Standard Chartered PLC

Thank you very much, and good morning or good afternoon, depending on time zone you are in. Hopefully, you've had a brief chance to review our first quarter results statements already.

So before we open the lines for questions, I'll just add a bit of color to the key headlines then share a sense of our expectations going forward. As you know, we set out in separate a set of priorities and commitments for the next three years.

That will not only take us above a 10% return on tangible equity, but also create a truly differentiated bank for our customers and our shareholders. We've taken a number of positive steps towards that objective already.

And although the set of results only covers one quarter, they show that we have made a good start. For example, shortly after the investor update, we were granted one of the three virtual banking licenses in the initial wave approved by the regulator in Hong Kong.

We are very excited to be working with our partners on this initiative, HKT and its parent company PCCW, a Hong Kong's leading telecom media and digital solutions providers. And CTRIP is one of the world's most innovative online travel agent.

The strength of these strategic partners bring combined with our own deep banking expertise in the market means that we are in a strong position to redefine the digital banking experience for customers in Hong Kong. We will own the majority of the equity in this joint venture.

And I mentioned it because it's a great example of how we are disrupting through digital and partnerships. And speaking of digital initiatives, we have rolled out our standalone digital bank model that we originated in the Cote d'Ivoire in the further four markets in Kenya, Ghana, Tanzania, and Uganda.

And then three weeks ago, we announced the end to various investigations into our legacy, sanctions compliance and financial crime controls. These matters have taken up considerable management time and effort and resolving them renews a major area of uncertainty.

These are two very different steps on the path of the course, but they are both important and will be hugely impactful in their own way. In terms of the four big markets we called out in February where we see significant upside potential, or those early days three of them improve profitability year-on-year and the fourth career, we have returned capital to the Group in the first quarter and that's further improved returns there.

Finally are not inconsequentially, another commitment we made in February, given our strong capital position was to manage the E side of the RoTE equation more dynamically. With the material regulatory uncertainty result, we can now begin that process.

Given the discounts to book value we currently trade at and coupled with our confidence in further improving profitability of the Group, buying back our own shares is the natural best use of surplus capital currently to benefit all our shareholders. With this in mind, we have decided to spend a billion dollars buying back our own shares, and we'll start this process imminently and will take to complete it before the end of this year.

As we said in the February, our intent is to operate within the refreshed 13%-14% CET1 range, meaning we are prepared to return for the capitals is not required in the business as and when appropriate. This will continue to be subject to the execution of targeted capital actions, opportunities to invest in the business and of course the regulatory approval.

So, today's numbers, in terms of first quarter results themselves are underlying profit before tax improved by 10% year-on-year or 12% of the constant currency to $1.4 billion. This generated an annualized return on tangible equity of 9.6% compared to 8.6% for the same period a year ago.

The 100 basis points uplift is certainly encouraging that as you know, the first courses results did not include things like the UK bank levy that is charged at the end of the year. So looking at the numbers in a little bit more detail, and starting with income.

As we indicated at our full year results announcement, we benefited from unusually both market conditions in the first couple of months of 2018, January in particular, and predominantly in wealth management and financial markets. Partly as a result of that tough competitor that we call out, income in this first quarter was down 2% year-on-year.

Foreign exchange translation also had a meaningful impact. And only constant currency basis is it worth highlighting that income was actually 2% higher, and in March, income was higher than it was last year.

So down 2% on a reported basis versus a strong competitor, but up 2% on a constant currency basis. And if you exclude the swing in DVA, then income was actually up 4% with momentum in the business improving in the quarter.

Although this is only one quarter and despite the outlook for the global economy remaining uncertain. It feels like sentiment in our markets is showing early signs of improvement.

For these reasons, despite the slight contraction in this particular quarter, we're still confident that over the next three years, we can grow income at a compound annual growth rate of between 5% and 7%, both keeping expenses growth below the rate of inflation. Over that period, we assume that the foreign exchange swings will likely even out and given improving returns is the primary objective, then the reported income growth on its own in any given year is slightly less important than our ability to generate operating leverage via positive jaws.

