HSBC Holdings plc (HSBA) Earnings Call Transcript & Summary

Good morning. Happy to see you all, and thank you for being here, and thank you to Peter's Speech, and I think he's likely politely trying to explain to you that this floor is where you graduate HSBC leadership to, and we're all down at the steam room. I joined 25 years ago, a few floors below at the dealing room. I then spent 15 years in China, from 2005 to 2020. I've seen some of you there. 5 of those years, I was looking after China as the CEO and then took up this year just short of 2 years ago.

Thanks David. And I started a few years before David, in 1991, spent 24 of my 32 years in the markets business on the trading floor across India, Hong Kong and Indonesia. And my last role was as India CEO, before I joined up with David back in Hong Kong to run the region in 2021.

Well, these few days, I know the hard work is on you, because we’re just speaking for 10 minutes, and I've just looked at your pack and it’s quite a lot to digest, and I took 25 years to do that. So we’re going to keep it reasonably light and interactive. We've taken your feedback and that’s why the feedback form is important. We will be more focusing on Q&A, demos and my better colleagues will really drill down into businesses. But let me just run you through on how today will be spent. Rosha and I will just frame the Asia business overall. We will then have Ming going through the results. We had a strong 2022 and a stronger Q1 '23. Dave Grimme will then speak about the driving of the discipline, the transformation program that we've in progress into saving $1 billion of savings, as well as releasing the $6 billion investments that Peter spoke about that embarked on a couple of years ago. Martin will then cover the risks of the region. Actually prior to that, we'll have the Q&A between Rosha and myself, David and Ming. Luanne and Mark, the Hong Kong CEO and China CEO, will then going into deep dive into our core leadership in Hong Kong as well as our growing strength in China. Frank will then talk about CMB for both Hong Kong and China, and Maggie leading into the leadership of Hong Kong’s WPB business. Before ending, we will have Diana and the CFO, Say Pin, to speak to you about Hang Seng, which is also a substantial part of our Hong Kong business. I think we will then have [ Noel ] opening up to Q&A before we end the day. So I think as Peter mentioned, the easy job for us is to talk about the Asia opportunities. I think the macro speaks of itself and the outlook, as it should. We know that the growth engine of global GDP will be in Asia Pacific. IMF -- I was just speaking to the IMF Asia Head, 70% of global growth will be sitting in Asia this year, and this is how we crafted the pivoting and the focus on Asia. Peter spoke about the $6 billion program 2 years ago, continue to drive our leadership in Hong Kong and China. But as well, the appointment of both Rosha and myself is to drive also a deeper expression into Southeast Asia and India. We're also going to invest very heavily into wealth because we think the great businesses here will create better wealth. We do think it's a great business, will end up with great wealth and the catchment, whether it's in WPB and institutional, will be substantial. It's been a difficult 3 years. Hong Kong has just opened up end of last year, went through many, many challenges. But I have to say the opportunities in Asia as well as our strategy has been strongly aligned, and the timing has been extremely eerily aligned as it were. You will know of our leadership here, and I hope you feel the depth and more of it here and also our strength in China. But during in the past 2 years, our renewed focus into investing in Singapore and India has really almost moved intact with, as China closed up with policy stress in the past 2, 3 years. The China plus 1, 2 and 3 consumed a lot of the business. And as we invested in the catchment in South Asia, Southeast Asia and India, it really was quite fruitful as I think the results will show. Our identity is in the cross-border space. And we know intra-Asia regional trade, FDI and GDP will overtake its relationship to the West. And so again, that is also taking part within the bank. I think the strategy is aligned. We have a distinctly unique advantage of our international connectivity into Asia as well as in the group. And actually, the renewed travels that Rosha and I had since the beginning of the year, I've been to China 4 times already, 3 of those that Peter mentioned about, spoke of the energy of the reopening up of Hong Kong and China, but also in terms of order activities that Rosha has encountered in India and Southeast Asia has proven that it's all on track. This is just really the IMF projection in terms of the bankable GDP. We as well as many other banks are more bullish in China. We expect almost 6.4% this year. We need to see further in terms of the sustainability of the growth in '24, '25. But certainly, we expect the rebound will be intact. We were with the Ministry of Finance in China, and they expect almost Q2 into a hefty 8% growth, albeit from a low to negative pace from last year. The banking revenue pool is higher than that. And you can see from China and India as well as the respective functions of wholesale and wealth, which we believe are where our opportunities are and aligns to our strategy. But I'm pausing here, and I'll pass to Rosha to look at where we are with our businesses.

