Barclays PLC ($BARC)

Thanks, everyone, for coming to this session with Barclays. Thanks, Venkat, for joining us one more year. Venkat, CEO of Barclays, as you all know. As usual, before kicking off the session, we will ask the polling question. What would drive relative outperformance of Barclays shares in 2026? Number one, U.K. business is growing loans over 5% CAGR. Number two, its markets business successfully navigating current volatility; number three, cost income on course to reach the low 50s in 2028, cost of risk remaining between 50 and 60 basis points. And number five, capital distribution seem to beat the over GBP 15 billion target '26, 2028. [Voting]

Capital distribution over GBP 15 billion. I must admit I thought #4, which had obviously embedded private credit in there [indiscernible]. We'll touch on the different themes in any case.

You presented your new 3-year plan last month. You're aiming to -- for over 14% RoTE with quite conservative actually market assumptions and a lot of it is under your control on costs and efficient capital allocation. Since then, of course, there's a lot of volatility in the market. Geopolitics, AI has come up. How are you thinking about the environment now and how you're seeing the business navigating it?

Yes. So first of all, thank you very much, Alvaro, for having me. I really enjoy being here at your conference and great credit to you for the crowd you always managed to get the engagement you managed to. That's it. So thank you for having us be part of it. First of all, I think the context of our plan which we presented 1.5 months ago is important. We presented a plan 2.5 years ago, approximately a little over 2 years ago in February '24, which we saw as the first stage of stabilizing and growing the bank, where we laid out targets of increasing RoTE greater than 12% in '26, increasing capital distributions at that point to greater than GBP 10 billion, again, '24, '25, '26, and rebalancing the bank, including an investment in our U.K. businesses. We've delivered every quarter under different circumstances, different environments. We delivered every quarter the elements of our plan. And so quite clearly, our shareholders wanted to hear about the future. And of course, we wanted to talk about the future. And so the elements of the future now are continuing that journey, intensifying the journey with greater ambition, accelerating ambition is the words I use. And that is increasing RoTE from greater than 12% in '26 to greater than 14% in '28, increasing the capital return from greater than GBP 10 billion for the 3 years ending '26 to greater than GBP 15 billion for the 3 years ending '28, and I take full note of the polling results. And then the third thing is to continue the rebalancing of the group, which is investing. We said GBP 30 billion of RWAs in the U.K.-related businesses by '26. We reported greater than GBP 20 billion or about GBP 20 billion, so well on the way there. And to bring the Investment Bank to about 50% of the group's RWAs. Now -- and alongside this are 3 things. One is accelerating the ambition. Second is investment in core technology, in the ability to do AI for deeply personalized customer service and for deeply personalized product offerings and to do that in an aggressive way. And we've doubled our investment to $2-plus billion, over $1-plus billion over the last couple of years. And then continue the journey on higher ROTE, both from a greater proportionate exposure to our higher returning businesses in the U.K. and from improving the returns in our existing businesses. And you would have seen that the Investment Bank has continued to perform well. It's in double digits, up a couple of percent from the previous year. Our U.S. cards business, which when we started our plan was 4-odd percent RoTE is, I think, 14% now, 11% now. So it's all increased. So that's what we continue to do. In the current environment, and I'm sure we'll talk about credit in a minute, the current environment, obviously, there's volatility. I've said many, many times that if you've got a good trading business and a markets business, which we believe we do, volatility is an opportunity to gain revenues by serving your clients as long as you manage your risks well, your trading risks well, which we take great effort to do. We still think that the M&A environment so far has been strong. Let us see if uncertainty continues, how that might be. And then the consumer exposures start off at a very, very good point at the credit exposures. So initial conditions are important, and they're good. So that's where we feel now. But obviously, you've got to watch the elements of uncertainty in the market. I'm sure we're going to come to them.