So if FX suppresses reported income this year, then it will also like to suppress expenses as it has in the first quarter, meaning that's an underlying operating profit level, the effects will tend to cancel out. So moving to expensive, the other side of Joel's equation, I've already mentioned the beneficial impact that had on our reported number.

But it is also worth bearing in mind that costs are often less for us in the first quarter of the year. Staff costs are usually higher in Q2 that the impact of pay rises flow through, and there is the usual phasing of investment projects coming online as the year progresses.

Then when thinking about the remainder of the year, we're well aware that to reach our minimum 10% return target by 2021. We need to generate significant positive operating leverage over the period and that absolutely remains our intent, including the 2019 whatever happens to FX in the meantime, I'll spend just a minute on credit quality, where as you know, we have made considerable progress over the past few years.

Credit impairment charges are often low in the first quarter. But this year, they were exceptionally low less than half the same period last year, albeit benefiting significantly from a provision release in private banking.

This gives extra weight to my usual warning of this time of year not to think of the Q1 outcome as the run rate for the remainder of the year, there is still a long way to go. Just a couple of observations on the balance sheet before I conclude with capital.

Average interest earning assets grew 5%, driven by prior loans and advances to customers with growth from financial markets and corporate finance in particular, and increases in trading book assets to support customer activity in financial markets. Average interesting liabilities were also 5% higher, reflecting growth in customer accounts and repurchase agreements.

And we continued to see some further migration from non-interest bearing customer accounts into interest bearing liabilities, but the net interest margin after adjusting for IFRS16 remained stable. Risk rated assets were up 9.9 billion, two thirds related underlying asset growth predominantly in financial markets and corporate finance and one third related to seasonality in market risk RWAs and the impact of adopting is IFRS16.

Finally, into the capital city. CET1 ratio was 13.9% at the end of the first quarter, down 30 basis points in the end of the year, but right at the top of the revised 13% to 14% range we gave in February.

Incidentally, the 30 basis points includes the impact of the $186 million final charge, as well as the foreseeable ordinary dividend, which is based on an interim dividend that you may recall this year will be $0.07 in one third of the prior full year dividend. Buying back a billion dollars' worth of shares would all other things being equal, reduce the CET1 ratio by about 35 basis points, and the program will likely take several months to complete based on recent volumes.

So to conclude, before we open the lines to Q&A, our first quarter performance demonstrates that we are making tangible progress executing the strategic priorities laid out in February. While progress may not be linear, we remain very confident in our ability to deliver an RoTE of at least 10% by 2021.

With that, I'll hand back to Calum and take your questions.

Yes, good morning. Could have three questions please.

And the first one is on the very strong revenue print within finance market and just wondering if you could share a little bit of comment on what happened in the first quarter and to what extent this is a very strong quarter or this is essentially a result of something more fundamental undergoing the restructuring of that unit, which I think historically has led to comparatively weaker revenue print compared to the rest of the group, but it seems to be that is one of the bright spots in today's results? The second question is with regards to the legal entity restructuring, which you announced back at full year result.

And I was just wondering if you could give us an update on where you are with regards to that legal entity restructuring in Hong Kong, and at what point we could expect a revenue benefit from optimized funding structure there to come through? And the final point is just on your earlier comment on the buyback, which you assumed to complete by the end of the year, which seems a fairly long period of time at this stage.

Could you just share with us what you're focused on in terms of whether buybacks can be executed London Stock Exchange versus Hong Kong? And is that one of the consideration why it could take longer to complete?

Thank you.

Okay, and thanks Martin for questions. So financial markets, I think there is certainly some elements in here of our business progressively getting into a better tempo.

There's been a lot of work that we have done over the last two or three years, as you know, upgrading the team upgrading our capabilities, moving more digital, focusing upon broadening the number of clients who we are offering products to, and so I think that has clearly been one of the factors that has helped us here. Obviously, markets do move around from quarter-to-quarter, probably a little bit more buoyant in the Asia region than maybe elsewhere.

Put the two together. And we've had a good quarter.

And it's nice. Actually see we had pretty good fourth quarter as well.

So two good quarters there is good progress and has clearly helped the overall numbers. And second question on legal entity restructuring.

