Standard Chartered PLC

Andy Halford - Chief Financial Officer

Rohith Chandra-Rajan - Barclays Ronit Ghose - Citigroup Chris Manners - Morgan Stanley Manus Costello - Autonomous Claire Kane - Credit Suisse Martin Leitgeb - Goldman Sachs Joseph Dickerson - Jefferies Chira Barua - Sanford Bernstein Robert Noble - RBC Capital Markets

Thank you, Liane and good morning and good afternoon to those of you who have dialed in. Hopefully, by now, you will have read our first quarter interim management statement.

I will spend a few minutes setting contexts and drawing out some of the key highlights before we move on to questions. So, general trading conditions in the quarter were much the same as we described at the time of our full year results just 2 months ago.

Some macroeconomic headwinds are showing signs of easing, competition still fairly intense and elements of the geopolitical situation remaining uncertain. And we expect absolute general descriptor to apply for period going forwards.

But despite those challenges, we continued to make a good progress, improving the financial performance of the group in the first quarter. So just two or three key numbers and then I will get into details: the income, $3.6 billion, which was up modestly on a sequential quarterly basis, albeit the benefit of some ALM gains; the profit before tax of $1 billion was a significant improvement driven by tight cost control and particularly loan impairment, which I will come on to; and thirdly, the CET1 ratio at 13.8% was up a further 20 basis points from the end of last year.

So, let me go into numbers in a little bit more detail starting with income. At group level, as I said, income of $3.6 billion was up 8% year-on-year or if you exclude the principal finance losses of the first quarter of last year, then on the comparable basis up 4%.

Encouragingly, on a sequential quarter basis, we are up 2%, although a proportion of the $75 million increase came from ALM activity that was particularly boosted by favorable market conditions in India and Hong Kong. So, looking at the sequential quarter-on-quarter income performance by client segments to start with.

In corporate and institutional banking, we saw some early signs of balance sheet momentum towards the end of the quarter that income was lower than in the fourth quarter in 2016. That was mainly due to the timing of corporate finance transactions, where you will recall we had a very strong finish to 2016 and to foreign exchange, where volatility was lower than in the period immediately after the U.S.

election results in the fourth quarter of last year. In retail banking, income was up slightly quarter-on-quarter; a strong recovery in wealth management, particularly in Hong Kong and a widening of deposit margins was offset by asset margin compression and seasonally lower credit card balances.

Commercial banking continues to make steady progress, with income up $22 million quarter-on-quarter. And in private banking, we saw positive momentum, adding about $900 million of net new money since the end of last year.

Now, moving then on to the income, but this time on a regional basis. Greater China and North Asia has had a good quarter with broad-based growth across most of the markets and strong ALM gains.

In ASEAN and South Asia, lower corporate finance income was offset mainly by ALM gains, resulting to 1% quarter-on-quarter improvement. Income from Africa and Middle East was 5% higher compared to the fourth quarter in 2016, following improvement in wealth management and financial markets.

And finally, the income was slightly lower quarter-on-quarter in Europe and Americas, impacted by financial markets and the timing of corporate finance transactions. So to summarize the income performance, we saw encouraging early signs of underlying business momentum towards the end of the quarter as well as the benefit of favorable market conditions in ALM.

When thinking about ALM instantly, bear in mind this is often a little higher in the first quarter, so taking the average over the past two quarters is probably more reflected at the underlying run-rate. However, it is obviously hard to predict that one precisely.

We remain absolutely determined to improve the top line and remain confident in our ability to find opportunities to grow with our clients in our various markets. Moving on to expenses, year-on-year, they were up 3%, excluding regulatory costs, despite significant investment and underlying cost inflation.

We will deliver further cost – gross cost efficiencies in 2017 that will fund investments into improving the fabric of the business, including in our regulatory and compliance infrastructure. Regulatory cost was just over $300 million or at the similar level to the fourth quarter.

And it remains our expectation that full year costs in 2017 will be at around the same level as they were in 2016. Turning to loan impairment, overall credit quality remained pretty constant, with gross non-performing loans up by broadly the same amount as credit grade 12 accounts reduced.

This follows the downgrade of the small number of corporate and institutional banking clients. The cover ratio in the ongoing business of 66% was down slightly due to the high degree of collateral we hold against the downgraded exposures.

Many of you will be aware that loan impairment is typically lower in the first quarter, but it was particularly low in this first quarter. This reflects to some extent the actions, the significant actions we took to improve credit quality generally since the end of 2015, but I would caution against simply annualizing at this level.

