Barclays PLC

Welcome to Barclays Half Year 2026 Results Analyst and Investor Conference Call. This call will be recorded for replay and transcription purposes. These will be published on Barclays Investor Relations website in line with Barclays Privacy Policy at home.barclays. During the call, our Barclays representatives may make forward-looking statements within the meaning of U.S. security laws. These statements can be identified by the fact they relate to future events and circumstances and sometimes use words such as may, will, Seek, Continue, Aim, Anticipate, Target, Projected, Expect, Estimate, Intend, Plan, Goal, Believe, Achieve or other similar words. Forward-looking statements are based on the current beliefs and expectations of Barclays directors, officers and employees and are subject to significant risks and uncertainties. No forward-looking statement is a guarantee of future performance and the Barclays Group actual results, financial condition or performance could differ materially from those contained in such statements. Subject to applicable laws and regulations, Barclays undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For more information on forward-looking statements and other important information, Please refer to the disclaimer notice in the presentation slides which accompany this call. At the end of the presentation there will be a question and answer session. If you want to ask a question, please press star-fold by 1 on the telephone keypad at the start of the question and answer session. If you change your mind and wish to remove your question, please press star-fold by 2. Please stand by and you will be placed through to the call shortly.

Here, having achieved 16.1% in the second quarter, and 14.8% for the first half. We are balancing progressive returns and distributions with investment to secure sustainably higher ROTE. We are increasing shareholder returns, announcing a £1 billion share buyback and an £800 million interim dividend. This brings the first half distributions to £2.3 billion, up 61% versus the first half of 2025. In our investor update in February this year, I spoke of an accelerating ambition for Barclays, forging segment-leading, operationally efficient businesses, primed to support growth. We said we would build the foundations for an all-weather ROTE from 2026 to 2028, with the aim of sustainably higher returns beyond 2028. As we discussed, our businesses are now revolving around technology, and our aim is to build standardized foundation, use modernized approaches and based on harmonized systems and processes. All of this is powered by our talented and inventive colleagues. And we are using additional capacity from our strong first half profitability to structurally improve Bowkley's returns. This program is showing encouraging results. Therefore, After our increase in distributions, we will use some of the capacity from our stronger first half profitability to take further cost action later in 2026. We anticipate that this will create greater cost flexibility from 2027 onwards. These plans increase our confidence in delivering a 2028 ROTE greater than 14%, accelerating our progress towards an all-weather ROTE. Anna will expand on this shortly. All three UK businesses delivered ROPE above 20% this quarter with consistent volume and revenue growth. Investments which we have made have allowed us again to monetize strong markets and banking volumes in the investment bank. The ROPE increased nearly 4% versus last year to 16% in this quarter. While the U.S. consumer banks delivered 10.5% ROTE, excluding the American Airlines gain on sale. Operational improvements across the group are delivering stronger structural returns and a better customer experience. We have achieved around £350 million of growth efficiency savings so far this year. As I have mentioned, we want our businesses to be segment-leading, driving growth through new capabilities and deeper client relationships. Our US consumer bank is entirely digital, with over 25 million customers and not a single branch. In this quarter, we completed the acquisition of Bestech, adding advanced consumer loan capabilities for our customers and partners. We have also announced a partnership to provide card products in the Samsung wallet in the US. Our segment feeding offering in the UK is Premier Banking. In this quarter, We have commenced a refresh of our banking app and launched Premier Wealth Management to provide planning and advice to Premier customers with no upfront fee. We have also announced the acquisition of GoHenry, which we expect to complete later this year, and this will help attract the next generation of customers to Bowkley's UK. Lastly, we are expanding and enhancing our branch network Thank you for joining us today. are self-directed investment platforms. This is now the most competitively priced such alternatives for those who seek full-service investment with the security of the bank provider. I'm highly confident in achieving the group ROTE greater than 12% in 2026, progressing to more than 14% in 2028. We have increased the group ROTE from 9% in 2023 to 12.2% in the past 12 months. and we have driven this improvement through consistent execution of our plan. We are on track to deliver around 31.5 billion pounds of income this year, which is the original 30 billion target. This reflects Broadway's franchise growth and progress to drive greater productivity in the investment bank. The benefits for strong performance go to you, our shareholders. We have announced 9 billion pounds of distribution since 2024, Well on track for more than 10 billion pounds by the end of this year. And by growing our highest returning UK businesses, we are building the foundations for sustainably stronger returns in 2028 and beyond. I have told you before that the UK is a great place in which to do business and from which to do business. Global and domestic events have not changed us. The UK economy has been growing in nominal and real terms and at a faster rate than the eurozone. And this has supported real wage growth, rising house prices, and stable employment. And as you can see from our results for several quarters, Bowkley is helping foster UK growth, not just benefiting from it. Anna will outline how we are doing so shortly. Declining investments since the late 2000s meant that UK corporate debt to GDP has fallen to a multi-decade low. Corporates have had the capacity to invest, but not the confidence. This seems to be changing. The majority of corporate C-surveys tell us that they are gaining confidence in their prospects. Firms plan to increase investment in the next 12 months, including in technology. This is broad-based across sectors and regions, with overall UK corporate lending up 9% in the past year. Bowkley is backing the future of customers and clients across the UK. We are driving UK growth and prosperity. and all the wires bringing stronger and more consistent returns for shareholders. Anna, over to you to take us through the second quarter financials in more detail.