That continues, we made a number of changes in organizational structures that impacted our business in Singapore, we have now changed internally some of ownership relating to our Hong Kong business and we hope over the balance of this year that we will have two or three made other changes that will occur. There are various approvals, we need to get to do those.

So I'd say that is on track. The benefits of that will accrue probably less this year, but then over the next couple of years, we'll start to see those benefits coming through in the income line as we reduce eventually some of our interest costs.

In terms of the buyback, the time duration will depend very much on the volumes in the market. I said by the end of the year, I was not meaning precisely on the 31st of December, so it will depend a little bit on the volumes and what proportion daily volumes we can buy without obviously influencing the share price.

And the exact terms of which markets will be buying back on will be published imminently.

Thank you very much.

Great, thank you. I have a couple of questions, please.

First of all, on the revenue side, two questions. Just following up on the previous question.

Is there any element of your markets business that you consider that you are over earning in the first quarter then kind of a total revenues are down year-on-year on a reported basis, but your rates and your FX revenues and some of the markets, lionize was looking very good. And so is this just as you said, buoyancy and markets, blah, blah, blah, is anything want to call out, anything in the revenues at all And the second revenue question is on transaction banking.

And it looks like there's been a bit of a change in trend after many quarters of the cash management, custody business, doing better on revenues driven by margin expansion, volume growth, that's kind of gone sideways in Q1 on a linked quarter basis. Whereas straight had a very strong bounce back compared to Q4 anymore.

Is any more color I think you can call out there? And my final question is on capital on RWAs.

I hear what you say about the growth Q-on-Q, looking ahead, is there any further RWA optimization, user risk reduction that you've already done that's going to come through or should we think you're modeling our RWA growth in the future, we just look at balance sheet growth and loan growth, because one of the success in the last few years has been quite significant auto optimization. Is that basically done now?

Right. I will try to answer your four part two part question.

And so on revenue and the question, the issue about over earning, I guess, is quite an interesting one as to what over is a point again. As you know, the nature of that business does tend to be slightly lumpy in terms of volumes and in terms of sort of rates.

And, you know, a number of things. I think, well in the quarter, and no doubt some of those may or may not recurring every, you know, forward quarter, but there's nothing particular that I call out there, albeit it was, you know, a very good quarter for us, and, you know, on the average will strive to do that, but, you know, there are no guarantees.

And transaction banking, nothing for the particular in there to call out. I think trade was probably a little bit stronger than maybe we have seen over certainly the previous quarter, it was back at third quarter levels and not declining from third quarter levels, which is good.

And cash management was a little bit flatter in the period, but nothing that I particularly call out that was all concerned in that space. And on the RWAs, I think the journey for most banks to optimize is a fairly, never ending journey.

And there are always things that we will be looking at to optimize. As we said back in February, our belief is that through management of balance sheets and assets, maybe one or two disposals et cetera, we can keep the rate of RWA rate growth down below the rate of income growth over the next three years on the average, and that we will continue to be very focused upon.

So the other grade growth a good path, which was actually asset growth is good growth in the first quarter, I think is fine. And there's nothing that's happened in the first quarter that would change my views on the medium term outlook for others.

Thank you, Andy. Can I just circle back to transaction banking, please.

So on the cash management, is there any change in trend on margin that you can see, either in Q1 you can see in the pipeline taking place, is that margin expansion have seen because the rising rates and also volume growth you've been winning cost to the mandate, has there been a change in trend?

If you go back a year, then there is probably was a little bit more uplift in margin coming through than we're seeing now. Margins are still holding up well, but sort of rate of improvement probably a little bit slower as you would expect.

Volume and mandates were winning still comes in at quite a steady run rate. So, you know, overall, I'd say there's nothing that are particularly cool out there.

A first quarter last year, we were bought 530 on cash management income went out 600 similar to the fourth quarter, but generally, I think our business is still running well, and there's nothing there that will concern me.

Okay, thanks for that. And just the final one on the revenues, the 5% to 7% CAGR is obviously a cumulative at the three year run rate.

And this year that, you know, given the exchange rate is going to be pretty tough to get to the lower end of that, right, Andy, it's more like a, you know, 3% to 5% if you had to put a number on the lower end of that 3% to 5%?