Thanks, David. So we capture these macro opportunities through our distinct footprint in the region and multiple engines of growth. When we set out a strategy in late 2020, one of the key areas of focus was diversification. And we are halfway through that transformation at the moment. In Hong Kong and China, we make $7 billion of PBT and including BoCom, that's $9.4 billion. But even in these markets, we are diversified. And one of the proof points is the growth in our market share in insurance in Hong Kong, where we are now #1 in 2022. In the rest of the region, we've doubled our profits from 2020 to 2022 from $2 billion to $4 billion. And this includes the 12 other international markets that we operate in outside of the large markets. And we'll talk a bit about this more on Thursday when we speak to you in Singapore. Our strong client franchise and leading capabilities is underpinning this growth, and we continue to invest in this franchise. In our Wealth and Personal Banking division, we've expanded private banking in China and Thailand this year, and we will be opening in India later in Q3. We also are investing in Pinnacle in China. In Commercial Banking, we've deployed digitized onboarding capabilities to acquire customers at scale across many of our markets. and this feeds into our transaction banking capabilities that are market leading in Asia. In Global Banking and Markets, we have enhanced our presence across investment banking and markets in Singapore as a hub over the last few years and service a larger part of the business opportunity that exists there. We also have invested in the Chinese joint venture for investment banking, HSBC Qianhai Securities, which Peter referenced as well. Now when we come to our international network, we generally believe David and I, that our global connectivity is our superpower. And we have the privilege of operating in a region where the governments, the regulators that we speak with are extremely supportive of growing trade and cross-border capital flows. Our wholesale client business in Asia generates $9 billion in client revenues, 60% of that wholesale revenue is cross-border and 60% of that comes from outside of Asia. We serve more than 5,000 non-Asian corporate clients in Asia. And just as an example of the strength of the East and West linkages that HSBC has, the North America to Asia corridor and the EU to Asia corridor are more than twice the size of the Hong Kong-China corridor that we bank, and they have been growing at over 25% over the last year. We see further opportunities in this space. We think that we have more market share to gain as some of our competitors, global competitors from the U.S. and [ Europe ] face challenges. And there are further tailwinds for growth as more and more economies activate the regional trade agreements that have come into place. Peter talked about RCEP, but even with the CPTPP, where 6 of our -- 6 of the members are markets where we are present, 2 more have applied and 2 more are likely to apply. Frank and Amanda will talk more about the Commercial Banking opportunity through today and Thursday. This network also makes us the leading bank in Asia for corporates and institutions that want to bank with an international institution. We cover 95% of Asia's GDP. 70% of the largest corporates active in ASEAN already bank with us at HSBC. And we are the leading transaction bank in the region across cash, trade, security services and FX. As we bank clients in more markets and with more products, we see our revenues continue to increase dramatically. Stuart and Monish will talk more about our Global Banking and Markets opportunities later in the week. And lastly, I'll just cover of wealth very quickly because that does get a lot of airtime, but I think I want to just bring out a couple of slides -- a couple of data points from this slide. We are seeing faster growth in Asia wealth than any other part of the world. We expect Asia wealth to reach $79 trillion by 2026. our Asia wealth revenues have grown from $5 billion to $5.8 billion in the last couple of years. But more importantly, just last year, our net new invested assets grew by $59 billion. This, to me, is the proof that our strategy is working, particularly in the hubs of Singapore and Hong Kong. And as we open up more banking -- private banking markets across the region, it will feed further into these hubs. I'm going to now hand back to David for the rest of the presentation.