Thank you, Venkat, and good morning, everyone. Slide 6 summarizes the financial highlights for the second quarter and first half, but I will begin with slide 7. Q2 ROTI increased 3.8% year-on-year to 16.1%. including a 1.2% benefit from the AA portfolio sale. Profit before impairment increased by 29% reflecting income growth and positive operating draws of 9%. We continue to drive EPS growth which increased 43% year-on-year to 16.7 pence. This is disproportionately driven by operational progress with attributable profit up 36% year-on-year as you can see in the bottom right. Lower share count from 3.2 billion of buybacks executed in the last 12 months further amplified this. We grew income by 16% to 8.3 billion and expect 2026 to be the ninth consecutive year of income growth. As you can see on slide 8, more stable income streams from financing in market, retail and corporate grew from 4.6 billion two years ago to 5.9 billion in Q2. Given year-to-date momentum, we now expect income to be around 31.5 billion, up half a billion from prior guidance. Group NII excluding IB and head office increased by 10% year on year. Lending momentum continued across all divisions while deposit growth supported full reinvestment of the structural hedge. We now expect Group NII of more than $13.7 billion in 2026. Structural hedge income growth is predictable and benefits all divisions, accounting for circa 45% of Q2 group NII. It will drive around half of the planned group income growth from 25 to 28 and remain a meaningful tailwind beyond. As a planning method, these expectations are based on a 3.5% reinvestment yield. Swap rates were above this level again in Q2 at 4.3%, further supporting NII in future years. Moving to cost. The Greek cost-to-income ratio improved to 54% from 59% a year earlier. Year-to-date, we have delivered $350 million of gross efficiency savings, including $200 million in Q2. Total costs increased by circa 300 million year-on-year, reflecting business growth actions. These include around 200 million of additional compensation accruals in Q2 in the investment bank to better align income and costs. And a decision to shift the compensation mix of material risk-takers are highest-paid employees, reflecting regulatory changes. Awards to be granted from 27 will move towards higher variable and lower fixed pay with a shorter vesting period. This will increase costs in H2 by 100 to 150 million weighted to the IB and provide greater cost flexibility from 2027. As referenced by Venkat, we anticipate taking additional structural cost actions in H2-26 funded by Stronger Half One Profitability. Our recent run rate is around 300 million in each of full year 24 and 25. Having recognised around 100 million so far this year, we anticipate up to 500 million in H2. Given an expected ROI of around 100% within 12 months, These actions should drive a commensurate improvement in 27 gross efficiency. The group's distribution plans and financial targets will not be impacted, including the high 50s cost income target. Turning to impairment. The Q2 group impairment charge of $571 million equated to a loan loss rate of 51 basis points. Consumer and corporate balance sheets remain robust and borrowers are behaving rationally. As an accounting matter, consensus on employment expectations increased as we anticipated, consuming the post-model adjustments that we recognised last quarter in Barclays UK and US Consumer Bank. We retained the 68 million PMA in the investment bank, recognising downside buys due to global macro uncertainty. For 26, we continue to expect a group loan loss rate around the top of the 50 to 60 basis point range. US consumer behaviour remains resilient, as we show on slide 45 in the appendix. We had expected the American Airlines portfolio exit to increase 30-day and 90-day delinquency rates by circa 30-bit and 20-bit, respectively. Instead, both rates fell in the quarter. This reflected repayments due to seasonal tax refunds, which were larger than usual following US tax changes. Delinquencies in the General Motors portfolios Also normalised, as expected. Turning to UK lending. Consistent execution of the strategy means that we have deployed 25 billion of UK business growth RWAs since 24, on track for circa 30 billion by the end of 26. UK lending grew 5% year on year, consistent with our guidance and recent track record. Our mortgage application share increased versus Q1, having exceeded the stock share for the past nine quarters, and our retention experience remains strong. The multi-brand strategy is also working in cards, demonstrated by consistent acquisitions since Q1 25, as you can see in the top right. Business and corporate investment appetite remains strong. Core business banking lending has grown consistently for six quarters. And UK corporate lending grew by 12% year on year, continuing the trend of growing faster than the UK market for the past 18 months. The next slide shows how we are doing this. As part of the corporate investment bank prior to resegmentation in 24, UKCB did not have the capital to lend nor the investment in technology that it needed. As you can see in the top left, this resulted in a loan-to-deposit ratio of 31% compared with 50% to 75% for peers and a lending market share of 9% versus 22% for deposits. Since then, we have been on a journey to rebuild UKCB. Whilst we have further to go, lending share has risen by 70 basis points and deposit share by 40 basis points. with a loan-to-deposit ratio increasing to 35%. Lending has grown by 19% in the past two and a half years. We have attracted around 1,400 new clients in this time with around 40% already borrowing from us driving circa 70% of loan growth. The risk characteristics of these clients is similar to the existing book. as you can see from the default grade statistics in the bottom left. Pleasingly, we have half the time taken for new clients to use four or more products. Investments in iPortal are delivering real benefits with 65% of client interactions now self-serve. There are further opportunities as we add functionality to the enhanced mobile app. and migrate all clients to iPortal during 26, reducing the number of access platforms from 5 to 1. Now turning to Barclays UK. We show the financial highlights on slide 16, but I will talk to slide 17. Roti increased to 20.4%. Thank you very much. The anticipated SBAs that I discussed earlier may lead to higher costs in H2 versus H1. These will drive gross efficiency savings in 27, supporting lower year-on-year costs in 27 and 28. NII increased to $2 billion, up 8% year-on-year and 1% quarter-on-quarter. Thank you very much. In Q3, we expect a neutral deposit of product margin despite competitive deposit pricing, reflecting card seasonality and day count. For the full year, we expect NII to be around the middle of the $8.1 to $8.3 billion guidance range. Deposit balances increase $1.7 billion in Q2 with stable currents and savings accounts. We prize time deposits selectively to deepen Premier customer relationships. The acquisition of GoHenry, which we expect to complete in Q4, provides further opportunities to drive our Premier strategy. Lending has grown consistently for two years, including 5% year-on-year growth in Q2, as the strong mortgage application volumes that I called out last quarter drove strong completion in June. Moving on to the UK Corporate Bank. Supported by the operational progress I outlined earlier, UK Corporate Bank delivered a Q2 ROTI of 21.3%. Income grew by 8%, driven by strong NII, up 15% year-on-year, reflecting volume growth and structural hedge momentum. Loans increased 12%, and we grew deposits by 4%. Private Bank and Wealth Management Rotary was 26.9% in Q2 in line with the greater than 25% target in 26 and 28. Client assets and liabilities grew 8% and favorable valuation effects contributed to a 15% year-on-year increase in AUM. Net new AUM of 1.8 billion for half one overall was broadly similar to the same period last year with Q2 inflows of $0.3 billion. Income grew 5% while costs increased 12%. We plan to continue investment including additional marketing and staff costs following the launch of planning and advice. While this investment will drive future growth, We now expect a mid-70s cost income ratio in 26, turning to the investment bank. We continue to drive stronger and more consistent returns by maintaining RWA discipline, improving income stability and delivering operating average for nine consecutive quarters. We increased RWAs mostly to support client demand, with around 40% of the year-on-year increase due to FX, while driving income to average RWAs up by 100 basis points to 7.7%. We did this in a disciplined way, with stable bar and no lost days, as we show on slide 41. More stable income from financing and international corporate banks continue to grow, as did our focus businesses, reflecting past investments. ROTI was 16% up 3.8% year-on-year. Operating jaws were again positive, despite additional performance costs in the quarter. And changes to compensation mix will support further cost flexibility from 2017. We remain confident in the circa 60% cost-income ratio and 12% RACI target for 26, despite the near-term cost of these changes and anticipated SEAs. Our strategy to improve the diversification of income is driving a stronger stable income base and less seasonal variation, as we show on slide 41 in the appendix Thank you very much. We expect the international corporate banks to become a larger part of the IB, driven by transaction banking, where we grew US dollar deposits by 16% year-on-year. Using the US dollar figures, markets income increased 17% year-on-year. Equities income was up 44%, driven by equity derivatives and prime financing, both focus areas, whilst equity Thick was stable versus a strong comparator. Around a third of the growth in markets income came from financing, which grew 16% year-on-year and for the eighth consecutive quarter. This reflected growth in prime balances, particularly in Asia, with around 80% of growth coming from markets top 100 global clients. Investment banking fees increased by 30%. Thank you very much. We participated in nine of the top global deals in the quarter with income up 91% year-on-year and the IPO pipeline for H2 remains strong. Turning to the US Consumer Bank. Let me start by outlining how portfolio changes affect the operational metrics. In April, we exited the American Airlines partnership which reduced reported card receivables by circa $6.5 billion. The acquisition of Bestseller in May added around $11 billion of managed balances as expected. These are originated to distribute, so do not materially affect reported balances, NIM or funding notes shown here. On an organic basis, we grew net receivables by 2% quarter-on-quarter. The mixed effects from exiting AA drove a 40 basis point increase in NIN and the share of retail card balances increased to 24%. Given continued retail deposit growth and lower funding needs, the share of funding from core deposits increased to 82% and the cost to income ratio was 39% or 49% excluding the $225 million gain on sale. Q2 ROTI was 30.2% and we remain focused on delivering a circa 12% ROTI in 26, excluding the AA gain on sale. We delivered 10.5% ROTI in Q2 and 11% year-on-year income growth on this basis in Q2. Costs increased by 12%, reflecting best day costs of $45 million per month since the start of May. Volumes in the existing business and best egg were as we expected. NIM of 13.2% was broadly as expected despite deposit margin pressure and we still expect NIM greater than 13% for 26. Higher benchmark interest rates in the quarter compressed market-wide pricing of originate-to-sell loans. Creating pressure on the non-NII line. Depending on the persistence of this effect, quarterly income may not fully build back to the Q1 level during 26, despite volume momentum. Turning to capital. We ended the quarter with a CET1 ratio of 14.3%. Given capital generation of 62 basis points in Q2 and 115 basis points in Half 1, we have announced a $1 billion share buyback and an $800 million dividend, equivalent to 5.9 pence per share. Proforma for the buyback, the CET1 ratio is 14%. Thank you very much. Guidance for regulatory RWA inflation in 27 remains unchanged at 19 to 26 billion. This includes Basel 3.1 changes on 1 January and implementation of IRB in US Consumer Bank, which we now expect in half to 27. Group pillar 2A requirements are expected to reduce following each of these events, and we will provide further guidance as we get clarity. On the broader regulatory landscape, we note the recent financial stability report that believe more can be done to drive UK growth. Proposed leverage changes would reduce Barclays' Tier 1 leverage requirements modestly by eight basis points, supporting its position as a backstop measure. We continue to work closely with the Bank of England to promote international alignment and competitiveness of the UK financial services sector. As usual, a word on our overall liquidity and funding on slide 32. We have strong and diverse funding, including a 75% LDR and an NSFR of 136%. And we are highly liquid across currencies, with an LCR of 158%. These measures reflect purposeful and prudent management of our balance sheets delivering resilience, thus ensuring we have capacity to support customers in a range of environments. TNAB for share increased by 39 pence or 10% year-on-year to 423 pence. There's mainly reflected organic earnings which should drive the overwhelming majority of future TNAF growth. To summarise, operational progress at 23 continues to support strong returns and EPS growth and we remain well placed to deliver all group targets for 26 and 28. Over to you Venkat for concluding remarks.

