage about your comments around the leverage ratio, proposal to potentially exclude unencumbered gilts.

Perhaps you could just touch more broadly on where you see the leverage ratio as a binding constraint now. For which products, which divisions do you believe the leverage ratio is a binding constraint for?

Then secondly, I want to ask about Basel endgame. Overall a 5% release expected for the Cat 1 and 2 banks on change in the G-SIB methodology.

Arguably more important from a competitive standpoint if the output floor's been dropped. When I look at the risk weights, I think under ERBA, it's 75% on retail loans, 45% for credit card transactors.

Can you just talk about what you think Basel endgame means for the competitive dynamics for the US consumer division and for the Investment Bank? Thank you.

Andy, why don't I start on leverage, and then I will hand to Venkat on the second part. Yes, like the sort of broader consultation might suggest, there is an ongoing discussion in the UK about the leverage ratio, and really leverage being a backstop, and we would support that.

You're noting that we have published a piece of work that talks about the opportunity in the UK, really for the treatment of unencumbered gilts, and we do think that that's important. As we make that statement, it's more about the opportunity for UK PLC, and the reduction in costs that that would have for the government, and we called out around 2.5 billion per annum on an ongoing basis.

We are not leverage-constrained. Clearly, we have considerable leverage usage within our financing business, within the Investment Bank.

That's why we are a significant issuer of AT1s in the market. As we do so, we're clearly mindful of the relative cost between those AT1s and the kind of margin that we get in the financing business.

The two things are somewhat unconnected. One is more of an observation on UK PLC.

Venkat?

Yeah. Andrew, on the capital side, we clearly are watching very closely what's happening in the US, not just in terms of capital ratios proposed under the Basel endgame, but the way supervision is itself changing, and stress testing is changing.

You've got to look at all three together. We would advocate very strongly for the UK numbers to be relatively consistent, and for the UK approaches also to adopt a greater transparency in the way in which add-ons are determined, both for banks and for investors.

The particular things on the Investment Bank and credit cards, let me begin with credit cards. In the credit card space, you're right that if there are no changes, then the UK numbers will at a parent level, for us, holding company level, add on more capital per unit risk than a US bank would face.

Now, what we are doing to adjust our business is obviously running it more efficiently, and also diversifying it. The purchase of Best Egg, and the direct-to-consumer loan business, should be seen as a part of diversifying our cards business into other places which are less penalised in terms of capital.

Then on the Investment Banking side, the point I would make is we have already for some time been facing US banks which have been putting more capital and more balance sheet. At least the way we have done the analysis, and you should probably replicate it, is if you look at returns per risk-weighted assets, a form of capital efficiency, I think we've done pretty well.

As we've over the number of years made structural improvements in the way the Investment Bank is performing. We've had eight successive quarters of strength in year-on-year income growth, on positive cost jaws, on income over RWA, as I said, and we beat consensus for eight consecutive quarters in the IB.

This is all deeply structural. What we're trying to do with these structural changes, with the increase in financing as a portion of our total revenue, etc., is finding our own ways to be competitive and to be efficient.

Now, on top of that, do I want to row against the current of capital disparity between the UK and the US? I wouldn't.

We've made our views known, but we will continue to operate the bank in the way we have, and shown the progress we've done quarter-over-quarter.

Thank you, Venkat. The only other thing I would add, Jason, is just our ongoing focus on the International Corporate Bank.

Clearly, that's another source of relatively capital-light revenue for us, and an area where we think we have real opportunities to grow. We've talked about that a lot at the year-end, and you can see it again in our dollar deposit growth in the quarter.

Thank you for the question. Can we go to the next question, please?

Good morning. Thank you for taking my questions.

I think I can echo, Venkat, what you were saying about the sort of underlying performance of the business. If you take out the one-offs, it looks like PBT's up 15% year-on-year.

Of course, a lot of the conversations are about one-offs and those sorts of matters. If I could ask two.

One, quite a lot of coverage in the media around potential SRT governance inquiries. If you could talk potentially about that or confirm that there's no change to the capital outlook for the group as a consequence of what may or may not emerge from that.

