Standard Chartered PLC

And good morning, good afternoon, everybody. Thanks for joining our Third Quarter call.

I'm just going to make a couple of comments upfront. Andy is going to take us through the whole deck that you should have access by now.

And then we will both be available for Q&A. My message is pretty simple, I feel good about where Standard Chartered is 6 months into a global crisis.

We're profitable. We've got a strong capital position and getting stronger.

We've got plenty of liquidity and that this is where we would hope to be. Obviously, the contrast to where we were in 2015, when I joined the bank or where we might have been, in this case, had we not taken the really substantial actions that we have over the past several years, it doesn't bear thinking about.

We made very substantial investments to secure our foundations. Always saying, and I'm sure I said to this very group, in fact, that the banking advances are made or not during the difficult times, and I feel like we're coming into this difficult time, have come into it, and are going through it, in very good shape.

Now the objective of this all, of course, is to tap into the underlying growth that is very, very present in our markets. I'm speaking to you from Hong Kong.

I've been in Asia for the past almost 3 months now. And I can report to that, which many of you already know, which is that while there are ongoing constraints in society and in our business, that things are getting back to normal.

And the Standard Chartered operational efficiency and capability is very much in place, helping to promote that at every opportunity, but also helping to - or along the way, benefiting from that. So along the way, as we've tried to fix the place up and procure ourselves for ongoing growth, we've made some pretty substantial investments.

So the most obvious of those have been in the areas of digital technology, digital banking and the like. As I sit here in Hong Kong, we're a month or so into - after the launch of our virtual bank Mox, which has gone very well and never declare victory at this stage.

But good account opening, good funding levels and the highest rating in the App Stores of a financial services app at 4.8 on the iOS store, for example. This is really encouraging.

What it says to me is that, one, we were making the right investments at the right time. Two, that when we set our minds to doing something, we do it right and can have very good success.

That, to me, bodes very well for our ability to take this good, strong financial starting position and convert that into growth and profitability over the coming period. Final comment before I hand over to Andy is just a word of thanks to my 90,000 colleagues around the world who have worked pretty tirelessly certainly for the past 9 months or so, but clearly, much before that, to enable us to get to the point where we can be talking very genuinely about how we're going to grow this franchise from here.

As Andy will take you through all the raw materials in place, the underlying trends and the things that we've been investing in for 5 years are clearly demonstrating their ability to grow. They have grown.

Some have taken a dip during the pandemic. Others have blown right through it.

But we made the investments so that we could capture the growth in our markets. We're determined to do that and have never been more confident that we can.

With that, I'll hand it over to Andy, and then look forward to coming back for Q&A a bit later.

Thanks very much, Bill, and good morning, good afternoon to everybody. So hopefully you got the slides in front of you.

I will go straight to Slide 3, the usual financial snapshot. So I'll cover the component part shortly, but just a few comments on this page.

So starting at the top, we saw encouraging, and we believe, enduring underlying momentum in some of our larger businesses but not enough to overcome the considerably harsher interest rate environment, which was the main reason for the 10% like-for-like reduction in income. We continue to invest hard in areas that differentiate us with underlying efficiencies, enabling us to keep costs flat at constant currency.

I'll talk later about some of the tangible returns we are seeing on that investment, particularly on the digital side. Credit impairment was about $70 million higher than it was in the same quarter last year, but it has come down significantly and progressively since Q1 of this year.

Altogether, this led to an underlying profit of $745 million in the quarter, a touch higher than in Q2. And finally, as you can see, our capital and liquidity positions remain very strong, giving us the confidence that we can continue to both support our clients and improve our underlying business through the remainder of this crisis as well as get back to funding shareholder returns, which, as you know, was the path we were on when the crisis hit, and we've edited that as soon as possible.

So let's start looking in more detail at our income performance on Slide 4. This is the usual view on income by product, excluding DVA and with currency fluctuations stripped out to highlight the underlying momentum.

Wealth Management income was up 16%. The performance that was underpinned by a noticeable improvement in sentiment in many of our markets as well as increased utilization of digital channels.

If you exclude the bancassurance bonus that was booked in the quarter to give a clean-up like-for-like comparison compared to last year, when you may recall, it was booked in the second quarter, income still grew 10% year-on-year. And with this acceleration, remember, the bonus for the year is now fully recognized.

Financial Markets was up 9%. Less spectacular in previous quarters where conditions were much more volatile, but remember, this was from a high base last year.

We believe this reflects the ongoing improvements the team has made to the business in recent years, which should spend them in good stead next year and beyond. The impact of lower interest rates is seen most clearly on this slide in our retail products and Transaction Banking businesses, as well as our internal treasury function from reduced returns on its deployed assets and adverse hedging ineffectiveness movements.

And now turn to Slide 5 to spend a bit more time on net interest income and margin. The 5 basis point reduction in NIM between the second and third quarters is entirely due to the impact of lower interest rates and would have been more pronounced, had we not significantly improved the pricing and mix of our liabilities in the period.

The two main drivers of that improvement were: Firstly, taking advantage of abundant liquidity in our markets to roll off some of our more expensive term deposits, and secondly, increasing our stock of lower cost and stickier individual current and savings accounts, which, as you know, has been a strategic focus for a while now. In terms of where the NIM will go from here, I expect it to stabilize slightly below the current level over the next couple of quarters.

Our ability to meet or beat that forecast will largely be a function of how well we can maintain those mix and pricing benefits. If we do better than expected, the net interest margin will not reduce much further, and it may even become a slight tailwind.

However, whilst our markets are awash with liquidity currently, and we don't expect that to change, if competition for liquidity does intensify significantly for whatever reason or interest rates slide further, then that would be a headwind. In terms of volumes looking forward, as more of our larger markets that we operate in come out of recession, we expect increasing client demand to generate erratic but decent growth over the next 12 months.

Given the greater reliance on bank lending in the Asia region. If that demand materializes as we anticipate, then we will be able to redeploy some of the sizable stock of high-quality liquid assets that we built up during the early stages of the pandemic into client lending.

That would benefit to the margin given the delta in yield between the two. Customer loans and advances increased 2% in the third quarter, bringing growth year-to-date to 5% overall.

I would not be at all surprised to see it running at least at that level next year, as some of the larger economies in our footprint rebound from the crisis before perhaps settling down in later years to a lower rate that will still likely be higher than in the rest of the world. And on the topic of growth, as you know, our focus on returns in recent years has driven real discipline around capital allocation and efficiency.