Yes. One theme that has definitely come up, as you well know, is private credit. The concerns have resurfaced on the back of MSF -- MFS in the U.K., sorry. My question really is, is MFS a result of Tricolor credit review? How should we think about that sort of case in the context of wider concerns around private credit and MBFI exposure more broadly. There are now a good handful of names in the MBFI space that have defaulted. So there's -- understand the concerns there.

Yes. So I'll come to them. They are all slightly different. First of all, let me just say before I begin that I don't think -- I would not categorize Tricolor and MFS as private credit. It's a different form of lending, securitized lending. To understand the context for us, and I'll talk about it, first, let's understand our framework. what's our framework. Our framework is in the market environment, which is shifting, first, we've got to monetize our opportunities. And I spoke about the trading environment. And just to remind you, the Investment Bank is about half the bank. 2/3 of the Investment Bank is our markets business. The markets business is about 1/3 of the bank, right? And it's an important source of revenue. And short-term volatility is conducive to the markets business as long as it allows you to serve clients, allows you to intermediate. We take great pride in the financing elements of our markets complex. And all that works as long as you manage risk well, which comes to the second point, manage risk well and trading risk as well as credit risk. And then the third thing is planning on realistic assumptions, which you spoke about, the conservative assumptions that underlie our plans, both on the size of the wallet in markets in trading and in investment banking, which we've held flat as well as our assumption into the plan that -- on the returns from the structural hedge, which structural hedge drives about 50% of our income growth through 2028. And the interest rate assumptions behind that are relatively conservative. So now we'll come to Tricolor, MFS and private credit. So the first thing is, as I said, I do not think Tricolor and MFS are the same as private credit. Private credit, and I'll come to that in a second, is lending, our definition, lending from the nonbank financial sector to individual corporates. And it's lending outside of securitized markets and banks, right? So high-yield bonds, regular investment-grade bonds aren't private credit. Lending by banks is not private credit. It's by nonbank players. So we'll come to that in a second. MFS and Tricolor, obviously, I'm disappointed by the fact that we had anything to do with either of those companies. I take risk management very, very, very seriously, and I don't like to find ourselves in these situations. With -- they are both examples of fairly deep and sophisticated fraud. We don't know how long it's persisted. We'll find that out fully. It's manifested itself in more recent years. In the case of tricolor, we have spoken to you about our exposures. And at that time, I said to you that I think there are 2 important things when you look at these situations. One is what are the financial pressures on the underlying business? And second is what is the quality of financial controls. I said that in our October earnings and said that we are going to look at cases where we have to worry about one or the other or both. And as you can imagine, we've been doing that. The other thing I will say is risk management is an evergreen exercise. It's like mowing your lawn. You do it over and over and over again. And that is what we are doing, and that is what we have been doing. We have no material credit concerns to report in private credit, which I'll come back to. On MFS, the publicly number has been GBP 500 million exposure. What I want to tell you is that our anticipated impairment from it is a materially lower amount. Why is it materially lower? It's materially lower because there are multiple facilities in them. Obviously, we risk managed by facility, although we care about the ultimate arrangement of those facilities. And not all of those -- and some of those facilities are better behaved and better performing than others. That's what our expectation is. It's also a number that is not the kind that would have been material enough for us to report on an intra-quarter basis. So you will get the results in due course. And it is also a number which is in the context of our business in this quarter and other quarters, something that we can bear. Having said all of that, right, on the one hand, I do not expect -- I fully expect that we will meet all our targets for this quarter and this year. On the other hand, as I said, I'm disappointed that we had anything to do with either of these 2. And the risk management exercise has always been strong, will continue to be strong, and that's where we will persist. On private credit, I've given you the definition. And what I'd say, repeat is that we have no material credit concerns. So what do we do in private credit? You would have heard that after the financial crisis, changes in capital regulations, lending to smaller and lower-rated companies started leaving the banking system and going to nonbank players. So we -- our direct exposure to these kinds of loans tend to be, therefore, what banks normally do or what banks do post crisis, which is higher quality loans and to larger companies. Obviously, we have an SME business and so on, but it's -- that's a different issue. In private credit, what we do is we lend to managers. And we work with the large, well-proven, long-running managers, top-tier managers. We lend against their portfolios of loans. We take great importance in our rights of collateral. So collateral calls when market values shift. Our transparency into marks and our ability to mark the portfolio because our ability to call collateral depends on our ability to mark the portfolio, prudent LTVs. So we lend with typically 60% or lower LTVs against these facilities. Sector limits, borrowing concentrations and the weighted average EBITDA of the companies we lend to underneath it is greater than $200 million. So they are larger companies, not smaller companies. So we tend -- we don't rely on third-party valuations. So as I said, collateral valuation, credit management, sector exposure, name exposure, overall facility LTV, client selection, the manager you work with, these are the pillars of risk management in our lending to private credit. So we feel very comfortable with it. And as I said, risk management is evergreen. We'll keep looking and looking and looking, but we have no material credit concerns to report there.