I'm just going to delve quickly into the key markets of Hong Kong and China before closing and passing into Ming. Hong Kong is really our key market of the group. It is our home market. We used to be called the Hong Kong Bank. And occasionally, we have been called the Bank. But essentially, it is really where our heart and where our spiritual home is, is where the heritage, the brand and the trust is. I have been in the bank for 25 years. Born in Hong Kong. But as I came back to Hong Kong into this role, I cannot fail to notice that intricate weave of this bank into all parts of the society. I was in my Asia board a couple of weeks ago, and one of the board members asked whether I had enough time to see clients. And my first instinct and reaction in Hong Kong was, I actually cannot not see clients in Hong Kong. When I go into the [ MTR ], when I go into dinners, when I go into any, any facades of the society, this city is banked by us. That's a huge obligation as well as a huge opportunity. We are the notes -- biggest, by far, notes issuing bank here. We are the key reference bank for the Hong Kong dollar interest rate. As Luanne decides the rates against the U.S. dollar movement, we are basically strongly referenced by all the competing banks. We are the final dollar clearer on behalf of HKMA here. So there is significant importance in terms of how we hold this responsibility. It cannot be shifted as you understand it. it's unlikely to be shifted into China sets of banks, nor is it big enough for any foreign banks to take up that role. So these are the sort of responsibility and the weight that we hold in this bank and the opportunity is about. The fact is I think Peter spoke about a lot of the challenges in China as well as COVID. But I think in terms of the evolvement of China is almost consolidated Hong Kong as the single and sole funnel of China's internationalism to the world and the international community into China. You're not getting the optionality of less of the optionality of the likes of Shanghai or Beijing or Shenzhen. It's very clear with President Xi here last summer speaking into the 1 country, 2 system, speaking into common law and speaking into the expression of internationalism in Hong Kong, which I think will be where we capture. And why? It's because we know despite the FT narratives or the Bloomberg narratives, you know trade and intertrade with China is still growing and substantially most of the significant economies still have China as the largest trading partner. Even U.S. is growing in terms of trade, and that needs to be facilitated through Hong Kong. The expression of the capital markets in China is very underweight by yourselves in terms of the market into Asia, into the China bond market, and that's a conduit through Hong Kong and the CIBM and stock and bond connects. The savings concentration of opportunities in China is very concentrated in China, and they ultimately need to go out to invest. Again, QDII schemes and many of the southbound connects allows that to happen and many, many more. Just on GBA, this is a city that doesn't -- Luanne will tell you how deeply saturated we are with the 7.5 million people. But there's 86 million people just across the border that's looking at new policies of interconnectivity as well as infrastructure with the Greater Bay in Hong Kong that would come through. So the release of that is significant. I think the biggest testimony is we have extremely capable Singaporean that's chosen to be the Hong Kong CEO of HSBC, and it tells you a lot about where the depth and opportunity of the city is, and not to say Singapore is not driving and then we're not successful there. I think -- so that's really for Hong Kong. China. We just know that any and every conversation that we've been to, whether it's the Middle East and my third time in the next month there as well as around the region, even the China plus 1, even the recipient of plus 1 has to be a China conversation. And in the past 4 months, going into there and looking at the resumption of the GDP, it's encouraging. But what's more encouraging is just really to see, and I don't know how many of you have moved into China, but that for me, just going into the Greater Bay in Shanghai and Beijing, there is still the energy and the youth of the economy. The biggest thing when I went back to Shanghai to see my colleagues is that sense of I'm going to build back my last 3 years. And I know that's regardless of politics and policies, I'm going to come through with good business ideas, creativity and technology that we can bank. We are small in there. The aggregated foreign bank market share is probably at around 1%. But you have voted that a pure China play isn't what you want. You've marked all the Chinese bank at 0.3x book. And you know that, that sort of risk and that sort of balance sheet isn't what you want. It is the alpha of connectivity that is where we want to drive our strength in retail, through wealth, through Pinnacle, through institutions built, which I think, again, we have a strong handle, we're the strongest bank by far in China, and it complements very well into Hong Kong. Peter spoke about the infrastructure that we have apart from the bank that our joint ventures of asset management, insurance and securities, we're already upping the ownership to the point that is profitable to us. Lots of noise on the geopolitics, U.S.-China, that will continue, but I'm speaking in all these conclusions despite all those. So we can, again -- Mark will go deeply into those opportunities. But just to conclude, as I said, the Asia macro story stands. Our strategy is aligned to it. We also have an infrastructural connectivity that nobody has that banks it very well. And I take up the challenge of whether it's an international banking model or a regional or local model, you may have momentary bright spots of rushes of capital and opportunities in specific local markets, but we have the best Asia catchment. But a lot of work to do, and my colleagues will speak into those.

Right. Who wants to go first? Martin?

I just wanted to ask on the broader competitive landscape across HSBC's Asian footprint. I was just wondering if you could comment if you see either opportunities or threats in particular pockets of your Asian footprint? Are there a number of competitors retrenching, or could -- sort of could there be opportunity for market share gains? Or do you see areas of increased competition?