Then secondly, just to follow up, please, on, Venkat, your last answer around relative capital intensity of the businesses in the US in particular. Could you just give us a sense as to which businesses you think are most impacted by the relative changes that are being envisaged, and in those, just some guesses to the cadence of sort of customer churn?

How quickly would we know if there was a delta in competitive intensity that actually mattered on the ground? Thanks very much.

Thank you, Jason. I'll start on SRTs, and then hand to Venkat.

On SRT, I'm not going to comment on regulatory reviews, but only to say that the regulator in the UK regularly conducts reviews, both individually and thematically across the industry. We have been very transparent around our Colonnade programme, and you can see that in the appendix.

We've given you the same slides for several quarters now. That is primarily our focus on credit management, as Venkat talked about before.

Indeed, has been in place since 2016. For those of you following along, it's slide 47.

It's a well-managed, well-embedded, well-regarded with investor programme that's been around for a long time. Of course, we have to notify the PRA every single time that we do an SRT transaction, so that's something that we've done.

From our perspective, the most important things that we are focused on, and I would expect the regulator to be focused on, are the risks associated with running that kind of process. We believe they are: number one, the financing of SRTs, we do not finance our own SRTs; secondly, the counterparty credit risk, remember ours is cash-collateralised, so that counterparty credit risk is minimised; and then thirdly, the risk of the market being shut at any point in time.

Now, clearly you mitigate that by having a very long-running, long-standing, high-quality programme like ours, but we also restrict the maturities in any particular quarter, they are less than £2 billion. That means that we would be able to mitigate that easily, even if the market were closed to us.

From our perspective, Jason, we're very comfortable with the programme that we have. We believe it's very successful, and provides the credit mitigation that we seek to do, and we don't envisage any changes in it.

Venkat?

Just to finish off on one point. All the attributes that Anna spoke about in of the SRT programme, they come from having an evergreen programme.

An evergreen programme where people know that they can expect a cadence of issue from us, the quality of issuance from us, and it helps us, and it helps them. On your capital question, let me begin by saying, first of all, there's no new news to us here, right?

We've been following this for a number of years. It has been clear that there is going to be disparity between the US and the UK.

It comes, as I say, not just from capital levels, but from forms of stress testing, the total capital stack, including regulatory add-ons. Now, there's not going to be a sudden shift.

What you're seeing is because of the way we anticipated, the way in which we've constructed our business over time. I just spoke about credit cards in the previous answer, where we've had a high-quality credit card portfolio in terms of FICO scores, and now we are diversifying it with the purchase of Best Egg into direct-to-consumer loans.

Second, on the Investment Banking side, you've seen again from us a emphasis on financing, which is, as I've always said, a very good business, properly risk-managed, and has capital benefits because it's secured lending, so that's becoming a bigger part of our portfolio. We continue to emphasise intermediation.

You will see that we manage our risks very well. If you look at our VaR, the VaR is managed and the number of loss days, which was only one this quarter, the VaR is managed at a low level.

VaR obviously is a way in which you control risk, and that can have an impact on capital. The way the business has been structured, it is with a view to these disparities, which are not new, right?

We will continue to work with the capital regime we have, and operate subject to it in the most efficient way we can.

Thank you, Venkat. The only other thing I would add, Jason, is just our ongoing focus on the International Corporate Bank.

Clearly, that's another source of relatively capital-light revenue for us, and an area where we think we have real opportunities to grow. We've talked about that a lot at the year-end, and you can see it again in our dollar deposit growth in the quarter.

Thank you for the question. Can we go to the next question, please?

Good morning. Thanks for taking the questions.

If I could come back to this topic around competition from US players. You've spoken to financing, and that's been an area of growth for you for a number of years now.

It's obviously not just RWA-based capital relief that US peers are getting, though. They are also seeing the sort of leverage biting point dropping away in the background.

Are you expecting to see more competition in that financing space as well? That would be question one, please.

The second, small one, I think, but on corporate lending in the IB, that looked quite soft this quarter, even with the fair value marks adjusted for. It looked like a soft quarter.

What should we be expecting there going forwards, please, noting that you're looking to the ICB as an area of growth? I know transaction banking is doing well, but if you could comment on that 1Q print for corporate lending, that would be appreciated.