Okay. Very clear. We've touched on this already in the Investment Bank, you're factoring sort of low single-digit revenue growth and within that flat market share in markets, you have grown share in the past. Is now the flat share reflecting your more cautious view on markets more broadly?

Sorry, is it affecting?

No, the -- within your plan, you're assuming flat market share. In the past, you have grown that market share. So is that a reflection of your view on markets more broadly?

So there are a couple of countervailing factors in this. One is, you're absolutely right, we have grown market share, and we aspire to grow market share, right? So let me leave you with no doubt as to our ambitions. Our ambitions are to be a bigger, better, stronger markets house. The way we've stated that ambition is, obviously, there are financial aspects of the ambition. But we've said that of our top 100 clients, which are the largest clients in the world, we are #6 investment bank and #6 markets business. So with a large number of them, we want to be #5, rank above. That number was in the 40s 2 years ago. It was 62 at the end of last year. Our target is 70 this year, right? So the more you do with each of these clients, the more you do in each of the products that you serve them. That has helped us. And in fact, the rank is a consequence of both work, the growth in our equities platform and business over the last number of years, especially in prime and financing. The growth -- we've always been very strong in fixed income, as people know in credit, especially. And we've continued to grow that with our trading businesses and securitized products, we are creeping up the ranks. Some would say jumping up the ranks. So all that is good. And we continue to be intensifying that effort and investing in the technology that enables that effort. At the same time, we've got to be mindful that you are in an economic environment that may favor certain sectors we are not in. We are not in commodities. We are in emerging markets run out of London and New York, not in local emerging markets. And we are going to live through a period of changing capital rules in the U.S., which we'll be hearing imminently, which could change the playing field for a U.K.-domiciled investment bank versus the U.S. one. When we factor all that together, we feel that it's the right and prudent thing to say that we'll hold our own. Do I hope we do better than that? Yes. Am I trying to do better than that? Yes. Am I pushing the organization to do better than that? Yes. But for our purposes, the assumptions are what we give you.

In the U.K. on the other hand, you're forecasting 5% loan growth CAGR across the U.K. businesses. It's a strong outlook. We've seen evidence of that coming through last year already. So it's more momentum, sort of ongoing momentum. What do you think is driving that? Is it sort of catch-up CapEx after a decade post-Brexit, AI CapEx? Any particular sector you're seeing driving that growth?