I think there's opportunity, particularly in the wealth space because I do think some of our global competitors are pulling back, either voluntarily or involuntarily. So I do think there's opportunity there. We're picking up business and clients and people in that space. I think on the middle market corporate space, I think many of our global peers realized the strong growth opportunities and profitability of banking, middle-market corporates in Asia. We've done that globally for -- since the day we were started, 158 years. Many of our global peers tend to stop at the very large corporates and only take them globally. So if I think of Citi, JPMorgan and others, they see the merit in middle market corporate banking in Asia and are trying to probably enter that space. That's been cyclical. They've been in, and they've been out, and they've been in, and they've been out. I know some of you are from those competitors here today. So I think we're conscious of that being a very competitive marketplace at the moment. And -- but it's hard to build. And it's hard -- if you're in and out, it's hard to reenter. And then always here in Hong Kong, you get waves of strong competition from the Chinese banks. And we've not been afraid in the past, and I've not been afraid in the past to say, it's a street fight every now and again. You keep the customers, you take on some of the competition and you defend your position, and then they go away a little bit because they've done a lot of low-margin business and then they pulled back their balance sheet. And there's a little bit of that happening at the moment. I think some of the capital that came in from the Chinese banks into Hong Kong, chasing volume, doing business at what we thought was low rate, low margin. Some of that capital has gone back to mainland China to restore the capital back into the Chinese banking system. So I think we're seeing some pullback on that competition. At this -- the simple answer is, when you operate in 60-plus markets, I work on the philosophy, there's a strong competitor in every one of those markets, at least 1 or 2. They're domestic, typically. Our biggest USP is mid-market international corporate banking. The peer -- our peers, the global banking peers, we compete for global banking type clients around the world, JPMorgan, Citi, Deutsche, we're all there, BNP, and they're all very good at it. A few compete with us and hardly any compete -- nobody competes with us on international mid-market corporate banking globally, nobody. A few of them come in and come out every now and again. And then we have regional competitors in mid-market, international corporate banking. But I'll honestly say there isn't a global peer who does mid-market corporate bank in the way we do.

Raul, and then Nick.

If I could just follow up on the $6 billion investment, and that target was set in 2021 at a time when perhaps rates weren't supposed to go up as high or as quickly as they have gone. So I guess the one difference HSBC has over all the other names you mentioned is a very attractive deposit franchise that throws off a lot of revenue when rates go up and you have a very big tailwind in terms of profitability. We probably have a lot more room to invest than you thought in 2021. So I guess the question really is, is it a matter of capacity and pace at which you can invest or is it that you feel pressurized? You're already have a mid to high teen...

Listen, they're standing right next to me. I feel the pressure all the time...

Raul, we’re going to buy you a drink after this. This whole day, you've been doing this...

But if I listen to what other banks are talking about, they are all -- they're all really aggressively talking about investing in -- I think Deutsche just bought a bank in another country, right? So everybody is thinking about how to capitalize in this market, and you've done SVB UK. But when we think about Asia, organic is probably the way -- the best way to grow here and to invest. And are you thinking about that at the Board level? Are you thinking about accelerating investment? Where would you invest your...

Listen -- it came as a theme from a number of people. Should you be investing more than you are? Are you constraining cost growth too much? Are you missing an opportunity for growth? So there's that generic theme, I think, on a number of your minds. And clearly, it's all on our minds as well. Let me give you a bit of backdrop to it. Well, firstly, I'm pleased that in the middle of COVID, we're still committed to spending $16 billion on investment in Asia, $3 billion here in Hong Kong, mainland China, $3 billion elsewhere. So all credit to the Board and, frankly, the management team to say even in the middle of COVID when the P&L was depressed and revenue was hurting because of COVID that we decided to take on an investment program of $6 billion, and we're broadly on track with it. So I think take that as a positive. The next thing, if I think about the context of this, for too long, we haven't earned the right to invest because our returns have been too low. There hasn't been -- there haven't been enough years when we've been above cost of capital on RoTE. So we, as a management team -- not just me, we as a management team, turn around and said in this 3-year transformation program, we've got to get our returns back above cost of capital to earn the right to continue to invest in the business. And that can't be a one-off and it can't be purely rates based. It's going to be sustainable and be able to sustain through a rate cycle. Now I don't mean a rates cycle that gets you down to 0 again because nobody thinks that's the normal rate cycle. And we needed to regain credibility as a group being blunt. So we've kept costs tight over the last 3 years, whilst investing. So saving money through digitization, organizational change, de-bureaucratisation, reinvest and start to grow revenue back up through fee income and NII, and we've done that. Last year, it was 11.6% before sig items, Q1 19.3%. I think we've got to continue to deliver performance. And we, as a management team, know we've got to prove to you quarter after quarter and to our investors that actually we're a dependable high returning business with growth potential and growth -- not just potential, growth -- with growth. And then I can take on a much more positive stance to investment. Now your question is, well, you've got really positive revenue this year. You've got positive momentum. Can you feed more investment in this year? And that is the debate we're having. But listen, we've had on really stellar quarter. We've had a good year last year. I don't want to rush like HSBC has done in the past -- get the first sniff of high rate, you go below the cost base to smithereens. And then rates come off and you've got a cost problem, you've got to go back into restructuring. I don't want that. I want a sustainable long-term strategy. And the final comment is, this year, we'll spend around about $4 billion of IT spend on changing systems, processes. We have a total IT spend out of $30 billion of around about, John, $7.5 billion, our total IT spend. So about $3.5 billion, keeping the lights on, running the boxes, running the network, resilience and everything else, and about $4 billion of change in the bank. These guys collectively every year -- last year, when they asked about the IT spend for this year, the ask was about $6 billion -- it was about $5.5 billion to $6 billion. So on a $4 billion change program, the demand was about $5.5 billion to $6 billion. I haven't been in this cycle any year when it hasn't been less than $1 billion over. You always get asked for at least $1 billion more than the envelope to spend. We are thinking about how we feed in continued digitization and IT investment and growth over the subsequent years as the business model sustains. So I think the answer is, I'm not against the investment. I just want to prove to you that we've got sustainability and returns, we've got sustainability and growth and will feed in more investment. You'd rather spend more money in a sense, we know there's opportunity.

