Barclays PLC

Good morning. Thank you everybody for coming here and welcome to our full year 2023 results presentation as well as our investor update. You could see the agenda for the day on this slide. And so what we will do is we'll first go into the results for 2023 before turning to the broader investor update. So as you saw this morning, I'll start with the results announcement with the performance highlights, and then I'll hand over to Anna to take us all through the financials. So we are delivering against our guidance. So we achieved, delivered on all our targets in 2023, and together with our consistently strong capital position throughout this year, what this enabled us to do was to give shareholders a material increase in distributions. Excluding the Q4 structural cost actions, Return on tangible equity was 10.6% for 2023, in line with our target of above 10%. And on the same basis, our cost-income ratio was 63%, in line with our guidance for the low 60s for the full year. As well as being accretive to future returns, the structural cost actions did not limit our ability to deliver a 37% year-on-year increase in total distributions. which now amounted to three billion pounds. This three billion pound number for 2023 included a total dividend of eight pence per share, with the full year amount of the dividend of 5.3 pence being announced today. And as well as a full year buyback of one billion pounds, which we expect to start in the coming days, and that's on top of the 750 million at the half year. Tangible book value per share has increased by 36 pence year-on-year to 331 pence, and our CET1 ratio was 13.8%, which is at the top end of our target range, which you'll recall is 13% to 14%. Overall, we view this performance as a strong foundation on which to build towards our revised financial targets over the next three years. and which we announced this morning and we'll talk about in greater detail in a few minutes. But before that, the financial part of these results, Anna, over to you.

Thank you Venkat and good morning everyone. Turning now to slide five. I think I'm going to need a script. Thank you very much. On a statutory basis, ROTI was 9% for full year 2023. This included the 0.9 billion of structural cost actions taken in Q4. And given the materiality of those Q4 charge over and above normal annual cost actions, I'm going to exclude it from the financial performance metrics today. On this basis, 2023 return on tangible equity was 10.6%. I would note that there was no impact from the over-issuance of securities this year, but given the material impacts to income and costs in 2022, I will also use adjusted numbers as comparators. Group profit before tax. was 7.5 billion, down 3% year-on-year, and income increased by 0.7 billion, while costs were 0.2 billion higher, excluding the Q4 cost actions. Within costs, litigation and conduct charges were small this year, at 37 million, compared to around 0.6 billion in 2022. And operating costs, which include L&C, were up by 0.8 billion. Impairment charges were 0.7 billion up to 1.9 billion, representing a loan loss ratio of 46 basis points, better than our three recycle guidance of 50 to 60. As usual, I'll now cover the three drivers of our returns, income, costs and credit risk management. We saw a continuation of year-to-date income trends through the fourth quarter, resulting in total income up 3% at £25.4 billion for the year. Barclays' UK income was up 5%, with growth in net interest income from rate increases outweighing lower cards income and the transfer of UK wealth in Q2. Consumer cards and payments income grew strongly, up 18%, driven by higher margins and balance growth in both US cards and the private bank. Corporate and investment bank income was down 4%, as lower volatility in markets and a record low banking wallet impacted the industry. This outweighed the tailwind from interest rates in the corporate bank. On the next slide, you can see net interest income across the bank and that it grew by 2.1 billion or 20% year on year, driving a 44 basis point increase in Group NIM to 3.98%. The biggest contributors to NII growth were CCNP and CIB, together adding 1.3 billion with around one quarter of the total NII growth coming from BUK. Going forward, whilst we will still report net interest margin, we will guide to Group NII, excluding the investment bank and head office. This is expected to be around 0.3 billion lower in 2024, at around 10.7 billion. BUK is expected to be approximately 6.1 billion of this, excluding the impact of Tesco, which I'll touch on shortly. The benefits from the structural hedge are expected to be offset by continued product market pressures, particularly in the UK. Turning now to the structural hedge in more detail. The structural hedge is designed to reduce volatility in NII and manage interest rate risk. As rates have risen, this has dampened the growth in our NII, but in a falling rate environment, we will see the benefit from the protection that it gives us. It generated $3.6 billion in gross hedge income in 2023, up from $2.2 billion in the prior year. It also provides a high degree of confidence in the net interest income growth assumed in our forward plan. To illustrate this, 3.8 billion of gross hedge income is already locked in for 2024 from the hedge investment we did through 2023, and this will continue to build. Given trends in retail deposits, we do expect the notional balance to reduce in 2024 at a broadly similar rate to Q4 23, before stabilizing in 2025. We have approximately 170 billion of hedges maturing over the next three years and we expect to roll around three quarters of them over the period. And with reinvestment rates remaining well above the average maturing yields of around 1.5% for the next three years. So we do expect the reinvestment to outweigh notional hedge declines. Turning now to cost. on slide nine. As guided, quarterly costs through the year remained below the Q1 high point. This excluded the Q4 bank levy of 180 million, which was flat year-on-year, and the cost-income ratio for the year was 63%, excluding the Q4 structural cost actions. Group costs of 16 billion were up 0.2 billion year-on-year. Operating costs increased to support business growth and enhance resilience and control. For example, partner focus spend to drive balanced growth in US cars and Kensington mortgages in the UK, as well as technology investments to support markets within the CIB. The impact of inflation was more than offset by efficiency savings. Looking at the 927 million of Q4 structural cost actions in more detail now on the next slide. These were across three main categories, people, property and infrastructure. Around half was in our head office and relates to our merchant acquiring and German consumer financing businesses, as well as a Canary Wharf office lease exit. A large proportion of this head office charge is goodwill and intangible write-downs and which will have no impact on capital. And the other charges are spread across the businesses. We expect the overall payback to be just under two years, with around half of the cost savings landing in 2024. You'll hear later how these cost actions are a key pillar in our plans to improve efficiency and drive a more productive cost base going forward. Moving on to credit on slide 11. The impairment allowance was broadly stable at £6.3 billion and we maintained our balance sheet coverage at 1.4%. the total impairment charge for 2023 of £1.9 billion was up around £0.7 billion year-on-year, and the full-year loan loss rate of 46 basis points was below our through-the-cycle guidance. As we expected, this included a higher Q4 loan loss rate of 54 basis points, driven by an increase in US cards. US cards was also the largest component of the full year charge of 1.5 billion in CCNP. The full year Barclays UK charge was around 300 million with a loan loss rate of 14 basis points. We continue to see conservative consumer behaviours across all our UK portfolios and we do expect the loan loss rate in the UK to increase over the next three years as we grow unsecured lending. I'll go into more detail on the US cards impairment on the next slide. Our US cards portfolio credit trends are in line with the broader industry. The US consumer bank loan loss rate is elevated in comparison to recent periods as we build our impairment reserves because of an increase in delinquencies. Write-offs are low. but we do expect them to increase during 2024, which is why we're building the reserve now. As a result, our U.S. cards coverage ratio stands at 10.2% on an IFRS 9 basis, and when calculated on a U.S. accounting basis, the CECL coverage ratio of 8.2% is in line with our U.S. cards peers. the portfolio remains high quality with 88% of the book above a 660 FICO. We do expect the impairment charge to remain elevated through the first half of 2024 and then to reduce in the second half. Overall, I'd expect the charge for 24 to be below the 2023 level and we're guiding to a 400 basis points loan loss rate through the cycle. A brief word on Q4 performance on the next slide before I take you through the businesses. Profit before tax excluding Q4 structural cost actions was 1 billion down 0.3 billion. Income was down 0.2 billion year on year at 5.6 billion. The second best Q4 in the last five years after 2022. This was driven by a reduction in non-NII, partially offset by an increase in NII, whilst operating costs were broadly stable. Impairment was around 50 million higher, at 0.6 billion, with a higher Q4 charge in CCNP from US cards, partially offset by a lower Barclays UK charge. Moving now to the business performance, starting with Barclays UK on slide 14. Roti was 19.7% in Q4 and has been consistently around 20% every quarter this year. Total income was £1.8 billion, with net interest income stable at £1.6 billion and a £0.2 billion reduction in non-NII year-on-year. This reflected the transfer of UK wealth business in Q2 and a number of one-offs. we would expect non-NII to revert to a run rate greater than 250 million per quarter going forward. The NII generated a NIM in BUK of 307 basis points for Q4 and 313 for the full year. We said at Q3 that our 305 to 310 basis points guidance was sensitive to the level and mix of deposits And the deposit trends that we saw in Q3 slowed materially in Q4. Deposits were down 2.1 billion compared to the reduction of 6.6 billion in Q3 as the pace of deposit outflows and migration to higher savings rates slowed. The other NIM drivers played out broadly as we expected, and you can see these on the chart on the right-hand side. The structural hedge continued to be a tailwind to NIM, although a more modest seven basis points in Q4 due to lower swap rates and a reduced hedge roll in the quarter. Bank rate effects turned negative in half two, reflecting pass-through in pricing, and mortgage churn continued to ease. We also saw a positive contribution from Treasury in the other category as we flagged earlier in the year. Looking forward to 2024, we are guiding to NII for Barclays UK of circa 6.1 billion compared to 6.4 billion in 2023. We will have a building tailwind from the hedge roll. However, in the short term, consistent with our industry expectations, we do expect this to be more than offset by some further reduction in deposits, but at a slower rate than in 2022 and a net reduction in mortgage balances. This excludes the impact of the Tesco bank acquisition, which I'll summarise on the next slide. The acquisition accelerates our intention to grow unsecured lending in Barclays UK, which we will discuss in more detail later. The transaction involves the acquisition of 8.3 billion of unsecured lending balances, roughly half credit card receivables and half unsecured loans, and approximately 6.7 billion of customer deposits. This will result in 8 billion of RWAs in completion, which is expected to be in half too. Given the uncertainty around this timing, our 2024 guidance does not include the impact of the acquisition, although it is reflected in our 2026 plans that we're announcing later today. Once completed, we estimate initially generating NII of around 400 million annualised and growing from that level. And as we complete the integration, cost will be somewhat elevated, but this should be broadly neutral to the group cost-income ratio. And as usual, following a portfolio acquisition, we also anticipate elevated impairment initially under IFRS 9, but again, expect that to normalise. As a result, we forecast a slightly reduced BUK roti in 2024, but once integrated, the business will have an attractive roti profile, accretive to the group roti over time. Turning now to consumer cards and payments. Continued growth in U.S. cards receivable and private bank client balances drove a $0.1 billion increase in CC&P, total income year-on-year. U.S. cards balances grew to just over $32 billion, up $2 billion in Q4, reflecting seasonally higher year-end spend. Client assets and liabilities in the private bank grew by $4 billion in the quarter to around $183 billion, with most of the growth being in invested assets. This is a positive trend for the future, but the initial growth is in assets under supervision, which does attract lower fees. CC&P ROTI was 2.6%, reflecting the impairment build in US cards I've just talked about. And this will be the last time we report the CCNP segment as we start to disclose our US consumer bank and our private bank and wealth management businesses separately. Moving on to the CIB. CIB income of 2.4 billion was impacted by lower year-on-year global markets income. The Q4 market environment had lower volatility in markets and subdued industry activity for banking. Investment banking performed relatively well in this context, up 13% in US dollars and up 36% on Q3, with DCM outperforming the market and offsetting continued lower activity in ECM and M&A. We maintained our banking market share in 2023 whilst we repositioned the business in a record low year for the industry wallet. Markets income was down 14% in US dollars against a record Q4 comparator for us, whilst our business mix also affected us. Corporate lending income was materially down on Q3 at 40 million, primarily due to leverage loan finance marks of 85 million. Underlying corporate lending income was stable. Transaction banking deposits were also stable, whilst income fell slightly versus Q3. Whilst deposit migration continues, this was at a slower pace than earlier in the year, and as a result, we are now again rolling a portion of the structural hedge related to corporate deposits. Looking at markets in detail on the next slide. There were several factors driving our performance in markets this quarter. Similar to Q3, both our business mix and the record comparator contributed to thick income being down 22% year-on-year in dollars. Lower volatility in UK gilts compared to Q4-22 and an industry-wide slowdown in rates and credit impacted Barclays more than our peers. And conversely, the market rebounded in securitized products where we currently lack scale. Equities performed broadly in line with peers up 3% in U.S. dollars year on year. Looking at the longer term trends in markets over the last four years, our share in income has been consistently higher than in the previous three. And our income now includes a greater proportion of financing, which, as we've said before, provides greater stability to our overall market's income. Turning now to the capital funding and liquidity metrics on the next slide. We continue to maintain a well-capitalised and liquid balance sheet with diverse sources of funding and a significant excess of deposits over loans. Looking at capital in more detail on slide 21, we finished the year with a CET1 ratio of 13.8%. The announced £1 billion share buyback will take us to 13.5% in the middle of our target range. We generated 18 basis points of capital from earnings in Q4 2021. and just under 150 basis points over the full year, both of which exclude a circa 20 basis points impact of the Q4 structural cost actions. Excluding the reduction due to FX, the 6 billion increase in RWAs reduced capital in Q4 by 23 basis points. We'll say more about our RWA flight path over the next three years later, but I want to address two main headwinds here. The first is a move of our US cards portfolio to an internal rating based or IRB model. We continue to make significant progress towards at least 85% of credit risk RWAs being IRB, which is the level required by the PRA for IRB bank. This move results in an expected increase in RWAs of around 16 billion from half to 2024. We don't expect any further material impact from model migrations from current portfolios beyond US cards. The second headwind is Basel 3.1, which we have quantified publicly for some time. The PRA's recent policy paper was constructive, and we've also worked through some refinements and mitigations. Furthermore, our previous Basel 3.1 guidance included an element for US CARDS RWAs, which has been superseded by the IRB migration. The aggregate impact of these factors means a materially lower impact from Basel III on implementation. And given this lower estimate, the total effect of the two headwinds is broadly aligned to the previously guided day one impact of Basel III.1, towards the lower end of the 5% to 10% of group RWAs. Furthermore, as more risks are captured in Pillar 1, we would expect some offsets in our Pillar 2 requirements. On this slide, we're illustrating the drivers of the RWA increase from implementing IRB for US cards. When applied to U.S. cards, our IRB models generate greater risk-weight density versus standardized models. And the key driver is that the models include 2009 financial crisis stress loss assumptions despite current and expected experience being materially less adverse. Under the US Basel III end-game treatment, we expect our peers in the US to also experience a capital increase, although noting that these rules are yet to be finalised. There will be further details on planned migration in the US Consumer Bank presentation later on. So, to summarise, we delivered on our financial targets in 2023. This, along with our strong capital position, enabled us to deliver a material increase in distributions to shareholders. It also represents a strong foundation on which to improve over the next three years. I'm now going to take the Q&A. Given the time constraints we have, please can I ask you to limit yourselves to a maximum of two questions per person, and please stick to the full year results topics. There'll be plenty of time to discuss the investor update later on. And if you could please introduce yourself as usual, not least I'm blinded by lights, so I can't actually see you very well. So thank you. Alvaro.

Hi, Alvaro Serrano from Morgan Stanley. A couple of questions, please, on the market's performance in Q4. You've touched, obviously, on the drivers behind it, but I wonder in the guidance you've given for 2024, what kind of environment are you factoring in given... It's proven to be pretty volatile and maybe the general environment for CIB, how you see it and what you factored in that, how sensitive that 10.5 to changes in the environment. And related to the Tesco slide, I mean, it does look pretty profitable, but maybe when you discussed Tesco and the discussion was had at the board, how did you compare that acquisition versus potential topping up your share buyback that you would have been able to announce otherwise? Thank you.

Okay, thank you for that. So thanks for both questions. So in terms of the markets environment, I'm not going to give a trading update at this point. But what you will see later on is that the assumptions that we're making about both the markets and the banking wallet are very reasonable actually. We're not expecting an increase in the markets wallet in particular in 2024. So we believe they're reasonable assumptions and actually that leaves the actions to grow revenues largely in our hands and Venkat Nadeel will talk about those later. In terms of Tesco, we will be talking later about our desire to grow lending in the UK, and unsecured lending in particular. Many of you have commented on the fact that we've lost market share in unsecured over the last few years. And actually what Tesco does is it allows us to accelerate and secure the plans that we would otherwise have pursued organically. And we believe that we can make those investments and fulfill the distribution plans, not only the ones that we've announced today, but the targets that we are giving ourselves over the next three years. So we'll balance shareholder returns with investments, but in our high-returning businesses. Okay, next question, please. If I could go to Joe, please. Thank you. If you're beyond the first row of tables, I really won't be able to see you, so...

Thank you. Thank you, Anna. It's Joe Dickerson from Jefferies. Just a quick question since we're sticking to the Q4 here. This other element of the UK NIM keeps on rearing its head. So that was a favorable nine basis points quarter on quarter. Do you expect that to smooth out over 24, this kind of volatility from the other aspect? And I suppose related to that, what are the – market indicators we might be able to look at to see how that line is moving because it's been pretty material now off and on for some quarters.

Okay, so just to remind you what's included in that other. So two things really. Basically, any other product other than deposits and mortgages. So to the extent that we're seeing cards or indeed our SME lending moving around, you're going to see it flow through there, but also Treasury. So our NIM, remember, is an all-in NIM. Some of our peers have a banking NIM, which excludes those treasury impacts. Really what's going on in the fourth quarter is a reversal of what we talked about a year ago. And as such, I don't expect that impact to reverse as we go into 2020, 2024. So, you know, it's really a reversal of the previous impacts in most material form. Thank you. Okay, can I go to this corner, please? Thank you.