Thank you.

Chris, why don't I start? I'll talk about leverage, and then I might hand to Venkat, and then I'll pick up on corporate lending.

Look, clearly, financing has been an area of growth for both us and for the US banks, and we've seen that over a number of quarters now. We're pleased with our performance, which is up 31% year-on-year in dollar terms.

We don't see that the US peers have been leverage-constrained up to this point. Indeed, it's not just this quarter.

If you look back over successive quarters, as Venkat has said, you see increasing levels of balance sheet generally being deployed into the business. Venkat, you might want to comment on the competitiveness of this product generally.

Look,

first of all, as Anna said, and we've been seeing this for a number of quarters, we've adjusted our business for a number of quarters. Second, especially when you come to things like financing and prime, there is a competitiveness element to it, but there's also a client service and stickiness element to it.

Our rankings have been growing consistently because of the services we provide to our clients in equity financing and in fixed income. We're a top-two fixed income financier, have been for a long, long time.

It's these capabilities that we bring to bear that make us very competitive and make us attractive to clients. I would view it on a much more holistic basis.

As Anna has said, and I said earlier, over a number of quarters you've seen the US banks put in both capital and balance sheet much more than we have. We've been very disciplined on both, minor fluctuations quarter-to-quarter, but keeping it stable.

Yet, we've continued to show the results in our Investment Bank that I spoke about in terms of continuous quarters of improvement. It's coming from building in the foundations to generate repeatable, improved performance.

Anna?

Thank you, Venkat. Chris, the corporate lending line, I appreciate, is very difficult to forecast, because what you've got there is an underlying level of corporate lending.

That's not really changing. We're clearly cycling through this process of reviewing the book.

We're sort of a little more than two-thirds of the way through that now. That number is fairly consistent at around 50-ish million a quarter.

Nothing really happening there. You've obviously got the swing in lev fin marks year-on-year.

It was up more than 100 last year; it's down 40 this year, you've got nearly 150 basis points of RoTE impact on the Investment Bank just in that line alone from those lev fin marks. Then the other two things that flow through there are costs of hedging and costs of SRT.

Nothing really notable to call out there. You should imagine in the current environment we do a little bit more hedging, but there's nothing particular I would call out for you, Chris.

Thank you.

Okay. Thank you.

Can we go to the next question, please?

Yes, good morning. Thanks for taking my question.

Just one, actually. Just wanted to go back to discuss your cost of risk guidance, which is now at the top of the 50 to 60 basis point range.

Just wanted to know what are your assumptions regarding especially the Middle East situation. Does your guidance capture any improvements in the geopolitical situation, or status quo, or maybe at the other end of the spectrum, maybe a potential increase in inflation because of the situation?

Anything you can give us regarding this new guidance. Thank you.

Thank you, Nicolas. We have called out that we expect to be around the top end of our 50 to 60 basis points range.

That's purely because of the single name that we took in the first quarter, and we do not see any other signs of credit deterioration in the UK, in the US, in corporate, or in consumer. From our perspective at the moment, if you do the math, then you'll see that we're broadly in the midpoint of the range for the remaining quarters of this year.

I can see that consensus is already at the position that we've guided to today, I think that's probably what the market was anticipating. At this point, we don't see any significant impacts from the situation in the Middle East, other than the revenue impacts, which have been broadly positive to date, the rate impact, and obviously our ability to capture the cyclical opportunity in the IB.

In terms of credit, we don't see any deterioration at this point. However, we have taken three, I would say, relatively modest adjustments in our IFRS 9 modelling as we look at future potential risks.

The first of those relates to UK and US cards, where we have been slightly more conservative with the unemployment rates that we have used predominantly, and we're just recognising those, that clearly consensus is moving on over time, and those two particular books are highly, highly sensitive to unemployment and the rate of change in unemployment. The second thing that we've done is, to Venkat's prepared remarks, we're a little bit more mindful of some of the Investment Bank exposures, and on that basis, we have put a little bit of downside bias into the Investment Bank calculation, essentially weighting it more heavily to the downside-one scenario.