Well, from my perspective, I think customer acquisition in Southeast Asia and India would be key and digitizing our processes. So some of this will flow through from the investments that are already being made. But one other aspect that perhaps we haven't touched on enough today, I think it's important, $3 billion has been invested already. We do need to monetize the investments that have been made. I think that is quite critical, and that will feed into the performance that Noel has been talking about.

We've got to subscribe to this cost rigor because I mean we've went through cycles that you've all experienced where -- we just had Hang Seng presenting. I mean as an entity, you would have wanted more -- the point about the red/green brand needs the investments. That tempo comes with how technology comes through. You're asking about HKD and eCNY. We have to be front footed in our key market to drive relevance to client behavior. So it's not exactly always immediately a model, but we have to be in place. So those are -- and China multiple-fold from wealth, Pinnacle, custody, institution, CFIBC sector leadership in recovering capital markets here. So that's where we would put sort of investments, in that we have space. But again, on the basis of that rigor, and I think we're running a reasonable tempo. We just need a few more quarters of strong, hopefully strong...

But we're doing a lot -- eCNY, there was a question on that. I spoke to the regulators in China about eCNY, and they said look, we're working with the technology, we're working with the business models. We haven't quite worked out what we want to do with eCNY. They were quite honest about it, they say. And if you can help us with some business models, that would be really great because they're looking at eCNY as a domestic digitization strategy, rather than an international digitization strategy. So well domestic -- most other CBDCs are looking at international remittances for people and remittances for small businesses, take out the inefficiency of the international payment system for migrant workers and for small businesses. China on the other and is looking at eCNY more as a domestic digitization strategy. So if you're looking at that, you got to look at programmable money because digitizing CNY in itself, doesn't have a lot of value. You just -- because we can move CNY digitally like that domestically through faster payments. We can do it here in Hong Kong, can do in most markets. Programmable money where you can direct money towards social causes or social initiatives, a very different proposition. And I think that's where you look at some of the architecture that's been built in India. It has that capacity to create programmable money, where you can, as a government, distribute money and stimulus into the economy in a very targeted manner and you can get that stimulus hitting the population you wanted it to hit. That's the -- if you're going to go eCNY, it's programmable money. And the question for China is, do they want to put that in the hands of the fintechs or the techs? Or is they want to put it in the hand of the central payments architecture? And they've chosen they want to put in the hands of the central payments architecture. Clearly, they should. And that's what India is doing. They've [ not ] allowed the techies to build it as an architecture. They built it and then allowed the techies to build business models on top. What else?

Nick?

Yes, a couple of structural questions. One, hopefully quite short. Just BoCom, where that fits into your sort of thinking? And then the second one is just on insurance. I mean, you've obviously got a big insurance business, which is part of the bank. A lot of insurers in this part of the world, there are a lot of banks in this part of the world have decided not to own insurers, but distribute. You're sort of going in the opposite direction. So I'd just love to sort of understand some of the thinking behind that.