Thank you. It's Guy Stebbings from B&B Paribas Exam, one on UK mortgages and one on US cards. I think you said in your remarks earlier that you're going to see a net reduction in mortgage balances in the UK, excluding the Tesco acquisition. It just seems a little bit odd, given some of the improving dynamics within that market from a volume perspective in terms of the data. So I just wanted to check assumptions there. Also, some peers have talked to better new lending spreads in 2024 versus 2023. Okay. And then on US cars, it's quite a step up in capital requirements from that model change. I'm just interested to hear if that changes your views at all in terms of the appropriate pace of growth for that business, or was this something that was always going to happen at some point in time, it's just particular timing? Thank you.

Thank you, Guy. So, you know, the mortgage market through 2023, and actually as we enter 2024, has been somewhat dominated by refinancing activity. So it's pretty skinny margins, still attractive, but skinny. And that tends to lead to a negative net in the market, which is what we've seen. So we're calling out nothing more than that, really, that the trends through the tail end of 23 have been towards negative net. And similarly, that matches up with, I would say, the broader macro trend around deposits where, you know, with QT and a sort of more constricted money supply, we'd expect deposits to fall. So it's really that that we're calling out in the UK, a contraction in the market in those two larger products, which we would expect to, you know, reduce our net interest income expectations before ultimately we see the balance sheet start to grow, and we'd expect that in the second half of 2014. Your second question, so I'm not going to comment too much on the strategy of the cards business because we're going to come to that, but we obviously always knew that we were going to have to go through an IRB conversion for US cards. We typically update the market when the quantum becomes clear and when the timing becomes clear, and that's become clear to us in Q1 of this year, which is why we're updating you now. As I said previously, we included an estimate for it contained within our Basel number. Actually, the way things have turned out, it's a bit bigger, it's a year earlier, but conversely is offset by some of the updates that we have on Basel. But later on, Denny will take you through some of the ways in which we expect to specifically counteract this. Okay, thank you.

Good morning, it's Ben Toms from RBC. Just back to the NIM if that's okay. Your NIM for the fall year came in above expectations. Can you just talk a little bit about the deposit dynamics you saw in Q4 and where they were better than you previously expected? And then into 2024, I think you talked about deposits, expectations for the deposit balance to continue to fall, maybe just about how you would extrapolate Q4 into 2024. Thank you.

Thank you, Ben. Yes, we ended the year with a Q4 NIM of 307, bringing the full year to 313. You might recall at Q3, we said we expected to be between 305 and 310, but that was largely dependent on deposit dynamics. And actually, it might be good to go to slide 15 if we can, because it might be helpful for this question. We said it'd be largely dependent on deposit dynamics, and if we saw a replication of Q3, we'd be at the top end of that range, and by my math, that's around 296. We ended up at 307, and the biggest driver is really that movement that you can see on the slide, where the deposit pressure in Q3 was 16 basis points, and the deposit pressure in Q4 was 7. And that's really because we saw a stabilisation, of deposits across Q4. And I think that comes sort of in two ways. Firstly, customer behaviour, customer migration really slowed down. And secondly, we saw a stabilisation in pricing as the rate environment settled. So, as a result, it was a markedly different deposit environment. Now, clearly, we take that forward into 2024. Noting those macro trends, and I would say also noting that Q1 and Q2 tend to be fairly active as a deposit matter, just because of seasonal effects, so pay down of tax, etc., but also because of the ISA season. But in the second half of 2024, I would expect this deposit activity to slow down and perhaps settle a little. And of course, we've got that ongoing impact of the structural hedge. So as we go into 2024, I think it's fair to say perhaps there's a bit more NIMS stabilisation than we might have expected. But we expect downward pressure on the balance sheet coming from both deposits and mortgages. And we'd expect to start growing the balance sheet again really towards the back end of the year, particularly, for example, through organic cards growth in the second half of 2024. And, of course, none of that includes Tesco, and we'll update you when we know the completion date. Okay. Where next? Rohits.

Thanks. Good morning. Rohit Chandaraj from Bank of America. Thanks for the colour on FIC. Just in markets, the equities business looks like it's been struggling with market share for about the last 18 months or so. So I was wondering if you could give us a little bit more colour about if there are particular product areas that have been more challenging relative to the peer group. And then secondly, just back on capital, you seem very confident that it's just US cards where we've got model updates. Why do you not expect them anywhere else? Is it because that's already been completed or you think the risk weightings on the other models are in the right place?

So on equities, actually our performance is fine in the fourth quarter. Nothing I'd specifically call out. Adeel is going to talk later on about a couple of specific product areas where we have a bit more focus on going, so I'll let him pick that up then. But there's nothing stand out, there's nothing particular that I would call out for Q4. On the capital point, as I said before, it's a requirement for IRB banks to get to 85%. the eagle-eyed amongst you, if you look in the pillar three, I forget which table, but it might be 28, you'll be able to see that actually, post-US cars, we get to around 67. The step between here and full compliance is largely around the wholesale models. And actually, under standardized, the wholesale models do a pretty good job of having the right weights against counterparties to reflect what would otherwise be an advanced treatment. So on wholesale, which is our only remaining big movement to make, we're not anticipating a significant movement in RWAs. And of course, outside of cars, you'd expect a movement from standardised to advanced to actually reduce The RWAs, it just doesn't in particular with cards. And our UK cards book is already IRB compliant. So this brings the US cards book up in alignment with that. Okay, Andy. I think, Andy, you might be our last question in the interest of time.

Morning, it's Andrew Coombs from Citi. Two questions, please. First on the UK, we talked about the net interest income, which came in notably ahead of consensus. Of course, so in the UK, net interest income we've already talked about and came in notably ahead of consensus expectations. But on the flip side, the non-net interest income came in below expectations. I know there is the transfer of WMI there. Are there any other one-offs you'd like to call out in the non-NI in the UK? And my second question, a similar vein, the corporate revenues in CIB, again, slightly lower in the quarter. Anything you'd like to call out there in terms of leverage finance marks or hedges or anything else in that line item? Thank you.

Okay. Thank you, Andy. Thank you, Andy. So on the non-NII in the UK, as you pointed out, it has changed structurally because we've moved UK wealth into private banking and wealth, and we did that in Q2 of 23. The other thing just to call out is previously we've seen sort of relatively lumpy debt sales go through that line in the past. Don't expect that going forward. We've got a forward flow arrangement, so it drips through the P&L in a much more gradual way. In terms of the one-offs across Q3 being positive and Q4 being negative, they're all too small, really. There's nothing I would specifically call out, which is why we're trying to be helpful here and give you some guidance to help you model it going forward and saying that we expect it to be above 250. And on the corporate lending line, clearly that does include the costs of our SRT and it does include the cost of the portfolio hedges. But really the only significant point in the current quarter is 85 million of leveraged loan marks that we took in the quarter. I wouldn't call anything else out specifically. I'd say that underlying corporate lending income is broadly stable from where it's been over the last few quarters. Okay, and with that, I will close the four-year part and invite Venkat to pick up the strategy update.

Thank you, Anna. Right, so now we come to the strategy update part. You know, it's been 10 years since our last Investor Day. A lot has changed in the world since then. A lot has changed at Barclays. So today, what we do is we present our vision for the future. It's a vision of a better run, more strongly performing, higher returning bank. It's a vision of Each is strong by itself, and together they are mutually beneficial and reinforcing. It's a Barclays which is appropriate to a changing and multipolar world, one which values a UK-based bank. Equally, it is a Barclays which seeks to deepen and broaden its role in the UK, even as it engages with the world from London. As I say, We are very bullish on the UK as a place in which to do business and from which to do business. Importantly, it is a vision for Barclays that is committed to generating strong financial returns and distributing them to shareholders. In my two years as CEO, I have worked very closely with my colleagues in the executive committee, outside of it and with the board, examining the path on which we have been the direction we need to take forward, and what you will see and hear today are the results of that work. We are creating a simpler, a better, a more balanced bank, words which I will come back to later. It's dedicated to higher returns for its investors, and how we do that is equally important. It's a vision anchored in ambition, measured ambition as I call it, and it's driven by disciplined delivery. And as I said, it's harnessed to our home here in the UK. So we've embraced this plan of measured ambition, measured confidence. We start actually with very strong foundations. Over 20 million UK retail customers, and that is before Tesco, and we bank a quarter of UK corporates. In the US, our credit card business has a further 20 million customers. In our investment bank, we've built leading global markets and banking businesses, which are at scale today. I repeat, at scale today. Delivering for our clients at a time when many competitors have pulled back, and in fact, some still continue to do so. You know, for a long time, fixed income has been the calling card of Barclays. We are number three in credit and joint first in fixed income financing. Our investment bank has led landmark transactions. And importantly to me, we were the top UK investment bank in 2023. This is a title to which I feel we always must aspire. You know, I said that we did an investor update 10 years ago, and Barclays has changed since that time. In fact, changed substantially for the better. We've strengthened the bank financially, improved its capitalization, and are now leaner We reduced our headcount by about a third over this period, and our footprint from more than 50 countries then to 38 today. We've exited non-priority businesses in Africa, in Asia, in European retail banking, as well as commodities, and there are two more in advanced stages of discussion. We've reduced our RWAs by about 20% in this period, Strengthened our CET1 ratio by 4.5 percentage points to 13.8% at year end, as we just spoke about. And at the same time, unfortunately, we have incurred about 16 billion pounds on litigation and conduct issues and costs. To me, this is a very, very disappointing number. And it is a stark and serious reminder as to why it is so important to run a bank well. and at the heart of running a bank well is what I call running it in a consistently excellent way. It is the surest way we have to preserve our reputation, protect our bank, and all our shareholders. Over the same period, we have reset our financial performance, particularly in the last three years, delivering return on tangible equity above 10% since 2021, and distributing 7.7 billion pounds to shareholders in that period, which is 35% higher than the prior seven years put together. And while this has been an improvement, it is not enough. And indeed, our shareholder experience needs to be better. We have listened, we have heard, and we will do even better. So how will we do even better? At one level, I want Barclays to be renowned for excellent operational performance. To me, operational performance and financial success are two sides of the same coin. Operationally, we have worked to what I call this new standard of consistent excellence for over a year and a half, looking to reduce complexity, harnessing technology, promoting strong risk and controls, and aiming to deliver a better customer experience. We need to continue to do this. Financially, we need to drive towards higher returns from our businesses while improving our efficiency. As I will talk about, we will invest RWAs in our higher returning consumer and corporate businesses while maintaining the RWAs in the investment bank broadly stable at their current absolute level. As you will hear, the investment bank RWA's will shrink in real terms as they will have to self-absorb the impact of Basel 3.1. Crucially, we are targeting higher, more predictable shareholder distributions. And lastly, we will have clearer financial reporting which will allow you and us to mark our progress more easily. So what will this plan deliver? First of all, improvement in ROTE from 9% statutorily in 2023 to 12% and above, to greater than 12% in 2026. Second, we plan to distribute at least 10 billion pounds to shareholders between 2024 and 2026. And this is about 50% of our current market capitalization. Third, we're putting a cap on the RWAs in our investment bank reducing its share of RWAs from 63% in our current CIB construct to around 50% by 2026. And to me, these are the three important parameters and numbers that we're focused on. How will we do this? Over the next three years, we aim to make the bank simpler, run it better, and make it more balanced. What does simpler mean? It means, first of all, a simpler business structure and then one that is organized and operated in a simpler way. I'll spend some time on this slide. From today, we will run Barclays through a business structure that, as I said, delivers greater accountability and transparency in reporting to investors. And there are three messages I'd like to bring out on this slide. why is this a simpler structure? Two, why do we have each of these five businesses? And three, why do they fit together? The structure is simpler because even though we go from three units to five, this reflects the way in which we serve our customers and clients, and it increases the transparency on our performance. We will no longer report either consumer cards and payments or the corporate and investment bank in their current construct. Instead, first we bring private banking and wealth management at Barclays into one unit, and we report this separately from the U.S. Consumer Bank, which contains our specialty credit card partnership business in the U.S. From the old CIB, we have created the U.K. Corporate Bank, which serves mid-sized corporates in the U.K., And this will be managed and reported separately from the investment bank, which now comprises global markets and investment banking. The investment banking part also includes our international corporate bank, which serves multinational corporate and institutional clients under one roof. As part of our effort to become a simpler business, we've also considered the strengths and weaknesses within our portfolio. As a result of that, if you look at what is in grey, we are in advanced discussions on the sale of our German consumer business and our Italian mortgage book. And this will complete our exit from European retail outside of the UK. We are also evaluating options for our UK merchant acquiring business, which I will talk more about later. So the first point was the five businesses. The second point is How do we think about each of these businesses? We are at scale in Barclays, UK. We are at scale in the investment bank, and we are at scale in the UK corporate bank. Our focus is on improving each one of them. Some parts will need to grow, and they will. In the private bank and wealth management space, we are very profitable, as we'll show you, but we need to scale further. And in the US consumer bank, We are on a journey to scale while maintaining our specialist focus, which must be more profitable. And that includes better management of capital and a lower cost-to-income ratio. And we'll talk about that. Finally, why does this collection of businesses fit together? The way we think about it is either they have a UK focus and or they bring synergies to the bank. For instance, if you take the U.S. consumer bank, it has client synergies with the investment bank, but also with our U.S. cards capability, as our Tesco bank transaction shows. And given that we have in that transaction entered into a partnership program, which is in fact the focus of our specialty business in the U.S. Further, the U.S. consumer business diversifies our investment bank in the U.S. stress test CCAR. Lastly, we've announced management changes this morning for our five businesses. They reflect both the promotion of the next generation of leaders for our important businesses, as well as a rotation within Barclays to broaden the experience of some of our existing business heads. So Barclays UK will be run by Vim Maru, who ran the equivalent business at Lloyds, and we look to him to apply his experience with Barclays UK. The UK Corporate Bank will be run by Matt Hammerstein, my colleague who has run Barclays UK for over half a decade and is now ready to step into this new challenge. His deep experience in the UK makes him an opportune and fit person to run this division. Private Banking and Wealth will be managed by my colleague Sasha Wiggins, who has served as both my Chief of Staff and managed our public policy effort most recently. She has her career anchored in our private bank before she ran our business in Ireland. And she brings the knowledge and the profile and the connectivity within the bank to achieve this ambition successfully. And our investment bank will be run by Adil Khan as Global Head of Markets and Kahal Deasy and Taylor Wright who remain co-heads of investment banking. Stephen Dainton who co-ran markets with the deal, is appointed president of Barclays Bank PLC and head of the investment bank management. My colleague, Paul Compton, who's been with us on the executive committee for eight years, will step back from his current role as global head of the CIB and become chairman of investment banking, speaking and working with our most critical clients. The U.S. Consumer Bank continues to be run by Denny Nealon. These business leaders are all members of the Barclays Executive Committee, and they will report to me. So that was the structure. Equally important in running the bank in a simpler way is how we operate them. We removed 5,000 roles in 2023. We are also repositioning about 30% of the people from our common platform, Barclays Execution Services, which we call BX. That's about 20,000 people. And we're driving that, moving them into the businesses, driving closer ownership, greater accountability, and speed of execution. We're focused on technology, which is a big driver of simplicity. 75% of our workload so far has been moved to the cloud, with a plan to get this to 85% to 90%. We expect to decommission a further 450 to 500 legacy systems on top of the 400 that we have decommissioned to date and with a much greater focus in the future on buy versus build. So I said first a simpler bank and then a better bank. What does better mean? Having a simpler business means we can focus on delivering better performance. for our customers and clients, and as well as delivering an improved financial performance for you, our shareholders. And we managed to do it in these ways. First, to better returns. As you have heard, we aim to deliver greater than 12% ROTE by 2026. To do that, we will continue to generate consistently high returns in Barclays UK, the UK Corporate Bank, and Private Banking and Wealth. while investing more in these higher returning businesses. At the same time, we aim to improve the investment banks ROTE from 7% in 23 to be in line with the group target of above 12% by 2026. And in the US consumer bank, we're also targeting an ROTE for 2026 in line with the group. So up from the 4% in 2023, and building back towards the levels of ROTE which we have delivered previously. So we're generating higher group returns by a combination of delivering higher returns from businesses which need to improve and allocating more core capital to businesses that have consistently generated higher returns and we expect them to continue to do so. The second part of running better is to continue to invest selectively. We have spent £300 million on cost efficiency and revenue growth and protection in 2023. And this number is increasing to £500 million by 2026. And while we continue to invest selectively in the investment bank, the proportion that goes to consumer-facing businesses will grow to 70% and the absolute amount will double. They are getting capital resources, as I said, and investment resources. Better income is not just higher income, but better quality income. And we aim to grow our total income to around £30 billion by 2026. Today, we already have a balanced mix of NII and non-NII, which is relatively resilient through rate cycles. But if you look at the bottom of this chart, you see two parts, retail and corporate, and financing. We consider these two to be more stable income streams, and they have grown by about 35% since 2021. And the proportion from these more stable income streams will be about 70% of the bank's total income by 2026. This slide reflects the anticipated effect of the announced acquisition of Tesco Bank and the planned disposal of our German cards business. Lastly, and very importantly to me, happy and satisfied customers are the scenic one on for any enterprise. And we need to improve our customer experience and outcomes. I mean, to illustrate this, in the UK, our net promoter score is ranked eighth among the 12 leading banks. This is not good enough. We aim to improve the customer experience by investing in it deeply and making it not just a point of focus, but a point of ambition and a point of pride. Our investments across our businesses are aimed at operational excellence and client satisfaction. As I said at the start, they are the same thing and it's the same size of one other side of the coin of financial performance. So we spoke about simpler, we spoke about better, and now I'm going to talk about a more balanced bank. And what does it mean? It means a more balanced allocation of RWAs with more capital deployed to our highest returning opportunities. And it also means a more balanced geographical footprint, more concentrated in the UK and in the US. We will continue to exert discipline on how we allocate capital, both across the bank and within the businesses of the bank. Of the 50 billion pounds allocated, which we now expect an RWA increase between now and 2026, we intend to allocate about £30 billion to our three UK businesses, Barclays UK, the UK Corporate Bank, and Private Banking and Wealth Management. Now, this includes the about £8 billion in RWAs in the Tesco Bank acquisition, which we announced 10 days ago. Of the £20 billion in RWA increases allocated to the US Consumer Bank, is driven by the changes in regulation that Anna spoke about earlier. Investment bank RWAs, as I have said, will be relatively stable and in fact shrink in real terms because we are absorbing in the investment bank the impact of Basel 3.1. Over the medium term, this will rebalance RWAs between our consumer and wholesale businesses and will support more consistent and higher returns. As I have said, the investment bank is both very competitive and at scale. Our prior CIB construct accounted for about 63% of the group's RWAs. The newly segmented investment bank accounts for about 58%, and as a result of the rebalancing of the group that we've announced today, it will reduce to about 50% by 2026. Further, as I'll talk about later, we will recycle capital dynamically to the highest returning areas within the investment bank. And I'll talk about that in the next presentation. And we do that so that it can grow income without needing more capital, improving productivity and returns for the group. Taken together, all of this delivers a more balanced bank. Now coming to geography. I said earlier that that we feel very confident in being a bank that operates in the UK and from the UK. And it is time to grow in our UK market. We have been a UK-centered bank for 330 years. We're still transatlantic with an important presence in New York. But the UK is a great place to run a scale banking franchise. The economy has remained resilient. The legal and regulatory environment is extremely strong and trusted. Taken together, operating out of London, we aim to be the UK-centered leader in global finance. So, in summary, we aim for stronger returns, greater shareholder distributions, and operational excellence. They all go together. We will do so by having a simpler structure, better operational and financial performance, and a more balanced business. So I repeat the words I said earlier. On the one hand, simpler, better, more balanced. That's the type of bank. On the other, we get there with our approach of being disciplined, consistently excellent in our operations, and risk managed in a way that will deliver enhanced returns for our shareholders. So what I will do now is turn it over to Anna to talk through what all of this means in financial terms for our shareholders in more detail. Anna?