So we are confident that we can capture those opportunities without dialing up the RWA intensity. Taken together then, when we look ahead to 2021 in this protracted low interest rate environment, we will continue to optimize the drivers of our net interest income and are increasingly focusing on generating more fee-based income, continuing the good momentum in our Financial Markets and Wealth Management businesses that I'll cover on in the next slide.

So turning to Slide 6 then. Our more capital-efficient non-funded income now constitutes just over half of our total income, having grown 8% year-to-date.

Income from fees and commissions has recovered from the low print in the second quarter, driven by growth in Transaction Banking and Wealth Management, and that bodes well for next year. The investments we've made in digital capabilities continue to pay off with our Financial Markets and Wealth Management businesses easily able to cope with the considerable uplift in client activity through those channels.

This was, to some extent, prompted by the pandemic, of course, but we view that digital conversion very much as a one-way three, particularly when our client see how much better the overall experience is. I don't think the long-term growth potential of our Wealth Management business can be in much doubt.

We know that business has grown for long periods of close to double-digit compound annual rates, and we think sentiment will continue to improve gradually next year. For our other big fee-generating engine Financial Markets, I know there is a natural skepticism about the sustainability of income from such businesses, but we believe the improvements made by the team there in recent years, and that will continue to be made, will underpin healthy long-term growth that is much less correlated to volatility than in the past.

I already mentioned the reduction in the Treasury non-interest income line, which was due to negative movements in hedge ineffectiveness, reduced FX swap income and realization gains year-on-year. And as a reminder, the P&L gains crystallized from asset sales within the Treasury portfolio was substantially higher in the first half of 2020.

And finally, before I move on from income, client demand for risk and Wealth Management is usually seasonally lower as the year draws to a close, and that's the biggest driver of the step down in income in the final quarter of most years. Plus, as I've already mentioned, a few nonrecurring items will not flow through into Q4 as well as the net interest margin stabilizing slightly lower.

So putting it all together, although the drivers are slightly different compared to 2019, we anticipate a rate of quarter-on-quarter reduction in income in the fourth quarter. So I will now move on to costs on Slide 7.

We said in July that we expect expenses to come in lower than $10 billion in 2020, excluding the UK bank levy, and we are well on track for that. We have kept a tight lid on costs with expenses broadly flat year-on-year, partly as a result of practically zero travel but also lower bonus accruals.

This has helped create capacity to invest even harder, with investments up 12% quarter-on-quarter. As you know, expenses are usually highest in the fourth quarter, mainly due to investment phasing, but I don't expect to see such a large uplift this year given the unusual circumstances.

Meaning, we should come in comfortably but below the $10 billion mark for the full year. Looking further ahead, we also said in July, we are targeting to keep cost below $10 billion in 2021 as well.

I'm sticking with that guidance, and we will continue to reduce operating expenses wherever possible so that we can maximize our investment in digital capabilities that are becoming a clear differentiator for our franchise. Meaning, that expenses overall, excluding the bank levy, as usual, may rise slightly year-on-year, but still within the $10 billion envelope.

In other words, we are not sacrificing our investment program to hit those targets. We may need to incur some restructuring costs to achieve those efficiencies.

I'm not in a position to quantify them exactly, but I don't expect them to be particularly material. So turning now to credit impairment on Slide 8.

We guided back in July that given the substantial provisions we have taken already at that stage, if economic conditions did not materially deteriorate, then impairment should be lower in the second half of the year. Now that we can see the third quarter outcome, that belief is obviously reinforced.

The $950 million charge taken in the first quarter of this year reduced by about a third in the second quarter, $600 million, and has fallen by a third again to $350 million. The reductions were across all stages, and it is encouraging that the Stage 3 portfolio is holding up well so far.

Our impairment charges, so far, this year includes around $800 million in stage 1 and 2, within which there is total management overcharge of $377 million. With total impairment standing at around $1.9 billion year-to-date, then the current trend would have to deteriorate significantly for the full year outcome to be much above the mid $2 billion mark.

But it will be an unusual end for the year with an array of complex IFRS 9 models to grapple with against swap remains and uncertain outlook. So obviously, that comment comes with an even larger caveat than usual.

I still don't think it's possible to reliably to predict the outcome next year precisely given so much uncertainty. But if our markets do recover, we expect that, that would certainly help asset quality overall.

Obviously, some sectors and markets will remain more under pressure than others and a lot will depend upon what happens to delinquencies and insolvencies after the various government relief measures taper off. Although our experience so far in markets where retail banking [indiscernible] may have been lifted is encouraging, we think it's sensible to remain prudent.

China and Hong Kong, for example, came out the moratoria earlier and delinquencies are down from the peak in the first quarter. But India and Malaysia have only just ended their general relief programs, and you can't necessarily read across from China and Hong Kong, where the dynamics are, of course, very different.

We decided to top-up the overlay in Q3 to try to get ahead of any possible issues as more markets across our footprint come out of various moratoria schemes. And now moving on to the asset quality in the bottom half of the slide.

As you can see from the chart, high-risk assets remain elevated given the continued impact of COVID. Whilst early alerts reduced by around $1 billion in the quarter, there was a broad equivalent increase in the Stage 3 assets and the CG 12 exposures.

It is encouraging that retail banking days past due rates, which basically cover the total portfolio that is not the moratorium peaked in May and have been steadily coming down since. And finally, to complete the financial overview, risk-weighted assets and capital on Slide 9.

No real surprises in the RBA print. I said in July that they would increase a bit over the remainder of the year, and they rose 2% or $4 billion in the third quarter.

This was driven by credit migration at FX mostly with decent client-led demand for credit at improved density in the quarter, partially offset by revolving credit facility rundowns. We typically end the year with RWAs falling in the fourth quarter for similar seasonal trends, as I mentioned before, basically clients reducing risk into the year-end.

But this year, given the uncertain external environment and possibility of migration, they may nudge up a bit further by the end of December. And last, but not - sorry, and looking ahead for the - to the balance of next year.

As I said earlier, if we do see asset volume growth as economies in our footprint recover, then RWA should also increase but as a similar, if not lower rate, even including the impact of credit migration. And finally, we remain very strongly capitalized above the top of our medium-term range at 14.4%, only 8 basis points, of which reflects the effect of various COVID-related regulatory relief measures.

This is a comfortable place to be over half a year into an unprecedented global crisis, well above the minimum hurdles that, as you know, have been repeatedly stress-tested. Bill and I and the Board have been very clear regarding our intent to return any capital that is not required to maintain a sensible CET1 ratio and fund growth.