Yeah, let's just talk about that, because obviously after the first quarter that's lower than the question you just raised this is very obvious one. So when we talked in February about the 5% to 7% range that was sort of on the average through that period of time, it was assuming that FX would sort of normalize over that period of time and that sort of still remains of you.

And I think on VAT basis, I am looking at this on a sort of normalized FX basis, we would still try to get into that 5% to 7% range. Obviously, it will be lower end of that range likely.

And given the first quarter, but still our ambition is to try to get as close to the right as we can this year and then over the three year period to be within that range.

Got it. Thank you very much.

Good morning, Andy.

Good morning.

Yeah, so just a couple of questions if I may. And the first one was another one, just on the sort of revenue trajectory.

I suppose to hit consensus the top line for the rest of the year you need to do about 6% revenue growth in the back end of the last nine month period. And take a point that adjusting for FX adjusting for DVA, you're running at about a 4% revenue growth rate at the moment.

And given we're probably not likely to have any more rate hikes for the rest of the year. Do you think that that sort of 6% revenue growth rate is achievable?

I am just asking following up from Ronit question there? And the second question was just a follow-up on that net revenue growth as well.

Given the cost controls being so strong and the buyback that you're doing, and you try to run a sort of maybe sort of smaller bank here, because I guess having less investment spend and so forth is actually going to maybe this time your revenue growth prospect looking into next year? Or do you actually, you feel that that's okay?

Thanks.

Yeah, Chris. It's interesting.

If you look at the first quarter, and we can sort of exile various factors in here. So I referred to the fact that the reporting number is minus 2%.

If you normalize FX to close 2%, if you accept the EVA 4%, I could go on and say, if you look at what happened in wealth management in the first quarter last year, which probably right about 70 million more income in that period over the long term, sort of average, that's another 2%. And actually, if I get enough of those, I've got the 6%, I've got your number.

Now I'm being a little bit selective in that because I'm picking a number of factors that all sort of heads up in one particular direction. But I think I get by to run into sort of question earlier.

Clearly, FX will play a proper translation of it. At the end of the day, most important thing for us is that in markets were performing on the current the constant currency basis.

And you know, we need to look at it that way, FX translation will move around over a period of time that is like that. We must be I think, more and more sort of guided by what we're doing actually underlying other businesses As I say, of the first quarter, when you have to make a few numbers to get to the averages, we will do what we can do to try to get into the 5% to 7% range in the quarter this year.

Obviously, current trends and suggested be lower under that rather than anywhere else. But that remains the case that over a three year period with still absolutely be aiming to be in the 5% to 7% range on the average.

And second question, are we aiming to run the smaller bank? Well, we're probably the first smaller bank to have a 5% to 7% top line growth for the three consecutive years.

So I would argue that we are not trying to run the smaller bank, we are trying to thoughtfully grow the bank, while at the same time, we are trying to get more returns back to shareholders so that we can improve the return on capital employed. And as we said in February, 13% to 14% as range capital, we feel entirely comfortable with it, it's a range we feel comfortable operating within rather than above, as was previously the case.

And I think the evidence you've seen today that we're prepared now two things. So 13.9%, the billion will cost us about 35 basis points, in reality that will take place over a number of months, although we will essentially book it if you like in the second quarter and needless to say, we would not have got the buyback happening.

And that's regulated for happy with it. And we are not going to be cutting back on investment at all in order to continue to grow the business and develop it as we want to do for the future.

Thanks, Andy. Can I just follow up on buyback points?

I think you said material, because and says, it's taking you down to 30 and 55. And if you were to do another billion, spend another 35 basis points, take yourself down to 13 too, is that something that yourselves in the board will be comfortable with?

Well, I think maybe there's a missing ingredient there that we might have actually been trading incorporated longer and generating some more underlying capital in the intervening period. So from the board's point of view being in the 13% to 14% range is absolutely ought to be, the evidence of this billion is that we can return the billion and comfortably be in that range.

As we generate future capital going forwards, the board will no doubt look at this from time to time, and will decide what is the appropriate thing to do at various points in time in the future.

Perfect. That's clear.

Thanks, Andy.

Thank you. Yeah.