Thank you, Venkat. As you've heard, our new three-year framework sets out more ambitious financial targets. The voice is going already. And meaningfully higher shareholder distributions. I'm now going to take you through what underpins these plans. We start from a strong foundation, having delivered ROTE above 10% for three years now, excluding the structural cost actions taken in the last quarter. Our objective is to deliver ROTI above 12% in 2026 as we grow and generate further efficiencies. Along the way in 2024, we aim to deliver returns of greater than 10% whilst we reposition the organisation and navigate the changing macroeconomic environment. Our plans to 2026 include the announced acquisition of Tesco Bank and the planned disposals of the German Consumer Business and Italian Mortgage Book, where we are in advanced discussions. I do anticipate that these planned disposals will reduce ROTI in 2024. So on an underlying basis, I expect we'll deliver around 10.5% broadly flat to 2023. But this inorganic activity focuses our businesses for ROTI improvement beyond 2024. So in executing these plans, we are focused most on what we can control. And over the coming slides, I'll talk you through the drivers of ROTI across income, costs, impairment, and why we're comfortable with the assumptions that we have made. But before I do, though, I would like to cover the impacts from the cash flow hedge reserve on the slide. With a year-end value of negative 3.7 billion, it is currently a drag to tangible book value per share. As we expect its value to increase going forwards, we're confident that our tangible book value will increase from the year-end position of 331 pence per share. And whilst mechanistically it creates a drag on ROTI, it's worth remembering that movements in the cash flow hedge reserve don't impact our ability to distribute capital. So turning first to income. So what underpins our nearly five billion of income growth? First, tailwind from our structural hedge. Second, some reasonable assumptions in the investment banking wallet. And third, the deployment of RWAs into areas where we have a credible opportunity to grow. So the plan includes the capital effect of 30 billion of RWAs deployed into high-returning UK business, and we will focus that on areas where we are frankly underrepresented. For example, we've traditionally been underweight in high loan-to-value mortgages. Our acquisition of Kensington provides us with the capability to expand in speciality mortgages and drive higher margins. In our UK corporate bank, our ratio of loans to deposits is very low and much lower than our peers. In UK cards, we have lost ground and aim to recover it, and clearly the acquisition of the Tesco business accelerates and secures our plans in this respect. As a reminder, we hedge the return from rate-insensitive deposit balances and our equity, and in doing so, we smooth our income profile through rate cycles, reducing interest rate risk. Given that we're at the point in the cycle where rates may have peaked and are now expected to fall, it acts as an important stabilizer. We have around 170 billion of hedges maturing over the next three years at an average yield of 1.5%, significantly lower than current swap rates. The expected NII tailwind is significant and predictable. 8.6 billion of aggregate income is already locked in over the next three years. And in addition to that, reinvesting around three quarters of the 170 billion at current swap rates would compound over the next three years to increase structural hedge income in 2026 by two billion pounds versus 2023. Turning now to the assumptions that underpin our investment bank. Venkat and Adeel are going to take you through how we plan to improve our RWA productivity and reallocate capital within the investment bank overall to generate higher income and returns. But it's very important to us that our growth in the investment bank is driven more by the execution of our own initiatives than by the market wallet. So we are not assuming that the market wallet returns to the highs of 2020 and 21. In fact, our plans assume that the market's wallet is broadly flat to 2023 and the investment banking wallet reverts to the 10-year average from last year's decade lows. Going forwards, we do expect higher income from the investment bank. Of course, managing costs is at the heart of what we control, and I'm now going to explain how both the efficiency programs and the changing shape of our investment spend deliver a more efficient and profitable bank. I gave a breakdown of our structural cost actions earlier, and today we've used efficiency savings to offset inflation. Now we expect these to more than offset inflation, giving us capacity for business growth. The first billion of savings lands in 2024, including payback from around half of the Q4 structural cost actions. And a further billion of cost efficiencies is expected through to 2026. And it's really important to stress that the efforts will not end there, but continue to benefit our businesses beyond that point. we would expect our business growth costs to flex in line with income. So overall, we're targeting a cost to income ratio in the high 50s by 2026, improving from 63% in 2023. Given the income target of 30 billion by 2026, we'd expect costs to be higher in absolute terms versus 24 at around 17 billion. So spend on regulatory change has been very intense in the run up to Basel 3.1 and we anticipate that this will peak in 2024 and then fall to a more normal level as material projects complete. This will give us the capacity to invest more in income growth, efficiencies and returns without increasing our total investment spend. And on the next slide, you'll see how these actions will improve efficiencies in each of our businesses. We expect to drive better cost income ratios across all of our divisions, and not all of them, however, will be top quartile compared to peers by 2026. Whilst leading cost efficiency is a goal for all of our businesses over time, for some of them we don't believe it's a credible ambition within this planned period. Barclays UK and the Investment Bank fall into that category and together represent some 70% of the cost savings we're expecting. And whilst their 2026 targets will take us more in line with the top quartile of peers, They don't represent the scale of our ambition, and we're committed to driving further efficiency savings beyond that point. In BUK, our ongoing transformation programme has been successful in streamlining and digitising the business, but there is more to do, and you'll hear more on how the identified savings will offset inflation and facilitate growth. In the investment bank, we spent about 3 billion since 2021 to sustain and grow future income, and around two-thirds of that is in markets technology, whilst the focus in banking has been more on people. And we will now monetize the investments. So in the future, we aim to self-fund further investments and total costs are expected to rise only modestly from 2023 levels. turning now to our risk positioning. I explained earlier that we plan to increase RWAs in Barclays UK, UK corporate and private banking and wealth by an aggregate 30 billion. This is a substantial shift in capital allocation and will reflect significant growth in lending across all three businesses in the planned period. When considering the associated risk, it is essential to understand where we start from in balance sheet terms. We've grown lending between 2019 and 2023 by 29 billion, but that's through mortgages at low LTVs and lending to corporates over which we have significant loss protection through risk transfer trades. Our unsecured lending has fallen despite U.S. cards growth. So at this point in the cycle, and as inflation continues to fall, we see an opportunity to re-establish our position in lending in the UK and unsecured in particular. And because of where we start, we're comfortable that we can do that within our existing risk appetite whilst maintaining our 50 to 60 basis point loan loss rate through the cycle target. In Barclays UK, as we grow, we expect a normalisation in loan loss rates towards 35 basis points, consistent with the 2019 level. In the US corporate bank, we expect a loan loss rate ratio of about 400 basis points through the cycle, as we grow a more diversified portfolio and optimise our credit mix. Still prime, but not exclusively super prime, like our airline files. And finally, as we grow our UK corporate bank lending book, we'll maintain our diversified portfolio, including our long-standing prudent approach to commercial real estate, and we'll continue to use significant risk transfer protection where appropriate, and I expect a loan loss rate of about 35 basis points. Over recent years, we've benefited from our diversified business model through a range of macro environments. And this diversification has provided us with relative stability to Roti during the 2020 to 23 period that we've just experienced. For example, in 2022, at the onset of the pandemic, our global markets business supported our performance when elevated impairment charges impacted the rest of the group. In 2023, we've seen a weaker investment bank income and decreased volatility and lower deal activity. But in this environment, our consumer and corporate businesses have provided ballast to group returns. We believe there's a natural offset built into our diversified business model by income and by geography and further supported by the stabilizing effect of the structural hedge. And reflecting this, we are confident that we can deliver consistent returns in a range of scenarios, providing a floor to our ambition. And on this slide, we've provided you with our macroeconomic and market assumptions, which we view as realistic. The next few slides describe how our drive towards higher and more predictable returns come together for our shareholders. We have a clear hierarchy for capital allocation in order of priority. First, how much capital do we need to run the bank, taking into account regulatory changes, including Basel 3.1? Our 13% to 14% CET1 ratio range remains unchanged, with sufficient flexibility and appetite to operate within the range and absorb headwinds. By doing so, we'll deliver for our investors, our customers, our clients, and our colleagues regardless of the environment. Our next priority, having maintained our target regulatory capital, is to our shareholders. And going forward, we expect to generate a greater amount of free capital for shareholder distributions. And third, we will balance this thoughtfully. as we invest selectively in our higher returning divisions, resulting in a more profitable RWA mix over time and a better bank for our stakeholders. We set a high bar for investment returns relative to the importance we place on shareholder distributions. In 2023, our 9% statutory ROTI delivered more than 125 basis points of CET1 capital accretion. By 2026, with higher returns, we expect this to grow above 200 basis points. We expect meaningful capital generation over the next three years. Taking into account capital demands from regulatory change and investment in higher returning businesses, we expect to have meaningful free capital supporting our distribution plan on the following slide. We have distributed a total of 7.7 billion to shareholders over the past three years, compared to 5.7 billion over the preceding seven. And we expect this to increase further through to 2026. We've made one step change. And as you've heard today, we plan to make another and return at least 10 billion to shareholders between 2024 and 2026. And this is in addition to today's announced full year final distribution. including those distributions, the total would be at least £11.8 billion by 2026 and represents approximately 55% of our current market cap. From this year onwards, we plan to keep the total dividend broadly stable and grow dividend per share progressively through lower share count. Over the past three years, we've reduced our total number of shares in issue by around 13% and do expect further reduction from the higher planned share buybacks from here. So to summarize, there are three key points of reset in today's targets. First, we're targeting a roti of above 12% in 2026, up from 9% statutory in 2024. Second, we expect this improved profitability to support our plans to distribute at least 10 billion to shareholders between 2024 and 2026. And finally, the proportion of the RWAs in our investment bank to the rest of the bank will reduce to around 50% by 2026. We have also set ourselves some supporting targets which allow us and you to track our progress. We expect to grow our income to around 30 billion by 2026 with more stable income streams growing by around 15% and maintaining a high quality mix. We aim to improve our cost income ratio to the high 50s as we balance future investments with further efficiency savings and capitalise on the cost actions we've taken already. and we maintain our 50 to 60 basis points loan loss rate guidance as we grow our loan book within the existing risk appetite. All the while, maintaining a solid foundation and operating across our 13 to 14% CET1 ratio range. Now I'll hand back to Venkat.

Thanks, Anna. So to summarize this first part of the presentation, you know, what is the investment case for Barclays? As I said, we have very strong foundations. We have a high returning UK retail and corporate franchise, which complements our top tier global investment bank with scale in our home market in the UK and in the US. We manage our capital in a disciplined way, growing our higher returning divisions while improving RWA productivity within the investment bank. And over the medium term, we will rebalance our capital allocation between and across our consumer and wholesale businesses. And we do this in order to support more consistent and higher returns to our shareholders. So from a strong foundation of double-digit returns, over the life of the plan, we plan to deliver over 12% ROTE by 2026, And I think this reflects both ambition and realism. We are well capitalized, have deep liquidity, sound risk management. And when you combine that with consistent and improved profitability, we believe it enables a higher return of capital to you, our shareholders. And we plan to return at least 10 billion pounds, as Anna said, to shareholders between 24 and 26. This is our vision for a better run, more strongly performing and higher returning Barclays. So I will now open for question and answers for which we have about a half an hour assigned. Please limit yourself to two questions per room so that we can get around as many of you as possible. As always, please introduce yourself and there will be more time for Q&A after the business presentations.

Alvaro. Thank you. Alvaro Serrano from Morgan Stanley again. Just a couple of questions on, I guess, capital allocation distribution. The disposals you've earmarked, Germany, sort of the mortgage, Italian mortgage business and the payments merchant acquiring, is this about sort of simplifying the business, sort of redeploying capital to sort of your core regions that you identified? And or how much do you need this for the 10 billion distribution? I guess where I'm coming from is, there's quite a bit of headwinds as Anna pointed out probably earlier than expected on credit card. Do you need this disposals for the 10 billion distribution to happen? How much are they dependent? And should we think about the 10 billion to be a progressive number or is it back and loaded or can you maybe talk about that? Thank you.

Yeah, so let me answer the first part about the actions and then Anna can cover the capital piece. We're doing this to simplify our business. In fact, one of these things was identified many years ago as something we wanted to do in Italian mortgages. And German cards, we are not the best holder for that asset. It's non-core to us. So that's the reason to do it. Obviously, if you gain some benefits from it, you can deploy it elsewhere. But the primary purpose is the simplification of our business and concentrating on our core capabilities.

Thank you, Alvaro. Let me pick up the capital detail there. So if I just take the businesses in turn, as Venkat said, the overall objective is simplification. Our German cards business is not large in scale. You'll see from our disclosures it's about four and a half billion euros. And as we noted earlier, we would expect that to be, you know, the disposal to be slightly accretive to capital, but not an enormous number given the scale of the business. Our Italian mortgage business, we are relatively well progressed. We might expect some negative impact in royalty from the sales I called out previously, but we expect that to be capital neutral. So it's actually neutral to our distribution plans. And in relation to the payments business, we're not required or our distribution plans do not require any action on that business at all. As we said, we've got it under a strategic review as we consider future options for it, but we don't require a sale of that business to fulfill the 10. As relates to specific timing, The way I would think about it is we'd expect 24 to be broadly similar to 23. And we'd expect distributions to increase over time at the point when Basel 3.1 is behind us and when the high returns for the businesses start to come through. So I would say a gradual increase over time. Okay, I was going to say, Jason's had his hand up for a long time, so let's go to Jason.

Thanks, good morning. Jason Napier from UBS. Two, thank you, Anna, perhaps following on from a comment you've just made. The impact of disposals in the round, all of the potential things that you're trying to get done on this year's ROTI, I appreciate Italy probably as a loss-making endeavor, but there may be gains elsewhere. So what have you got in the roti guide for this year for that? And then secondly, the targets for 2024 quite clearly suggest no negative operating leverage from Italy. all the moving around that's going to take place in the balance sheet and so on. And while I appreciate a lot of the guidance you've given for 2026, as you look at consensus for 2024, it's at least 10% lower in profit terms than you're suggesting you'll achieve today. Is there any colour that you can provide on the place where you think the market is too pessimistic? Thank you.

Yeah, okay. So I refer to it in my scripted remarks, We'd expect the impact of inorganic to be around 40 or 50 basis points this year. So that's why we've distinguished between our statutory target of greater than 10 and indeed the number that I called out on an underlying basis, which is around 10.5. And as a roti matter, the biggest moving part in there is actually Italian mortgages. But as I said, not expected to have a significant impact on capital. So hopefully that's relatively clear for 2024. In terms of 2024, I would say as I look at consensus, obviously our plans are above there. My expectation of cost is broadly in alignment with consensus. So I think around 16.5, I would be happy with that number. there is clearly a difference in terms of income expectation. I'd also call out it looks like there's a difference in terms of impairment expectation as well. Remember before I talked about U.S. cards perhaps being a little bit heavier in the first half of the year and then falling later. So I think they're probably the biggest differences, Jason.

Thanks. Thank you. It's from JP Morgan. If I can have two as well, please. The first one is just one of the key highlights of your plan is the growth ambition, both in the UK and outside the UK. And I guess if we look at the evolution over the last few years, the change here seems to be the ambition to grow the UK and in particular, I guess, a change in the UK unsecured and cards strategy. I think, Anna, you described it as not a change in risk appetite. And I was wondering if you could elaborate that because from the outside, it might appear that you are changing your risk appetite to take more risk in the UK. So that's the first question. The second question is there are plenty of people out here who are more, you know, who reward cost-cutting plans and might be less optimistic on the revenue environment. So just on that question, point, the 1.7 billion of business growth-related costs, could you give us a little bit more color in terms of how permanent those costs might be? And if you ended up in a macro environment, which is slightly different from what is in your plan, how much of that 1.7 billion can be flexed quite easily? Thank you.