Whilst we might hope that this first quarter performance of the full year loan impairment does not start with the number two, the reality is that the operating environment overall remains challenging in parts of the footprint and stresses do exist in parts of the portfolio. So a good start to the year, but let’s be careful about extrapolation.

So taking all of it into account, the group was significantly more profitable compared to both the equivalent quarter last year and the immediately previous quarter, albeit with the benefit of lower principal finance losses and ALM gains. Now, looking at the balance sheet, we are increasingly well capitalized and remain highly liquid.

Customer deposits were up 5% due to our continued focus on gathering high-quality client operating accounts and client assets also grew at a similar rate in the quarter. Now, whilst it is very encouraging to see positive momentum on the lending side, as we are very much open to business, around two-thirds of the quarter-on-quarter growth arises from corporate finance and currency translation.

Looking forward, therefore, corporate finance is an inherently lumpy business and FX will be what it will be. So I would not expect to see the same rate of growth going forwards over the remainder of the year.

As I said earlier, our CET1 ratio is up 20 basis points to 13.8%, boosted by profits in the first quarter and foreign exchange translation. This capital strength will enable us to navigate changes in regulatory requirements as and when they may happen whilst also taking into – taking advantage of opportunities to grow should conditions continue to improve.

So, to summarize before I hand back to the operator, conditions for our clients in the quarter and therefore for the group showed some signs of improvement, although competition is intense and the global geopolitical outlook remains uncertain. But despite this backdrop, we have made real progress improving our financial performance.

This is an encouraging first quarter, but we are certainly not getting carried away. We are clear what the journey will look like from here to realize the full potential of this unique franchise, but acknowledge that we still have some way to go.

Delivering sustainable income growth is an important part of this and remains a key priority. Our investments into improving the fabric of the organization are making it easier for our clients to engage with us and that together with our resilient balance sheet and strong capital are making us more competitive and will enable us to take advantage of opportunities for growth in our markets.

With that, I will hand back to Liane and take your questions.

Hi, good morning, Andy. It’s Rohith from Barclays.

I had a couple, please. One was just – I am just trying to tease out to you a bit more detail on your caution on the provisioning outlook.

I mean it’s clearly a big step down from sort of the run-rate we saw through much of last year, obviously the big pickup in Q4, you highlighted a couple of – or some sector specifics in Q4 last year, but I was just wondering if you could sort of give us some indications to the type of areas that you are cautious on that might see that charge pickup and as we progress through the year, so that will be the first one. And then the second one, just on the income, I guess you have very helpfully provided some indication of ALM, it sounds like $100 million – or $100 million to $120 million a quarter is what you might think is more realistic for a run rate from ALM, I am just wondering if that was the case?

Thank you.

Yes. Thanks Rohith.

Yes, it’s a difficult one. It’s the loan impairment sort of provisioning and forecasting forwards is not a sort of confident science.

And as you will appreciate, $2.5 billion or thereabouts of charges last year and starting with a $200 million number for the first quarter this year is clearly a pretty significant difference and it is encouraging at many levels. On the other hand, we do have $10 billion or so of non-performing loans sitting in the books overall and whilst we have got sort of good provisioning levels against them, there will no doubt from time-to-time be one or two that do cause more problems.

So I think all I was trying to say is I do hope that we will be much better than where we were last year. It would be nice to think the full year number doesn’t start with the number two.

But I think it would probably be somewhat optimistic just to do a simple multiplication of the first quarter and confidently think that that is a likely predictor of the full year. And on the income, the ALM side yes, I think what you have said, I would say is broadly right.

It does move around a fair amount between quarters. And we had a $200 million, first quarter.

We had a $30 million, fourth quarter. And to your point, an average of around $100 million, it’s not a precise one, but I would say if I was sort of thinking about how to look at this going forward, I think I would agree directionally with your hypothesis there.

Okay, thanks very much.

Hi, good morning. It’s Ronit from Citigroup.

Can I just pick up on a couple of questions related to the balance sheet and to the loan growth, Andy, the 5% Q-on-Q, can you just split out how much of it is FX translation helped?

Yes. About $3 billion of it is on sort of translation.

So of the 5%, as much as 3% is translation…?

Sorry. $3 billion.

So it’s…

$3 billion. Okay.

Yes. Sorry.

$3 billion is translation, okay. Cool.