Thank you Anna. We are continuing to build upon the momentum of our delivery in the first two and a half years of our plan. We will further strengthen the foundation for an all-weather roti by accelerating investment and delivering operational progress. I will now open to Q&A. As ever, please limit yourself to two questions per person so that we can get around as many of you as possible. Please also introduce yourselves as you ask your questions. Thank you.

If you wish to ask a question, please press star followed by 1 on your telephone keypad. If you change your mind and wish to remove your question, please press star followed by 2. Our first question for today comes from Chris Callum of Goldman Sachs. The lines are open, please go ahead.

Yeah, good morning everybody. Two questions from me. You talked about a commensurate improvement in group efficiency in 2027 from the three in the million of additional SCA spend in H2. So could you comment then on how you feel about the 18.2 billion of OPEX that consensus has in for next year? Does that feel too high or too low when you think about the SCA tailwind on the one hand versus some of the higher compensation costs on the other hand? and then second on equities I sort of I get the mid-40s print that looks a bit low versus it appears but it's basically in line on a two-year stack I just wondered if you could give any color on sort of regional trends growth in the US and APAC whether how much that would have been higher versus what we see here in EMEA and in financing I was surprised that was flat Q&Q it seems like prime was really strong across the street in the second quarter so if you could unpack that financing sequential evolution a bit maybe it's fixed financing versus prime maybe it's Thank you.

Okay Chris I will start and then I will ask Venkat to make some comments. So what we have said is that we expect to take up to over 300 million of structural cost actions in the second half because we see compelling opportunities to get a good Return on Investment and Drive the Long-Term Sustainable Returns of the Business. In so doing, we expect a commensurate improvement in the gross efficiencies next year. Now, what we haven't done is given absolute targets in costs. The way we think about costs is because returns are our North Star, cost-income ratio is our North Star. because to the extent that the business has a degree of momentum around it, we may incur further absolute costs. So that's what's really important to us. We believe that the cost-to-income ratio in 2028 will continue to be a low 50s print and we expect 2027 to be a meaningful year. Thank you very much. and that is very much driven by the investments that we have made in the business. What we see all the way across the investment bank is that we are growing in the areas that we expected to grow within. So particularly within equities what you're seeing is a strong print in equity derivatives and also a strong print in prime. We have some exposure to Asian The Asian market through our prime business where we're essentially satisfying the demands of our global clients. And we noted that about 80% of that growth is coming from our top 100. So it's just reflective of that global strategy. Venkat, anything you would add?

Yeah, and I think just to add on to that, you should view this picture in terms of the longer term of what we said about the investment bank. So one is just starting big and then coming small. We said that we are going to operate with a stable capital base of around £200 billion, give or take, and we've been there. Second is we expected that would be a smaller fraction of the overall bank, which it is. Third is that we'd be increasing top-line revenues, increasing returns, which means costs fall relative to revenues, and increasing capital efficiency, and we've shown you a number of 7.7% return on our WAs. so all of those things have been achieved over the full period and I believe in nine quarters out of ten. Other than that we also said we diversify the business both in terms of stable sources of income versus versus intermediation and then the role of equities versus fixed income. So you know there are slides here which sort of indicate that page 41 for instance shows you the rising Thank you. Thank you. towards a little bit towards Asia helping our large clients access the Asian markets. Our balance sheet has grown a little to take advantage of that but you should continue to see this business operate with the principles and the guardrails which we set out two and a half years ago. Stable capital, increasing capital efficiency, revenue improvement, disciplined cost management, higher returns and a more diversified business in terms of stable sources of revenue versus intermediation, equities versus fixed, financing versus the rest.

Thank you, Debra. Thank you. Thanks. Next question, please.

Our next question comes from Alvaro Serrano of Morgan Stanley. Your lines are open. Please go ahead.