Shall I take the first part, Anna, on risk, and then you take the second part on costs? So within our broad risk appetite, which is the way we generally look at not just what our expected losses are, credit losses are, but also internal stress tests and so on. This fits well in. In a sense, it's a reversal of a risk position, which the former chief risk officer took a few years ago, where post-Brexit and in COVID, we were extremely cautious on the UK consumer, rightly or wrongly. and equally, there was a structure which we had in our credit card business that favored longer-term, bigger balance transfers. What we are talking about now is something that does not emphasize that. It is a generally higher quality but broader expansion of unsecured lending, and this is both in loans and in cards. The Tesco portfolio, by our judgment, has a very similar credit profile to our own, And so it is within the broader risk limits. Obviously, you're taking on more risk by doing it than if you didn't, which is the point of your question. But we think on a risk return basis, it's going to be accretive, which is of course why we do it.

Thank you, Benka. I think also, Raoul, it's really important to remember where we start. So in the UK, I think over the last 10 quarters or so, we've had a very, very low loss rate. We've consistently, under consensus, consistently under 30 basis points. So, you know, we're starting from an extremely low base rate. And actually, we've already started acquiring We step back into the market in 2022. It just takes a while for that lending to season through, which is what we're observing now. On your second question around costs, our fundamental objective here is the ROTI. It's 12%. And therefore, as far as Venkat and I are concerned, the primary target is the cost-income ratio target. the 17 billion is the number that falls out. And that 1.7 is the business growth that we would expect to flex. Now, most of that is run the bank cost. There'll be an element of performance cost in there. And of course, we will seek to flex that if the income is either up or down relative to that 70. And that's why we're calling that number out specifically. As to your point around the macro, though, I'll take you back to the point where we feel like we've made realistic assumptions. You know, we've got a well-diversified bank, so we're confident in our ability to grow. We've set out today for you the expectation of that, which is 30 and 17. Obviously, over time, we'll flex both of those numbers, but the roti is the heart.

And, you know, when we've looked at this plan... through the range of economic scenarios Anna put out. We think it's fairly robust. Nothing's ever totally invariant, but it's fairly robust to changes in that. Okay. Sorry. And then Joe and then Andy.

Then Tom's from RBC. You mentioned at the beginning if we wind back 10 years and look at the last investor update and since that point in time we've had 16 billion of litigation and conduct issues. Going forward, could you just give us a kind of what you've penciled into the plan for conduct and litigation going forward, given that was probably quite a big surprise versus last time, and maybe comment on whether there's anything in there for motor finance. And then secondly, in terms of the ambition for the investment bank and keeping RWA's flattish 50% of total group by 2026, can you maybe just give some colour on which product lines are the ones in the investment bank that will probably bear the brunt of of absorbing the Basel 3.1 RWA inflation. Thank you.

Can I just say on the second half, why don't we wait until we have the investment bank presentation? You're going to get more detail on that. And then if you still have a question, we can on the first half.

So as we plan going forward, obviously we plan for an ongoing and relatively low level of litigation and conduct costs. Just purely as a technical matter, if we were planning for anything in a concrete way or if we expected anything in a concrete way, then we'd be providing now and calling that out in today's results. So that's how we think about it. As relates to motor finance, we exited the business in 2019. Up to that point, we had a relatively low single digit market share. There's clearly the SCA review ongoing. There are a number of potential outcomes from that. And so at this point, we have not sought to make a provision, both because of that range of outcomes, but also because we haven't received a material number of complaints. So that's the reason why we haven't provided at this stage.

Sorry, Joe, go ahead, and then I'll come back down.

Hi, thank you. It's Joe Dickerson again from Jefferies. Just on the looking at the optionality in the UK merchant acquiring business, One, I'm supposing there's nothing in the 26 targets that suggests completing something on that front. Correct me if I'm wrong. And then two, is this something that you're looking at more from a cost efficiency standpoint, or what would be the rationale there? Is it that it doesn't fit with the integrated overall payment solution, et cetera?

So let me again go to the second part first, and then Anna can come to the first part. We'll talk more about it. But in a nutshell, what it is is about a form of partnership to deliver better technology more efficiently on acquiring to our clients. We intend to remain in the full ecosystem of payments, which includes acquiring. It's just we think that part can be delivered better in partnership with others. And that's what we're talking about. And so we'll come back to that.

And, Joe, just in relation to the 2026 targets, we've included – merchant acquiring within those targets. Partly because we are exploring options at this point in time. We haven't made any decisions. But also, as Venkat pointed out, this business, in whatever form, is critical to Barclays, the Barclays ecosystem, and in particular to our corporate and SME clients. So either way, it's a service that we would expect to have.

Yes, Andy. Yes.

Thank you. It's Andrew Clemson, Citi again. Two questions. First, big picture strategic question. If you believe the press as part of Project Minerva, originally there were some bigger strategic decisions considered, the US cards, the equities business, et cetera, et cetera. Obviously, what you've decided today is more about shifting things around the edges and reallocation of capital as opposed to any larger exits or divestments. So you could just elaborate on thoughts there if there was anything you considered anything you ruled out that would be helpful um second question number specific question um on slide 48 our favorite hedgerow um i missed this initially but um in the footnote you say you only plan to roll three quarters of the hedge which would suggest quite a sizable decline in the notion also for Why is that? What's the rationale there? And if you could also just provide us with a split where the income's recognised now on the new segmentation basis. The two-thirds will be in UK, but how does the other third split between IB and corporate UK? Thanks.

So, you know, what I said at the start, Andy, was that In two years as CEO, working with my colleagues, working with the board, we've obviously taken a broad and deep look at the bank and the direction which we want to take. And your questions were specifically about the investment bank. And it has been very clear to me from the very start that the investment bank, A, has been at scale, approaching scale, that the businesses which we have work fairly well together and are linked, and are mutually reinforcing. We'll talk a little about efficiencies which we can do within the investment bank, between banking and markets, and even within markets. So I'll come back later to that question about where are we getting RWA efficiencies from when we come to the investment bank section. But it's equally important to recognize where we start from in the investment bank. You know, there are many businesses in which we are not, and we are at scale for what we do. We are not in commodities. We are not in Asian equities. We are not in local emerging markets other than in India and a bit in Brazil and Mexico, actually Mexico. So there are things we are not in and we don't plan to get into them. And if you even look at the last three or four years, you know, the areas we have built are three and Adil will talk about it here as a focus. Financing is one of them where we've been steadily accreting market share. Equities has been one of them through Prime. but not just Prime, and securitized products. Because fixed income is the calling card of Barclays, as I said, and you can't be in fixed income without being strong in securitized products. And we've always been good in origination and financing, and what we're doing is building trading. So it is very conscious of the ecosystem in markets, and in banking, as we'll talk about, it's been debt capital markets heavy, moving to equity and ECM. together, we don't feel the need at the scale which we have and the footprint that we have to take any of the sort of more drastic actions that others have taken. So let's come back to U.S. Cards. I believe it's a business of great synergy, as I've said, and it stands on its own two feet. It had a low ROTE print this year, but we're going to talk to you about how we manage the capital change as well as how we, not just in capital management, but also cost management. So we'll come back to that.

And on the hedge role, I mean, what that three quarters tells you is that we do expect continued migration and reduction in deposits and I've called out the sort of broader macro effects and really we're reflecting those. So that's why we're saying we, you know, our assumption is that we'll roll about three-quarters of it and that's what builds up the maths that I refer to. As to where that actually lands, still two-thirds within the UK. The rest of it will be spread across UK corporates There will be some in the investment bank, both because of the international corporate bank, but also, remember, the equity structural hedges allocated through RWAs, and then obviously the private banking and wealth. So perhaps we'll come back to you and others, Andy, with a bit more of a detailed split of how we expect that to land in the future.

Thanks. Thank you. It's Guy Subbings from BNB Paribas. Building really on the first of Andy's question again, around the outlook for the IB in the plan, presumably you had multiple iterations that you considered, and one of those perhaps you wouldn't have constrained capital to the IB at all, as you are in real terms here, the regulatory changes. I'm just interested in that plan, how much incremental revenues you might have generated from the IB, obviously not looking for a number, but just in broad senses. And with that being the case, you know, If you are constraining capital, I'm just trying to get a sense as to how much that could inhibit market share gains. Thank you.

So just as I said, we came to a conclusion very quickly that the IBA was at scale. We came to a conclusion equally quickly that it was at the appropriate scale. And in fact, what we needed to get was capital efficiency, which is what we're doing. And that's what we're going to talk about. So, in essence, the analysis didn't go there. I didn't think it needed to go there. Right? Capital efficiency was what we thought we could get. And what you will see later is a plan that looks to get greater revenues with less capital. Other questions? Yeah.

Thank you. Just kind of follow on from that, actually. If your revenue aspirations end up being more capital intensive than you currently plan for, how would you deal with that? Would you not go for those revenues and maintain your RWA expectations? Or would you try and cut costs further to compensate? Or I guess the other option is to change your distribution. So when you're thinking about those options, what would be the ordering there? So that was the first one. And then the second one was just, You've given us some very helpful information on how you're resegmenting the businesses. I'm curious to understand a bit more about how that changes the way that you actually run the business. So this is essentially a breaking out of subdivisions within existing businesses. So what synergies or improvements does that drive across a business? Is it just focus or is it something else?

Shall I try both? Yeah. Okay. So I think when you look at the way we, Anna, described the capital and the use of capital, she said there were three things. The first thing was to be a well-capitalized bank, and that is the 13% to 14%. The second thing was the shareholder returns, the $10 billion. And the third thing was, after that, investments. If you look at the investments we're making and have been making, and we lay out in this plan, they're in businesses. that are today returning in the high teens or 20% and above. Well above what most people would consider our cost of capital. So that's basically the answer to your question, Rohit. That if we have that waterfall, we have the discipline that anything we're going to do is going to be above what is our accepted cost of capital. And so I don't foresee, ourselves breaking from that waterfall. We're going to be guided by it. That's the first part. On resegmentation, and Ana, you should stick into both, but on resegmentation, first of all, as I said, it's guided by how we run our businesses and our clients. There are tremendous synergies, including synergies which you might not easily anticipate. I spoke about the synergies between U.S. cards and the U.K. cards business. You know, Tesco is a 20 million partnership credit card portfolio. 20 million is a lot of people to bring onto your systems. When we did GAAP, we did 10 million, right? So we clearly have an experience of a scale that frankly no other UK bank can match. You'll also see synergies between private banking and wealth and our corporate bank, private banking and wealth and our investment bank in terms of both products and clients. And of course, private banking and wealth and our UK banking network. We'll talk about that and the corporate bank synergies to everybody else. So there are strong synergies which we intend to exploit and continue to exploit as we go through this and you'll hear more about it in the afternoon or later today morning.

I just reiterate that you know the capital allocation priorities are very clear. On the second point, the way I think about it is we report how we manage, not the other way around. And we want to manage the business in a very client-focused way, and therefore our reporting is changing in alignment with that. But we will still continue to generate the synergies that Venkat's talking about. We will still leverage common technologies and common services across our BX, So, you know, still very, very focused on keeping the firm connected with that consistency.

And, you know, when you think about that last point about common technologies and services, when you run a large bank today, as some of you who work in one know, there's a lot of investment that you have to make. We spoke about a billion plus in regulatory change. It's models, it's fraud systems, it's all sorts of things, risk systems. And to be able to, in essence, spread it across many businesses is really, really important. So it's a synergy in cost-benefit. that people don't often think about, but redeploying quantitative resources, redeploying databases and technology is a big part of it. Other questions? All right, so we reassemble at 1045. So there's food and drink at the back. We'll come back to our regular presentations. The ladies is somewhere there and the gents is somewhere outside. Thank you. So we'll see you at 1045. About 20 minutes. Thank you. Thank you. you Thank you. Thank you. Thank you. Thank you. Right, so we're now going to begin with the discussions about the individual businesses. We'll begin first with the investment bank, and then we'll go to U.S. Cards and Barclays UK, and then I will come back and spend two minutes on, not two minutes, a few minutes, on the UK corporate bank and private banking and wealth. Later this year, you're going to hear from the heads of those businesses in more detail. And then within the investment bank, Adil Khan is going to talk about the markets business. I will cover banking at a higher level. And later this year, you'll hear from Kahal and Taylor in detail on banking. So let's begin with the investment bank. You know, for over two decades, investors have been asking questions about the size and the importance of the investment bank at Barclays. And you've heard a little even today. Should we have it? Will it be competitive? Is it good for the UK to have an investment bank? And more. Let me be very clear. I'm proud of what we've achieved. We have built a leading business, a globally competitive investment bank. As I've said, it's performed very well. It is at scale. It is a critical part of Barclays and will continue to be an important part of Barclays. I'm equally clear that there is a lot more to do. Our investment bank has to be higher returning, and relatively speaking, it has to become a smaller part of Barclays. As I've also said in answer to some of the questions, our investment bank is a focused business. We powerfully cover large sections of the global capital markets with deep client relationships. And what we want to do is strengthen this position in our key areas of coverage. We aim to deepen our client relationships and to monetize the investments which we have already made. And even as our investment bank grows in absolute income, we aim to hold our capital broadly flat to today's levels. And so importantly, therefore, we expect a higher ROTE from our investment bank. And we're going to be more efficient in our use of capital, as I've discussed earlier, But the simple way to think about it is that we're looking for the investment bank to grow and to contribute more while consuming less. To contribute more while consuming less. And we're going to show you how. So what is the investment bank? We've changed its structure, as I mentioned earlier. And so going forward, it's two businesses, global markets and investment banking. Together in 2023, They contributed 11 billion pounds of top line revenue to the bank. The UK corporate bank was part of what we called the CIB, and that is now reported separately, and I'll talk about it later. There is also an important business, the International Corporate Bank, which serves our largest corporate clients in the UK and elsewhere. It already works closely with our investment banking business, but now will be managed, operated, and reported as one unit. This combination of businesses will allow us to deepen our relationships with clients, both large cap and multinational corporates, which require access to the full spectrum of investment banking capabilities. And so that is beyond DCM, ECM, and advisory into corporate lending and transaction banking. The global markets business, which comprises fixed income and equities, remains the same. Important, of course, is how markets and banking cooperate and work together to deliver the entire suite of investment bank capabilities to our clients. And I'll come back to that. So today, the investment bank has strong foundations. As I said, with the scale and breadth to succeed amongst our largest global peers, and we are focused on our core strengths, which is very important. It's diversified and has a stable top line, which I will take you through. And we are focused top-tier businesses and have demonstrated strong risk and capital discipline. The secret sauce in our investment bank is in our synergies. I'll repeat it. The secret sauce in our investment bank is in our synergies. We are big enough to offer multiple sophisticated products to our clients, but both nimble and culturally driven. to work closely across banking and markets, to customize delivery, and to create tailored solutions. And this nimbleness and cultural drive are really important. In fact, we are renowned for the sophistication of our service, especially our fixed income and risk solutions for our clients. About 55% of our revenues come from the Americas, which is the largest financial market in the world. And which is why I believe we are the only non-U.S. domiciled investment bank that can consistently compete with the U.S. banks and win. This audience, more than anybody else, should appreciate the importance of a strong research franchise. And so I think you know us well here. We have many top research teams and we are maintaining momentum as a top five research house globally. You know, we lead with data-driven content and help clients identify and adapt to changing thematic trends of the future. And these capabilities underpin our client relationships. And it's an important ingredient in helping us grow our rankings, both with our top 100 market clients and with banking clients. And you'll hear a deal about that in a minute. So let's go to financial performance. Looking at our financial performance over the last three years, What you will see is that our income has been relatively stable at around 11 billion, and I'll talk a little about that. But ROTE has reduced from 14% three years ago to 7% in 2023. Both RWAs and costs have risen as we've invested deliberately in the business. But what we want to show you now is how we will improve our RWA productivity, capture cost efficiencies, and generate income growth by monetizing the investments which we have already made. We aim for the ROTE of the investment bank to be in line with the group's greater than 12% target by 2026 through three key levers. Income, RWA productivity, and costs. Income, RWA productivity, and costs. So let me start with income. One reason why people have always questioned the value of the investment bank within Barclays is they think that it's a volatile business. And up to a point it is. There are parts of this business, income, that fluctuate with the markets and fluctuate with the economic environment. What we have been doing, though, is to construct a business that has greater stability through two things. One is diversification, and the other is what we call balance. So if you look at the top line, it has been in the 11 to 11 and a half billion range since 2020 through changing and some would argue volatile market environments, which include COVID, which include recent geopolitical instability. So let me take those two things first. First, you take diversification. We get diversification between the volatility-related elements of banking fees, and market trading revenues, or what we call intermediation, the top two lines. And in volatile markets, trading revenues go up, deal volumes tend to shrink. And in calmer times, the opposite happens. So this makes the combination of the two more stable than for banks which have only one deal-making or only have trading, right? That's the diversification between the relatively volatile elements. Then you come to the ballast, which is what you see circled at the bottom. And the first part of that is our financing income, the money which we make from lending to institutional clients against stocks, what people call prime, and against bonds, which we call fixed income financing. It's a business in which we have invested heavily over the last number of years. It's technologically complex, and it's very sophisticated. You have to manage the risks well. And our income has grown from around 1.8 billion pounds in 2019 to 2.9 billion pounds in 2023. Adil will talk about this in a moment. The second source of ballast is our international corporate bank. That income has grown also. It's helped, of course, by the rising interest rate environment. But in turn, it makes for a more stable top line. So I said, first is income. and you continue with income, and what you've got, as I said, is a scale business overall, but two businesses at slightly different stages of evolution and success. In global markets, we've made significant investments in technology and capital, and we've had a corresponding growth in revenues. What we want to do now is monetize the investments which we have made and continue and deepen our capital discipline. The bottom line here is that the market business is at scale, it's well invested in, and it's a counterparty of choice for the most sophisticated investors in the world. The investment banking business is at an earlier stage of maturity. It has just gone through a repositioning under new leadership. We have to strengthen in DCM and in the UK and with financial sponsors. We have strength in DCM and in the UK and with financial sponsors, but we need them to broaden and we need to deepen. We have a greater focus here on RWA productivity, trying to move the business from being debt heavy, which tends to be RWA heavy, to be more balanced across advisory and ECM and fully integrate with our international corporate bank. You know, Anna spoke to you earlier about the income growth in the investment bank and how much of it is under control, is in our control. And on this slide, what I want to convey to you is that over half of our income growth is coming from initiatives which we control. This means, of course, doing things better because our team and client relationships can improve and deepen, and it is not arising from heroic assumptions about wallet growth or market share. We expect high single-digit income cable through 2026, but over half of that comes from management initiatives in markets and banking, which Adil and I will cover in more detail shortly. The remainder comes from a normalization of the industry wallet. But as you heard from Anna earlier, it's not the industry wallet going from lows to highs, but it's going from its currently low levels to more historically normal levels. So the first lever was income. The second is RWA productivity. So moving to that second lever, what does RWA productivity mean and why is it important? As you can see from the top left, As we've increased RWAs in the markets business, we've actually kept the ratio of income to RWAs relatively constant. This reflects capital discipline which we need to continue by recycling capital continuously to higher returning opportunities and it also benefits from the higher velocity of capital which we allocate to markets. On the other hand, the right hand side shows banking income over RWA and this has declined over this period. which reflects the reliance on DCM in our current mix. As I mentioned, we have a plan to improve this and I'll cover this among the key initiatives in a moment. Overall, we intend to increase RWA productivity by reallocating capital towards the higher returning international corporate bank and that's within investment banking and as well as towards financing opportunities in markets. So income, RWA productivity, costs. And so the third important labor is costs. We have invested in a very planned and focused way in the investment bank, both in markets and banking, to the tune of about three billion pounds in cash investment in the last three years. In markets, it's mostly been about technology. Investing in the modernization of our infrastructure not only simplifies our operations and reduces costs, It also drives improved stability on our platforms, which leads to better client outcomes. Remember what I said at the start. Technology excellence and client outcomes are the same thing. In investment banking, of course, it's much more of a human capital business. And what we've invested is in people with a focus of the infusion of talent in our focus sectors and products. Now what we intend to do is to monetize these investments and grow future income with relatively modest cost growth expected across the investment bank. So this includes higher performance costs given the higher income which we have in our plan. We will of course continue to make focused investments in our client franchise, but we expect these to be self-funded by efficiency savings. Overall, We expect to deliver an improved cost income ratio from around the 69% we have now to the high 50s by 2026. So let me now take you through these two pieces and Ariel Khan is going to begin. I'll begin with investment banking and then Ariel will go to markets. So in investment banking, I said that our markets and banking businesses are at different stages of evolution. What our market business did three to five years ago has been paying off. And we look to do the same in investment banking. So we start with some points of advantage. As I said, we are consistently number six globally. We finished this year, or 2023, as the top UK investment bank, which is a position I always aspire to hold. We look more like a US bank than a European one, if you look at 66% of our revenues coming from the Americas. and which is a much more profitable market than Europe. I've also said debt and DCM is the calling card of Barclays, where we are number five globally. We also rank number five with financial sponsors and have established ECM and advisory practices, but we need to grow them, and I'll describe that shortly. We intend to leverage our strength in DCM in several ways. We drive greater product penetration with clients, making existing capital allocated to our loan work harder for us. First, we aim to broaden the product relationship with existing clients, principally via treasury-oriented products and services. Second, we'll continue to provide sophisticated rates, FX, and equity risk management solutions to our clients through ongoing collaboration with global markets. And these synergies are important. This kind of business is typically originated with investment banking clients but designed and executed in our markets business. Adding incremental products requires minimal additional capital and provides attractive recurring revenues as I'll cover on the next slide. Our international corporate banking business is already well established in the UK. where if you look at it, 92% of our UK investment banking clients have corporate banking dealings with us. That number is far lower outside the UK, and we aim to increase that by fully integrating our treasury platform into the investment bank. The ICB generates high-quality income, and about 80% of it is recurring, therefore making it more stable and more predictable. and it is capital efficient, helping RWA productivity, which is an important area of focus for us, as I said. We also need to rebalance our investment banking mix. We recognize clearly that we're overweight in DCM, and we're going to grow the proportion of our relative share in ECM and M&A, and we aim to do this in two ways. First, we have invested on the top right to upgrade talent in technology, healthcare, and energy transition. Over 60% of the hires for which we made in 2023 were in these sectors. And together, these sectors represent about 40% of the industry wallet in the last three years. And we are confident that they will continue to be important. We also have an opportunity to leverage our strong position with financial sponsor relationships, where we rank on par with our U.S. peers, and to do more ECM and M&A with the same sponsor clients as our U.S. peers do. So to summarize on investment banking, we've got the products, we've got the client relationships, we've got the capability. What we've got to do now is to translate it into returns. And the bottom line in the investment bank is we expect to generate about 700 million pounds of income growth by 2026 from management initiatives. We will do this by building our fee share to the levels we had a few years ago in the ways in which I outlined and by improving our income productivity. to drive further returns. I will turn over now to Adil to talk about global markets and then I'll come back to conclude.