And then of the remainder of the underlying growth, you said – in the release you called out corporate finance and mortgages, if one was being cheeky, I would say the revenue number on corporate finance and mortgages both fell quarter-on-quarter and I hear what you said about deals closing in Q4, but is there any color or comments you can give us around pricing trends on this extra volume growth you have put on, on an underlying basis, how are the pricing, how are the margin trends looking. And just final related question on volumes, by geography, has a lot of this growth come in the Hong Kong or Greater China area?

Yes. So it’s – I don’t think it is being cheeky, I think that your question is a good one.

So remember that some of the impact on the numbers into the first quarter, a small amount of it, is affected by small divestments of retail businesses, so Philippines, Thailand, etcetera have taken a little bit out of the numbers on that front. And secondly, as you articulated in your question, we did actually see a good chunk of the increase in the loans and advances actually in the month of March and therefore sort of not fully reflected in the numbers.

And I would say overall on margins what we have been seeing the last several quarters is margins being under a bit of pressure because of pricing and hence the gain really being won or trying to get the volume growth to offset that. I think actually margins in the first quarter overall for the bank as a whole were actually fairly similar to the margins in the first quarter a year ago.

And in part, that is benefiting from the continued focus or an increased focus, I think over the last year on liability management and making sure that we are getting the sort of cost of funds to improve over a period of time so that we can broadly offset the net effect of the impacts on selling price margins versus volumes. So that’s sort of the picture, I would say that the liability side is pretty well compensating on the other side.

On sort of Hong Kong and a good start to the year in Hong Kong, so this time last year, it was such a difficult start in Hong Kong and but they have had a good start, particularly on the wealth management front. And actually, wealth management has done well across the piece.

You could see that’s sort of up $50 million or so, $40 million, $50 million, quarter-on-quarter and definitely have got now more assets under management in the private side. We did strengthen some of the team in selected parts, well, including in Hong Kong and it’s nice to see some early benefits coming through from that.

Great. Just to clarify and that’s very helpful to see them, some margin points, you talked 1Q ‘17 similar ballpark to 1Q ‘16, so the asset spread pressure being offset by liability spread improvements, is that a fair summary?

Yes.

Thank you.

Good morning Andy, just two questions if I may. The first one was maybe to come back on the margin point, can you remind us your sensitivity to rising interest rates and yes, how much benefit you think you are going to have from sort of two recent rate hikes we have had in the states and yes, should we be expecting a margin expansion from here, just because when we look at the loan book versus the revenue, it’s actually off and slipped a little bit in Q1.

And the second question was just on capital and dividends, I guess you are sort of targeting 12% to 13% CET1 ratio, you are profitable, when can we think about capital return and maybe you could lead us through that a little bit? Thanks.

Yes. Chris, so let’s take those in order.

And so you may recall we have got the rough estimate of 50 basis points of increase in U.S. interest rates as being $300 million to $400 million full year effect.

We said that that did assume that those interest rates were updated sort of globally, irrespective whether it was dollar or local currency, so I think as you look forwards then, reflecting that most of the change has been U.S. – or U.S.

dollar peg rather than rest of the world and that we have got now the sort of first quarter percent that came in back end of last year sort of in the first quarter numbers and another quarter which obviously will roll forward. And I think what we are seeing and this is part why the liability margin has improved slightly is we are seeing that sort of run rate reflected in the numbers, but you obviously need to take account of the fact that it’s not all currencies, it’s dollar only and that so far, we obviously got one quarter actually firmly in the numbers.

On the capital and dividend point, it’s clearly, it’s sort of interesting one. We said at the full year that really the whole question about dividends was influenced substantively by A, making sure we have got enough capital confidently going forward and B, making sure that we have got enough confidence in the progression of earnings but as and when we do start the dividend again, that then we have got the confidence we will have the earnings to be able to fund it.

So I think on the capital front the build for 20 basis points is good. IFRS 9 obviously is going to come in at the end of this year and clearly per your note and other notes, that will tend to be a slight drag rather than the opposite.

And Basel III/IV, a little bit unclear quite where that is in this process now. So there are sort of one or two things still wobbling around out there, but hopefully, over time, those will clarify certainly the former of those two.

And then the other one was investors are not going to want a recommencement of a dividend unless we are confident that we have then got the future earnings growth to be able to fund that going forwards. We said at the end of last year that, whilst it was encouraging that we were picking up, it was still a pretty short track record.