We were clear on that point before the crisis and we remain unequivocal on that point today. Obviously, we have to consult our regulators and then see what the outlook is before we can commit, but we are very conscious of how patient the shareholders have been and are clear what return on tangible equity we ultimately have to deliver.

And so we intend to get back to returning capital to shareholders as soon as possible. So having covered the financial side, I'll now spend a few minutes summarizing the progress we're making on our strategic priorities.

Starting on Slide 11, I'll start with the decision to streamline our organizational structure. There are a few structural elements of the reorganization that together will help us to sharpen further the focus on our strategic priorities and drive productivity improvements, as you can see from this slide.

Firstly, we are combining our two business segments that serve individuals, Retail and Private Banking. Aligning resources will enable us to eliminate any remaining duplication and allow more seamless delivery of our digital and wealth management propositions across the customer segments from mass market to ultra-high net worth.

We are also completing the merger of our other 2 business segments that serve large, local and multinational corporates and institutions. This is past an ongoing process to simplify the organization, reduce complexity and help us serve our clients better, including delivering our unique network.

And last, but not least, we are creating a single pan-Asia region that will improve our ability to take advantage of opportunities arising out of increasing intra-regional capital and trade flows, supply chain reconfiguration, the growing affluent segment and the increasing importance of the Greater Bay Area in China. Crucially, these changes will also enable us to challenge and develop a more diverse group of our internal talent.

The next slide, number 12, dives into one of many digital initiatives we are excited about. Bill has already mentioned Mox, which you can see various examples of on this chart.

It's been designed from the ground-up with our partners using state-of-the-art technology, enabling a very personalized experience to a new pool of digitally savvy customers. There are many encouraging early signs.

It's notched up a lot of firsts. And whilst it's the first stand-alone bank, we certainly don't think it will be our last.

In fact, we're already exploring the possibility of equivalent ventures in some other markets. So stepping back, these initiatives Mox, our lean wholly owned digital banks in Africa and our innovative banking as a service platform in Indonesia that has just signed up its second part there, these are all part of the process, preparing to get back profitably into the mass market segment across our footprint.

We are also pursuing multiple digital initiatives on the corporate and institutional side. To give just one example of the pace of progress, at the start of 2019, we had just two APIs, application programming interfaces, by which our clients could connect with us.

Today, we have about 100, and the list is growing all the time, which I suspect compares well with many of our peers. So it's an exciting time at Standard Chartered.

It really feels like we are on the verge of something different, and we will cover what it all means in more detail at our full year results. Moving on to Slide 13 then to cover what it means to us to be purpose-led.

Starting with the first two sections from the left, given our footprint, we have a unique role to play in helping address climate change in the longer-term and helping our markets to pursue a green recovery from the pandemic in the near term. Most banks will talk to you about their sustainable finance aspirations in volume terms but we believe impact is, at least, as important, in other words, where is as important as how much.

Less than 60% of the financing needed to achieve the United Nations' Sustainable Development Goals in low and middle-income countries is being met. In Africa, this is as low as 10%.

This is why we are proud that 91% of our $3.9 billion sustainable financing is in emerging markets, and 86% is extended to some of the world's least developed nations. And now, on to our people, who continue to do a tremendous job, as Bill has mentioned, in difficult circumstances.

Physically, we are back at close to pre-pandemic capacity in our largest region, Greater China and North Asia, and we are starting to transition back to the office in many of our other Asian markets, whilst always being mindful of our colleagues' physical and mental well-being. But it's not just about returning to the office.

We are working across the bank to test the boundaries of what it means to work flexibly in the longer term. Whether working from home or the office, we continue to upskill our people to increase their agility to adapt to more digital and remote working environment.

And finally, on the far-right column, half of the $50 million fund we launched in April to provide emergency assistance to those affected by the pandemic has now been distributed. And we have seen a strong response to our $1 billion commitment to fund businesses fighting COVID.

We continue to support our individual customers, small businesses and corporate clients that have requested some form of financial relief from the impact of COVID. The aggregate of loans and advances covered by those being reduced by close to $5 billion during the quarter, to just under $10 billion or around 3% of total loans and advances.

So on to Slide 14 to make some final comments before we open the line to questions. We are making tangible progress on our strategic framework, and we will keep adapting and executing it to create opportunities to improve our returns and grow our business.

I won't repeat the outlook comments at the top of the slide. They are there to be as clear as possible about how we think the rest of this year and next year like to pan out.

The bottom of the slide shows the latest IMF forecast. We are highly geared to the very large economies in Asia that are expected to come out of recession sooner and faster than those in the West, which is one of the factors that underpins our belief that we should see increased demand for credit next year.

And so to conclude then, we continue to make good progress on the strategic priorities we laid out in 2019. And when we deliver our full year 2020 results in February, Bill and I will provide an update on the progress we're making on those strategic priorities, set against the prevailing macroeconomic outlook as well as our shareholder return recommendations.

So with that, I'll hand back to the operator, so Bill and I can take your questions.

Yes, good morning. And congratulations to the results and the strong trend this morning.

Two questions from my side. And the first one is on how should we think about revenue progression from here.

And, I guess, there's really two elements to that. So number one, NII and NIM.

And it seems like if I read the slide right, that you're essentially guiding that NIM might be a little be bit lower, but given the expectation of loan growth that we should be at or past the point of NII inflection. How should we think - is that correct?

And in terms of other income, in particular, Financial Markets income, which some to higher volatility this year, would you expect that equally to trend somewhat higher in 2021 compared to 2020? The point I'm trying to get is whether we should overall see a slight increase or stabilization of revenues in 2021 compared to 2020?

Or whether there's any other elements, which would prevent that next year? And the second question on capital return and Standard Chartered was in a unique position of being in the middle of a buyback when the dividend ban came earlier this year.

And then just given what happened since sort the completion of the disposal of Permata, and the capital position now compared to your target range, how likely is that, from your perspective, that you could do a buyback potentially next year from your discussion with the regulators? Is buyback, and then the broader form of capital returns, something which, depending on outlook, in February is possible?

And would you expect international U.K. banks to be treated differently to U.K.

domestic banks, just given that it seems like the economic impact at this state in Asia is much milder compared to the West? Thank you.

Okay. Thanks, Martin.

Let me have a stab at answering those questions, but Bill will, no doubt, either interject or add to it. So revenue progression, which is clearly, I think, the really key question.

So we saw the net interest margin come down by 5 basis points between the second quarter and the third quarter, which actually, given the size reduction in interest rates, I think that was good evidence that the focus we've had upon mix of liabilities and on the pricing within liabilities has actually managed to provide some reason to offset against some of the interest rate pressures. We said that we think that there's a little bit further to go on the reduction on the NIM, but hopefully not too much more.