Thank you Venkat. Good morning everyone. My name is Adil Khan. I run the markets business at Barclays, and I've been here for the last 15 years, a stat I'm incredibly proud of. So before I start, I think it's important to set the stage. Over the last few years, we've all lived in an increasingly challenging environment. This has been experienced by a lot of you. As Venk had mentioned, we've gone through a pandemic, a war in Middle East and Europe, and also an unpredictable inflationary environment. So our clients have also experienced this and they increasingly need a more reliable partner. So with all of this in mind, our ambition for the business is fairly simple. Number one, we want to be a consistent partner for our clients. And secondly, we want to drive stable double-digit returns for our shareholders. So how do we do this and what are our drivers for success? Firstly, we want deep, broad client relationships within our business. Secondly, we want prudent risk and capital discipline within our businesses. And lastly, we want to transform our technology to drive better outcomes. So now I will run you through our plans for the next few years. But before that, let's start with the numbers. So on the top left, you can see in 2019, we produced 5.3 billion of revenues. Now we knew at 5.3 billion, we cannot produce stable double-digit returns or be consistent to our clients. So we embarked on a new strategy. And over the last four years, we have increased our average revenues by 2.2 billion pounds. And today, we run a 7.5 billion revenue franchise. Now, we care deeply about the capital we use to produce these numbers. And last year, our income to RWA ratio was 6.2%. Now, that is a little light compared to where we like to operate. And we have generally operated higher. Plus, in periods of volatility, like 2020, we were at 8%, which means we serve as a natural hedge for group income. Now, over this period, we've also grown our institutional client market share by 200 basis points. In fact, since 2019, we have been the second fastest growing client franchise among the major banks. Now, if you look on the right, you can see that we have diversified ourselves across geographies, capabilities, and businesses. Our regional footprint has a strong lean towards Americas. As Venkat mentioned, we are the only non-US bank with scale access to the largest capital markets pool in the world. Our businesses are equally weighted among equities, spread, and macro. And while individually these revenue streams can be volatile depending on the operating environment, together we think they are stable. And lastly, we have grown financing. It is a third of our revenues today. This is a stable and predictable income that allows us to be more strategic with our clients. So in summary, when you think about markets today, it is a business with deep, broad client relationships. It's also highly diversified, so it can produce stable double-digit returns. And lastly, it is at scale. at scale to be competitive and a relevant player in the market. Now Venkat talked about simpler, better, and more balanced. I will walk you through the same journey and starting with simple. So for us, it's very simple. Our client franchise is what drives everything. On the top left, You can see, through an intense focus on our clients, we have been improving our client franchise. Today, we are a top five client franchise in global markets, in fixed income, and in equities. In fact, what is more impressive, because you have U.S. banks in the mix here, is that we have grown our client franchise by one notch in markets, two notches in fixed income, and three notches in equities. Within our client franchise, we have also grown our share with the top 100 clients by 220 basis points. And our growth and progress is not limited to that account base. We've made similar progress with the next 150 and the rest of our clients. Now, if you look on the right, you can see how many of our top 100 clients we ranked top five with. In 2021, that number was 30. We wanted to deepen our relationships with these clients. Why? Because they're large and they're growing. They're also more complex. So they like to partner with the same reliable banks again and again. And that brings more predictability and stability to our income. So we implemented an accountability framework with a lead client executive per account. And we figured out where we needed to lean in across the investment bank and the group versus asking for more. And today, through that framework, we have grown our number to 49. Now, we will apply the same framework and intensity of coverage to grow this number further to 70 by 2026. Now, staying on the theme of simpler, clients are important. They bring us to business. But the stability of our platform relies heavily on how well we risk manage ourselves. On the left, you can see that we have broadly kept this flat, broadly stable bar profile, despite transacting much more volumes through our platforms. Over the last few years, we've also made a deliberate effort to move away from illiquid, longer data type intermediation activities into more flow-focused businesses. And so because of that, today, we turn over 80% of our market's cash balance sheet on a weekly basis. And this is what enables us to outperform in periods of volatility like Q120 and Q222. At the same time, 70% of our capital profile today is under two years. And that is how we recycle 20% of our intermediation RWAs every quarter towards higher returning opportunities. Now on the right, you can see the bell curve of our income distribution. And you can see how we have shifted it to the right. In 2019, half of our trading days, half of our trading days sat in the 0 to 15 million pound bucket. Today we have moved them all into the 16 to 30 million pound bucket. This effectively means we have raised the floor on our income. And it also makes us more stable. In this process, we've also taken the number of our loss days or loss making days from 16 to seven in 2023. Now moving to the team of better, let's start with our businesses. Here you can see the strength of our franchise. Our top five revenue ranked businesses are 53% of the wallet today. So effectively, we are a top five player in half of the market's wallet. This is a very large wallet of nearly 100 billion. And within these businesses, we have a strong market share of 11% today. In 2019, we had an 8% market share, and over the last few years, we have grown that, and we've held a double-digit market share now for the last three years. Also today, 72% of our income comes from these established capabilities, which again means we are more stable. So how did we achieve this? Since 2019, we used our capital discipline and allocated them an extra five points of capital. And now, five years later, their contribution to our revenues has increased by 12 points, versus the respective wallet contribution only growing by two points. This tells you that there is strong evidence here that when we provide oxygen to our established capabilities, we can outperform the market. Let's take the example of our equity prime business, which Venkat talked about. In 2019, we were outside the top five. This is a business that requires a huge amount of infrastructure. And we know in order to finance a client, we must be able to execute, clear, settle, and asset service a collateral across all major global markets. So when the operating environment changed in 2020, we invested. And today we run a top five franchise that actively competes with its US peers. Now I'd like to make two final points on this slide. Firstly, the 11% market share we have here, this is in our established capabilities. We want to grow this further. This is where we have operating leverage. And secondly, as Venkat mentioned, prior to 2019, we did make some very difficult decisions. We exited commodities, we exited parts of our onshore emerging market trading businesses, we exited parts of our Asia equity business, and that is what has allowed us and enabled us to be consistent to our clients for the last few years. Now moving on to the rest of our franchise. There are parts of our franchise where we are not top five. we still have a healthy market share of 5% within these businesses. And when we think about these businesses, they're important to us for two reasons. Firstly, they help us maintain a stable ecosystem to our clients, so we can be consistent to our clients. Secondly, they represent opportunities for us. either because we have lost some market share or the operating environment is changing. For example, last year, in European rates and equity derivatives, we did lose some market share due to idiosyncratic reasons. But traditionally, these businesses have been very large for us because in rates, we have our sterling franchise. We're also a primary dealer in 17 countries. And our corporate derivative franchise through banking brings us large structural advantages. Similarly, in equity derivatives, we are one of the largest issuers of structured notes. So over the last 12 months, we are addressing our platform gaps, and we've already allocated them the capital they need to regain their lost market shares. Securitized products is a different example. This is where the operating environment has changed. The life cycle here is you originate a pool of assets, you finance those assets, and finally you trade those securities. We have a top three origination franchise. We've built a top five financing franchise, but we did not trade these securities. So in 2021, when QT was starting, we realized there was an opportunity. So we invested in the product. And today, just as the operating environment is improving and our clients need us, our investment is starting to come alive. Now, these three opportunities together represent an extra 500 million pounds of revenues for us. And just a 1% market share here gives us an extra 200 million pounds of revenues. So given our historic market shares and the fact that our client franchise has stayed strong within these businesses, it gives us confidence that our plans are measured and prudent. Now, staying on the theme of better, a common dependency across all of this is technology. Today, within our trading businesses, our clients increasingly experience us through our electronic offering. And in our financing businesses, through the stability and delivery of our platforms. Now, this experience relies heavily on running a smooth life cycle of a transaction. And the life cycle of a transaction through pre-trade, pricing, and post-trade has large dependencies on your technology infrastructure. So our journey here started by simplifying our infrastructure. We started getting rid of legacy applications, legacy point-to-point feed, and we have now decommissioned 84 applications since 2021. Once we simplified our infrastructure, we started modernizing it. We started putting new applications in the cloud. We started containerizing new applications. And we also started creating more reusable applications. So what happens once you have simplified and modernized your infrastructure? You start to become more stable and agile. And today, we run a much more reliable platform. Our outages are down by 78%. And that is something our clients care about deeply. At the same time, our breaks are down by 53%. And that is something our regulators care about deeply. And finally, now we are more agile. We are releasing more algorithms. We're deploying product features quicker within our platforms. So why does all of this matter? Because eventually we want better electronic platforms. Because we want these businesses to play a bigger role in our revenues as they're capitalized businesses. And you can see that our efforts are paying off. Today we're ranked number one on London Stock Exchange and we have grown our low touch equity and FX revenues by 87% since 2019. So finally, moving to the theme of more balanced. We want to be more predictable and stable, so we did that by growing financing. Since 2019, through a very deliberate strategy, we have grown our financing revenues at a 13% CAGR from $1.8 billion to $2.9 billion in 2023. Today, they represent 36% of our market's revenues, a very stable 36%. Now, why did we want to grow these revenues? Firstly, they represent stable and predictable income for us. Secondly, if you look at all the consolidation, AUM consolidation going on among clients, their financing needs are going up. This gives us an opportunity and enables us to be a much deeper partner with our largest accounts. Thirdly, these are RWA-efficient businesses that are secure lending businesses. So we like the risk profile, the risk-weighted profile of these businesses. And lastly, there are huge barriers to entry here. So to operate at scale, you require a huge amount of investment. Now, our platform has been tested over the last few years here. Between 2019 and 23, there were some very large moves in asset prices. And these moves happen in a very, very short period of time. That is the worst kind of operating environment you can have for this business. Despite all of that, we managed our credit and operational risks very well through this period. Now, I want to share two more facts with you before I leave this slide that gives us confidence in our financing platform today. Today, we have a financing relationship with 96 of our top 100 markets clients. Secondly, since 2021, more than 50% of 1 billion plus hedge fund launches. These are large, very experienced hedge fund managers. They chose Barclays to be their prime broker at the beginning of their journey. That gives us a lot of confidence in our platform, but it also tells you that clients are trusting us at the beginning of their journey. Now, To wrap up, we will stay focused on clients. We want to further deepen our relationships by achieving a top five rank with 70 of our top 100 clients. We're going to remain prudent around risk and capital management. We're going to deliver an extra 500 million pounds through our three select intermediation businesses while maintaining momentum in our top five franchises. We will complete and monetize our technology transformation so capitalized businesses can play a bigger role. And finally, we're going to bring more balance to our financing revenues by growing them by an extra 600 million pounds. Now, I'd like to finish by saying we have been executing a strategy that is working since 2019. We have been consistent to our clients. We have been a reliable partner to our clients. At the same time, we have the ability to produce double-digit returns regardless of the operating environment. So the next few years are about executing the same strategy with the same precision and discipline that we have applied over the last few years. Thank you, and now I'll pass it back to Venkat.

Thank you, Adil. So I'll wrap up on the investment bank. So what you've heard, from Adeel and the market side and what you heard from me is that overall we intend to improve the investment banks ROTE to be in line with the group target of about 12%, above 12% by 2026. We recognize that this is a significant increase on the 7% last year. And I believe from what I told you though that and what you've heard from Adeel that this is a credible and achievable ambition built from the foundations we've developed. Our income growth target in this is a high single-digit CAGR, and it's firmly predicated on initiatives which are within our control. And it monetizes investments which we have made in cost and capital, driving strong operating jaws and resulting in a cost-to-income ratio in the high 50s. You have heard that we are limiting the proportion of the investment banks' RWAs to the rest of the group at around 50% by 2026 as we allocate more capital elsewhere to higher returning consumer and corporate businesses. We can achieve this while absorbing regulatory inflation within the investment bank due to the capital discipline which already exists in our markets business and a pathway to improving return on RWA in the investment bank. And as I said at the start of this, we're looking for the investment bank overall to keeping the cloud clients at the heart of what we do and indeed deepening those relationships with clients. We expect this plan to generate stable and attractive returns on a consistent basis, supporting our group targets and delivering value to our shareholders. So I will now hand over to Denny Nealon to take you through the U.S. Consumer Bank presentation.