The first thing quite simply is bringing it under greater management focus and making it a part of a management objective. That's what we did [ 2 and half ] years ago when we said that we are going to grow our RWAs. Second is catch-up, as you say. There were parts of our corporate bank, parts of personal lending where we were underrepresented. Now we accelerated some of that with the purchase of Tesco and the capabilities it gave us in both unsecured lending in credit cards as well as in personal loans. We also had laid the groundwork a few years before that with the purchase of a specialty mortgager called Kensington Mortgages, which gave us the ability to do complex and high LTV loans. So the GBP 20 billion growth in RWA has come from all of these things, the GBP 20 billion we've seen so far, and that gives us the confidence to go further. And then in 2 areas of our own control, business banking in the U.K. and corporate banking in the U.K. First, we made the U.K. Corporate Bank a separate segment reporting into me. We've invested a lot in the underlying technology, something we call iPortal, which makes it easier for corporate managers to work with us. The importance of this to the overall strategy of the bank cannot be underemphasized. About 90% of U.K. investment banking clients are corporate banking clients. That number is much smaller when you leave the U.K. So we're trying to build the capability, not just domestically but globally to give good user-friendly service to our clients. And that investment is also what is driving this growth. So we think we're going to grow just by offering better products, offering better customer service, focusing on this and regaining share that we had frankly ceded over a number of years previously.

The cost outlook in your plan was better than most of us expected. You're aiming for low 50s cost income and in BUK. Specifically, you expect costs to be down each year. Can you walk us through what you're doing differently there? Which areas are you seeing the biggest reduction?

Yes. So obviously, cost-income ratio is cost and income. Let me talk about income first, and then I'll come back to cost. So 2026 will be the fifth consecutive year of NII growth for the bank. It's not just what interest rates themselves do. It is how you do your structural hedge and how you manage interest rate risk. We have said -- I've said many times that I believe that it should be predictable and programmatic. And that's what we do and why we gave you clarity into that. I believe interest rate positioning is one of the most important things the bank does, and it is not something that -- it's something that you need to be very, very rigid and risk managed and programmatic about. That drives about 50% of the growth of group income growth. We've spoken about the markets and other businesses. Elements of the environment can be favorable, but we've been conservative in the way we've projected it. So then if you come to cost -- but actually, before I come to cost, just further on income, we are looking to invest in diversifying our income more from interest income into fee income. What we are doing in wealth management is important as a part of that. The acquisition we made in the U.S., Best Egg, which originates to distribute direct-to-consumer loans is an important part of that. Our investment in transaction banking in the corporate bank is an important part of that. When you come to cost, there are some things which are mechanical and then some things which we are, of course, striving. First of all, the cost element comes down. Costs we've had in the last few years from the acquisition of Tesco and the integration of Tesco fall off. So that's one thing that helps. Second is that if you look at our own performance, we've been delivering positive jaws, including in the Investment Bank. And we are doing this by investment in technology, which we expect to accelerate, and we spoke about this a lot at our Investor Day by a broader and deeper modernization of both our infrastructure and our practices, harmonizing practices, operating consistently across the bank, which in large complex organizations always takes effort. And then the use of AI. I mean people talk a lot about it. And I think it's important for me to say that it is absolutely tangible, absolutely real, something which we are investing a lot of time and effort in. How and where we will see the productivity, I think it's a little early to say. We are seeing tangible ways in which it is improving the quality of customer service, the quality of product personalization, but we think we are at the tip of the iceberg. But the cost-income ratio is basically driven by the income profile and our expectations of cost to fall for all these reasons. So again, we think it's realistic.

I think you queued me out very well to talk about AI, which is even a bigger theme this year than it was last year. And obviously, it's driven some of the market moves earlier in the year. And one number that caught my attention to the plan is you quote 75% of your workforce in central services. Other banks may or may not be the one that was presented before you was quoting that in the long run, they see 25% of the workforce in central services. How are you thinking about the AI benefits over a longer time period? And also, maybe you can touch on the benefits and also some of the disruptive risks that the market is concerned about.