Good morning. Thanks for taking my questions. First of all, on deposit, The competition in the UK, you call out the product margin being slightly weaker. Presumably that's the ISA season, deposit dynamics. And the question is really, what's the level of confidence that it's just the ISA season because loan growth is strong, presumably we've seen in other regions that driving persistent deposit competition. but you're obviously confident because you're a UK and AI guy and this is pointing to 3% quarter-on-quarter growth, runway more or less for the next couple of quarters. So maybe some, if you can expand on your confidence, why this is transitional and AI should accelerate from here and we shouldn't worry about that deposit competition dynamics. And the second question on US cards, the US consumer business, consumer banks. I don't think I've heard it this time but I apologize in advance if I didn't catch it but I think you were talking to a 14% NIM in the second half as a run rate for US cards can you sort of touch on that if that's still the expectation and a bit more expand on the broader revenue picture for the second half I know you touched on the subsidization margins but just what to expect as a run rate going forward thank you

Okay, thank you Alvaro. I'll start on both of those and then Venkat may have some comments on USCB. As we called out in our prepared remarks, we have seen a high level of deposit competition in the second quarter of the current year. You're absolutely right, that relates in large part to the ISA season. We saw an ISA season that was 7% higher than the previous year and very competitive in terms of its pricing. Now most of our maturities were actually in the first quarter. Most of the market maturities were in the second quarter and that allowed us to somewhat stand back and price very selectively and use our premier proposition to really defend and maintain our market share which is what we have done. About 85% gross that we've seen in the ISA balances year on year are driven by our premier customers, which is exactly what we want. So we think we've done a good job. That says you can see some marginal pressure in that product margin. We said that we expected that product margin cash impact to be broadly flat quarter on quarter, and you can see it was a little worse, and that's essentially down to that fact. As we look forward from here, we have confidence in the NII progression across Q3 and Q4. And, you know, if you recall what we said at the outset of the year, we felt that Q1 to Q2 would be a bit more muted. Initially, we said stable. Then we expected a little bit of growth, which has clearly been somewhat challenged. But from here on in, we continue to expect growth. Why? Because in the second half of the year, we see card seasonality. There is a day count component. We have seen mortgage margins somewhat recover after the compression that we saw in the Q1 swap volatility. And very importantly in relation to deposits, a couple of things. Firstly, you've got the concentration of the ISA market behind you. But secondly, remember that term deposits are in large part one-year products. and we saw the start of this more intense competition in the second half of last year. So as we go forward from here, what you're going to see is that the maturing margin and the prevailing front book margin are somewhat converging in the second half of the year. That was not true for the market in the first half. If pricing stays where it is, they'll be broadly neutral by two-fourths. So we're taking all of that into account, Alvaro, and we expect sequential growth in BUK NII into Q3 and then again into Q4. So moving into USCB, so in the quarter we've seen two impacts that relate directly to the elevated level of rates versus what we expected. and I should say that the underlying business is performing as we anticipated. So we're seeing good underlying cost growth, particularly, for example, within our General Motors portfolio. We're seeing good volumes within Best Egg. The NIM progressed to 13.2% as we expected with the roll-off of AA. We do expect NIM progress. from here, and I expect it to elevate into the third and fourth quarters. Because rates are a bit more elevated, deposit margins are a bit more compressed, and therefore you might see that hold it back a little bit, but I do expect to see further progress from here. The more material impacts in US cars are actually around non-NII, as you called out, and again, that's rate-driven. and it's just because of the reference rate is a little bit higher than we anticipated but APRs haven't really moved. The prices of those securitized loans going into the market is a bit compressed versus what we expected. But as we step back, Q2 has been a really pivotal quarter in terms of what we expect from this business on the go forward. Venkat, you might want to comment a bit more.

Yeah, I mean, the first on this person, When we, you know, we've been talking about this for a number of years, it was, at its core, it's a partnership card model. But we've been building beyond that. First, we've been rebalancing it towards retail, that's on the top right of page 28. The second is, we've been increasing the amount of deposit growth, especially the retail side, and as it shares total deposits, that's the bottom left and middle of page 28. Third, is we've built essentially a digital bank in the U.S. now with 25 million customers in our single branch. It's got deposits, it's got cards, and now we best act direct to consumer loads. And in a way, this part of the bank has been the leader for the bank in digitization, in efficiency, in harmonizing systems, all the things we're investing in and which some of our SEAs are about. And what you could see at the bottom right is the, you know, cost efficiency in that group, where the cost-income ratio is, you know, I think the best in the group, around 39%. And it allows two things. One is high cost efficiency. This is what we are trying to do everywhere. That's what the SEAs announced this quarter are about. Secondly, It allows us to bring in a lot of change quickly because of the tech platform. So we transitioned American Airlines, we integrated Best Tech, and we've announced a product launch on Samsung with both their cars on the way to a digital wallet. So, you know, we're very ambitious about this part of the bank, and hopefully you'll continue to see strong results coming from it. Thank you.

Okay, thank you, Alvarez, for the question. Next question, please.

Our next question comes from Guy Stebbings of BNP Paribas. Your line is now open. Please go ahead.

Hi, morning. Thanks for taking questions. The first one was back on the US consumer. There's obviously a lot going on in the course with AMSDAG. I think we've previously said that the Q1 figure of 983 with maybe a little bit of a growth was sort of a reasonable gauge into Q3 and beyond. I'm just trying to check. I think you made an earlier comment and Michael Altschiff. Maybe that wasn't the case. Can I just sort of check that comment you made earlier in terms of when we get back to that Q1 runway? I seem to remember at Q1 as well you talking about kind of the upside to consensus US consumer NI. You just moved a bit but maybe able to reflect at all on where market expectations now sit for that business would be helpful. And the second question is on cost of investments. I mean, clearly a very good revenue performance can be helped by the idea of giving that sort of extra capacity for investment. I appreciate you're going to need a scope for further investment here, but as we look out to 2028 and the cost of income, which you highlight still being the North Star, is your conviction of improving as to where you land within a low 50s cost-to-income ratio, given that incremental investment that you're making? And I just want you to look at Mark Expectations and 54% were absolutely ambitious enough if you like. Thank you.

Okay, thank you Guy. So if you recall, and clearly you do, in Q1 I said I felt that Q1 was a good basis for subsequent quarters. I think given those two rate impacts that I've called out, It feels like it will take us a little bit longer to build back to that base guy. That's really what we're seeing here. Primarily in terms of those sold securitization prices. Although remember, as a bank, we do have some optionality here. So we have probably greater optionality than some participants in that market in that we can choose to hold some on the balance sheet if we feel that's the right thing to do. But, you know, as Venkat said, our conviction about this business strategically is completely unchanged by a quarter's rate expectations. And we still feel that we have the organic momentum in the existing cars business, in Best Egg, and in what we have... announced in respect of Samsung. You might also remember that in Q1, I talked about a pipeline of future partners where we would bring everything into one place for them. And that's really what we were referring to when we reflect that Samsung partnership. More to go there. In terms of NII in 2028, well, I'm not going to mark the market this every single quarter. What I would say is I made a comment. Clearly, analysts have responded. Thank you. And as I see the movement, I see it in the two particular areas that I called out at the time. One was US cards and one was our UK, one was our UK corporate bank. If I can move on to cost investments, I mean, as Venkat said, What we are focusing these investments on is exactly what we said we would do in our investor update in February. So it is around platform modernization. It's around process optimization. It's around change delivery modernization. And in so doing, making the organization simpler on a permanent and enduring basis. So clearly what that investment does is it gives us greater confidence that we will be able to achieve our results in the short to medium term. So these are exactly the investments that we anticipated that we would be making. But two things have really changed since that investor update in terms of timing the first. is just the momentum of the earnings. I mean, our earnings per share are up 43% in the second quarter. And that allows us to make these investments whilst balancing our primary two commitments, which are progressive returns and progressive distributions. So ensuring that everyone is sharing in that momentum. And then the second thing is the more work we do, the clearer the view that we have on the opportunities that are in front of us to make the bank more efficient. And that's why we have the conviction in the ROI. So from our perspective, it gives us more confidence about a ROTI target which is open-ended for 2028. And actually, just as importantly, beyond that point, because we said what we were doing here was somewhat deliberately not optimising the short-term ROI of the business, but to be looking forward and creating, yes, a progressive ROI pathway, but a sustainable and higher level of ROI in 2028 and beyond, what we called an all-weather rating. So that's really what we're trying to achieve, but see it as more conviction in 2028 and beyond.