Okay, so good morning everybody. I'm Denny Nealon, CEO of the U.S. Consumer Bank, a role I've held for the last four years. I've been in the financial services industry more than 25 years, having previously worked at JPMorgan Chase and Bank One, and have been with Barclays since 2004. I'm excited to be here today to talk with you about the U.S. Consumer Bank, a business that was previously reported within the consumer, cards, and payments division. I'll focus my comments on three areas. First, I'll provide an overview of the business, as well as some key U.S. market characteristics. Then I'll review our financial performance and key performance drivers. And finally, I'll walk through our plan to achieve mid-teens roadie on a sustainable basis post-migration to IRB capital rules. Now, let me tell you more about the business. So the U.S. Consumer Bank has been part of Barclays for 20 years, and we're principally focused on providing credit cards to U.S. consumers. We operate in what we call partnership cards, which is essentially a business-to-business-to-consumer model where we partner with global corporations. Partners choose us to help them drive increased sales and customer loyalty to the co-brand or reward cards that we provide. Focusing on partnership cards is a conscious choice that we made which plays to our strengths in a market where we would otherwise have to invest significantly to build brand awareness. The strategy has worked well for us. We've grown significantly and are now the ninth largest issuer in the U.S. and a leading partnership issuer. We have approximately 20 million customers across 20 partnerships and $32 billion.

Right here, thank you.

Okay, so starting back with slide 92. As you can see on this slide, we partner with 20 leading U.S. brands across multiple industries, and I already mentioned a few of them by name. You know, key point here, very strong relationships, many of whom have been with us for more than a decade, and our historical renewal rate is about 90%. And importantly, this portfolio is very balanced by size without undue concentration risk. That said, the current portfolio mix is heavily weighted to airlines, so we are diversifying our sector exposure. The addition of Gap and a partner in 2022 was a noteworthy first step, which I'll talk more about later. So slide 93 and now turning to financial performance from 21 to 23. First point, first, I'll point out that the 4% road he delivered in 23 is clearly below our target level. I will explain the drivers of this performance shortly. But it's important to state that this level of return is not representative of the strong underlying performance of the business. We've grown net receivables by $10 billion, or 45%, over the last two years to $32 billion. We've achieved that through a balanced mix of strong organic growth post-COVID and strong inorganic growth from the acquisition of the AARP and GAAP portfolios, with combined balances of close to $4 billion at acquisition. Alongside balance growth, we've also seen significant growth in income and an improvement in NIM to 10.9%, driven by the benefits of a higher interest rate environment, the addition of a gap portfolio, and normalizing revolve rates from COVID lows, and a steadily improving cost-to-income ratio, in part reflecting benefits of beginning to scale the business. But offsetting these, the loan loss rate increased to 500 basis points as we built reserves for the expected rise in write-offs, which were coming off of historic lows consistent with those seen across the industry. In addition, new accounts were down significantly due to less travel during COVID, which otherwise would have matured and added to profitability in 2023. This, along with a large allowance build, resulted in a lower-than-normal RODI of 4%. Now, switching to the next slide, slide 94. I'd like to use the remainder of this presentation to articulate why we are confident that we can deliver returns in line with the group target by 2026, even in the face of regulatory headwinds in the form of IRB and LACI legislation. And also give some color on the impairment outlook and why we think it will revert towards our historic long-term average in the future. Now, moving to slide 95. We have a very clear path to deliver ROTI in line with the group target by 2026, which incorporates three elements. The first is the stabilization of consumer credit performance. Second, the specific actions we're taking, which will improve performance by scaling the business, driving improved operational efficiency, and expanding margins, each of which I'll talk about in more detail shortly. And third, it considers regulatory headwinds that we are actively working to mitigate. But first, it's important to understand USCV's track record, which gives us confidence that we can deliver on this plan. If you move to slide 96, please. As you can see from this slide, the business has a long track record of growth, returns, and prudent risk management. In the nine years before COVID, the business delivered an average erroneous 16%, helping the group achieve its return targets over that time. The roadmap performance since 2020 has been uneven, reflecting impacts from COVID, but given recent balance recovery and normalization of customer behavior, we expect future performance to return to the more consistent pattern delivered between 2011 and 2019. It's also worth noting that we are making very deliberate investments to scale the business. New account originations encourage J-curve effect, principally driven by upfront marketing and day-one impairment build. which dampens in-year RODI. That said, these annual new account vintages mature to RODIs of greater than 20% over time. This is one of the key reasons why scaling a business is so important. This J-curve effect will decrease significantly at greater scale when a mature, higher-returning back book becomes a larger percentage of the total portfolio. Additionally, greater scale has the added benefit of reducing volatility when we add new partners in the future. Now, moving to slide 97. Oh, we're back up. Okay. Now, building on the theme of USCV's strong track record, what we wanted to highlight on this next page is how the business compared to other top 10 U.S. issuers over the last 10 years, using delinquency rates as a proxy for credit quality. We have consistently maintained our position within the peer group during the period, even in the early and mid-2010s when our average FICO score was a bit lower than it is today. And being positioned in the middle of the peer group is consistent with our partnership-focused model, where we balance the need to deliver resilient risk-adjusting margins for shareholders with trying to say yes to as many of our partners' customers as we can. While we have seen a recent uptick in 30-day delinquencies, this was expected as we were coming off historic lows during COVID, and as you can see, very much in line with industry trends. We believe this 10-year period demonstrates two things. First, that we have demonstrated strong credit discipline over time, and second, that we have not taken on outsized risks to grow the portfolio at the rate we have. Now, let's take a closer look at the drivers of impairment over the last few years. As previously mentioned, the recent normalization of delinquencies was expected and is largely a reflection of customer activity catching up from COVID lows. While write-offs have been broadly stable, you can see that we've rebuilt loan loss reserves to cover the write-offs we expect in the future following the normalization of delinquency rates. While this positions us well for the future, the end-year impact of 2023 was significant. Now, looking ahead, we expect delinquencies to continue to tick up in the first half of 24 and then to stabilize. The result is that we expect the 24 and 25 impairment charges to be below 23 levels and for our loan loss rates during those periods to be closer to our long-term average rate of around 400 basis points. Importantly, we remain well-provisioned, as evidenced by a strong total coverage ratio of 10.2%. As you can see, we've also provided our U.S. legal entity CECL coverage rate of 8.2%, which is in line with U.S. peers. Finally, it's important to note that we continue to feel encouraged by the health of the U.S. consumer. Unemployment levels remain near historic lows. Moderation in inflation is contributing to real wage growth. There are still healthy levels of excess savings, and strong spend and repayment levels persist. Now, in line with the group, our plan to improve returns can be viewed through the lens of simpler, better, and more balanced. And I'll speak to these individually in a moment, but to summarize, we are looking to improve operating efficiency, scale and diversify the business, improve margins, and optimize the use of our balance sheet. Now, starting with simpler. As you can see from the charts, recent investment in the business has improved operational efficiency, but we recognize there's more to do. We've invested to digitize the business and built a retail platform as part of the GAAP acquisition, which will enable us to add new partners more efficiently in the future. This increased investment to onboard GAAP, combined with lower card balance and subdued income post-COVID, drove our cost-to-income ratio in 2021 to 60%, significantly higher than our long-term average. Since then, though, these investments have helped reduce the cost for average active account by 15%. and contributed to a reduction in cost-to-income ratio to 51% in 2023. Now, looking forward as we continue digitizing, automating, and scaling the business, we expect a further reduction in cost-per-average active account, contributing alongside margin improvements to a cost-to-income ratio in the mid-40s by 2026, broadly in line with our historic average. On the left-hand side of the slide, we provide a few examples of what we mean when we say we can become more efficient and improve customer experience by digitizing and automating key customer journeys. Transaction disputes and rewards are two great examples of common points of customer friction, which today too often result in customers reaching out to our call centers. We can simplify processes like these so that customers can self-serve from the device of their choice without ever picking up the phone. That's simpler for our customers and more efficient for us. And we have similar opportunities in the colleague front, and so we're investing significantly to upgrade colleague tools and are leveraging automation to eliminate manual, time-consuming activities. Now, moving to better and more balance. We will also look to scale and diversify our business, targeting $40 billion in net receivables by 2026. That strong track record of growth since 2011, where we've grown receivables at 8.5% CAGR versus a 5% industry average, gives us confidence that we can achieve this through a combination of organic and inorganic growth. We see a large opportunity to grow in the retail vertical, and we expect the retail portion of the portfolio to increase from around 15% today to around 20% by 2026. And this will also help us rebalance our FICO mix to improve risk-adjusted returns. We also plan to recalibrate our risk-based pricing in response to industry-wide late fee reductions. We expect that over time, this and other actions will fully offset any headwinds from these changes. Now, on the liability side, today we're about 60% funded by core deposits, which is a great low-cost way of funding our card assets. We are investing in new capabilities for our deposit platform, including targeted marketing to our partners and a tier-based pricing strategy, which should result in around 75% of funding coming from core deposits by 2026. Overall, we expect these actions to drive more than 100 basis points of NIM expansion by 2026. Now, turning to the shift to IRB capital requirements, which you heard Anna speak about earlier. The first point I'd like to make is to reiterate that this is a PRA-driven adjustment that is industry-wide and not USCB-specific. There is no underlying credit problem that is driving this increase in RWAs. We expect U.S. card issuers to also see an increase in 2025 under proposed Basel rules. But as you can see, the capital treatment for us under IRB is significantly more conservative than the current standardized model. This will impact us in the second half of this year with an expected RWA increase of around 16 billion pounds or a risk-weight density equivalent increase of around 60%. While this will have an adverse impact on returns, we've been focused on a series of actions that will reduce the impact and help deliver returns in line with the group target by 2026 and mid-teens returns over the long run. These actions include re-optimizing credit line strategies and leveraging strategic risk transfer agreements to reduce capital requirements, enabling USCB to continue to grow but at a less capital-intensive rate. So, to summarize, the U.S. partnership market is very attractive with solid economics, ample room for growth, and requires specialized capabilities and expertise that we have developed over the last 20 years. We have a proven track record of winning and growing partnerships, producing strong outcomes for our partners and customers, and delivering strong value in return for shareholders. Although there remains some uncertainty with regard to the macroeconomic environment, we are well positioned. We have extensive experience managing credit through multiple cycles and are also well equipped to manage regulatory change. As you can see, we are outlining key targets for the business that underpin our commitment to deliver returns in line with the group target by 2026. First, we will continue to scale the business and grow receivables to $40 billion. We will deliver a net interest margin of more than 12%, which represents more than 100 basis points of growth. We will drive cost-to-income ratio down from the 51% we saw in 23 to the mid-40s, reflecting our long-term average. We will continue to manage credit risk prudently, and we will manage loan loss rate to around 400 basis points, also consistent with our long-term average. On RWAs, we are taking action and expect 2026 RWAs to be around 45 billion pounds, which represents an RWA density of around 145%. As we deliver upon these targets, we will be building momentum in the business that not only will deliver returns in line with the group target in 26, but will generate increased confidence in our ability to achieve our long-term goal to deliver mid-teen roadies on a sustainable basis. Thank you for your time today. I look forward to future opportunities to discuss the business with you. I will now hand over to Vim Baru, CEO of Barclays UK. Very good.

Good morning, everyone. I'm Vim Maru, the new CEO of Barclays UK. I know many of you here today through my 20 years in financial services, and I look forward to getting to know you again in my new capacity. So let me take you through how Barclays UK, or BUK as we call it, is going to support the ambitions and targets that Venkat and Anna just set out. As you know, BUK is our ring-fenced bank. It serves retail customers and small business clients across the UK. Barclay's 330-year heritage helps to build deep customer trust and a strong brand position. Whilst our history gives us those foundations, our focus is on positioning the business for the future as a growing, high-returning business which delivers good customer outcomes. That's about making BUK more efficient, investing in our client and customer relationships, and growing through more tailored products. Before I come to each of those, let me briefly remind you exactly what BUK is. BUK operates at scale in an attractive and sophisticated market. We have 20 million active customers. The depth and breadth of those relationships provide a robust and strong deposit base. That is the foundation of our lending businesses, where we are a leading player in the mortgage, credit card, and loan markets for individuals and small businesses. Over 80% of our income is generated by net interest income, and we are committed to growing this through a combination of lending growth, asset margin enhancement, and the structural hedge program that Anna mentioned earlier. That structural hedge program is a fundamentally important part of how we manage the business through an interest rate cycle. The strength of our deposit franchise is the result of significant investment and focus over many years, irrespective of the rate cycle. That hedge helps ensure we can maintain investment in our customers, efficiency, and asset growth. All of that underpins our plans to maintain a high ROTI performance. Our OTI for the past three years has been around 18% or higher. We have been disciplined in the way we have delivered these returns, with positive jaws in our cost-to-income ratio, low impairments through tight credit controls during the pandemic, and a conservative funding profile with low loan-to-deposit ratio. We know we have more work to do to drive more efficiencies and lower our cost to income ratio, which we aim to reduce to around 50% by 2026. Our prudent risk and funding profile means we have the capacity to grow lending whilst maintaining our discipline, thus enhancing our profitability. So how do we intend to do that? Consistent with the group strategy, we are focused on making BUK simpler, better and more balanced. We will be simpler by investing in digitization, automation and technology, delivering material efficiencies. We will be better by investing in customer experience and our product offering, supporting the relationships that underpin our deposit franchise and creating opportunities to broaden these relationships. We will be more balanced. We have positioned the business conservatively over the past few years. Now is the time to grow by winning back market share on the asset side of the business, particularly in unsecured lending and business banking. I'm going to spend a little time on each of those to bring them to life and how we intend to deliver. On delivering a simpler BUK, We have invested significantly in transforming the business in the past three years. That, combined with economic headwinds over the pandemic, led to a cost-to-income ratio of 68% in 2021. Our investments and changes in the environment have brought that to 58% today. But we must go further. Our aim is to get that to about 50% by 2026. In the chart on the left, we have segmented our cost base into four parts to show how we think about our costs. We are focused on driving efficiencies across all four, but I have singled out the top two because this is where we believe we lag peers. On distribution, this covers the cost of servicing our customers day to day. We have historically operated with a higher number of branches, creating higher associated real estate and people costs. We have acted by reducing our branch presence as customer behavior has shifted. Our focus will now shift on optimizing the way we engage with our customers and communities. We will do that through a far more efficient and flexible footprint. By the end of this year, we will have over 900 touchpoints available across the country, including branches, flexible community sites, and shared banking hubs. Of course, the primary basis of customer interaction today is through our digital channels. In fact, 98% of customer interactions are now digital. Our touchpoint optimization will strengthen that further, completing our digitization work and leveraging our physical footprint as a value-added complement to it. In operations in technology, we are in the process of automating the parts of our operation which are not yet processed straight through and simplifying and upgrading our technology capabilities. The historic complexity and fragmentation of our technology means that the transition cost has increased this proportion of our costs. However, this is an investment in our future capabilities and further efficiencies that we must make. The evolution of our cost base over the last three years has been shaped by these investments. The left side of this slide outlines the impact of our cost actions to date. We have streamlined BUK through actions such as rationalising our product portfolio, reducing our branch numbers and headcount, and simplifying our technology estate, all of which I mentioned on the prior slide. That has brought base costs down by 7% and contributed to our cost-to-income ratio declining from 68% to 58%, notwithstanding the impact of inflation on our underlying costs. That gives us confidence in our ability to drive our cost to income ratio to about 50% in 2026, as our investment in efficiency will continue to offset any lingering inflation. This cost discipline not only delivers efficiency today, but it also creates capacity to invest in both future cost efficiency and future revenue. On the right-hand side of this slide, you see that our plans reflect an 80% increase in transformation investment spend over the next three years to 1.2 billion pounds from 700 million pounds in the prior three-year period. Our investment in driving cost efficiencies will continue through customer journey, automation, optimization, and simplification. The mix of investment will evolve with continued focus on revenue growth as we align our products with customer needs better and capture the opportunities of the partnerships that you saw on a prior slide. Combined with the benefits of our investments to date, we expect the income benefit from investment to increase by about £600 million in 2026 from £100 million in the prior period. Combined with the expected efficiency saving, that makes our aim to deliver a cost-to-income ratio of 50% both achievable and credible. Let's shift to how we make BUK better. That requires increased focus on an investment in improving our relationship with our customers and clients. As I mentioned at the beginning, our starting point is strong, evidenced by a deep deposit franchise rooted in trust earned across multiple generations. We know that our focus on transformation over the past years has disrupted those relationships. You see that in the dip in our overall net promoter score in the chart on the top left here. For example, the scale and pace of our branch closures, as well as the product and service simplification that we've undertaken, has disrupted how we interact with and support customers. Meanwhile, work required to update the information that we hold on business clients has created understandable frustration on their part. We are committed to enhancing that position from here on. I showed you earlier that we have rationalized our product offering by 32% and made our range simpler. We did that in part for efficiency, but also so that we could invest in tailoring our offering to better align the service that we provide with the needs and expectations of our different customers. We have much more to do to get that alignment as precise as it needs to be. Getting that alignment right creates the opportunities for us to enhance our relationships with our customers. And as we do so, we would expect to see average balances grow and an increase in the number of needs that we solve for each customer. By being better, we improve customer satisfaction, we support our deposit franchise, and we maintain the foundation of a resilient funding profile that enables us to grow the asset side of the business. And that brings me to the third priority, how we intend to make BUK more balanced. Just move on a slide. There we go. As I mentioned at the beginning, we are a scale player across our balance sheet. The last three to four years has benefited scale players on the liability side of the business as consumers and businesses retained high cash balances across the pandemic. Coupled with economic uncertainty, this severely limited their appetite or need for borrowing. We believe we are at the beginning of more stability in the UK, with the inflation outlook having moderated and the consequent rate stability giving more confidence to borrowers, both individuals and businesses. We are also confident that our investments to date have placed us in a good position so that we can capture the opportunity that recovery will present. A quick reminder of where we have come from. We made deliberate choices to navigate the long-standing economic uncertainties in the UK with a low risk profile. That was prudent, but it led to market share declines, particularly in unsecured lending and a lower margin profile in mortgages and a persistence of a low loan-to-deposit ratio in business banking. In short, we didn't take the opportunity to reallocate or recycle underutilized risk appetite from one area of BUK to another. That opportunity is now in front of us. I'd like to bring each of those to life a little more now. In unsecured lending, our plan is to grow market share. We have simplified our customer journeys and revamped our credit and affordability models to enable this. In consumer loans we have historically focused on relationship lending, but we will shortly begin to open up our lending to all qualifying customers, whether they bank with us or not. I will shortly come back to a dedicated slide on the recently announced Tesco deal. In mortgages, our aim is to improve application margins through a number of initiatives. First, by improving our broker support, including by simplifying how we support brokers and improving the platform through which they provide us with their applications. Secondly, we will do more high loan-to-value lending as a proportion of our total book. Our current position versus peers is conservative at 6%. We have capacity to grow that proportion without materially shifting our risk position. We also have the capability to offer specialised solutions through our Kensington acquisition from last year, where the margin opportunity is typically significantly higher than that of our existing Barclays product range. And finally, we intend to increase our focus on the mortgage needs of our Premier and Blue customers, who are far more likely to come to us directly. In business banking, we will grow our lending market share by leveraging our existing relationships on the liability side, both in terms of access to customers and our ability to automate credit decisioning, given the visibility we already have on their financial positions. We will also continue to broaden our lending proposition, including in the asset finance space and accelerate digitization of client journeys to make it easier for them to access what we offer. Whilst lending is at the heart of our growth opportunity, we will conduct this in a controlled way that maintains our disciplined risk profile. I'd like to bring that to life explicitly. As I noted earlier, we made deliberate choices to de-risk during periods of macroeconomic uncertainty in the UK. While that impacted market share negatively, it also led to historically low loan loss rates. You see that clearly on the left side of this slide. Today that rate stands at 14 basis points versus 36 basis points in 2019. It's worth noting that even that 2019 level was lower than years before that. We have capacity to grow within the parameters of our historic loan loss experience And our 2026 plan delivers a risk profile that is consistent with that 2019 level. The right side of this slide shows you that same information in a graphical format for BUK at the top and then cards and loans below that. You can see the larger blue eagle representing 2026 lies in between the 2019 position to its right and the 2023 position to its left for the business overall. My point, simply that we have room to grow as we pivot BUK to take advantage of opportunities to increase market share and margins and deliver a more balanced asset profile within BUK and ultimately for the group. Given the recent announcement of our intention to acquire the retail banking business of Tesco and enter into a long-term exclusive partnership, you will naturally wonder how that fits within the ambitions that I've just shared. This slide outlines what that banking business is. Eight billion pounds of high-quality unsecured loans split evenly between credit cards and personal loans funded by £7 billion of non-transactional deposits that fit neatly into what I outlined earlier about being better. We are naturally excited by this opportunity. It takes us a long way towards the unsecured lending growth ambitions that I just shared. In particular, this provides the opportunity to grow both the lending and deposit products through the Barclays and Tesco brands, which we believe appeal to different segments of the market. The long-term exclusive partnership with Tesco also provides an unparalleled platform to work with the UK's leading loyalty programme, as well as the opportunity to market through Tesco channels and the open market. This builds on our existing UK partnerships with other leading retail, consumer electronics, and loyalty program brands. Importantly, the customer base is similar to ours, leading to broadly aligned risk profiles. So this fits squarely within the risk appetite framework that I outlined earlier. By delivering on our plan, we position BUK for the future and deliver an attractive and sustainable ROTI profile that is high teens in 2026 on a larger balance sheet. Underpinning that is continued growth in income, where we expect a compound annual growth rate of mid-single digits CAGR over the next three years, concentrated in net interest income. Our continued focus on efficiency will lead our cost-income ratio to around 50% by 2026. We expect the better utilization of risk appetite to normalize our loan loss rate towards the 2019 level in a controlled and disciplined progression. And as we grow our asset position, our RWAs will necessarily grow as a result, and BUK's contribution to the group's RWA profile is expected to grow. given our focus on unsecured lending you should expect the impairment build in rwa growth to be slightly more weighted towards the first year than the associated revenue build that will cause roti to moderate in 2024 then recover to our target our ability to invest in that future revenue growth as i said at the very beginning is protected by the structural hedge reflected in the 2024 net interest income guidance of £6.1 billion that Anna referenced earlier, although that excludes any contribution from the Tesco portfolios when that transfers to BUK, expected in the second half of this year. So our focus on efficiencies will make us simpler, our focus on our customers and clients will make us better, and our plans for growth will make us more balanced, We have invested significantly in recent years to prepare the business to growth. We are now ready to seize the opportunity before us. Thank you for your time and I will hand back to Venkat.