We are now one more quarter on, albeit an encouraging quarter, so I am sure the board will be looking, as it said it will do, at dividends half year, full year. And it will decide at some point whether it has enough confidence to recommence.

And at that stage, we will obviously communicate what the intent is.

Okay, thank you. Could I ask you maybe just to elaborate on one point there?

You say IFRS 9 is going to be a slight drag. And would slight be under 30 bps or how should we think of slight?

That’s quite encouraging. Is it not...

Yes. I think, if you look at our annual report and our acronyms and glossary, it’s – I don’t know the word slight actually does appear there.

But yes, I mean it will all be a few tens of rather than sort of half numbers are higher than that as best we see it at the moment, but we have got to crank a lot of stuff through a lot of systems and go through that, which we will be doing over the coming weeks. So, I will not get hung on your 30 criteria point, but I think it will be a few tens or a number of tens and we will communicate that later in the year.

Thanks. That’s very kind.

Hi. I wanted to ask two questions, please, one on income and one back from the point about capital.

Can you just give us a bit more detail about what happened in a couple of your revenue lines? In mortgages in particular, they were soft.

I wondered if there is anything going on in Hong Kong with the way that the Hong Kong mortgage book prices and whether or not there is any pressure there. As HIBOR rises, I believe some of those mortgages are switching to a different pricing basis.

And I also wondered if you could give us some color on the markets business, which was disappointing relative to history and to my expectations anyway. And then on my capital question, just longer term, you are at 13.8%, notwithstanding the headwinds that you talk about going forwards.

If you are to position where you are say 100 basis points above your core Tier 1 requirement or your range, do you think you are most likely to try and deploy that and to drive revenue growth? And if so when will we start to see a meaningful deployment of that capital to get the top line growing?

Yes, okay. So on the mortgages, there is nothing significant.

I said a couple of divestments businesses or impending divestments which take a small amount out of the numbers there, but there is nothing particular to call out. I think penetration in Hong Kong of the mortgage market is running strong.

A little bit of margin compression on that, but overall the sort of market share take is good. So, you put those two together.

It’s a slight reduction on the income front. In terms of financial markets, capital markets, I mean it does move around obviously from quarter to quarter.

We have been a bit lower on the Foreign Exchange in this quarter than we were previously. Other banks maybe more U.S.

have benefited a little bit more on that front just because of what they have been involved with, but nothing particular to sort of callout on either of those two fronts. I think we will see those move up.

So, for FX and rates, for example, is this kind of a fair run-rate or might there have been a couple of positions that run against you? I mean its step back up to the sort of closer to 300 level where you were averaging last year?

I would say, it is probably depressed a little bit overall, so you should probably think on the average that being a little bit higher than this is where the average would typically be.

Thank you.

And capital, I think that we would regard getting momentum in the business as being the most important thing. And we have got the liquidity to be able to do that.

We have, as you well know, until this quarter been struggling a bit with getting the asset growth, so the fact that there is more asset growth in here I think is definitely encouraging. And I think that we would be minded where we can do even if it is likely to the detriment of capital ratios to be actually getting to the growth in the business rather than be running precisely to a capital ratio, particularly one that is above the top of our range.

It’s not a precise science, but just from a mindset point of view, I think we would all see the momentum in the business as being the key thing. It is improvement, but you know – we know that there is still quite a long way to go before we get the returns up to the level that they need to be at.

Got it. Thank you.

Hi, good morning. I have a couple of questions really, more follow-ups.

First, on the rate sensitivity, so the benefit that you had in the first quarter, where would we have seen that come up in the product lines? Is that really driving the ALM benefits or perhaps the cash management improvement quarter-on-quarter?

My second question is on the asset quality developments. So, you did have some migration from CG 12 into the NPLs, but there has been – your coverage ratios have come down again.

So really, what drives the decision there not to take more loan impairments and boost the coverage levels? And my final follow-up is I appreciate some of the loan growth is back-end loaded in the quarter, but really you are talking very much about volumes being at the expense of margins.

And so really where do you expect to see the strongest demand or the strongest driver of growth from here in the coming quarters? Thanks.

Yes. Okay, Claire.

So rate sensitivity will have come out in ALM line predominantly and to a lesser extent in the cash management line, but those will be the two areas, where we have seen the improvements and to some extent on the deposits line as well. So, those are the areas where the rate sensitivity will come through.