That's very consistent with what we've done in previous periods where we faced uncertainty. We're not trying to make a prediction here.

We're really just recognising some of the uncertainty around us. Now, clearly, if the situation were to persist, and we started to see real economic effects coming through in terms of higher inflation, then that may have some impact on credit.

There's a few things I would say hopefully to reassure. The first would be we clearly had recent experience of this in 2022, where we saw a sharp inflationary environment, and we saw a sharp increase in rates, and we saw very, very resilient consumer and client behaviour.

Corporate balance sheets remain strong. Consumers remain in a very robust position.

Whilst we've added lending since then, there's been no meaningful change in our risk stance since that point in time. That gives us confidence.

The second thing is that, obviously, we see, I would say, rational changes in behaviour from both clients and consumers, being mindful of the uncertainty, and perhaps paying back their credit cards a little faster than they otherwise might. We think that that's really positive for credit, and it's something that we observe.

Overall, nothing additional that we've taken so far, other than those three PMAs. IFRS 9 is highly procyclical, if we were to see a real deterioration, then clearly that might lead us to make some changes, but of course we'll call that out if it occurs.

Thank you for the question.

Thank you.

Could we go to the next question, please?

Morning everybody. My first question is just on lending dynamics, and Anna, I think you've just covered some of this, but I want to drill down on one point.

In the UK Corporate Bank, how much of the moves you've seen on loans and on deposits as well actually in the first quarter is potentially attributable to macro uncertainty? The premise being that if you were to start to see scarcity and sort of inflation-driven restockings cycles, companies loading up on inventory at higher prices, that will drive demand for working capital lending, while also compressing corporate cash balances.

Simplistically, that just maps onto the Q-on-Q evolution in loans and deposits you saw in the UK Corporate Bank, but that could just be a coincidence. Then second question on the disclosure on slide 46, 45, sorry.

Has the uncertainty of the last few months in the private credit space changed at all how you think about the growth outlook in those areas? I think there's a sort of consensus building that the credit risk for the banks and so on is pretty low.

You call out the absence of losses, but simplistically, private credits as an industry has been growing pretty quickly. If you in your internal planning had forecast that stacked bar chart, let's say for 2028, 6 to 12 months ago, would the composition of that bar chart look very different today?

I.e., has the size of the opportunity set in financing changed in your view? Thank you.

Chris. I'll pick up the first of those, and then I'll hand to Venkat.

Look, you've seen in Q1 15% lending growth, 3% deposit growth. I don't think that's due to anything like the sort of behaviour changes that you talk about, Chris.

I think that's probably a coincidence. In fact, it's very consistent with what we've seen in recent quarters.

About 50% of the lending growth that we are seeing is coming from new clients, and as they come on board, they are also placing their deposits with us, which is why we're seeing that balance. Remember, we are very deposit-heavy within our Corporate Bank.

Our loan-to-deposit ratio, I think, is around 34%. We would expect to be growing lending faster than deposits.

That is our absolute strategic intent. Venkat, over to you on the second question?

Yeah.

Just on the first point, which is that the growth you see in lending in our Corporate Bank is very largely our own actions. This is what we said we would do in our strategy.

We said that we have had a bigger deposit base, and we wanted to encourage lending to our clients and grow our client book. That's exactly what we've been doing.

Coming to your question on structured financing exposures, look, there's a supply of credit, there's a demand for credit issue. I think what you're seeing in the liquidity dynamics in the private credit market may mean a shrinkage supply of credit coming from the funds themselves.

It'll take us some time to see. The reason this thing has happened is that obviously the private credit funds have been giving loans in a niche which has been fairly well-publicised the banks were regulated out of.

Now, things could change in the US, and so banks may come back in there. Generally speaking, when you look at the way we are exposed to it, which is in the way shown on the slide, which is working with the fund managers, I would imagine you're absolutely right that I think the growth of this thing is probably going to be levelling off or declining in the next year or so.

We have to give it some more time, but that would be a reasonable assumption.

Thank you.

Okay. Thank you, Chris, for the questions.

Can we go to the next question, please?

Morning. Thanks for taking my questions.