Yes. So as I said, it's an important part of this bank, and I imagine any bank's efforts over the next number of years. The central services number, let me just talk to that for a second before I go to the rest of the question. Our 75% number includes not just technology and operations, but just because of the way we are constructed, all of the risk, finance, legal, HR, compliance, businesses, audit. So all that is sitting in this number. So obviously, a range of types of jobs, right? Everything from a serious quant programmer and developer who's going to be helping us use AI and advance its use within the bank to more operational and process-driven people. The investment in AI takes 3 parts. The first is, as you probably heard, you get the best out of AI if you are on a modernized infrastructure and where your data is stored properly, stored safely and accessible and usable for the sophisticated models. So we said at our earnings that 70-plus percent of our applications are on the cloud. That number is increasing, that we're spending a lot of money on standardizing data platforms and computational platforms, how you access this. Then on top of that comes the AI itself, which is a combination of enabling people across the bank, training them and then placing a few big bets on projects. This we are doing in a series of efforts, we call it a catalyst program within the bank, focusing on what we think are the big important projects where we need to use AI to make ourselves more efficient. And that's being run by our co-CEOs of the -- COOs of the bank. And the phrase I've used internally is that the business is now revolving around technology. Technology is not revolving around the business. So we are already seeing the benefits of this, greater than 15% developer productivity, automating core accounting platforms within finance and using AI and credit risk systems. We're going to see more of it. Not all of it will lead to savings in people, but it could lead to tremendous improvement in product delivery, which is why how you use it is important. So I'll give you an example. I've spent some time with people who manage our customer service agents. Typically, somebody calls, there's a phone call, deal with a customer service agent, they service you. At the end, a manager, maybe once every few weeks or a month, sample, listen to a few phone calls to see how the people are doing. Did they answer the call properly? Did they help the customer with the problems? Did they help them quickly and efficiently? Did they ask how else they could help? Now with AI, what we are doing is sampling the transcripts of 100% of the calls. So that you get a full view of how a customer service agent is helping somebody doesn't necessarily save time, but it actually creates for a better understanding about the quality of your service, a better ability to help individual customer service reps improve the way in which they deal with customers. And hopefully then you offer better customer service because you use it, right? That should be an edge for us ultimately in growth and revenue and market share. It will take time, but that is the intelligent use of AI. So we are going to be seeing it across our businesses, whether it's trading bots, whether it is better settlements, whether it's better customer service, better ways of developing algorithms. And I think over time, we will get a sense of how much this is going to give us revenue growth because we can address customer needs better, faster? How much of it is going to drive capability because we are building more personalized products? And how much of it is pure efficiency savings?

Maybe a last one on capital, and then I'll open up to the floor for questions. Your plan is based on 14% CET1 and the reality of your range, as you've explained before, is 13% to 14% we have sort of, in theory, Pillar 2A potential reductions once Basel 3.1 is implemented and the FPCs also push banks to run with lower buffers in the U.K. When do you think you'll be in a position to reassess the capital target? It looks like your peers are closer to 13%.

Well, look, first of all, you're right, we are at the high end of our capital range. I think it's important to project a strong capital and to have a strong capital base for the bank. It's taken us some years to get there, but we've been there in the last couple of years, and I think it's a helpful place to be. Second is, there are still uncertainties in the world. First of all, the U.S. is coming with its Basel regulations. Second, the U.K. is coming out at the start of next year. We have to see what that is. Third, we have to understand on top of all of that, what it is as a management team, we feel that it's prudent for us to maintain in light of both whatever regulation lands up with and what we see in the overall environment. So expect us to continue to run a strong, well-capitalized bank. And we think, by the way, that at this level, we can run the place efficiently. We can provide capital to our businesses to operate in an efficient way and a high-returning way. And as we've said before, generating generous returns to our shareholders.

Great. I'm going to open it up to questions, although -- yes and today have been a quiet audience, but let's see if there's any questions. I got a few more. There's one, [ Carlos ].

Coming back to the...

Sorry, can you just identify yourself...

[ Carlos Garcia ] from Mutuactivos in Madrid. I wanted to ask about the private credit exposures. I mean I still don't catch what are the economics in terms of capital consumption and profitability of lending to someone that is lending to someone else. I assume you take the same risk for a lower spread? Or is there any benefit in terms of capital consumption? Or is there any equity ledger in these funds that is protecting you?