The question on loan quality, the – we had a small number of accounts that were in CG 12 that have now gone into non-performing. So that’s much sort of dollar-for-dollar an increase in non-performing, a dollar-for-dollar reduction in the CG 12s, the good news actually is the CG 12 bucket sort of hasn’t backfilled very much with new things going into it.

So, if you take the two categories together, we are pretty level with where we are at previously. And in terms of the question on the cover ratio, the cover ratio, we are not driving from a sort of top-down target of a certain percentage.

It is actually the aggregation of the individual decisions as to what is the right level of provision to cover or to carry on the individual loan exposures. And we just – because of the particular exposures, it has moved very fractionally, the cover ratio down albeit when you take collateral into account as well, it is actually really, really similar to last year.

So, I don’t think you should read anything particular into cover ratio. And I think you should take away that whilst there is a bit transparence between the CG 12s and the non-performers that actually there is not much new that was coming into the CG 12s during the period.

And the loan growth, I think we are just going to push on all fronts where we can get reasonable returns at reasonable levels of risk. So, we have said right away across the business that where there are opportunities out there that are within our tightened risk tolerances, we really wanted to be pushing on that.

Clearly, we want to be getting the momentum in the corporate and institutional banking business moving. It is our biggest client group by some way and therefore particular focus in there, but it would be wrong to call them out sort of specifically wrong to get the commercial banking book moving as well.

So, we are pushing on all fronts and hopefully the aggregation of that will be the thing that will help on the top line over a period of time.

Thank you.

Yes, good morning also from my side. I have a couple of question, please.

And the first one is with regards to this year’s stress tests from the Bank of England. And I was just wondering if you could share a little bit of color on how you are seeing this year’s exercise from Standard Chartered’s perspective?

I mean what we see obviously from an external perspective is that the parameters for international stress are somewhat higher compared to last year’s round, but equally your book, in particular the liquidation book, has substantially improved since the last round. And I was just wonder if you have any sense on what kind of CET1 delta you are going – you are likely to see in this year’s exercise?

And the reason for the question is I am trying to get a sense on when we should think that we could get an – more clarity on dividend and dividend capacity from here? And is that really the stress test at the end of November or could you already have some visibility at least on recommending some form of interims as early as the first half results?

The second question is with regard to potential acquisitions. And I know that, at some point the rest of management comments given, that you would look at – very selectively at opportunities to grow, also if that means inorganically in a smaller context obviously.

And I was just wondering if you could shed a little bit of light on how you think of what you could look at, is it retail, is it commercial and what geographies? Thank you.

Okay, Martin. So Bank of England stress test, obviously is a relatively early stage.

Last year’s was a reasonably tough. It had a lot of pressure on Asian markets.

And we sort of did okay in that test. This year is, sort of that the margin, maybe a little bit tougher one or two things.

But as you say, the steps that we have taken internally, two things particularly, one, liquidation portfolio and the realization of a good part of that and secondly, the AT1 issuance that we did in the middle of last year which was not eligible to be taken into account in the previous stress test, but will be eligible to be taken into account this time I think should give us a pretty helpful sort of buffer against any downdrafts. Acquisitions, I think it will be fair to say that, the last 18 months, the focus has been on sorting the business and getting the focus operationally.

And – but sort of acquisitions has not been prime attention. I think, as we do progress things, then clearly at the margin, if there are sort of smaller opportunities that are definitely value accretive, obviously we should have a look at those, but I would continue to think our primary focus is going to be very largely on the operational performance of the group.

Thank you. Is there anything you could add on the dividend side, is there any scope for the first half results to give an indication on potential interim, I think there was – some of the news agencies quoted the headline earlier today.

Yes. Sorry.

I didn’t answer that, but listen, I think the Board will look at dividend in a half year, full year. It does that anyway.

It is a matter of routine. And to sort of add it to my previous comments, it is going to be partly about the capital sufficiency, partly about earnings progression, stress tests.

I think you are right. Actually, it’s sort of tying that into the list.

I do not know what the outcome will be, Martin. At some stage hopefully, we will have the confidence on all fronts and we will move forward again.

Whether that’s at the half year or the full year or next year, time will tell.

Thank you very much.

Hi. Most of my questions have been asked and answered.

I just had one question, you have referenced – FX has been referenced several times around loans and capital, so I am just wondering could you call any specific currency pairs that are particularly impactful that we should be watching over the coming quarters? Thanks so much.

