NatWest Group plc (NWG) Earnings Call Transcript & Summary

I think we're being counted down so I think we'll kick off, and I think we can leave the back door open. Cool. Thank you very much for joining us at the Barclays Global Financial Services Conference here in New York. It's our pleasure to welcome Katie Murray, Chief Financial Officer of NatWest. Katie was appointed Group CFO in 2019, having joined the firm in 2015 and has held a number of senior finance roles across a career spanning more than 30 years. Katie, thank you very much for joining us and taking our questions.

Lovely to be here. Thanks so much, and Good morning, everyone.

Cool. I'm, by way of introduction, Aman Rakkar, head of the U.K. banks' coverage at Barclays. Yes. So let's kick off with the macro. The macro outlook has shifted quite materially since you issued your H1 results, both the interest rate and the inflation forecast moving meaningfully higher. We've also had a new Prime Minister announced and her initial policy or flagship policy is around freezing the energy price cap. I'll start by inviting you to comment on whether or not you're seeing any kind of shift in customer behavior and if you could kind of let us know how you're thinking about the way in which that energy price cap might benefit your customers?

Yes, sure. Absolutely. So lot has moved. A lot and continues to move. I think it's important that we don't always think of that as wholly negative. So I mean, unemployment came out this morning, 3.6%, the lowest since 1974. I don't know if you were born by 1974. So I mean, in most of our lifetime, that's a huge kind of change. So it's important as we think of macro but not all of it is kind of bad news, but there definitely is movements. I mean we put our guidance out at a 2% rate. Market implied come back a little bit. If you look at the kind of swap, but it was up 4%. So I mean that's a huge kind of potential tailwinds, which I'm sure we'll get into, but also just a lot of volatility within that number and I think we'll only really see the impact of some of these market movements as they settle. I feel I've probably said that to you for quite a few quarters in a row yet and so I feel the settlement kind of sometimes to come through. If we look at the energy price cut, we think that, that will help inflation in terms of value but we'll wait to see how it actually gets rolled through in the kind of the speed of it. I don't think it would necessarily be immediate, but you'll start to kind of see the benefit of that coming through and then we look to our customer behavior and obviously, there's the business that we're continuing to grow, and we still see continue to see good growth in that retail and the credit card kind of side of things. When we dig into the credit card detail, you're really looking for something to say, is the spend on more kind of essentials rather than discretionary items? And we're not seeing that. It's still discretionary. Those of us who traveled to the U.S. in the last couple of days ports are busy in terms of that piece. So still a lot of discretionary spend that's going through that. Within the commercial space, you saw that we had 2 good quarters of loan growth as well across and particularly in the last quarter across all of our lines of business. So there is a lot of activity within there and importantly, within the impairment book, we still struggle to find any signs of deterioration within that. So overall, people -- although indices are quite negative, people are continuing to kind of be kind of economically active.

Yes.

and often, when I go to talk to customers, what they often say to me is I'm doing okay, I can work ahead to navigate this piece and that piece I'm actually a bit worried about the others. So it's quite interesting in terms of just the economic mood. I think, is something that weighs on people more than what we actually are seeing in the data.

Yes. So I mean, just to drill into the point around asset quality, the point around interest rates, expectations are that base rate could exceed 4% in the coming months. When you're thinking about the implications on asset quality, is that the level of interest rate that concerns you?

So when we look at interest rates, so we... when any new customer comes to us, we assess them on 2 different factors. The first factor is interest rate moves. Currently, our SCR rate is 4.99% and then we add a couple of percentage points on top of that so in terms of the customer rate you were paying on a fixed, which, let's say, it's around about 3-ish depending what happens, we're testing you're at 3% or 4% above that so actually can you cope with that kind of level? So that level in itself isn't a particular concern for the retail side, similarly, on the commercial side, we do very similar thing in terms of testing and importantly, on retail, we also look to test where are you on affordability. Then we kind of take your outgoings and we apply kind of inflation as that, and we continue to keep updating that inflation number in the ore. So that would mean that some people might be struggling to find credit on the mortgage side because we've increased that inflation side but again, in terms of what we're writing, we know that we've got the comfort within there. So we're not unduly worried about rates at that level and I think it's important to go back and then what actually impacts us more in terms of driving unemployment . We talked about that a moment ago for the retail side and then if I look to the commercial side, kind of GDP growth to actually do some of these challenges caused lower borrowings, which will hurt me more probably in later years than today and then kind of the unemployment impact on that as well. So at the moment, we keep a very close eye on it. We test it extensively, but it's not a factor that we're looking at and we're particularly overly concerned about from a risk quality point of view.