And that should play out certainly over maximum in the sort of next couple of quarters. So I think that hopefully, we'll have a NIM somewhere in the sort of 120, thereabouts of range for the majority of next year.

That will be clearly lower than the average in 2019, given that we started high in 2019 and has lowered during the period. So the question then for next year, which you alluded to as well, is really going to be about volume on the interest income side.

Now I think encouraging thing there is that we have seen, from the start of the year, about 5% volume increase and - on the balance sheet. And if you look at the projections for countries coming out of recession, the IMS numbers that we've included, et cetera, I think that gives pretty good support to suggest that there will, over the next few quarters, be a progression of improvement across many countries.

So our sense is that to be getting that to right volume growth maybe a little bit higher than that should be, they totally impossible as we go through into next year. Then obviously we’ve got the non-interest income that you also refer to, which being over half our income now is really important and in the low interest rate environment becomes even more important.

Financial Markets and Wealth Management, I guess, are the two big ones to call out there. Yes, Financial Markets did have a particularly good first half this year with particularly volatile markets.

But we really are very confident that, that is an overall - the three quarter numbers collectively are a good run rate for this business, something that we absolutely should be aspiring to continue with going forward. There is still an opportunity to penetrate more of our base, and this is not there for all about volatility.

So we remain very comfortable with the Financial Markets business and, as I said earlier in my comments, the way the team has improved that business over the last several quarters, I think is very commendable. Wealth Management also, I referred to a track record there is now pretty long-established.

We have definitely seen confidence in Wealth Management, particularly in Northern Asia, pick up really quite nicely over the last several weeks. And our hope would be that, that would sort of spread through other countries as we go through next year.

So we feel reasonably comfortable with the non-interest-related income. And hence, a stabilization of income next year, I think, should be there or thereabouts where we should aspire to be.

Obviously, quite a number of months to flow under the bridge, but that is, I think, directionally where we should expect it to be. On capital returns.

So start point, 14.4%, which is good, in some sense as sort of 6 months into a huge global crisis, slightly surprising, I guess, that we are actually above the top of our target range. We have, I think, evidence clearly that in the past, and it continues to be our view, we have no intent on sitting on extra capital over and above what we need to run the business.

And, in fact, we have had dividend returns and buybacks going on simultaneously in the past 12 months or so is good evidence of the fact that we have no intent to be holding capital. What I think we need to do is just see how the remainder of this year does pan out and see whether the sort of macro environment as we see it today, continues to be roughly as we see it now.

Secondly, we will, no doubt, have discussion with our regulators about where their minds are on this. And then in February, when we do the update on the full year results, I think, hopefully, the issue will be how much to return.

The secondary issue, which Martin, you referred to in your question, is clearly one of the mechanism for returning it. Buybacks dividends, not have that discussion yet.

Obviously, we fully understand the share price where it is. The attraction of buybacks.

We clearly understand a lot of investors prefer the dividend route, but I think step one is probably getting agreements that there is an amount that can be returned, and set two is going to be agreeing what the best mechanism for that return is.

I think, Andy, you hit all the points I would hope to hit. I guess, I'd only have - obviously, we can't -- we wouldn't comment on what the regulator might be thinking.

They'll make their statements when they choose to. I would agree with the premise of your point, Martin, which is that the markets that we operate in are fast growing, recovering quickly, and we've demonstrated a pretty satisfactory result so far in terms of both of credit quality and resumption of input growth.

And clearly, in the overall equation, we would hope that, that would be considered, along with everything else, that our Board or our regulators would consider when it comes to distributions.

Perfect. Thank you.

Thank you very much.

Great. Thank you for taking the question.

I had a couple. First one is a follow-up on Andy's guidance that is on this call and the presentation deck.

I mean, if I sort of just run those through quickly through a spreadsheet, I mean, you're coming out at a RoTE of about 5%, 6%. And obviously, the loan losses, the credit impairment is going to be a big delta.

But I'm kind of - Andy, am I kind of - is this - am I saying my math right, is 5%, 6% the right ballpark? And the follow-on question, which is more important is that, that doesn't seem like a good enough return, given the footprint you operate in.

I believe the growth opportunities, how Asia is doing well, how your business is doing well and sort of 5%, 6% RoTE just doesn't seem good enough. So what are the sort of the deltas?

What else can we do here, apart from hope for credit impairments to come down to get that RoTE up further? And my second question is linked to your confidence on market share gains in Financial Markets and elsewhere.

Are there any numbers you can share with us in terms of just scoping what the relevant market shares are today, ballpark versus what you think you can get to? Because obviously, as you've alluded to, Andy, there's quite a lot of skepticism about how much of this year's markets revenue for all banks are inflated by market conditions.

And my final question is to do with Mark's spiel. I mean, you've talked about at the start of your presentation, how excited you are about Mox sitting in Hong Kong right now.

But we've talked before about how Mox doesn't really move the needle this year or next year at your group level. But if you were to globalize Mox, maybe something else could come up?

And what kind of ambition do you have to try to reinvent your retail bank using Mox outside Hong Kong? Thank you.

Okay. Thanks for that.

Let me pick up the first two parts, and then Bill can address Mox, et cetera. So how would I look at RoTE?

So 5% to 6%, not good enough, would agree with that. We want to get to 10%, and we still believe that, that is something that we should get this bank to.

It is a level that other banks do achieve, and it's been our goal for a period of time to get up there. If we have not had all COVID issues this year, and you've taken what we printed in the first quarter, we'd be down cyclic to 10%.

And then, unfortunately, we are now at but COVID was not something that we envisaged and obviously, something that the whole world has to deal with. So I guess, overall, you could say that COVID just may put us back, I don't know, a couple of years probably on the overall sort of RoTE ambition trail.

It remains clearly, absolutely our target, 10%, but it is not where it needs to be yet. As ever with these things, I think it is going to be multiple in terms of how we get there.

Interest rates clearly has held it back. There is nothing we can do about that.

If we were back in the interest rate environment a couple of years ago, we'll be having a very different discussion today, but that is not where we are at. So what we have got to do, I think, is focused upon multiple fronts.

One is what we can do in the interest space, as I've talked about before, to make sure we are taking our share of the volume gains that arise across the Asian market where we have a great reputation, there are markets that are coming out recession first, and we see a lot of opportunity in there. Secondly, we have, on the non-interest income, got to push the fee side of the business in the Wealth Management, Financial Markets space and that we are absolutely doing.