Yeah, I mean, look, just to add a few things to Anna. First of all, absolutely, we have much more conviction today on the cost-income ratio target for 2028, which is in the low 70s. Second, as I said in the answer to the previous question, look at the U.S. Consumer Bank as a better indication of how this works in practice. What happens is that we invest in technology and processes and systems and you see the results in cost income ratio. So that's why we have the greater conviction. Third, reiterate Anna's point. We are using the benefits of our higher returns over the last two quarters to invest in the things that we said we would. First, share the distributions with you, our shareholders. Second, of course, we will capitalize. Progressive returns to you, our shareholders. And importantly to continue to invest in the business so that we can achieve these targets with greater confidence and speed. That's how you should read everything today.

Thank you so much Guy. Can we have the next question please?

Our next question comes from Jonathan Pierce of Jefferies. The line is now open. Please go ahead.

Hello, good morning. I've got two questions, please. The first is really just a clarification of some of the answers you've given in the last 30 minutes on both net interest income and costs. On the NII, it sounded, Anna, from what you were saying, as though USCB forecasts for 28 have maybe got to the right place, but UKCB is still a bit low. I mean, you don't want to be marking every quarter, but it would be helpful just to Get a sense as to whether I've read between the lines correctly there. And then on the cost-income ratio, again, taking understanding you don't want to be bound to an absolute cost number next year, but consensus is at 55.5% on the cost-income ratio. That feels a meaningful step down from this year towards the low 50s in for the year 28. Are you comfortable with consensus cost-income ratio for next year? Thank you very much. as well. So, if you could help us with the shape of the dividend, that would be good, thanks.

So, Jonathan, let me take your first clarification point. So, I'll just repeat what I said. I'm not going to market to market. Clearly, the analysis community has listened and we've seen a movement in that consensus for 2028. We have confidence in all of our businesses and and we have confidence in the UK consumer corporate bank as well as the US consumer bank. So, you know, we've seen both of them move up. In terms of cost income ratio, look, it's high 50s this year, our expectation, low 50s in 2028. We haven't given you any guidance at all for 2027, but what we are saying is that given that we are committed to progressive returns, Year-on-year and progressive distributions, you should expect us to be making a meaningful step between the high and the low position in 2027. And then coming to dividends, we're right. Over the last few years, we've typically done one-third, two-thirds. We've made a deliberate shift towards a 40-60. and the reason that we've done that is we feel it's more reflective of our US and our European years and it is more consistent with our general desire to get distribution into the hands of shareholders more quickly. See it as consistent with the move to the quarterly buyback. So what you should be expecting is that at the half year we are at 9 billion of our at least We've paid $800 of the $2 billion dividend already, so you should be expecting 9 plus 1.2 plus another two quarters of buybacks. Clearly we said our distributions would be progressive. and that's probably the limit of the guidance I can give you at this stage Jonathan but hopefully you can see the conviction that we have around distributions which are up 61% year on year.

Okay, thanks very much.

Thank you Jonathan. Next question please.

Our next question comes from Benjamin Toms of RBC. Your lines are open, please go ahead.

Morning both, thank you for taking my questions. The first one's on PBWM. That new AUM in PBWM in Q2 was relatively weak. Can you just give some kind of about what's impacting performance here? I think I was a little surprised. My feeling was you've been quite active in trying to make your proposition more attractive in this space. and then secondly on BUK, you spoke in previous courses about your strong mortgage pipeline. Have high swap rates and the news flow around the changes, potential changes to stamp duty, albeit potentially changes overnight, have they had much of an impact on your mortgage pipeline as we stand today? Thank you.

Okay, thanks Ben. I mean there's nothing I would particularly call out on PDWM. I can hand to Venkat for what we've been doing there but you know in absolute terms these are not very large numbers and therefore they can be a bit lumpy clearly we have ambition for this business for it to be much bigger so you can get some lumpiness quarter to quarter as we look over the first half in totality it looks completely fine and actually broadly similar to the previous year let me just deal with mortgages and then I'll hand to Venkat on PBW and more generally What we've seen is a strong quarter in mortgages. As I mentioned before, we've seen somewhat of recovery in margins in application margins in Q2 after the compression that we experienced in Q1. Actually, the gross completions were very strong. We had a £10 billion quarter. That's the biggest quarter we've ever had. And June in particular was a very significant month for us. So no signs as yet. You know, there's real wage growth in the economy and good demand for mortgages as we see it across the bank. Our growth share has exceeded our stock share now for many, many quarters and clearly we have quite a breadth of proposition now with Kensington in place. The only thing I would call out is that we have seen a slight change, if you like, in the mix. of what people are looking at. So a couple of things. Firstly, people are remortgaging quickly, given, if you like, that uncertainty in the market. And secondly, we're seeing a move to lower tenants and more tracker products, relatively speaking, just as customers are seeking to secure, if you like, a lower rate in a slightly more uncertain environment. So that's the only thing I would call out at this stage.

Yeah, look, on PBWM, of course, I'll reiterate what Anna said, that you'll see, given the size of this business, some movement quarter to quarter. But I think, again, the broader picture here is very important. The overall terms of this business are affected both by the growth of the business that you see, as well as our investment. Our investment comes not just in technology, but in the way in which we are constructing products. making them more accessible. You know, our broad goal for the wealth management and directed investing part of this, which is much more of the mass market in the U.K., is to make available low-cost, transparently constructed and priced, risk-appropriate options to the investment public. We want them to invest in their financial futures. And in this quarter, we've done two things to make that easier. One is that we removed custody pricing for custody charges for all customers in Barclays Direct Investing. So with that removal of custody charges, we've got the most competitively priced alternative for those who seek full-service investment with the security of dealing with a large provider, particularly a bank. Another thing we did as part of our premier product in retail is that we've launched something called Planning and Advice, which allows premier customers to access human-led advice through our app, again with no upfront fee. So all of this is a form of investment in the future of financial planning and we expect to see the results of this investment over time. But you're absolutely right to point out that this is an important area of focus here and hopefully a long-term growth area for us. Thank you.