You sound very, very bullish on the outlook, with only kind of a small PMA taken, and the implied rate benefits of the top line, and calling out consensus even on lower rates being too low. Is it not a bit perverse that an energy price shock that causes higher interest rates and lower economic growth outlook is actually a positive for bank earnings?

I guess, is there any negative risk in there from growth? Which parts of the book from a growth perspective would you be most worried about in this type of environment?

Yeah. Look, you raise a very good question, Rob, and I think there're two issues here: there's one of timing, and then there's one of certainty or knowledge.

Clearly, inflation risk has increased with what's going on in the Middle East. You can see it in the UK inflation numbers speaking just in the UK, and over time, there are worries in the US as well.

For a variety of reasons, it's not hit employment. Growth in the UK at least until February was strong.

Growth in the US remains strong, and there are important sectoral reasons for why that is the case, related a lot of course to tech. We've said to you, and Anna has said, that we are not seeing any impact on our retail or corporate credit portfolios in the UK or the US, especially the smaller companies.

All of that puts together explains why credit conditions are generally good. We've said that we expect impairment to be at the higher end of our cyclical range of 50 to 60 basis points, and we've discussed NII, and we've discussed the interest rate income for the bank.

The longer this thing goes on in the Middle East, and the more inflation feeds into the economy, then there is a risk of lower growth, and then there's a risk potentially of the implications of lower growth, including on credit. We are not seeing it yet, and I don't think it's fed through to consensus, which is what we follow.

That's the reason. What you're seeing from us is prudent risk management in the forms of the way we've talked about credit lending or our approach to credit, in the way Anna described a slight emphasis to weaker scenarios in calculating IFRS 9-related impairment.

What you're seeing from us is a little more prudent positioning, a little more prudent balance of weighting of impairment scenarios, but it's not yet played through mainstream consensus numbers, or of course into what we're experiencing in the portfolio. Anna?

Yes, thank you, Venkat. I think the other thing I would call out, Rob, is that our confidence is drawn and relates to the plans that we continue to execute.

This is another quarter of execution. Of course we're mindful of the environment, and Venkat's called out a few examples.

Our focus is on executing the plan, as it has been over the last few quarters. That's really what's delivering the momentum that you can see today.

Also the diversification that we have in the book, both geographically and between different types of business, allow us to be resilient in quite a range of environments. We're clearly mindful of the outlook.

Thank you. Okay.

Thank you, Rob. Perhaps we could go to the next question, which I believe is the last question.

Thank you.

Thanks very much. I had two sort of related questions, and I guess you've partly covered it in the answer to Rob's.

I guess what we're all struggling with is the contrast between people like the Deputy Governor of the Bank of England saying markets are ignoring risks, there's an awful lot of volatility going on, people are not focusing on it, and the message from you, which is there aren't really any problems. I suppose the way I'd ask the question is, what has to happen for there to be a problem?

You must sensitize your book. Is it that the Middle East continues for much longer than expected?

Is it the oil price of $150 is the big question mark, because obviously $100 is not a problem. What is an environment which would have you guys thinking, this is a problem for our book, and we're going to have to start taking some material numbers?

I guess that's the first question. Then just related to that, I was struck both by the size and the high proportion of write-offs you took on the one-off exposure.

I'm just wondered, could you give us a sense? Is this like a normal exposure to you?

Would this be like a top-10%? How many of these sort of size, single name exposures do you have on your book?

Would this be a very material one? Then I guess secondly, related, I guess you've been through all of them now.

Can you give us some flavour as to why this was a one-off, because it was an extraordinarily big number in itself, and a big percentage write-off, if that makes sense. Thanks so much.

Okay. Why don't I start, Venkat, and then I will hand to you.

Ed, I'll just reiterate, we are very mindful of the environment around us, and that's why we are managing risk and capital very, very carefully. We go into this kind of environment with a resilience that would not have been there a few years ago.

We are operating with greater proportion of our capital focused on more stable returns. We have higher operating leverage, which gives us greater resilience.

Of course, we have much higher levels of absolute capital. If there is a deterioration, then we would face that in a completely different position as a bank.