Thirdly, we've got to be ruthless on our management of the allocation of capital and make sure that what we are investing in is getting us good returns and is, therefore, generating the greatest amount we can from the base. Impairments, this year, is obviously a high impairment year.

We will see how next year plays out. Giving us the wind, we will be on an improving trend next year.

And then hopefully, we will come through the COVID period. Costs, we are very, very focused on, but we're trying to get a balance there because the sort of raw cost takeout of the underlying versus the absolute need to invest more in digital capabilities so that more and more of our business is digitalized more and more of our customer interactions are digital and I think many businesses have learned through COVID, the importance of that.

So I'm sorry, answer your question is multiple. But your point is taken, we need to get there.

We are absolutely focused on getting there. Interest rates, obviously, has caused us to take a step back on that from.

On your market share gains question. When we come to results in February, we will provide more information on that.

There is obviously a bit of a sort of lag in terms of publicly available information from competitors, which does make it quite difficult to know exactly what our share is doing. From what we see, the volumes we're dealing with, we think our position in our markets is remaining very strong and that we have been gaining some share over that period of time.

But the harder evidence of that, we'll get a little bit more insight as others report over the coming weeks. Bill, let me hand over to you on the Mox and related questions.

Good, yes. Thanks, Andy.

Thanks for in it. Look, I just add a little bit of color on the RoTE side.

I can assure you that your sense of concern about 5% to 6% or whatever number your model throws at, is matched by our own concerned, but equally matched by our determination. So when we look at the things that we've been doing over the past 3 or 4 or 5 years, we talk about regularly, they're still the right things to do.

And they've been growing steadily, improving operating profit and returns. And that's growing our network business, focusing on our affluent population, becoming ever more productive through digitization and otherwise, maintaining strong credit discipline and evolving our asset liability mix.

But these are the - that's the recipe to get to 10% plus RoTE. It's working.

It's not working as quickly as we'd like because we've had a combination of economic slowdown and now that the lower interest rate effect of COVID. Wish we could magic it all the way.

We can't. And does that mean we should throw the strategy away?

No, absolutely not. Why?

Because the strategy is working. It's evidentially working.

So 1 day, the stock market will realize that and we'll all be happy campers. I would -- on Andy's comment on the markets business, completely agree.

Let's keep in mind that we do not have, and nor are we going to have any time soon, a large U.S. capital markets business, right?

That's been the profit driver for a lot of our peers. And we wish we had it.

Again, I'd love to magic it up, but we don't. And we're not going to anytime soon.

What we do have is a really good emerging markets business, especially at local currency, with a very strong FX business with an improving rates business, which is strong but can get stronger. I mean, we've scratched the surface of the potential on the rate side in our core markets and with a relatively nascent credit markets business.

Obviously, we've got a very big credit business overall. So the upside for us is quite substantial as we hit full speed on the local markets rates and credit side.

And I think we're reasonably tapping what has been very interesting FX market, and I think will continue to be an interesting FX market for some time. So I feel very good about the prospects for growth in that market, recognizing that it will fluctuate from period-to-period with market conditions.

And Mox, I mean, that's bottom question out to digital banks or retail digital banking. Mox is now our 10th stand-alone digital bank, right?

We've got 9 in Africa. We have, obviously, one in Hong Kong.

We have a banking-as-a-service model that's in - as Andy and I look discussed at the half year, is in testing right now in Indonesia for launch in the early part of next year. We've got the indigenous digitization efforts in most of our other markets, including some partnerships.

We've got a partnership with Towson, Korea, where we're building a digital bank together, leveraging what we've learned in our other 10 markets and what we're learning in Indonesia. We've got indigenous efforts in India, Malaysia and elsewhere.

So the real - the reason for me to call out Mox was to demonstrate that when we make an investment, and quite rightly, I think our shareholders are asking, look, you turn a lot of money at your digital investments. Where's the meat, right?

Where is it showing up on the bottom line? And the fact is we are establishing ourselves very, very clearly as a leader in any of the technology areas that are critical for the future.

We're establishing ourselves as a very credible partner that will give us access to tens of millions of customers. Keep in mind that we have 10 million today.

So that's a quantum leap in terms of access to customers. And with that comes a tremendous increase in productivity in all of our businesses.

This is very low-cost income ratio business and once fully up and running, very accretive. I think that's the reason that these stand-alone digital banks seem to trade at so much value in private or public markets.

So all in all, we feel very well positioned to convert - give the early success that we've had in Mox into really profitable business streams as we're able to layer in products and services and as we're able to roll that out across markets, recognizing that the second Mox, assuming we use the same or similar tech stack, will cost a lot less than the first Mox. And the third Mox will cost a fraction of that again.

That's all the game. Obviously, so far, what you've seen is the expenses.

Apprentices, we've managed to make all these investments without increasing our expenses in 5 years, right? So - and while improving the compliance operation while investing heavily in cybersecurity, et cetera, et cetera, et cetera.

So we feel really good about where we stand right now. And I think that the opportunity for growth in hard-core cash profits, bottom line, is great from here in the digital sphere and elsewhere.

Thanks, Andy. Thanks, Bill.

Morning, all. Could you just walk us through the pieces, the cost pieces, please.

I think you had an investment last year of $1.6 billion. So what's it going to work out as this year?

And should I expect that to increase next year? Or is it just maintaining the level that you're hitting this year?

And then presumably, the travel and entertainment and marketing will increase next year as well. So how much do you save this year from those items?

You also talked about sort of natural inflation in the cost base of around $200 million to $300 million. So how much you have to save through efficiency to kind of keep your costs flat next year?

Or slightly up, I guess, is what you're saying?

Yes. Okay.

Let me pick that one up. If you go back over the last 3 or 4 years, I would say that in reporting a pretty flat cost profile overall, roughly, roughly, we've taken about $0.5 billion of underlying cost out in order to be able to fund about $250 million of inflation and about $250 million of increased investment costs, particularly in IT.

And we've done that 3 or 4 years running, and we will continue to do that again next year. The investment spend will probably be a little bit higher next year, not hugely, but in that sort of ballpark, very much focused on digital because to the previous points, we really do believe that is important going forward.

And all that does is renew our need to take underlying costs out of the system. This year, we'll have two benefits in it.

One, we will accrue a slightly lower staff bonus, which we have said been open about and hopefully, that will not be a recurring feature. So we will have to find away next year to take other costs out instead.