So if you will forgive me, we will recommend to you a piece of Barclays research from the middle of last year that takes you through how nonbank lending works. But in sum, what you are doing is that you have a lower capital risk because you're lending to a diversified pool of assets and that somebody else is owning the senior risk on. I mean you're owning the senior risk, somebody is owning the junior risk. So you do it to a diversified pool of assets at a 60% LTV and you get the benefits of diversification and you get the benefits of lower risk and you get the benefits of daily collateral calls and margining. So you -- the return per unit risk is more beneficial to do it that way than the traditional way under the capital regime.

The traditional way is the leverage buyout traditional...

The traditional way where a bank would just lend o its own balance sheet.

Yes. There's a question there.

Maybe to follow up, as some players are under stress, would you be happy to take the slack in this private credit lending? Would you increase your exposure?

Unlikely. I mean I think in this environment, risk management is important. And the thing that is moving in the market because of the liquidity concerns is what is the underlying valuation, right? And so you need clarity on valuation before you make that answer, right? So we are happy with our levels of exposure.

Aditya from Brevan Howard. Just one more on that. Do you think what's going on in private credit is at risk of being systemic? And how do you -- and what do you think could be the secondary fallouts on that front?

Look, private credit is still a relatively small part of the overall credit market. So I don't know what the word systemic means, but it can mean many things, but it is still a contained part of the market. And it's dominated by, as we discussed, nonbank financial players. So into the banking system, as long as the exposures remain well controlled and the LTVs are well managed, it feels less likely to come into the banking system. And in fact, that piece of research, I'm sorry, again, talks about that. The concerns more broadly are obviously what people -- if there are certain sectors that are affected more than others and what happens to lending in those sectors. But that's as much being driven today by the quality of credit as the business model disruption that we are seeing or that we are hypothesizing based on what we think AI will do to businesses. So that's the part that's harder to call out.

By the way, there's a panel tomorrow in private credit, what's next with our credit strategist and U.S. credit strategist with myself and our...

You're running that panel, I saw.

Yes. I'm hosting -- not my knowledge. I'll share my knowledge as well, but we've also...

Tomorrow evening, right?

Tomorrow, closing.

You're closing the session with that.

On a high note.

On a high note.

Any further questions from the audience? There's one there, [ Aransha ].

She does not need to introduce herself.

I'm village, let's call it like that. So just more broadly, I mean you've been quite visionary or first mover in things like SRT and mobilizing the balance sheet, recycling capital. When you look at where most of your takers of SRTs, your counterparties in SRTs are coming from. Do you feel there's too much concentration in general? Do you think the number of counterparties are too narrow? Or actually, there's still enough capacity to grow and mobilize balance sheet at the same pace?

Is that a general question or a question for Barclays?

Sorry, in general, but you've done one of the best -- in general, you've done one of the best deals where you've been very smart recycling assets. So as you grow, how do you see the capacity to continue?

Yes. Thank you. So let me just -- for everybody's sake, talk a little about our SRT program. So this is a risk transfer program, which we use to transfer risk on a name-by-name basis from our loan book. We've done this for over 10 years. What we do is that we essentially sell our exposure or proportions of our exposure on a name, loan-by-loan basis. So this loan we've originated, part of that is sold to very large asset managers around the world. To be very clear, we do it on what we call a fully funded basis. So we receive the money. It's not a derivative. And second is we do not finance it, okay? So there's no coming back to us. We've operated under those principles for over 10 years. And I joined the bank as Chief Risk Officer over 10 years ago. When I came, this program was in existence, and I thought my, what a good idea because it achieves 2 things. First of all, it actually gets risk off the balance sheet. Second is that it gives you capital benefits because it gets risk off the balance sheet. The importance of such programs, which we had discovered -- the world had discovered during the financial crisis is you can't just start a program like this when you think the credit markets are bad because people don't know what kinds of loans you originate. People are not familiar with your default history and so on. You'll create it and you'll sell it, but many of your asset managers, you know that a real track record is more important than a synthetic track record. And so we've got a real track record over 10 years. To date, about 40-ish percent, give or take, of our loan exposures are securitized in this manner. That number has crept up, and it's crept up because when spreads rally, you should do more of this, which is what we've been doing. Why? Because it's cheaper to lay off the protection. And in a bull market, people want to buy your stuff, okay? So I have no doubt, [ Aransha ], that the demand side, if credit conditions worsen, the demand side will soften. What I hope is that it softens less for us than it does for others because the critical part of the risk management is to keep doing it. Keep doing it even when it's painful and you want the NII, you just do it. You get the risk management benefit, you get the capital benefit. And the importance to us of working with the very large players is they're sophisticated buyers, good relationship, and they would have the capacity in good times and bad to stand with you. Now you're right, it's a narrower group. But I think it's -- I think the strength comes from the length of the program, the performance of the program and people knowing about the program. So you should expect us to continue to see -- to press on with it, right?