Thank you. So we will now spend a little time on the corporate bank and private banking and wealth. which are two new reporting units. I mentioned that we will also come back later in the year with a presentation on each of these by Matt and Sasha, respectively, in addition to a deep dive on the investment bank. So you will have the opportunity later to hear from them. The UK Corporate Bank is the beating heart of Barclays' 330-year history. We have relationships. with about 25% of the UK market. These relationships average 18 years in length and they are covered with a network of locally based teams around the country. Under the resegmentation, the UK corporate bank includes a large part of the operations which we previously reported in the corporate lending and transaction banking lines. It also includes corporate card issuing previously included in consumer cards and payments. So what this does is that it brings together our trade and working capital solutions into one business. The integrated business has reported strong returns and last year generated about 1.8 billion pounds in income. The income streams are diversified and a great priority for us is to grow the fee income alongside capital efficient growth and lending. So what is it that we do here? On this slide, I'll summarize the breadth of our offering to corporates. We support clients with their short- and long-term financing needs, including extending finance to support the transition to net zero. We provide working capital solutions through card issuance, overdrafts, invoice discounting, and traditional revolving facilities. We help clients to move their money, to pay suppliers and employees, to collect money from their customers, and reconcile their transactions. We also help clients to invest liquidity through a range of solutions. We support clients in managing risk as they grow their international exposure through our award-winning trade finance and FX propositions. And what this range does is it positions us well to grow over the next few years while giving clients access to expertise in other parts of the group. Our clients' needs are evolving quickly. and we are focused therefore on delivering operational needs simply and seamlessly. And to meet these, we have priority areas which are well-defined, starting with the importance of our leading payments ecosystem. And digital delivery is important because it frees up time for our clients and also makes our bankers more efficient, allowing them to spend their efforts sharing data-driven strategic insights. And this client interaction will enable us to deepen and to broaden our client relationships. And as growth opportunities emerge, clients want us to make it easier for them to access the right financing structures in quick and simple ways. I said I would talk about payments. We spoke earlier about looking for a partnership in our merchant acquiring business. So I want to say a little bit about the payment ecosystem, which is about making and receiving payments. This is an essential part of the functions we provide our corporate clients. We are one of the largest sterling clearers in the UK. We are a leading corporate card issuer with more than 12 billion pounds of payments per annum and the third largest merchant acquirer across Europe. That's the far right. We process over 300 billion pounds in payments a year, which we estimate represents one in every three card payments in the UK system. Our objective always is to bring the best capabilities and the most efficient services to our clients, and we pursue the models which deliver these outcomes. Our traditional bank payment systems have largely been built in-house over many years and are very resilient. What we are doing now is focusing on developing further digital solutions. And the landscape across card issuing in the middle and merchant acquiring on the right has been fast moving with much innovation. We've had years of experience combining strong in-house capabilities with those provided by some of the partners listed here in order to benefit from greater scale in technology and operations. In merchant acquiring now, which is on the far right, we are looking at, we are exploring how best via partnerships to provide further benefits of scale, global scale, and new technologies and innovation to our clients. That is what that strategic exploration is about. As with the rest of the bank that you've heard, we talk about simpler, better, and more balanced. We're focused on making this business simpler by enabling clients to access the solutions and services more easily. Our main digital channel, something we call iPortal, already gives clients access to a wide variety of services through a single entry point, and they can self-serve about 30% of their needs, and the adoption for these solutions is around 90%. We plan now to build on this, expanding our self-service capabilities through both online and mobile access, and increasing the efficiency, speed, and frankly, better controls. And what this will allow us to do is to decommission legacy systems. And what we've been doing is also investing in stable and automated back office platforms and the tools our relationship teams use, making their client interactions, as I said, more productive. All of this, we expect, will improve the client experience while using efficiencies to fund investment. And it allows us to retain our low cost income ratio. We aim to be better by deepening the relationships which we have. You know, we were the first bank to introduce industry specialist teams more than 20 years ago, and we continue to lead and to innovate. Our network of business development directors has resulted in more than 550 client wins in 2023 and a growing market share. And we are hiring additional coverage bankers in areas where we see growth opportunities and continuing to develop our propositions. Recently, we migrated our trade finance business from legacy technology to cloud-based systems. 40% of our clients use five or more products, which is up three percentage points over the last two years, and this demonstrates our ability to increase that penetration. And as we deepen our relationships and improve our offering, we think we can do more. With 28% of our clients using two products or fewer today, the potential for revenue growth here is significant. And we are confident that we can increase our share of wallet from existing clients and grow through new client acquisitions. So next, I want to focus on lending, which makes us more balanced. We have a loan-to-deposit ratio here in the UK Corporate Bank in the low 30s, and we are well-placed to grow, providing a better balance for the business as we grow more fee income. And we will deploy more RWAs to support this effort. which in turn can lead to deeper and wider client relationships. Our existing book is well diversified across sectors, and we have a track record of low impairment. And so we'll continue, of course, to use the group's significant risk transfer program, providing first loss protection and reducing both impairment risk and capital requirements. Within our credit risk appetite, there are areas where we can be more competitive on price and take larger credit positions with stronger clients. And we are confident in that way of growing lending at attractive risk-adjusted returns as we develop our digital delivery and product offering. And we also expect to generate business for other parts of the bank, leveraging our track record in the debt capital markets. So finally, on the corporate bank, I just want to highlight some key financials and summarize our ambitions. As I said, a key priority is to grow fee income alongside a capital-efficient growth in lending. Our recent performance positions as well to achieve this. Over the last two years, we've grown at a 15% CAGR. This reflects, of course, the benefit to NII from rising rates, but also double-digit growth in fee income and net client growth. And while loan and deposit volumes have been stable, our propositions and client relationships have enabled a 10% growth in clients in the last two years. The income growth has actually helped us, resulted in a healthy cost-income ratio and contributed to returns increasing from 14% to 20%. We have the opportunity now to grow income further while we increase our investment in simplification and automation. So we still aim to deliver a cost income ratio in the high 40s. And post-COVID, we have benefited from a gradual release of modeled impairment and we expect a more normalized impairment profile going forward. Overall, We expect returns to moderate from the 20% we reported last year, but we still target high teens over the coming years. So to summarize, the UK corporate bank is already delivering strong returns. We're confident we can continue to grow at these attractive returns despite the normalization of rates and impairment. Lastly, private bank and wealth management. On top of my mind, the day I became CEO was an ambition to realize the great opportunity that the private bank and wealth management business provides for Barclays. We had a strong private bank, have a strong private bank, both in the UK and in select international markets. But the wealth management business in the UK and our digital investing business, what we call smart investor, was unprofitable and subscale. Moreover, these two businesses sat in separate parts of the bank on either side of the ring fence. Over the last 12 months, we have put them together again with the regulatory permission. And what this does is it provides us with a very significant opportunity to serve the financial needs of UK customers in our retail business together with serving our high and ultra high net worth clients. In addition, It enables us to have a single investment function and shared platforms. We aim to provide advice to our customers and clients at each stage of their personal financial journeys. And we will do so with robust financial management tools which are fairly priced, managed transparently, constructed simply, and delivered efficiently. So this is the private bank and wealth management business today. As you can see on the left-hand side, the business has been structured into four distinct segments. Firstly, self-directed digital investing for those who are starting out or want to invest anything from one pound upwards. A UK wealth management proposition for those at a more advanced stage in their financial journeys. and of course a service for high and ultra high net worth clients domestically and internationally who have access to a full suite of private banking products. What you see on the right is that the business has grown its assets and liabilities on the average of 10% a year over the last five years. And it's reasonably well diversified both geographically and in terms of products. The combined business today is already producing high returns, 31% in 2023 compared to 14% ROTE in 21. A good part of that growth has come from deposits, given the impact of higher rates, but we've also been growing our investing and lending offerings. The income has grown from £1 billion to £1.3 billion, and our cost-income ratio has shrunk from 86% to 69%. This is a very good and profitable business. but what it needs to do is to scale, particularly in the digital investing and the UK wealth management segments. Again, given its high contribution to the group, this is an area of investment. So again, we're going to do this by being simpler, better, and more balanced. Part of what I, being simpler, as I said, was to combine the businesses. We now have one management team, a single investment function, shared platforms, and simpler segmented customer propositions. And there are significant efficiencies from doing this. Part of being better is for us to fully leverage the synergies across the bank. And we're developing a more effective two-way referral flow for clients with other business units within the group. Barclays UK... provides us with a significant source of new client referrals into digital investing and wealth management. And having a closer collaboration with the investment bank enhances our distinctive point of differentiation by giving private banking clients access to a wider range of investment solutions. Being more balanced is in part by growing our digital investing and UK wealth management offering to the scale that is aligned to the size and scale of our UK retail bank. This proposition has very high operating leverage and we're focused now on making specific enhancements to provide better service to our customers. Very recently, we launched a new pricing structure and we will now focus on the content and digital capabilities we need to enhance the customer service and journey. In the UK wealth management space, we will lower the entry point to 250,000 pounds and again focus on providing easily accessible advice, digitally enabled as much as possible, and the simplified transparent investment proposition. Both of these will be better integrated within our banking app and our website. Moving to the private bank, across the UK and our international business, we have over 160 billion pounds of client assets and liabilities. and we provide a high-touch personalized client service. Our priorities are actually fairly similar for both segments. We need to build out our teams, including our UK regional footprint, as well as our teams in the international markets where we already have an investment banking presence. Also, we need to invest in systems and processes to enhance the client experience. In addition, we will invest in our client solutions, including alternatives and lending capabilities. Altogether, these priorities are going to require an investment into our private bank, which will lead to our ROTE being greater than 25% by 2026, which is slightly lower than last year's numbers. We aim to deliver high-quality, double-digit asset and liability growth across segments and maintain a cost-income ratio in the high 60s. To conclude, We have a great opportunity in this business, and it's one that I'm really excited about. We need to be simpler in terms of our business and the propositions which we provide our customers and clients. We need to be better in terms of our service and technology capabilities, and more balanced by scaling our UK wealth offering. Now, almost every bank talks about doing better in private banking and wealth. And so you might well ask, what makes Barclays succeed? I think there are three things. One is the scale and depth of our franchise in the UK and how few of our customers use our investment services today. There are 3 million customers in Barclays UK with investable assets who may benefit from our digital investing or our UK wealth offering. The second, in my opinion, is that the UK market could be better served, particularly for those customers in the intermediate stages of their financial journey. I think there's a real role for us to provide a service which is transparent, which is competitive, which is digitally available, but with access to human advice. And finally, we have proven we can grow this business. Over the last few years, five years, we've grown client assets and liabilities by 10% per annum. We've won awards internationally, the best foreign private bank in Switzerland, the number one private bank in Monaco, the number one international private banking bank in India. And we're confident we can achieve an ROTE of greater than 25% by 2026. And to me, private banking and wealth represents a very attractive opportunity for the bank. It's capital life fee and income based business and high returning. So with that, What we will do is I'll invite my colleagues to come up and we will move to the final part of Q&A for today's investor update with a Q&A on the business presentation that you've heard. As previously, please limit yourself to two questions and introduce yourself. And I am the emcee. All right, who would like to go first? Yeah, Akbar.

Happy to go first again. Alvaro Serrano from Morgan Stanley. Just a couple of questions. One is on the efficiency gains in the investment bank. I don't know if you can make it a bit more tangible for us, given any examples of where you see capital efficiencies in particular. Obviously, there's been discussion in the past about diverse finance deals that are still on the balance sheet. Is that a source? of capital efficiency, and if so, maybe help us quantify it or give us a bit more sort of flavor on how easy those efficiencies are to deliver. And second, on U.S. cards, the 12% NIM, you've listed sort of quite a few things that drive the NIM improvement, and rates wasn't one of them. And I realize this business is – lower rates is good for it. So maybe I've seen your rates, that rates assumption at the back, but can you quantify maybe how much rates plays into that NIM expansion in the U.S. cards business? Thank you.