Yes. let me deal with BoCom. Listen BoCom for a long time has been very accretive to the bank. Our investment in BoCom -- because the bank return was so low, BoCom was accretive. We've now got a situation where BoCom throws off good profit for us. It's a good access to the domestic profit pool in China. It's hard to get access to a domestic profit pool in China through managed business of that -- to get access to that size. So it's good. Ironically now, because the group return is going up, BoCom is probably slightly, as a return, is dilutive to the return of the bank. But listen you go through the cycle, it's been accretive for a long time, it's a decent return, it's above cost of capital, and so we still see it as access to a profit stream. We're trying to monetize the relationship as much as we can. So it isn't just a passive investment that there is actually some synergies coming out of it. And I think David and/or Mark covered that earlier. So we're in a status quo position with BoCom. On insurance manufacturing, look, your point is a great one because we're in the situation where we own the best insurance business in Hong Kong. It's both a distributor and a manufacturer. The profitability out of both on an economic basis is very, very good, but nobody values it because it's a one market captive insurance business, even though it's very profitable, you don't -- I think the market doesn't really look through and give that business the value it would have, it was a stand-alone listed business, particularly the manufacturing bit. The problem is you can't list stand a captive single market business. So even if you wanted to list it and give it its own identity, technically, you can't. It's not listable as its current business. It's a good business economically. I don't wake up in the morning thinking we keep in the business that isn't earning good returns. But I do wake up in the morning thinking, I wish I could get a better valuation on it than I currently do. Now we're building out -- we're trying to make it less than 1 market. We're trying to make our insurance business in Asia, more than just a captive. So with the work we're doing in Pinnacle, we've got both the manufacturer and distribution capability. We're building up a good business there. Our business in Singapore, we've got both a manufacturer and a distributor. China is definitely not a captive. It's more of a direct to market than it is a captive. Hong Kong, we're really a captive because we have such a big market share on banking. So no matter what you call it, it's a captive. In Singapore, we're building up both direct to market and more of a direct-to-market business than a captive. And in India, we own.

26%.

36% of the joint venture -- 26% of the joint venture. And I'd be happy to go up -- there's 3 partners in it. And if we could -- we'd be happy to become a 2-partner joint venture if we can get to that position. Now roll that forward, it becomes a much more interesting strategic proposition at the end of that journey as you get through the majority of that journey. And I think what I'm doing is building strategic optionality. But I don't think that strategic optionality is here today because I don't think you'd get enough value for that single-market captive business. And I think we've got to work on over the -- in the interim period is how do we explain that strategy much more fully so that you can at least attribute some credit and value to that business activity. And I'm not saying we will list, we won't list, we will sell, we won't, we'll hold. I'm not making any of those decisions. I just know that the strategic optionality down path would be better on value creation opportunities than trying to just run for that value creation today. But that's the call.

Are there questions? Andrew?

Andrew Coombs, from Citi. Just actually a couple of follow-ups, I guess. You talked about BoCom. I think the words you used were, it's been a good investment. If you rewind back, say, 2009, it was a joint venture on cards. You were talking about the synergy prospects. Has that ship sailed now? Is there anything else you could do?

No, I think to be honest, we've changed radically our strategy in China on WPB. We were built -- and listen, I'm not a WPB person, as I said, I'm not a wealth person. But I think we were rolling out a strategy in the Greater Bay area. It was principally around Retail Banking, mortgages, credit cards, branches. With the benefit of hindsight, I'm not sure that was the right strategy to pursue. What we're doing now is a wealth-based strategy, less capital-intensive, faster payback. I mean a cards business has very slow payback on it as you're building it. It's just a long payback curve because you've got a provision on day 1 for what could be revenue in 5 years from there or 3 to 5 years. So I think we've retrenched on that and said we shouldn't lead with retail banking per se. We should lead with wealth and international Wealth Management is our strategy to enter the Greater Bay Area, not retail banking, my simplification of the strategy that was and the strategy that is.

And then a broad-based question in part relating to your answer on insurance, but you have talked a lot about organic expansion plans today. Are there any areas where you look at and think a bolt-on acquisition here will accelerate our expansion plans meaningfully? And how do you weigh that up against dividends and buybacks in this market?

Listen, we can do bolt-ons, probably. It depends on your definition of bolt-on, but the bolt-ons we've done so far, [ John ], have probably added up to just under $2 billion, is it? About $1.7 billion, if I remember correctly? $1.6 billion, $1.7 billion?