Just following-up on that question from Chris, really, Can I check if there's any update on the promoter and if you were to self-promoter, I reckon perhaps you could comment on whether this is right. It's about a 30 to 40 basis point uptick in your Core Tier 1 ratio.

So first question is, is that a correct estimate? And secondly, if you do generate that incremental capital in the second half of this year, would you be committed to returning that back to shareholders to bring yourself back to the midpoint of your range?

Thank you.

Yes. Thanks, Manus.

So ended last year, obviously, we communicated that we were putting the investment in part in a noncore category. It is a business as I think most of you know, where we have quite a high number of resources and assets on our own balance sheet because of the structure and responsibilities that go with our investment.

If we are not to be an owner of the business at a point in time, it does actually disproportionately release risk weighted assets. If there are any developments in that regard at any future point in time, then we will update you.

But as of now, there is nothing further to update. And then finally, to your question, hypothetically, if you come back to the 13% to 14% level, if we do anything that is likely one of our continuing to be putting us about the range, then obviously that will be appointed that would cause us to have a look at whether we are in the right place.

If we're too high, then we can do the appropriate thing as we have demonstrated that we are prepared to do today.

Okay, I think I thought about. This on the first bit, you're basically saying you don't want to answer whether it's a 30 to 40 basis points up lists?

It will be some way in that sort of say, it could be a fraction higher than that somewhere in that I would say.

Thank you very much. Thank you.

Hi, morning, Andy. Thanks for taking the questions.

Just I'm looking at costs and their loan losses from revenues for a second. If I look at both and the question is reasonably similar, so we look at costs I know you said that 1Q is lower and investments we faced.

If I look at the next nine months of the year and look at the run rate we have in for 2019, looks like I got 10% pick up from the 1Q 2019 run rates, so I appreciate costs are going to pick up an investment in phase but is that the kind of pickup we should expect or is that kind of is that number, is that 10% increase in kind of quarterly cost run rates? A bit too high.

And a similar question on the loan loss number as well. If you look at if you exit out the right back that you had, you're still tracking I think for about 500 million total loan lost in other impairments and total impairments.

And has 1 billion as well so maybe there's something in a loan loss number that you're seeing that suggests I would be higher, or is that kind of is a 500 million or number for this year realistic, I appreciate how hard is to forecast loan losses going forward? And then I just want to on capital4 to understand there's a clear one thing, so the risk way density was pretty much flat.

So is over assets. I think you've said in this call and obviously the earlier as well in distress, did you expect that to keep coming until we should still model that risk weight density of I think it was 37% in the core in this quarter should carry on cracking down even after the commodity sale?

Thanks.

Okay, so costs loan losses and capital intensity. So on the cost, first quarter, I think has been good controls that we have increasingly had in place for the working.

We are managing to invest in the business and keep control of the costs. As I said in my script a short while ago, there will naturally be a couple of things will put the cost slightly higher, as usual in the back end, the one is salary increases as they come through perfectly normal.

And secondly, that the progress on spending on new investment areas does tend to build a slight momentum over the course of the year. So you can normalize the 2.4 for the quarter 9.6.

I think that would take you to a lower numbers and is likely to be the outcome. Our intent is still particularly look at this on a constant FX basis that we would see costs for the full-year being slightly below the rate of inflation but nothing that happened in the first quarter that makes me they are away from that and indeed, we will absolutely keep the pressure on investing because we see a number of areas there, which will enhance our future by so doing.

Loan losses are always a little bit difficult to draw linear extrapolations from in the first quarter. We've called out the fact that even by our standards, the first quarter was incredibly low.

And in part that was because of a reversal of a previous provision of about $48 million. So as I know, you picked up in your question, one sort of needs to reverse that out.

That even so one gets to quite low numbers. I think the first quarter historically tends to be a little bit lower.

So I would again, not to take the adjusted number and just multiplied by four. We will do obviously what we can to make sure that that cost as well control the balance of the year lead indicates this is still stable to March the positive, which is good.

And you will take your own view as to what you put in your models, which also linked with your third question about what you put in the models for risk weighted assets and sort of capital intensity. As we said, and I said just a while ago, our belief is over the three year period that we should with a number of other actions as well to actively be able to keep the rate of the other blue a growth below that of the income growth and that remains our view.