Okay, thank you Ben. Perhaps we could go to the next question please.

Our next question comes from Chris Kant of Autonomous. The line is now open. Please go ahead. Good morning. Thanks for taking the questions. I just wanted to come back on the UK and keep it up behind us. That's okay. On the UK and the 8.2b and the implied NII figure, I know you said middle of the 8.1 to 8.3 range, but let's just work with 8.2 for the sake of argument. Is that specifically assuming 3.5% swap reinvestment in the second half? Because consensus is about 50 million higher on the full year, but it seems like maybe 30 million of that is just consensus assuming a foreign change reinvestment rate and perhaps sticking to the 3.5 planning assumption. And also on this 8.2, if I think about the quarter-over-quarter consequential growth, it looks like you're implicitly saying Thank you very much. Thank you very much. Thank you very much. but obviously you're not making money on the custody, so why are you making money? Thank you.

Okay, Chris, I will start and then I will hand to Venkat. So at the beginning of the year we gave you a range of 8.1 to 8.3 on the UK and we said that the reason for that range was actually around how we felt around the uncertainty on deposit dynamics in particular. All we're saying at this point in time is that with the ISA season behind us, given the pricing dynamics that I called out before, we are basically, you know, there's a narrowing range of outcomes in the second half, and us focusing on that middle of the range reflects that and no more. In terms of the swap rate, we consistently apply a a swap rate assumption of 3.5% to our structural hedge. We think that's the right sort of sensible basis for it. You're correct. We have seen over the first two quarters the actual rate of reinvestment being in excess of that. That has very little impact in the current year. However, it will increase NII in future years and it will lead to a stronger tailwind and a number of other people who have been involved in this project. So, I think it's important for us to make sure that we're doing everything that we can to make sure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we can to ensure that we're doing everything that we Venkat.

Yeah. So first, I mean, it's a good question. I think the bottom line is we want to be able to serve our customers in the UK for the entirety of their financial needs. This includes deposits. This includes loans. This includes payments. And of course, this includes investments. And in order to do that, you've got to do two things. One is to widen the base of your customers and then the second is to broaden the products that you offer them. So the widening of the base of the customers you have seen with our investment in Premier and in fact with our acquisition of GoHenry which is for the next generation of our customers in the longer term. And in terms of products, you've again seen it and by the way the other widening the base was with Tesco and the acquisition of Tesco Bank. Widening the products, you've seen it with mortgages, you've seen it with some of our credit card products like in Tesco, and now you're seeing it in investments. And in investments, again, think of it in two ways. There's self-directed investments, which is where we remove the custody fees, where we want people to come in and invest. And of course, you still charge for transactions in stocks and ETFs. And then the second thing is to move on the journey of advice and guidance in your investments, and which is what our planning and advice offering is. So again, if you're a premier customer, there's no up-front fee, but there will be other ways in which we can help you. The idea behind all of this is to make it low-cost, transparent, transparently constructed, transparently priced, and then Risk Appropriate, right? Traders for people at different stages in their financial journey. And you're right. What happens ultimately, we make it this worse, is that a customer is there with Barclays for the entirety of their financial needs and that we provide it to them safely, we provide it to them efficiently, and we provide it to them transparently and cost-effectively.

So Chris, just before we leave you, just to put some numbers around it, I mean, we believe there are 400,000 customers within our UK customer base who would benefit directly from this kind of advice that Venkat called out. So clearly that ability to connect them digitally we think is an opportunity for us. And sorry, I didn't really answer you on the exit run rates. So I won't give you a specific, but what I would say is that if you look in the first half, the product margin impact on that NII bridge has been negative. What we expect in the second half is for it to be neutral to positive. So that would underpin that accelerating NII that you covered. But thank you for the questions. Can we go to the next question, please?

Our next question comes from Edward of KBW. Your line is now open. Please go ahead.

Yeah, thanks very much. Morning, everybody. I just have two questions. The first one, in terms of this additional investment in the second half, I think previously you were committed to the UK costs falling every year for the next three years. I think that's the way you articulated it. Is that still your commitment? So even with that additional investment? Will costs in BUK still be down each year for the next three years? That was question number one. And then the second question was a slightly broader question. I get what you're saying about the NIM in the second half and the product margins will stabilise or even improve a little bit. But if I look at the totality of Barkey's NII, it seems that the volumes have taken off way faster than I think certainly consensus and certainly I expected. but your NII guidance is broadly the same or even a little bit, maybe a tad lighter which implies obviously that the margin is going to be lower than we were all expecting. Firstly, is that broadly a fair representation? And secondly, are we talking about margins being there or thereabouts now going forward? I get what you're saying about the structural hatred momentum but actually you're probably going to have to share if you're going to keep this sort of momentum growth in volumes You're actually going to have to share most of that gain with customers going forward if you're going to keep your share in the deposit market. Is that a fair understanding? Thanks so much.

Okay, Ed, let me start and I will then pass it on to Venkat if he's got any comments. So the answer to your first question simply is yes. So in incurring additional structural cost actions and in incurring some costs in, quite frankly, responding to regulation and getting to a more flexible pay mix for our MRTs. These are not permanent elevations in the cost base. That's not what they're intended to do. They're intended to drive the returns of the firm and they are intended to create optionality and efficiency in the cost base. For BUK, we still expect sequential falls. year on year during this plan and for the group as a whole I expect positive draws in every year of the plan so that remains completely unchanged that's what we meant when we said it's the momentum that allows us to do this without disturbing the commitments that we have to the outside world and then on your second question I think about it slightly differently, Ed. So we committed that we would put down 30 billion of RWAs in UK business growth across 24 to 26. And at the end of the second quarter, we are at 25. That is exactly where we expected to be. So the pathway between balance growth and NIR growth is as we anticipated it. And the thing that's driving the growth in NII across Barclays is not price. It's capability builds. And that's true of every single product that we have. So if you go to mortgages, it's Kensington and it's the mortgage portal. That's what's allowing to drive our market share up so that the growth share is higher than the stock share. If you go to cars, it's Tesco and it's the customer journey. If you go to corporate, it's about the capabilities that we've put down in terms of speed to market, speed to lending. And I could go on, but this is capability-led. It's not price-led. So we don't feel like we are under margin pressure. Now, that said... The UK market and indeed the US consumer bank markets are extremely competitive, but they always have been. And there's no real intensification of that beyond the comments that I've already made. So, you know, we're confident in that progress because we feel it's being driven by capability builds and quite frankly, in some areas, building back to the level of share that is more natural for us, particularly in something like corporates.

The only thing I would add is that on your slide 10, you show 1.2 billion of additional revenue from the hedge. And yet, if I'm looking at your guidance, banking NII is not going to grow by 1.2 billion. It's going to be somewhat less than that. So that would sort of imply that despite all the volume growth, the underlying NII, if it wasn't for the hedge, we wouldn't be getting any NII growth at all. and I'm just thinking about what that means as we go beyond this year and into sort of 28, 29, 30, what's happening in terms of the underlying dynamics.