I guess just to complete the point the discussion around that then. I mean, when you're looking at risk in your book, are there specific portfolios that you're most closely monitoring right now?

Yes. I mean we, it's always an interest we monitor all of them very closely. So what we did at the half year, was we spent a lot of time looking to see like who's going to be impacted by increasing cost of living, including within that, the energy price cap, the energy price cap changes that have come in will be helpful. Our base case of inflation was 8.4%. Our downside took all the way up to 15%. So we've kind of tested from a cost of risk perspective, really big changes in that kind of sort of rate in terms of where we are. We then kind of look similarly then on the commercial side, what we did is we kind of went sector by sector and made different PD progressions and say we think well, that one could go worse by one. This looks the worst by 2 in terms of that to actually work out which ones they are. So it's not I think we were in covered times, we talked about 5 sectors we were monitoring really closely. I'd say now we're monitoring the whole book probably more closely. I always say I'm comfortable saying that because we are monitoring credibly close all the time. We're kind of looking at that piece and then by doing that kind of PD progression piece kind of these are the ones that we're more interested in and we are a full service bank. So there's no we don't have sectors that we say that we don't lend to but within sectors, there will be bits that we would have less appetite for us. So we're very, very closely monitoring that.

Okay. Great. So for everyone in the room, we do also have audience response survey questions. We've got 6 of them. I'm going to pepper them throughout the conversation between me and Katie. If it's the right thing, we can maybe get the first couple up on the screen. Number one, what would cause you to become more positive on NatWest shares? One, positive revenue surprises; two, greater cost savings; three, better asset quality; four, better capital dividends; five, clarity on U.K. macro; six, reduction in U.K. government ownership. Okay. It's a fairly emphatic response there, which I guess, I think, is reflective of the conversations we're having around a macro outlook.

I mean, definitely, the way that Alex and I think about it, I mean, we're lucky we've both been in financial services for a long time. We've worked our way through many different crises over the years in different kind of macro scenarios. I think the important thing is to make sure that you're there for your customers to help work with your customers so that they understand what they can do and if you look at the kind of customer base now, many people haven't lived through inflation and rising rates and then be running a business in that time. So actually, our job is to really work with that we can't influence that U.K. macro backdrop, what we can do is to make sure the bank is ready to be able to deliver on it. The 17% interest me a little bit in terms of that piece. It's good. It's down at 47.5% ownership now that are from 62% over a few years ago. So we're making progress we just need to continue to make sure we're doing the right thing for the business to enable that the government to make whatever decisions they feel appropriate at the time.

Can we go to the second question, please? What do you expect to be the biggest influence on NatWest revenues in the coming 12 months? One, loan growth; 2, pricing 3, policy rates or fees and commissions so 91% for policy rates. So let's before I let you comment on that, maybe let's shift to a question in that direction, which on a more positive tone, the income outlook is improving. You upgraded your income expectations for the full year '22 to around 20 to around GBP 12.5 billion, sorry.

Yes, don't get ahead of yourself.

Sorry. But as we mentioned, kind of the rate expectations have probably increased actually since you issued that guidance, base rate projected to get above 4%, both rates are rising. Mortgage margins have also kind of widened a bit over the summer months. Interested if you could talk to your assessment of the revenue outlook, and in particular, whether you see potential further upside in the outlook?