And secondly, our travel and hotel budget for this year, as you might imagine, has come in somewhat lower than our normal run rate the previous year. And I guess, a reasonable belief set for next year is that it may not be quite as low as this year, but it probably will be fairly low again next year.

So that will also help. So basically, the story is taking out roughly $0.5 billion underlying cost in order to be able to fund inflation and to be able to fund the increased investment in digital, that is what we did this year, last year, the year before, and that's what we need to do next year.

Okay. Thanks very much.

Hi, good morning. Thank you for taking my questions.

Two simple ones, please, if I could. Coming back to Mox.

I think the thesis of sort of digital banking, both in end markets that you're present in and those that might be contiguous with your footprint make a huge amount of sense. I wonder whether you could share some of the experiences so far and the kinds of customers that you're attracting?

And whether the sort of mature business plan, return on tangible equity or product set for these sorts of endeavors is equivalent or better than the sort of performance of the big bank in Hong Kong. In other words, if there is any kind of churn at a sort of industry level, do these things produce superior returns?

Or is it really about sort of defensive defense against demographic change and so on? And then secondly, thank you, Andy, for the slide on the divisional reorganization.

I wondered whether you'd add a little bit more color, please, on whether there are any sort of financial consequences of that, whether the cost dynamic is important? Or whether it's really about organizational design, complexity and the like?

Thanks very much.

Thanks very much for the question, Jason. The client profile so far is what we've targeted.

So we -- first of all, what we launched with was a deposit and payment proposition with -- focusing on the quality of onboarding. The quickest application approval process so far has been a bit over two minutes, which I think is a record-setting in the world.

It takes 30 minutes to open an account and with that, you get a payment account, a number of these cards with - and a lot of sort of bill paying to facilities and things of that nature. We will layer in products around first credit cards.

Credit cards will come next, a set of lending products. And then over time, we'll add in wealth products.

So the outset we targeted millennials, and that's tech-savvy millennials. It's an entirely a mobile phone-based system.

So -- and that's what we've got. The spending pattern so far have been very much linked to relatively small value transactions, food and other consumables.

That's exactly what we would expect at this point. Obviously, as we broaden out the offering to involve credit and Wealth Management products, starting with trading of FX and equities, we would expect to attract both a higher proportion of people savings, but also a wealthier, perhaps more mature demographic.

Along the way, obviously always focusing on making the customer experience best-in-class, which is what we seem to have done so far. The long-term returns are, obviously, they've been impacted by lower interest rates.

So at the outset in a deposit-gathering platform, with interest rates having dropped, the short-term profitability will be lower than we would have expected otherwise. Equally, obviously, as we are able to layer in credit and wealth products, we get back much closer to the sort of profile that we see in the main bank.

The main bank, as you know, is very skewed to wealth, which has been a profitable and growing area. It will be a while before Mox is able to compete with that, both because of the demographics of the customers and also because of the very well-established position of Standard Chartered bank.

But the cost base is also much lower than Standard Chartered bank. So I think we could get to the point where the profitability of the digital bank is converging into the main bank, but it will take a while.

It will take a while. So back to Andy.

Yes. So on your regional question, Jason, I see two dimensions to the regional one.

One is the two Asia regions becoming one. And the other is the Europe and Americas region reporting into Simon, running the Corporate Bank business, given that almost all the activity there is corporate bank.

There will be some cost opportunity, I think, in both, given that, obviously, we've got some regional HQS, et cetera, that we don't need to, but I think the bigger benefit is more actually on flow of activity and on sort of focus upon clients and certainly in Asia, being more alert to changing patterns of the supply chain. So a little bit on the cost, some on the income, probably slightly more on the income side.

Thanks very much.

Good morning, everyone. Two questions, please.

The first, if I could just sort of go back, I think Martin asked right at the beginning, on the revenue. The sort of inflection between when the downward pressure from rates starts to alleviate and lead more positive growth from areas like Wealth Management and Financial Markets starts to become the driver.

Your guidance for Q4 seems to be pointing to full year revenue of sort of 14.7 to 14.8. The full year consensus for '21 is currently 15, and that was a sort of fairly flat profile against what was originally expected for 2020.

So my sense is, are you still comfortable with around 15 for next year? That would seem to imply revenue growth of between 1% and 2%.

Is that consistent with your thoughts on this idea of inflection between those two broad revenue drivers? That's the first question.

My second question is on sort of dividends and what happens if the PRA does give sign off at the full year. I'm really interested in this idea that investors had to forego their final 2019 dividend, like $0.20.

Is there any thought process that might say, well, we can restart and sort of pay back that $0.20 as a sort of 2020 final and then the real dividend policy, as going forward, will be driven from 2021 onwards. Is that in your thought process still?

I'm just interested in your thinking around that thinking. Thank you.

Yes. Okay, Tom.

So let's take those in order. Clearly, forecasting with precision 15 months out in the environment we're in at the moment is not the easiest of things.

As I said earlier, on the interest side of it, you've got the stabilization of the NIM, but the stabilization being lower than the year average for 2019, which we can all work the numbers out on. We have got the fact that balance sheet has been growing 5% or so this year.

And arguably, more countries will be moving in a better space next year. So maybe that could be a little bit higher.

Financial Markets, Wealth Management, we've talked about as well, momentum on both of those is good. Financial Markets obviously had a particularly strong first half, but we think the engine there is running strongly.

We will get to as close as 15 as we can for next year. If we can exceed it, fantastic.

If it's just a shade below, then that won't be a disaster, as long as the momentum as we come out next year is on a clearly and confidently improving trend. In terms of dividends, I suppose one can look at the return that we could be able to make in terms of is this making up for one that we didn't do previously or is this a new one.

I think I probably would take the slightly more holistic view of what is that is surplus and is it sensible to be contemplating? Returning that?

Will the regulators be happy with it? Whether it is a catch-up on something previous or whether it's a 2020 related number?

I don't know. I think it's the quantum that counts and then the mechanism for the return.

So we will, as I said earlier, we'll have that discussion at the very start of next year, and it'll be good to see a resumption.

Sure. Thank you.

Hi, everyone. I wanted to focus on asset quality, please.

I wanted to dig a bit more into why you're giving such an upbeat message on the outlook. If I look at the balance sheet metrics, your Stage 3 is up, your Stage 2 is up.

Category 12 loan - credit Grade 12 loans are up 29%. And your coverage is down.

So what - why are you feeling so comfortable about the outlook from here? And if I also, just as an add-on to that, look at Slide 20, it looks as if you've seen higher levels of relief applications in the CIB business, in particular.