Well, I mean, this is clearly the gross hedge income. The other thing I would say is there is momentum from the structural hedge. We know that. That is somewhat enhanced by the fact that our deposit stability is there and, you know, therefore it's important that we grow the deposit franchise also but the thing I would also say is look back over the last few quarters Ed and add up what's coming in from the asset balance column in the UK and you will see that you are getting to a building momentum of asset income I think you'll get to like 130, 140 A million of additional income coming through in the UK alone on that metric. Clearly that is just building quarter in, quarter out. It's somewhat being led by mortgages, so the margin's going to be a little bit lower than the UK as a whole. If you go into corporate, it's exactly the same. The NII growth in corporate is being driven by lending as much as it's being driven by deposits. And this is really important for the long-term balance of NII. Of course, at the moment, this is being disproportionately driven by the structural hedge. But at some point in the future, beyond 2028, it's really important that the diversification within NII comes through and those asset balances start to carry that momentum from there on in. That's what we're very much focused on.

Okay. Great. Thanks very much. Okay.

Thank you. Next question, please.

Our next question comes from Andrew Coombs of Hippie Group. The line is now open. Please go ahead.

Good morning. One follow-up on the structural cost actions and then a first question on the investment bank, please. On the structural cost actions, you've talked about a commensurate improvement in 2027 efficiency. So is it fair to assume that these investments are more focused on the cost side as opposed to revenue growth ambitions? and linked to that in your prepared remarks, you talked about the SCA in the UK, you talked about a higher cost income and PBWM. So it is interesting that's where the bulk of these structural cost actions are being deployed, it is in the UK businesses. And then my separate question on the investment bank, obviously it's a very strong quarter, for advisory, for ECN, for equities. It's something we've seen from your peers as well. Absolutely, just invite you to talk a little bit about the sustainability of that industry wallet and comment on the AI CapEx super cycle, where we are in that and how that impacts on your thinking about the wallet opportunity going forward.

Okay. I'll take the first one. I'll take the first one and then Venkat will take the second. I mean, structural cost actions are focused on the cost base of the firm and improving the efficiency and the effectiveness and the cost income ratio of the firm. I'd encourage you to think of structural cost actions as one of the investment options that we have. We're clearly investing in driving the revenues. and we take the same approach here. We have the same degree of focus on the ROI here but you're correct in that it will be it's focused on driving the gross efficiencies i.e. it's entirely cost related but it is one of many actions that we take in respect of investment and we think of it no differently. I wouldn't think of it as particularly skewed to the UK. You should expect it to be more broadly focused across the organisation. Given what it relates to, because it relates to platforms, it relates to processes, it relates to change agility, that is relevant for every part of the bank. We will come back to you on the slips as we have that detail. The additional cost that we talked about in respect of MRTs, so the £150 million I would expect that to be more disproportionately focused on the investment bank but note on the investment bank also because of the momentum there we are repeating our guidance both for ROTI and for CIR for the year Venkat?

Yeah and on the investment bank you know you're right that we're seeing very good momentum across the piece of the investment bank I think AI CapEx through the cycle is a bit of a tough question, especially in the kind of environment in which we find ourselves. But I think over the long term, you're going to see investment in two parts. You're going to see investment in people building up their systems and their processes to take full advantage of AI because you get the best outcomes if you've got, you know, efficient compute platforms, homogenized databases and the like. and you will see that and then of course on the use of tokens. And in the tokenomics of this, some amount of efficiency will have to take place where people distinguish between different types of languages, different forms of token usage and the ways in which it is put to work. As far as our own share through this, we've had a prominent role in some of the very large debt offering that some of the US hyperscalers have made. We continue to advise many of them in an advisory way and on capital planning and expenditure. I think it is an important, and then there's of course all the ancillary stuff that comes into the industrial sector including power and grid and construction. And we've got a fairly good industrious practice. So you should expect us to continue to play a prominent role there.

And Andy, if I might just If I might just add, of course we want to be able to take advantage of the cyclical opportunities in front of us, but it's really important that we continue to keep that structural discipline around the IB, which you can see us doing quarter in, quarter out. With that, I might just go to the next question, please.

Our next question comes from Amit Goel of Mediabanker. The line's now open. Please go ahead.

Hi, thank you. I've got two questions. So one, just coming back on the additional SCA, I was actually a bit surprised by the 100% return on investment. So I just really wanted to understand a bit better, like if the returns on that type of investment are so high, why wouldn't the group be doing that kind of investment in any case? And why limit it at the amounts? And then secondly, in terms of USCB, just trying to understand also the split or the expectation then for the NII versus the non-NII as we look forward. Because if I answered from the core, the NII is in broadly the right place now. I think previously you'd mentioned at Q1 that you'd expect the non-NII to build to about 20% of total income. and I think consensus is now actually at 24%. So I'm just kind of wondering whether you also think the non-NII expectation going out to 28 is also a little bit too high at the moment. Thank you.

Okay, thank you, Annette. Why don't I take those questions? So on the first one, this is a plan of balance. We're trying to get a balance between progressive returns Progressive distributions and investments in the business. And, you know, you can see that balance in the first half. You can see that rate is 14.8%. You can see the EPS growth. You can see the growth in the distributions that I called out before. So we're really trying to ensure that, if you like, everybody shares in the momentum of the bank. And that's really important. and it would be just as easy for us to not make those investments at all but we don't think that is the right thing for the long-term returns and the sustainability of those returns as we look out to 2028 and beyond. So for us it's really a balance. We do, as we look at these investments, we do feel like it's the right time for us to do it in part because of the momentum that we see that allows us to undertake them without disturbing our commitments to the outside world but also that we have businesses that are primed for change and they are able to absorb that degree of activity as Venkat called out before using USDB as an example and clearly we have a degree of execution discipline now that we've demonstrated over the last few years so We think it is the right time to do it. And as we go through the plan, you will see a balance of investment in the top line, investment to drive efficiency in this way, while still delivering progressive returns and progressive distributions. In terms of USCB, we're trying, I guess, to focus more on total income in this business because the The addition of Best Egg does make it a bit more of a complex mix. I think we'll get to 20% eventually, but, you know, clearly that's going to take some time for us to build because what we're doing is we're originating balances through Best Egg and we're building up that kind of managed portfolio, if you like. But in terms of the overall income trajectory of that business, You know, we have considerable confidence in it for all of the reasons that Venkat outlined. Okay, thank you, Annette. Perhaps we could go to the next question, please.

Our next question comes from Pearlie Moll of Bank of America. Your line is now open. Please go ahead.

Hello, good morning. So, we've talked a lot about cost. So, it sounds like you want a balance between distribution, growth, various different things. Well, I think at this point, so it looks like in the guidance, income is now 500 million higher and incremental cost is 450 higher. So if there is another quarter of very strong IB income, et cetera, would a lot of these incremental income be just spent on SEAs? because obviously, you know, if you are having opportunities to invest in things that give you 100% ROI, that probably suggests that you have many other opportunities to invest and improve the long-term efficiency of the company. Is that the right way to think about it? Obviously, distribution probably not in a bad place already. You're already on track to meet all of that. So that's that. And then the other question is just quickly on and deposit mix in the UK does look like there's a bit more of a shift towards time deposit. Is it just a function of the ISO seasonality or is the fact that the market is a bit more competitive and therefore rates a bit higher and I suppose if you look at the swap rates look to be probably staying higher for a period of time. Should we expect a little bit more mix shift towards time deposits from here?