So I mean, I think when you look at it, so we guided to 2% and flat from there. If we look at kind of market implied it's sitting at sort I think 4% at the end of the year, maybe some small increases then only beginning to come down. What we do find is there's often a gap between market implied and the economist expectations, we go more with economist consensus rather than the market implied piece but if I caught the economic expectations today, they would also be a bit higher. So look, I think there is some potential within there. I think what you want to remember is September. So when you look at the guidance we gave you around impacts of managed margin and structural hedge, we talk about for 25 basis points extra, it's about GBP 276 million of extra income. Obviously, when that comes in, in the year has come quite a big impact. So I think one of the reasons why we felt so comfortable giving the half year guidance is an awful lot of that's already baked into the book at that point. So if you see more coming through, there's obviously potential on that side but very comfortable with the around 12.5 billion that we talked about at the half year, and it's a bit higher, then that's fine. We'll obviously build that NAV as we go through.

Yes. Just to drill into one of the real drivers of your rate sensitivity thus far and the rate hiking cycle has been very low deposit pass-through or deposit betas as we like to refer to it reflects a lot of liquidity in the system, but also the strength of your deposit franchise and I think one thing that I found really remarkable is your commercial banking deposit franchise is really demonstrating the strength of the franchise and very low deposit pass-through, I guess, when you look forward, is it reasonable to expect deposit betas to continue being low in a tailwind for NIM going forward?

I mean the guidance that we gave you was around on a 50% pass-through of each rate. If we look at the last one, we passed through about 40% on the retail side and about 20% on the commercial side. So is there and that's kind of growing. So you can see that effectively, with that last week, it was bigger and I think if you go to the early stages when it was very little pass-through, I would say that each rate hike now will bring a pass-through related or different from what we saw in the early kind of stages. There is, as you say, huge amounts of liquidity in the market. We spend a lot of time also looking at customer behavior, who's kind of moving funds around and if I'm an SME business. I'm quite possibly more indebted than I was because I've taken government loans. I also have quite a lot of cash sitting on in my balance sheet and 24% of government loads have the cash absolutely untouched we have a very nice 35-day accounting for SMEs pays up about 40 basis points. People are moving to it. So they quite like to have access to cash, even though 35 days is not long term at all. So I think that's quite interesting. So we're not seeing movement of people in terms of that. One of the things that we're spending a lot of time at is also to think about deposit beta, it's a really good headline what are they doing and other banks passing through but I think what's really important and are also what you're doing actually working with your customers. So we froze SME fees freezing SME fees is more valuable to them than passing on more deposits. The amount of financial health checks that we do with our retail base has some greater value to people with very low savings or almost no savings in the deposit past and actually doesn't help them with the cost of living at all but then one of the things for me to think about what's the whole suite of things that you're doing, we've frozen SCR. We only passed to half of the last rate rise on SCR, we didn't pass through all of it. So if you find yourself in that position, it wasn't as penal. So I think it's the speed of what you do on the assets and the liability side to work out what's the kind of the right balance for all of your shareholder groups rather than just, I think, only focusing on the deposit beta, which is a good and easy understandable headline, but actually there's many different ways to think that we can work with customers to get the right outcome for all of our shareholder group.

That's fair. That's fair. I guess the other major driver of an improving revenue outlook is the structural hedge. That's a book that's yielding somewhere probably just below 1%. Those balances are being reinvested at somewhere between 3% and 4% based on the current rate outlook, and you've also increased the size of that structural hedge pretty significantly over the last 18 months. I mean that seems that that's a potentially meaningful tailwind for the interest income going forward.

I mean, definitely, what we tried to do in terms was to give you the guidance as to what that would be, but you're absolutely right. And where we're putting on is significantly above what's rolling off and you can see that as it kind of rolls through and we've always talked about it being very mechanistic. My treasurer donors is in the audience today as well. What we know is that people love the mechanism when it's going up. They don't like it on the way down. So at the moment, it's definitely the right thing to be doing, just each as it comes off, we reinvesting it but I would say that that's a very strong is a strong benefit and you saw that as we did that build of the additional GBP 1.9 billion, how much of that was actually been driven by the structural hedge but given that those are kind of 5-year hedges, you'll see the benefit of that coming through for over several years to come.