That's also where you've seen a lot of Stage 2 increase. So I wondered if you could just talk us through, in particular, the corporate outlook rather than the group overall?

Thank you.

Okay. Let me start with that, and Bill will, no doubt, add.

There's a lot of moving parts here. And as you've observed, we've got some that have gone up, so say 3 Category 12.

We have got some that have gone down, the early alerts, which tend to be a sort of feeder down into the former category. We have got our Northern Asia region where we have got a very considerable stabilization of credit.

And, in fact, the credit impairments that have been going through that region have remained at a low level. The cover ratio being slightly down is also interesting because what we are finding is that where we have got accounts that could be problematic, we have generally got better security, better collateral against those as a consequence of some of the tightening that we have done over the last several years.

So where we have got the problem is not necessarily the case that the actual likely exposure is going to be as big as it was previously. So when you put all of those together, yes, we're watchful.

Yes, we know that some of the stats have gone up a little bit. But overall, we're not sitting here thinking, gosh, there's a huge great sort of latent problem that's sitting under the surface here.

It is obviously going to be stressed by what we're going through, but it doesn't seem to us to be a disproportionate problem. We have got relief measures that are coming off in various countries.

And as I said earlier, so far, this is - let me do the retail comment, and then I'll come on to your question on corporate. On the retail front, the earlier countries that have come off, we have not seen a significant increase in defaults thereafter compared with what we'd have expected going in.

Now that may not be a read across to other countries that are coming out. But so far, the evidence on that does not look too bad.

We have seen days past due in retail coming down and, if the Northern Asia markets are an indicator of what is likely to happen in South Asian markets, then we'll hope over a period of time, we see that sort of pattern coming through. So a number of reasons why, yes, the number's gone one way.

Some has gone the other. But overall, we don't feel that this is in a worse position than we would have expected.

The moratoria and the corporate side, the book is interesting. So we've got a level of corporates who have sought some degree of relief.

Proportionately, more of that is with the commercial bank clients. So the slightly smaller businesses, which you would expect.

But nonetheless, we've had quite a lot of what has been drawn, has actually been or been deferred, has actually now been repaid. So the sort of stock we've got there is slightly rotational.

But generally, the trend on that is not one that is in a direction of travel in a sense that it is concerning us. So yes, we're keeping an eye on it.

We have got near $400 million of balance sheet reserve set up to deal with things that are unexpected or unintended, but that's sort of why we would actually be reasonably comfortable with the quality messaging, notwithstanding the data point that you have focused upon.

Yes. I would only add that this is obviously an area that we've been extremely focused on.

We review the portfolio name by name. We put very, very robust, both underwriting and ongoing management processes, in place over the past 5 years.

They've worked where we've had a problem, and we have had a couple over the past 3 or 4 years. We called them out very quickly.

I think we - I think - I'd like to think, at this point, the management has a little bit of credibility that when we see a problem, we call it out. And when we feel relatively comfortable about things, we also call that out.

And what you've heard from Andy and from me, is a fair degree of caution simply because there's unknown. But we feel like we took an appropriate level of provisions in the first 9 months of this year, reflecting everything that we see going on in the world.

And the sorts of ins and outs of the various credit grade categories that you've reflected Manus and that Andy has commented on, are very much in line with the approach that we've taken to provisioning. So we feel that yet again, the ECL overlay that we took in the third quarter is appropriate against the quality of the portfolio.

Got it. Thank you very much.

Good morning, Bill. Good morning, Andy.

I had two, if I may. First is on - sorry to come back to this one.

But on the 2021 income expectations, I guess, we talked about the drivers. And I just wanted to kind of drill into - just a tad more detail there.

So my best guess of your NII commentary is that it could be down net 5% year-on-year, given what the NIM is going to do and your expectations for loan growth, which is probably the best part of that $400 million headwind to digest next year. I totally appreciate the good work that's been done on Financial Markets.

But given the year-to-date performance, year-on-year, I do struggle to see that up. Is it right then in terms of you clawing back that $400 million next year, is it really about what comes through in Wealth Management, which is, I guess, trending at really encouraging at Q3, but even if I was to annualize this level, it might be a stretch.

I was just interested if you kind of would frame it that way about - is it Asia Wealth Management that's the delta? The second was just on NII.

Is there anything additional you guys can do on the funding cost next year? I note that the CASA inflow in the quarter was really, really strong.

Not sure how sustainable that is, but is there something additional that you can do? Thank you.

Okay. Let me see whether this is a way to look at things.

So if you look at the net interest margin we've had over the course of this year, you could get to about, I don't know, 1.3 sort of average for the year. If next year is a sort of 1.2 average there or thereabout, that sort of 6% to 7% down.

We have had volume growth running at about 5% this year-to-date and therefore, the question really is, whether we can nudge another percentage point or two out of volume. If we can, you could get back to neutrality.

If we are still at 5%, then there'll be a slight reduction on the net interest income next year. On the fee income side of things, as we've said that we've been happy with the performance of the Financial Markets business.

We do understand the first half was a buoyant period externally but we do think that there is still a fair amount of volatility out there. So certainly, our intent is that we will keep the average engine of the first 9 months of this year running as much as we can do throughout next year.

And Wealth Management, as we said, momentum is there. So you put all that together, maybe it's a shade under $15 billion.

If we could get to $15 billion, great. Maybe it's a shade under that for next year.

I think as a 15-month out forecast in a very difficult forecast environment, that's probably the message you should take. If we can keep stable on income in 2020 and 2021, that would be great.

If we could do a little bit better, that will be even better. But it's in that sort of zone.

On the funding cost side of things, we constantly are working on trying to increase the mix to get more current cap saving account. The digital bank initiatives will start to help on that front, albeit, obviously, that takes a bit of time to build up.

We have also got a big focus on the rates we are paying, where it isn't core account and savings account, and that is one of the things that has given us an advantage in the third quarter. That is obviously subject to a little bit more to market forces.

But wherever we can do, we'll be working on things like that. The legal restructuring that we did a couple of years ago again, not huge in the overall scheme of things, but every bit helps, that also is helping a little bit on the funding costs.

So we are absolutely working that side of the equation as much as we can do. And I think the fact that we kept the margin erosion second quarter to third quarter, down to 5 basis points is testimony to the fact that, that is a big area of focus in the business.

Okay. Thank you.

I guess my first take was the NIM pressure that you're guiding for was probably a bit more like 10% NIM, down, given that it's probably more likely to be 120 next year versus north of 130 this year. It sounds like I'm probably slightly overanalyzing that kind of guidance.