That's number one. Number two would be, as Venkat has said, we continue to manage our risks carefully.

He's talked about some changes that we are making around how we approach lending. I would also call out the way that we've managed the volatility in markets in the first quarter, you can see both the VaR and the single-day trading loss, that tells you how we are approaching risk in this kind of market.

You're right, to the extent that the situation intensifies, either in terms of inflation, or indeed, time, we might see that start to flow through into the real economy. That's how we are positioning ourselves, to manage those things robustly.

Venkat?

Let me just continue on that question for a second, and then I'll come back to your second question. What Anna has said, we're managing our risks, we take a view to the future.

Also look at the structural composition of the business, right? What you've seen in this quarter is an anticipation of greater volatility and greater economic weakness.

That has led to volatility in the financial markets themselves, which our trading businesses have been able to do well in, because of the help that they're providing to clients and the intermediation as they do. The question I always ask is if on the first day of the quarter you knew how the quarter would fold out, what results would you expect?

At the last day of the quarter, did you get the results that you thought you would expect, right? If you look at our businesses, because of the structural changes which we are doing, a, what you see in each business is what we would have thought; b, the way the businesses interact also gives us protections.

Coming back to the question that, I think it was Rob who asked it, on the one hand, you're getting an advantage from interest rates. On another hand, you're getting an advantage from trading and trading-related activity.

On yet another hand, you're getting the advantage in the Investment Bank from people seeking capital markets transactions and IPOs, right? Then credit conditions still remain strong.

If that changes, which it could over time the longer these things go on, then yes, you would have some issues on impairment, but you may still continue to get benefits from other sides of the portfolio, right? Then we've not spent some time on this call, but we do have fee businesses, transaction businesses, all of which will be important and relevant as people look to hedge financial exposures.

It's a diversified bank, diversified sources of revenue, and it's important to focus on one or the other, but you've got to look at it holistically. This quarter's results show you the importance of that.

Then coming to the second question, first, I would take you to page 45, where we've gone through the history of our exposures to these things, and what we've said is, as a credit matter, we've had no losses or negligible losses across all of this. That's the first important thing.

When fraud happens, right, and depending on the extent and sophistication of the fraud, the numbers are appreciable. I'll say two things: I don't like to lose a single dollar, a single pound to fraud.

On the other hand, this business has been structured, has been performing well over the last number of years. It has been structured in such a way, and we've made fundamental improvements to it, that we are able to absorb it.

Doesn't mean I like it, doesn't mean we won't take steps, and which we are taking steps to reduce that likelihood, minimise it, and so on. We can absorb it.

In a credit lending business, there's always the chance of that. We look to reduce it and minimise it by good risk management.

There are obviously lessons which we have learned from watching these two situations, and those lessons we've put in. That's what I would say.

The last thing, I know this is the final question, if I may close on this, the message I'd like to leave all of you with: first of all, thank you for joining us. Thank you for being on this journey with us.

Thank you for the excellent feedback you give us on this call and between calls. What you're seeing is yet another quarter of the demonstration of the fulfilment of our strategy.

Quarter after quarter after quarter, we've been improving this bank structurally in the ways we said we would, and delivering in the ways we said we would. Across the bank, in the Investment Bank, an increase in RoTE now to double digits, it's 15% this quarter.

In US cards, an increase in RoTE, when we started this plan, it was 4%, we've just printed an 18% quarter. The bank's RoTE itself is at 13.5%.

We are reiterating all our targets. Strong capitalisation, we're at a 14.1% CET1 ratio, which is a little above the high end of the range.

That shows you prudent planning, prudent stewardship of capital, and with a view to what might come in the future, which some of the guys you have asked questions about, the growth in NII, the strength of our deposit base, the increase in UK corporate lending, fulfilment of our RWA promises in the UK, increased client engagement in the Investment Bank, and so on, and so on, and so on. We've laid out our strategic plan.

We've laid out the structural improvements. We look to deliver upon it quarter after quarter, and to report to you that way quarter after quarter.

That's our aim. Thank you very much for joining us.

Thank you, everybody. We look forward to seeing you on the road, and of course we'll see some of you at the analyst breakfast.

Thank you for your questions.