Thank you very much.

Good morning, Andy.

Good morning.

Hello. I think revenue to that's a little bit already.

Just on the cost I mean I know it's only a quarter. Can you give us any sort of color on what's been going on within net cost number maybe on costs, call headcount and the phasing of investments so far just give us a little better feel for what was driving that sort of better Q1 number?

Yeah the records [ph] a slightly better first quarter on first quarter and that's very consistent with what they've said previously, with the sources getting to a peak of that about sort of first second quarter last year, so it's nice to see eventually those starting to come down a little bit. Headcount today is slightly lower than where it was at this time last year.

Or there's a bit of a mixed change between directly employed and contract workers a lot of focus on our shared service centers and locations of where our people are, and all the work being done looking at internal processes, particularly from the eyes of customers, to see what we can do in terms of improving the experience customers have taking out wrinkles, and hopefully not only improving customer satisfaction, but also taking some costs out there. So as they're always cost of the constancy of new ideas, new things we're looking at, and but the heart of it is the intent to continue to make sure that we can invest without enough money to continue to invest in digitizing in moving the business forward so that things like the Hong Kong joint venture, we can do and we've got the appropriate investment funds to be able to do that without disturbing the flow of our P&L process.

Okay, thank you. And just I mean, I just got me just one on the RWA.

Obviously, it was quite a big annualized growth in Q1 and you've explained the drivers quite well around the accounting change and the sort of market risk. But Fahed's point, I mean, the credit risk RWA do seem to be tracking loans quite closely.

And I think that's something that we're hoping over the medium term that we're going to see, a divergence in your optimization will drive a slower pace of RWA growth versus the loan book obviously important for your revenue number. So is there anything you can add that you haven't said already that on that issue?

The only thing I can add is that what we said in February that we believe will be the case on the average over a three year period remains of you. It is only eight weeks since we did that update.

And not all of the things that will give us some outside benefit there have come through in the first eight weeks. But that doesn't deter us from our belief that actually that growth should be more moderated than the underlying income growth.

Okay, lovely. Thank you.

Yes, thanks very much. A lot of my question has been answered.

But I do have a couple of actually. First of all, I see that you're sort of talking about improving a little bit within your markets.

And in terms of interpreting this, should we be thinking in terms of wealth management, financial markets, corporate finance, in terms of where the sort of the primary sort of uplift might come from that. And also, explicitly I see no reference here to retail banking loans, and I was just wondering what they done in the quarter whether there was any upward movement or not?

The second question I'd have is that you made reference in your introductory remarks to Korea thing that you'd made some capital returns to the group level. And I was just wondering whether you could comment on whether this is actually a small amount of the materiality of it, and whether there's much more to come?

Yeah, Robert. So sentiments, it's very difficult to recapture across a number of markets just sort of where people's minds are at.

I think over a lot of last year, people were particularly looking at the sort of the U.S. China issues with a degree of sort of where is all this sort of heading.

I think we sent a little bit more moderation of people feeling that there will be some sort of resolution there and that life will continue thereafter. So it's more just at the edges, a little bit of improving.

I wouldn't it - it was a comment made sort of more generally, rather than specific to individual product areas, Wealth Management clearly has been doing well in the first quarter, or they said earlier, the comparison of a year ago was difficult. But just generally, I think the sense that things are sort of settling down and people are getting on with their lives and our businesses failing, but that is not too bad place to be.

Retail banking if the P&L side of it, the headline number was down year-over-year, however, the whole of that was explained by wealth management, if you sort of x [ph] out the wealth management side of it, the rest of the retail business was performing very much in line with what we expected in line with the previous year. And bearing in mind that the loans tend to be mainly local currency and retail that we are with sort of thing balance sheet fairly similar to last year, sort of plus or minus 1%.

So, not a lots of change in that space, but a good loan book and loads and lots of customers sort of doing well and overall credit quality also still high.

And so, did you have a quantum career as well?

Yeah. So if you look at local filings in the earlier part of the year and these are on the public record, we didn't to make a big thing of it.