Okay. Thank you, Perla. Let me take those So what we're saying on SDA is that we normally do 300 million. We've actually undertaken about 100 million in the first half. That means that in an ordinary course of business, we'd be telling you we expect to spend about 200 million in the second half. Actually, we've added up to 300 million to that. So we're talking about undertaking around half a billion pounds worth of structural cost collections in the second half. In terms of and operational lists and the level of investments that we can deploy wisely on the heart of the shareholder, we think that's the right sort of level. So clearly as we look forward from here, Venkat and I have at least as much confidence in the roti of the firm as when we started the year for 2026. and you can see that in the fact that we have upgraded our income twice. First 31 and then to 31 and a half. So we think the momentum's in the business but this will be a big operational lift for us in the second half and we are very focused on ensuring that we deploy that absolutely wisely. So yeah, that's our primary objective here. And then in terms of your second question, Our current accounts are broadly stable. We are, if anything, slightly better than the market. What we're really looking at here is some churn within the time deposit market and customers seeking yield. As we say, we feel like we've progressed through the ISA market well. I think what's really important because we've had some comments this morning about the structural hedge in relation to this. So what's really important for the structural hedge is to realise number one the structural hedge in no way relates to time deposits. They are by definition interest rate sensitive and are excluded from the hedge. So all of this sharing has no impact on that for us or indeed for others. It's really the stability of the relationships overall and the current accounts. So everything that we see in the deposit market is very rational from customers and doesn't undermine our long-term expectations in terms of NII. Okay. Thanks, Pearlie. Perhaps you could take the next question, please.

Our next question comes from Nicholas Payen of Kepler Sherbrooke. Your line is now open. Please go ahead.

Yes, morning. I have two questions. The first one is relating to the structural age. You mentioned that you expect the structural age income growth to continue beyond 2028. So I don't know if at this point you can share anything regarding maybe the natural yields beyond 2028, maybe the kind of marginal growth you expect beyond that point. That would be the first question. And then the second question, Question would be on your partnership in the U.S. with Samsung. Is there anything you can say maybe regarding the marginal contribution that you expect from this partnership on the LSA 223 responses? Great, thank you.

Okay, Nicolas, I feel we're going to disappoint you on both of these answers. in respect of the detail that we will give. So we haven't given any detail on maturing yields beyond 2028. Of course we will do that in time. The only thing I would just anchor you back to is the fact that we are planning this on a, we think, a very realistic basis at 3.5%. The fact that we have somewhat elongated the longevity of the slots that we are putting into This hedge reflecting the length and the stability of the relationships that we enjoy across the bank. And it's those two things that we feel will carry the momentum beyond 2028. We're just not in a position to give you that maturing yield at this point in time, although we will do at some point. In terms of the partnership on Samsung, We don't actually call out the economics of any individual partnership, but I think, you know, to Venkat's earlier point, this is one in which we are very excited. It's a de novo partnership, so it starts from zero. And what you're seeing is the fact that we have built a digital card capability in order to bring this partner on board. and you should expect us to continue to build out the kind of capability that you would see in another digital wallet.

Yeah, I mean, think of this as more about a statement of capabilities in two ways. One is our ability to do this relatively quickly at a time when we were doing lots of other things like DevTech and American Airlines. And the second, what this means. because as Anna has said, it is a card capability later into a fuller digital wallet on the Android ecosystem, an important player in the Android ecosystem, and one of the world's leading tech companies, which is well known for its very high standards. So that kind of a partnership is demanding of us, but it also makes us much, much better, not just here, but more broadly. So it's a capability extension and hopefully a financial extension as well that you'll see over time.

Thank you Nicola. Perhaps you could go to the next question which I believe is the final question. Thank you.

Our final question for today comes from Alberto Artoni of Intesa San Paolo. Your line is now open. Please go ahead.

Good morning. Thank you very much for taking my question. Just one clarification and cost. Apologies for coming back on this topic. Given that your structural cost actions are going to be accelerated in the second half of the year, I just wanted to understand That means that going forward, 2027 and 2028, you will have lower investments, lower structural costs because you just broke this to the second part of 2026. So you're just accelerating and shifting this cost in the second part of 2026 or you're just increasing the amount of investment just because the opportunity is there for doing that.

Okay. Okay. So don't think of it as an acceleration. Think of it as more. And I'm on both sides. So we are, just for the current year, we have increased or we expect to increase our spending on structural cost action. But you will also note that we have increased our expectation of gross efficiency saves over the entirety of the period. So we're now saying that it was 2 billion. Now we're saying we expect to generate more than 2 billion. of Great Efficiency Saves during that period. So, you know, from our perspective, you should expect us to continue to balance returns, distributions and investments, both in terms of the top line and efficiency. So clearly our priorities remain as they were. You know, regulatory capitalization followed by distribution, followed by investment in the business. If we see good opportunities to invest where we feel that is the right thing for the shareholder, we will do that. But don't think of this as instead of 27 and 28. It is additional, but only because we have certainty that we can deliver the right return.

Okay. Thank you very much. Sorry. Go ahead. Go ahead. Anna, well, I did a quick... Okay, thank you. A quick follow-up on the... because the guidance for 1728 has now been changed, if I got it right. So it means that you have more, but you talk about having more confidence. So, I mean, this type of investment that you're making, that you plan to make, additional investment that you plan to make, will increase your confidence in your ability to deliver the results. Is that the way to read this process?

Yes. Thank you. Increase confidence.

Thank you very much. We appreciate the time and the attention you've given. We look forward to meeting some of you on the road in the next few days. What I would say to sum up is when universities result in a whole, they're 10 years into the plan we announced in 2024. They're two quarters, 10 quarters into it. Two quarters into the plan we announced earlier this year. In every quarter, in every way, cumulatively and individually, we've been meeting our guidelines. Sometimes a little more than others, but generally it's been a part of progress in the terms, a part of progress in distributions, a part of progress in efficiency in the bank, and in our capabilities in the bank more broadly. We are a bigger part of the UK ecosystem than we were. We maintain our strength and are a bigger part of the global ecosystem, especially in equities and financing issues. We're using the enhanced and increased revenues from this first half to A, increase distributions to our shareholders, B, to continue to remain safe and well capitalized, and C, to invest in our business, right, for the long-term benefits of this business, both in terms of the revenue capability, the cost efficiency, and the ability to bring better products safely and Chris Yee to our customers. And we want to do, as we said, in the UK, own the entirety of the customer experience and continue to be a great and important partner and a growing and important partner to our institutional clients worldwide. Thank you. Have a good day.

This concludes the Barclays Half-Year 2026 Results Analyst and Investor Conference Call. Thank you all for joining. You may now disconnect your lines.