Yes. I mean, we sort of said, we think it will reduce slightly from where we were in Q3.

We hope it won't be too much. And directionally, I think the sort of percentage I gave to you of there or thereabout.

Okay. Thank you.

Hi. Good morning, guys.

Just a quick one, most has been addressed, but just on the Q4 guidance for revenue, in particular, that we would see something of the magnitude that we saw last year in Q4 on Q3. Well, I guess, since you put that out there, I guess, why is that -- why do you see that as the case?

I mean, we've got a huge IPO going on in Hong Kong and the U.S. election and COVID 2.0.

I mean, certainly, I would have thought these would have created very interesting opportunities in the Financial Markets business. So just wondering what the driver is there, particularly given that in the likes of Financial Markets, you've discussed how your investments in capabilities have been bearing fruit.

So why wouldn't that be the case in Q4 this year, relative to last year? Thanks.

Yes. I mean, if you look at the pattern over the last several years, the fourth quarter has tended to dip a bit compared with the third quarter.

You're right. Clearly, U.S.

elections happening in the middle of it may help a little bit. But in the overall scheme of things, that plus one IPO is not going to change our numbers massively of itself in the one quarter.

I said earlier that in the Wealth Management space, the bank assurance bonus that we get for the full year because we are confident of getting that we have basis booked that by the end of the third quarter. So you don't get that as a benefit in the fourth quarter.

Evidentially, in the last 2 or 3 weeks of the year, you just get less activity from corporate to a sort of -- it's going down to the end of the year. So there will be some things to your question that will be helpful.

There'll be some things which are not going to defy gravity based upon recent history of corporate slowing down activity in that period of time. And that's why we've said, let's just be aware, the fourth quarter typically is a bit lower.

And it probably will be the case again this year.

Yes. Maybe just a touch of color.

When we look at the things that have characterized the first part of this year, when we talk about volatility, the big source of volatility was the structural drop in U.S. and then global interest rates.

Now that's not going to happen again most likely. And obviously, if we went into negative rates in the U.S., there'll be a whole different discussion to be had.

And second was a structural realignment of the dollar, first up on the back of crisis and then down on the back of economic performance and COVID and other concerns. That could repeat.

I mean, I'm certainly not hoping for COVID 2.0 to produce the kind of volatility that you suggested it might. But if it does, and that translates through to currency markets in some way, that could be -- that could present opportunities.

But the underlying trend for us in the Financial Markets business is our clients' propensity to hedge and our clients' propensity to enter capital markets. And obviously, from our perspective, the capital markets where we operate is most helpful for us.

And that is typically more seasonal, as Andy suggested. And I think there's no reason sitting here right now that we should expect a different type of seasonality than we've seen in the past.

I guess, then why the need to call it out given the consensus was I think calling for down 4% quarter-on-quarter. Why -- that seems to be more or less in line with prior patterns.

So why did you feel the need to call it out?

We're kind of like consensus on everything. So why bother to have to call it at all.

Fair enough. Thank you.

Hi, Andy. Hi, Bill.

Thanks for taking the question. I had just one general question, and sorry to go back on revenues.

If you remember at 2Q, I think you talked about $15.2 billion there and thereabouts. It looks like we're heading to a number of kind of more like $14.8 billion, $14.9 billion.

We do have to get to a discussion what that will be. That kind of feels that the number we're heading towards.

From the period, we said that in 2Q, HIBOR, I think, has been pretty flat. Financial Markets has been very good.

It's very hard for you and for us to forecast these revenues. So what has changed in your understanding of revenues that's led to kind of us thinking there and thereabouts $15.2 billion.

From now there and thereabouts kind of $14.8 billion $14.9 billion. It's quite a big down on EPS.

Just from your point of view, when you gave that kind of those thoughts in 2Q, and now considering where we are in 3Q, can I just ask what's changed for you in terms of that guidance change? Thanks.

So a few thoughts. I don't think the $15.2 billion was our number.

That was the interpretation of what we said, or what I said probably. What we did say when the interest rates were going through such a significant change was that we saw the balance of year income probably initially, if they're being impacted about $600 million negatively.

And at the half year, we said actually having seen the forward curve, so it's probably more $800 million. If I were to look at the first quarter, where we printed, I think, 3.8 first quarter, which was essentially pre-interest rate reductions and you sort of planned that by four as a sort of proxy for the full year, if you normalize that for volume growth, actually, where consensus is for the current year there or thereabouts, is not a million miles away from 0.8 down.

So I just think it's just been an unusual period when we get such significant interest rate corrections, it is never going to be easy to precisely work out the impact of them. And when you've got a backdrop of something called COVID that's going on as well, it's just difficult to be very precise.

I don't think we were too far off the mark with what we said. But others will form that view.

So I think we are where we are. We've talked about where we think margins will be, talked about where we think the volumes will be.

We've talked about Financial Markets and Wealth Management. And we'll see just our next year sort of quite how things have panned out, and some of that will be about how effective government action has been.

Our governments have got on top of COVID or not as the case may be, which obviously unfortunately, it's not within our grasp to influence.

That's fair enough. So I guess, is it fair to say there and thereabout is plus mine $300 million to $400 million?

Like is that is a scale of forecastability? Is that why?

So when we think about kind of guidance looking out, we should be quite kind of skeptical on the ability to understand it at to that kind of range because that feels like the difference -- we knew the $800 million at 2Q when we talked about there and thereabouts, $15.2 billion, it feels like we're somewhere shy of. The problem with the revenue downgrade is then it becomes a possibility downgrade because then you kind of extract that forward.

So there and thereabouts, is that the kind of range we're thinking about $300 million to $400 million?

Yes. So I'd say this, if you've got a business that's, whatever, $14.7 billion, $14.8 billion income on a full year basis, sort of for this year, as I said earlier, if we could hold to that level next year, I think that will be a reasonable outcome for divest.

It's great. You're sort of plus or minus $400 million, it's what, the 2.5% sort of delta on that number, 15 months out.

I would love to think we can be somewhere in that sort of corridor. And let us hope that we are.

So directionally, yes, I'd be comfortable with that. But external events could either for the positive or to the negative, could impact that.

I guess, the plus or minus 10% delta on EPS, though. Okay.

Thank you very much.

Okay. Thank you.

Right. I think we have come to the end of the questions.

So thank you all for joining the call today. Hopefully, that has answered most of your questions.

If you've got more then, no doubt, you will call into Mark and IR team, and we can handle those off-line. Thank you all very much indeed.

Thanks, everybody.