Next question, please. Maybe I'll touch on where we started with the polling question in the reply around distribution. Your plan outlines GBP 15 billion total distribution.

Marina tells me to say greater than GBP 15 billion.

Greater than GBP 15 billion, she tells me as well that. Runs a tight ship.

I'm back to eighth grade maths all over again.

That you've explained it builds in some flexibility around if M&A opportunity arises. Can you share with us what kind of asset you would potentially consider? What kind of hurdle rates you have? And presumably, if that doesn't happen, then it will be greater than GBP 15 billion?

Yes. So you're right, that GBP 15 billion -- greater than GBP 15 billion has in it above that number, some capacity to invest in the business and to return capital to shareholders. Investments in the business can be organic and it can be inorganic. Our base plan is organic. There's a lot for us to do in technology. There's a lot for us to do in growing our businesses. And by the way, what's happening with AI and its effect on business models, and you can see it even in the financial services industry, makes you want to pause and think exactly when you buy a business, what kind of business you're buying, right? And how vulnerable is it to technological disruption. That's why the business we bought in Best Egg, we felt comfortable in it because it's a technology business, right? The thing is completely digital, as in fact, is our entire U.S. consumer bank. We don't have a single branch in the United States, right? It's an entirely digital offering of lending, of banking, credit cards. And of course, there are customer service people who use their fancy AI stuff I told you about, but it's a digital operation. So you've got to look at that when you buy a business. For us, the answer has always been if something gives us capability and/or scale available at a good price and which we can integrate. To that, I will add now, given what AI is doing, the strength of the business model over time and its ability to deliver that. So if something meets all those criteria and works for us in the way Best Egg has worked for us right now, Tesco and Kensington have worked for us, then we will always look at it. But I cannot emphasize enough the importance of the business model, right? Tesco, 3 years ago, Kensington, 5 years ago are people-heavy business models. We have modernized them, and we will modernize them. But that kind of a people-heavy business model today, you've got to look at very carefully. That's why Best Egg was so appealing to us.

Anyone has any last questions? Maybe I'll ask a last one to wrap up. Yesterday came up with Lloyds and NatWest around potential sort of policy change in the U.K. Obviously, labor government has been pretty supportive. But if there's potentially changes in leadership in the U.K., how do you think that potentially can affect the policy momentum?

Yes. Look, I read the remarks that my counterparts or the other 2 U.K. banks made yesterday. And I agree with them entirely. I mean I think it will be a bad outcome for this country to increase taxation in the banking system, which is a critical part of the economy, over 10% of the economy, when the banking system is already more heavily taxed than counterparts in the Europe and the U.S. We are a key part of London, being one of the great financial centers of the world. And the vitality of this industry is tremendous, whether you take the large banks or you take the fintechs. And so I think it's important to continue to support that industry. And we will work with the government as we have, and we are very grateful for this government recognizing the importance of this industry and continuing to act in a very pragmatic way with regards to this industry. We think that's a good thing.

Great. We're approaching the end of the session. So once again, thank you, Venkat. Very interesting session for being with us for one more year.

Thank you.