There has been a sort of respect of the capital in country that has released not for half a billion dollars back to us as a group that's being done with for the local approvals et cetera. And the business is very focused upon continuing to generate the profitability such that we can overtime, get further capital returns back from our investment in that market.

Thanks very much.

Good morning and thanks for taking my questions. Firstly, on the Hong Kong digital banking license, honestly I feel for where we are on the cost trajectory of this program.

Will the investment going into this be captured within your current cost outlook? I suppose on that will you be fully consolidating this venture given your majority stake.

Secondly, just coming back to RWA, I'm sorry to kind of come back to this given the number of questions or comments so far, but they did come in quite a bit higher than the market was expecting Q1. And importantly IFRS 16 and market seasonality underlying themes consumed 30 bps of capital in Q1.

If I look at consensus, they've got 2% RWA growth in 2019, including IFRS 16, which then puts your full-year number below the Q1 RWA Just wondering if you see that realistic that the full-year will envelope Q1, particularly if the [indiscernible]. Thank you.

Yep. Jenny.

So Hong Kong digital, we are incurring costs and as we've been building platform over the last few weeks and months. We have been incurring those costs and those are incorporated within our reporting numbers and within our thinking going forwards and yes, we will consolidate that this with a major shareholder in the business when it is fully up and running.

RWAs which seems to be the topic of the day and I can only reiterate that there are elements within the first quarter that are unique to accounting standards, there are elements that are unique to market risk that impact sort of end of last year start this year. And what is left in the credit space is actually I think, so encouraging the in line with the fact that we have got asset growth on the balance sheet, which would say was good thing.

And we remain to repeat off the view that over a period of time, we should be able to manage the RWA growth below the rates of the income growth and that remains of you.

Okay, thank you.

Hi, good morning. I was just wondering if you could tell us if there's been any deliberate cost flex this quarter.

Just kind of offset the fact that the revenue is running below your target. And then I guess, linked to that, if you could just talk about the jaws gives us a bit of divisional color on the jaws just because you've got some quite different income performances between the different business units?

Thanks.

Well, deliberate cost flex, have been deliberate call to action. Yes, as flex, implying something that's trends [ph] now.

We have been consistently working on the cost base with the primary objective of taking out inefficient costs, and freeing up enough space to be able to invest in the business as we move forward. And that's what remains of you and remains the objective.

I won't go into jaws by product or by whatever there is nothing particular in the course in the first quarter that I would call out. And as I said earlier, to be in the five to 7% range on income and below inflation on costs, does it apply across the piece that we will see jaws opening up progressively over the three year period.

Fine. Okay.

But I mean, is it? I mean, I know you say you don't want to give too much color but I mean, is it fair to say that you've retail bank, he's got negative jaws, still?

Retail banking I think was fairly similar to - to last year. It I mean, the each of the business areas has got its own things that it's working upon all the cost side of it, no part of the business is immune from that wealth management and the products that were in retail has got different cost components to it.

And if we can get good growth at a wealth management process, even if the cost is higher, or vice versa, we will do that. We will do whatever is best for the bottom line for the business.

And it's something that moves over time wealth management and can be lower than it was a year ago cost based Wealth Management slightly more fake. Those sorts of things have an impact in this.

But I wouldn't say this anything particular that I would draw out on the cost front.

Okay, lovely, thanks.

Thanks for taking my question. Good morning, Andy.

Can I ask whether the buyback would be done for the Hong Kong side or on these?

Yeah we will issue more details either during the cost of today or tomorrow come under which the two when you will give you more details on which markets and how we're going about this. But overall, we will be pressing on with it ASAP and depending upon the market volumes, we will work our way through the billion that over the next five or six months or thereabouts.

Thank you.

Good. Thank you.

And thank you all for your questions. I think this quarter has actually been quite an important quarter getting the longest standing legacy combat issues out of the way is a big step forwards, starting return the capital, something we have not done for a long time is another big step forward.

Momentum in the business of the thing you can see is continuing the investments in things like the virtual bank license in Hong Kong evidencing that we are prepared to do things differently going forward and are firmly positioning ourselves to a more digital world involving more partners. I think is a good start to the year and we will update you in another three months on the first half.

Thank you all very much.