I mean the FX movements overall in the bank over the last year have not been particularly significant. So well, the top line, I guess not that significant, but the bottom line, if you are not making much profit, then actually it doesn’t have too much of an impact, I guess as we move forwards, just sort of Korea, Singapore, India are the ones which obviously we keep an eye on probably more at this point in time than some of the others.

But there is nothing sort of in there that is sitting that’s sort of alarming us, but to your question, from time-to-time, they are obviously ones, which we are more focused upon.

Great. Thanks.

Good morning Andy. I have just got two questions, on transaction banking, the trade line has been flat for the last four quarters, even if Asian volumes, exports and imports, we have seen that it’s significantly up, really your cash management revenue lines have come across very nicely, just wondered if you could give us some color around how volumes and margins are playing out in that space, that is number one.

And the second is on CCPL, CCPL I remember you are telling me three, four months back that the big de-risking that you did over the last 2 years, that’s coming to an end and now if there is a business, you would write it, yet sequentially CCPL is down around about 7%, so how much of that is still de-leveraging going on, I understand seasonal Hong Kong trends or else do you have like a sharp margin drop, any color on these two would be very helpful?

So on transaction banking, we have put a lot of focus on the cash management activity over the last several quarters. Offering that sort of service to a corporate gets us very well established with that corporate.

And I think the product that we have got there is definitely as good as anybody else in the market. We have been winning a high proportion of bids that we have been involved with over the last several quarters.

And I think you can sort of see that coming through in the numbers. We were sort of 400-ish on income three or four quarters ago, it’s nearer the 500 level, so good to see that that is actually bit by bit sort of coming through.

There is – will be time on winning those things and then actually seeing the results come through. Trade has been an issue, also the compression of margin.

And with the commodity prices, particularly a year ago, obviously what we were actually funding was itself from a price point of view, sort of somewhat low. So that has been more one where we have had to be focused upon making sure we have got the volume growth to offset some of the margin pressure.

But overall, that one sort of stable quarter-on-quarter is good. And in terms of the CCPL, we did do quite a lot of de-risking on that front.

We have been sort of re-looking at that just to make sure that we are not going too far on that front. And obviously, the income line is only one part of the story here.

It’s the loan impairment and the avoided loan impairment that one really needs to have an eye to, to actually see it on a net basis. And there are one or two areas selectively where we are just looking at whether we can push a bit harder on that, as overall, the level of income has come off and we need to do it.

The leveling can be off again, a bit impacted by a couple of retail divestments, not a huge part of it, but it is a part of it...

I think – sorry then. Go ahead.

I was just going to say it’s – did that answer your questions, or not.

So on the credit card side, so I just wanted to understand, are you still writing the front book in Hong Kong, Singapore or you are still looking at the portfolio again, I understand what you are doing in Korea, but especially in Hong Kong and Singapore, are you writing front book right now?

Yes. No, we are up for business, definitely up for business.

I think operator, we probably have time for one more question. So don’t know who we have in the queue.

Hi, good morning. Just one follow-up really on the net interest margin and U.S.

rate, you are saying U.S. rate increases are in the numbers and also that you are seeing margin pressure, I was wondering if you looked overall, should we expect margin increase this year and next year as well?

Yes, it’s a really good question. I think after a number of quarters when we have seen overall margin decline, it is encouraging that we are now sort of sequentially flat and flat year-on-year.

And back to the previous point, obviously one of the things that’s helped that has been the increase in the U.S. interest rates.

And we are certainly going to be working hard to at least I think maintain the margins if we can. I think the issue goes back to one of my previous answers on making sure we have got momentum going forward.

I think we prefer to get more volumes still into the books rather than be going for outright margin increase in that process, albeit fine tuning to that extent our day-to-day decisioning. It’s not always the easiest thing, but I think a step at a time.

I think getting back to more stable margins is definitely a step in the right direction. And getting the sort of volume growth at the sorts of level of margin is what the focus is going to be over the coming quarters.

Thank you.

Good, well, with that, thank you all very much for joining the call. In summary, I think that it is encouraging that we are seeing signs of the bottom line picking up quite significantly.

We do need to be aware that the loan impairments may be slightly un-particularly low, but overall I think there is good evidence that what we said we were going to do a while ago, we have not only been getting on and doing, but there is evidence that that is now progressively bit by bit coming through. So with that, I will – thank you very much.

And we will probably next hook up on the half year results at the start of August. Thank you.