So why don't I take the first one? I'll pass it to Anna to start on the second one. Maybe, Danny, you can chime in afterwards. So at a macro level within the investment bank, you're talking about RWA per unit income, is going to come in a few ways. Within markets, as we've said, we've maintained a high level and I think recycling capital and focusing on liquidity and sort of revolving, as Adil said, 20% a quarter of what you put out and increasing that is going to be one source. In investment banking, it's coming in a couple of ways. Number one, It is from the move from DCM which is capital heavy into ECM and M&A. The second is recycling capital as it gets released into international corporate banking and the transactional services which are closely, going to be closely managed by the investment bank or managed within the investment bank and which represents higher recurring revenue. and an allocation of RWAs into the financing side of markets. So at a macro level, that's how it happens. Obviously with individual clients, over time we will assess whether we are getting the right mix of business for the capital which we lay out. But that's part of exactly that reallocation. And then do you want to start on that?

Yes, sure, why don't I start and then I'll hand to Denny. You're right. We're not calling out rates. We saw a benefit from rates in 23, actually, because of the lag effect of repricing as rates rose within the U.S., which obviously we don't expect to recur. Actually, our NIM expectations are much more about what we expect to happen to pricing, to mix. And deposits do matter, but only to the extent that we expect a greater proportion of retail funding in the future. But Denny, you might want to expand on pricing.

I think, as Anna just said, there's really four things going on. So I think the whole industry will see some margin compression as rates come down. So that's built in our forecast. But I highlighted three things that are going to help us drive NIM expansion. One is we have We are going to be going more in the retail sector. We expect that to help us rebalance our FICO mix. They'll help deliver higher margins. Second, alongside the late fee legislation, we'll be repricing some of our existing accounts. And then, you know, we have a really strong award-winning deposit platform and we're investing in that. And so we expect to get more value from that going forward. So those three things are what offset that margin compression that you can expect when rates drop.

Next question. Yeah, Joe. Joe, then Rohit, then Raul.

Hi, Joe Dickerson from Jefferies. Just in terms of the competitive landscape in your two U.S. areas, so the investment bank and then the cards and payments business, could you just perhaps elaborate on how the Basel endgame may be impacting the competitive landscape in the U.S., although I do see that the banks in the U.S. have done a pretty good job of pushing back on that. But your views on that would be interesting. And then in the consumer space and cards in particular, we've seen in the past 24 hours Capital One and Discover, effectively Capital One going into the network business. So how do you see the impact on the landscape changing in the U.S. cards or not, as may be the case as a result of that merger?

So let me start with Capital One Discover. Then I will just give a broad answer to the first part of your question and let Adeel and Denny talk about that unless I know you want to add something too. So on Capital One Discover, look, we've got to see the details on it. Clearly it is a transaction that is based on a cards portfolio as well as payment trails and payment capabilities. and it shows, if anything, that these things are valued in the banking system today. As I hope you've seen in the last few hours, both cards and payments are critical parts of the Barclays proposition as well, and something which we think we're good at and trying to do better. So that's my sort of first takeaway from it, and we'll of course have to see the details, and I will say that There is a regulatory angle of it, which, you know, my colleague Jason Goldberg, I have to plug Barclays Research, wrote overnight with Terry Ma. And we have to understand that better as well.

Okay.

So then coming back to the competitive landscape in the U.S. So at one very high level, capital rules generally increase over time and banks adjust to them. The big banks adjust to them. And I imagine that's what ultimately will happen. And what I do hope is whatever settles down in the U.S. capital landscape is relatively mirrored in the U.K., whereas you know the regulators also have a competitiveness mandate in addition to financial safety. So we'll have to see where it goes. And what we hope is that it's sort of fair across both sides of the pond. What you have seen us do, is move to internalize what that will be, both at the overall Basel level, as Anna said, to the lower end of five to 10%, which includes what we said for IRB in the US cards business, already included in UK cards, and then we've got a bit of corporates to go. So I think it'll all finalize over the next two years. Hopefully it'll be relatively even, but we will adjust competitively, as we have done in the past, Adeel.

Yeah, I completely agree with what you're saying. I think, as Anna referenced, the impact of Basel, we expect it to be the lower end of 5% to 10%. So that means mid to high single digits for markets. And look, I think I go back to what I said earlier in my presentation. Our ambition is to generate double-digit returns for our shareholders. So if there are businesses that will be impacted because of Basel, we'll be ruthless about allocating and reallocating capital within our portfolio to accommodate for that.

What I'd say is, as we showed actually on the slide, we expect that through the actions that we're taking that we'll be able to get our density rate to similar levels to what U.S. issuers will have. So I don't think there's going to be any competitive issue there. And, you know, at the end of the day, we've had capital differences over the years between the U.S. and U.K., And it's never kept us from winning business at good returns in the past, now, or in the future. And really, because what that really is about at the end of the day is not just about price. It's about can we help partners drive their business forward by helping them increase sales and customer loyalty? And we think because of the capabilities that we've built, we do that pretty well.

Anna, anything to add? Yeah. The first would be, you know, clearly we're reacting to what we know here, and there's some time to go to see the final rules. So what the teams are doing is they're firmly focused on what we can control, both in Denny's world and in the deals world. We would expect to see some increase in capital in the U.S. from our U.S. peers. The exact level of that, we'll see. I think what's really important for us to just remember, though, is that less than 10% of our group capital is in the IHC. So for us, some of these movements in US rules are less important than what happens with our primary regulator with the PRA in the UK, which we still expect to be the binding position for Barclays.

Rohit?

Thank you, Rose Chandrarajan, Bank of America. A couple of questions along similar lines. Sorry to be boring. The US, sorry, the IB, thank you for the additional commentary around kind of the flows of the RWAs. I think so far you've really talked about optimisation, a move from DCM into ECM and advisory, and then a negative in terms of, a small negative in terms of Basel III in markets. Is there anywhere else within particularly, I guess, the markets business where outside of optimisation, you might be taking some capital away from businesses in order to fund the capital-like growth that you're talking about in some of the focus areas for markets? That would be the first one. And then again, the second one is just on, again, on US cards. I guess what you've shown is you have... some inefficiencies relative to your local peers from a capital density perspective, which you expect to offset through mitigation, but that usually comes at some cost. And Venkat, you talked earlier about the benefits of being a diversified business, but when you've got a standalone cards business without a broader US retail offering, there are some, I guess, some headwinds from an efficiency perspective relative to peers. So what is it that makes Barclays a good cards business in the U.S. compared to a large U.S. bank, for example?

Adil, do you want to take the first one? Let me start on cards and then you can fill in.

Thank you, Rohit. So we really think about our business through the lens of two components. We have cards. a bunch of top five revenue-ranked franchises where we are maintaining a pretty high income-to-RWA ratio. And then you have the non-top five franchises, which we showed you. If you look at the non-top five franchises, there are two types of businesses there, one which we need to maintain to be stable to our clients. Within those, we have a pretty low capital footprint. And then you have the rest of our franchise, which we think we have room to improve because we've either lost market share or the operating environment is changing. If you look at that component of our franchise today, we have 38% of our RWAs allocated versus them driving 28% of our income. So it also tells you that those three focus businesses which we've talked to you about, we've already allocated the capital they need and the technology resources they need so we can drive that income over the coming years.

So then coming to the question on the U.S. cards business, the first thing that I focus on is we have to have an apples to apples comparison. This is a specialized partnership card business. We are not looking to compare this to a broad-based U.S. banks card business, which includes its own branded cards. We are not in branded cards. In fact, the important thing, whether you talk about this or whether you even talk about our markets business or investment bank, is that we focus on the things which we think we do very well and which are attractive to our clients. This specialized cards business has a few attractive features to it. Number one is we have 20 corporate clients, B2B2C, 20 million customers. We are not competing with the end customer. for the end customer with the corporate client. We're not trying to sell them a mortgage. We're not trying to do other things with them, which many other banks might. And what it does is allow us to focus on increasing the engagement which the corporate customer has with the underlying client. And that is the thing that leads to the revenue uplift for the corporate client. And that's what Denny had on one of his pages, 6X, 7X. So we don't compete. Second is we are good at what we do. And that's an indication of both the blue-chip quality of our clients and the 90% renewal rate that he spoke about. So an apples-to-apples comparison would not have us talk against the broader U.S. banking market. Of course, there are things we need to do better. We need to adjust for the capital rules. We need to improve and increase our own funding of this. and manage our costs better, and as we get scaled, improve the ROTEs. So we have a lot to do to improve it. But the apples-to-apples comparison is not versus a general U.S. bank.

Anything to add? You answered that really well. I'm very proud of you. Thank you. No, I just piggyback on something I said earlier. We are a specialist issuer. Most of the largest U.S. banks I think you're really asking about, they don't compete every day in partnerships. They focus on their own proprietary brand. And the other thing I pointed out earlier is the size and scale of the partnership market is very significant. So there's a big game to play for, and we believe that we have built a sustainable competitive advantage and the capabilities we bring to the table. And as Venkat said, that focus on driving, helping drive our partners' businesses forward is different than most banks bring to the table. And so what we build is about how do we – because we believe if they do well, we do well. And so our focus there is pretty unique, and it's worked really well.

And if I may add one thing – sorry, Rob. Just one thing on risk management in that business. It's underlying credit risk management, but it's also choosing your partners well, choosing partners with whom you can actually bring that expertise to bear – and managing that relationship over time. And in the end, it's those attributes that lead to a high renewal rate, and it's those attributes that lead to a Tesco choosing us in the UK. Sorry, Raul. It's coming behind you.

Thanks, Venkat. It's Raul here from JPMorgan. Still plenty of questions, but I'll stick to two. The first one is on you know, what's going on in the UK in terms of consumer duty.

In terms of?

Consumer duty. So there's a broad agenda that is leading to various implications for financial services players. Obviously, apart from motor finance, you're present in most products in the UK, but one of the features of the UK market is very limited cross-selling. So I guess the question for you and for Wim is, where do you think are the risks for you in your current situation? business model as configured, especially as we go into the new rules July this year on the back book? And then secondly, where might be the opportunities for you as other players, you know, have to reconfigure their own pricing? And I think your recent stockbroker changes have probably been a step in that direction.

Let me start with the second half and then I'll turn it over to Ben. So I think consumer duty, which is a very beneficial way to look at actually what products people provide to customers and managing mis-selling risk across and appropriateness risk across the consumer product landscape is a good thing for the customer. As in all forms of regulation, it actually ends up benefiting the larger players. Because what we are able to do is understand it, manage it, absorb the fixed costs, and operate. Frankly, over the long term, it serves as a barrier to entry. I think, therefore, when I spoke earlier about wealth, and I said fairly priced, transparently constructed, efficiently delivered, It's easier for us to do these things than for smaller companies because we can, A, we know how to do it because we do it in other parts of our business, and B, we can sort of structure it and absorb the costs better. So I think it's an advantage to the large players as generally forms of regulation are.

So I think a couple of things to add, and I think that point about our scale and what we've done in the past is quite important because, again, I think one of the things that struck me about Barclays, and you'll see it in other banks too, I guess, is just the culture from a customer-focused perspective is really strong. And treating customers fairly has been around for a while, and the nature and behavior that we have here has been strong too. Of course, consumer duty... made us think through every line of our business and consider very carefully whether tweaks that we should make but it's not been as heavy a lift because of the culture that's already innate in our business and and so i think that's that's been a huge help in where we were and the steps that we had to take and actually i think we've made lots of great great progress I think the important thing here is a level playing field. Actually, there are some things that sit outside of the fence in terms of regulation and then making sure that the regulators then apply all of that in a similar and coherent way right across the market. I think that's the important thing to call out. And then you touched a little bit about sort of limited cross-selling. To some extent, when you look at our balance sheet, and I talked about it, Conscious steps that we've taken have led to that and actually one of the things that we're trying to do as we lean into the changing shape of our balance sheet as we move forward is actually protecting our franchise and increasing that cross-selling capabilities. At the moment, some of our customers are going somewhere else for a credit card because of what we've chosen to do in the past. That's a real opportunity for us to really deepen the franchise and increase the number of products and services that we offer to our customers.

Just on buyback capacity, mainly for Anna. I'm sorry to ask about the next buyback when you've not even started this one, but the capital walk for 2024 is quite difficult to nail down, just given the moving parts that you've got. You start with 13.5 pro forma, and then obviously first quarter of every year, usually there is a trading-related RWA pickup, so it tends to be not very capital generative. And then I guess you build capital towards your 125 basis points per year sort of run rate through the year. But when we think about the moving parts around the 16 billion of RWA add-on coming in the second half, plus the various acquisitions, Tesco, whether or not you sell, you know, the timing of German cards, should we still be thinking about six months as the right, you know, kind of beat of looking at capital return and buybacks, or do we think about that as sort of end of 24th?

Thank you. So I think the root of this is the capital generative nature of the business and our ability to consistently generate capital year in, year out, which we've demonstrated. And I would say that clearly there is some seasonality to the business. You've called it out. We typically deploy more capital in Q1, but typically we generate more capital in Q1. That's That's what we demonstrate in most years. Around the 16 billion and indeed the onboarding of Tesco, those are in our capital flight paths. And you wouldn't expect me to talk to you specifically about timing today. That's a matter for the board and it's something that we'll consider. But we have got a fairly... fairly consistent pathway going if you like to look at it that way and the other thing that we've done is very clearly highlight for you today our priority which is number one regulation number two the shareholder and number three investment so that should tell you how we're thinking about the return of capital as we go through 2024 but actually beyond into 2025 and 2026

We have time for one more. Go ahead, Ben.

Ben Thomas from RBC. You talked about the improvement in application margins in BUK for mortgages. I just wonder whether you might give a sense of where we're at now and where you expect those application margins to go to. It sounds like it's largely mixed base for those margins. And then secondly, in wealth and private banking, the ROTE, I appreciate that the guidance is greater than 25%, which includes some scope for a number bigger than that, but the step down from where you are today to that number is relatively large. Is there something in there for the fact that you're still having to invest in that business in 2026, and therefore post-2026 you'd expect a step up, or is there an acceptance that it requires ongoing investment in that business every year?

Thank you. Right. Do you want to start with mortgages? Go ahead. Yeah.

So, as you know, we don't comment on spreads and mortgages. What I would just say is that, you know, spreads have been attractive but pretty thin, as I said earlier. Because the market is very much dominated by refinancing activity, and you see that typically in Barclays. You know, if you look at our loan-to-values, they are low, just above 50% for the portfolio, and we're acquiring in the sort of mid-60s. So there is a real margin opportunity here for us to utilize the capability that we've got within Kensington. And then you might want to add to that.

So mix is one for sure. I think the other is process and service, which I think I'd call out because at the moment, if you don't have great service and great process, you end up having to compete more on price. And so I think as we invest more in our capabilities that I talked about, that should help us be able to compete better in the broker market as well as in the direct market too.

All right. All right. One final question, Andy, for you.

Andrew Coombs from Citi. I'll just stay on the UK. Firstly, a clarification on slide 114. You talk about a mid-single digits NII CAGR in the targets. Is that off of the 2023 6.4 or is that off the 2024 6.1 plus the 0.4 from Tesco's?

Very simply, it's from 2023 from the 6.4. Perfect.

And then more broadly, you outlined some of the initiatives on slide 111 that you have in order to grow the revenue base. Within that, mid-single-digit NII CAGR, there's kind of three moving parts. One is those initiatives that you've outlined. The second is the impact of the structural hedge. And then the third is the impact of lower rates, I guess, if I had to break it down to three parts. How much of that revenue CAGR, forwardly speaking, is from your own initiatives that you are now implementing, do you think?

So, Andy, we haven't broken that down. I think what we have done is we've given you an indication of the RWAs that we expect to deploy within this business. Not directly, but if you take the 30 billion and imagine it splits broadly in alignment with the RWAs of the businesses that we're focused upon, then you'll get an indication of really how much we expect to come from lending growth. And we gave you some modeling tools, if you like, around the structural hedge earlier, so the 170, the reinvestment, and two-thirds of that goes to the U.K.,

Right. So, sorry, go ahead. I'm just going to build. I think it's pretty broad-based as well in terms of those initiatives. So it's not concentrated in one area or the other. And the structural hedge is clearly important, but the dynamics change between 24 and 26. because obviously you've still got some deposit migration happening now. Then you have a different effect coming with rates. And then, of course, all of those lending actions that we've talked about there on that slide start to play through into 2026.

I'm just very conscious we didn't answer Ben's second question, which was why do we expect a greater than 25% ROTI in the private bank? Do you want to pick that up?

Yeah, sorry. That's quite far back. It's investment. So investment is what brings it down from the 30 plus down to 25. I think on this one, we're looking out to 2026. We're starting from fairly early levels in both the digital investment and the wealth management business. So it would be foolhardy of me to project beyond 2026. But I think it's important to say that this is an important and attractive business for us. And we're going to invest for it. Thanks. So those who follow TestCricket know that lunch is taken promptly at 1 p.m. So I want to thank you for coming. And let me just repeat, you know, and thank you for being here for the last four and a half hours. You know, so I hope you got the sense of why Barclays. We've got very high returning UK retail and corporate franchises. We have a top tier global investment bank. We've got multiple levers to allocate capital in a disciplined way. We're looking to drive growth. within the higher returning divisions of the bank, and greater RWA productivity within the investment bank. We are resetting our level on ROTE to 12%, higher than 12% in 26, and capital return of at least 10 billion pounds in the next three years, 24 to 26. Those are the summary statistics. There's a lot more. We are available over lunch to chat with you as well. So thank you for coming, and thanks for spending the time with us. We really appreciate it.