I guess it would be remiss of me not to then complete the NIM picture or the major drivers of mortgage market. You're a key player in that space. You've taken share. It's interesting, I guess, mortgage pricing has been rising a lot top rates have been rising a lot. I guess the spread dynamic is maybe yet to settle but it does seem from our observation that over the summer, you saw some widening in mortgage margins. I guess what's your take do you think this operating environment is sustainable? Do you think we're looking at the reintroduction of risk premium and asset pricing? Or is competition just going to return?

So I mean, the way that we look at it, we believe it is a good market. Structurally, in the U.K., we know that demand our piece of supply. If we look at kind of what we had in Q2, the market was still strong. It remains strong just now. There's a bit of movement around about it, but we're very comfortable with the strength of that. We believe that the market is behaving rationally. We've done 28 different increases since the kind of rates started to go up. It's something we do quickly and we can see that the market kind of is behaving in that in a very rational way and others are doing the same. So comfortable that that's still there. I think that you do, obviously, the swap curve moves very quickly. We can move a little bit less quickly, but there's things obviously in the background that we're trying to manage that with in terms of hedging to buy to buy ourselves a little bit of time in terms of that piece. Overall, good market. We believe we still have good growth to have within that and working very hard on things like how do we make sure that we work with the customers so that they don't spend a lot of time on SCR that we get them into the kind of renewal process very quickly. It's something we've invested a huge amount in from a digital perspective. So in terms of renewing your mortgage and things, it's literally a 10-minute thing that you do on the app. Therefore, your ability to convert your customers in. We approach them 6 months before their term ends so that they can lock that deal in at that point. So I think there's lots of things that we happen to make sure that that market is as strong as it is. We know that we're not unique, other banks are kind of doing the same but for me, the pricing pieces is the critical one to make sure that we continue on that and at the moment, we're very comfortable that people are continuing to behave very rationally around that market and there is still good strong demand within the market, which I think is something not to forget in terms of that piece.

I guess there is an uncertain outlook for the housing market for a number of reasons. Does that cause you to shift your risk appetite at all? Do you adjust your approach to that market?

So I think the adjustments we make to our risk appetite are around sort of the inflation assumptions, cost of living assumptions and obviously, we'll be tested on the rate and obviously our own pricing. It's, we don't believe in our base case that there's a big market price fall coming 90% of our book is secured. We have 54% loan-to-value. So even if you saw a little bit of price kind of movement actually, we're comfortable from a risk perspective, it's there and when you split out the loan to value, you can see that there's not a whole lot sitting up at that 80%, 90% that will then move. There's some but overall, the book is average of 54%. So we do continue to see it as a very important market for us and one that we're comfortable to continue to work through and actually, it's more about the affordability of the individual rather than the larger macro side of things.

Okay. Great. Thank you very much, Katie. We'll bring up the next couple of ARS questions. Audience members, you also have the ability to ask questions directly to Katie. I think there's some microphones dotted around we'll make some time available a bit later on moving to this question. So how do you think about NatWest cost development versus expectations? likely to beat expectations, thanks to savings initiatives likely to meet expectations, likely to miss expectations due to cost inflation, or, not sure, but would like to see more cost savings initiatives. It's a pretty balanced mix there. Yes, likely to meet expectations and I guess the third answer probably just reflects the broader inflationary…

You can see in our base case, we had base inflation of sort of 8% in terms of that we confirmed that we were very comfortable we hit the 3% cost reduction this year, but kind of moving to broadly flat into next year. I mean, if inflation is wildly different from that, then that's where you have some challenges but at the moment, we remain comfortable. We've got, as you know, a very, very strong history of managing costs in the organization that continues and will always be a focus and in terms of that piece, I think they're broadly flat guidance for next year feels appropriate and the assumptions that we had made and let's see what the next few months bring on that side of things.

I guess, given the revenue tailwind that you're enjoying and the net interest income growth that is projected to happen in 2 year period. I mean is there any part of you that's tempted to kind of reinvest the proceeds of this revenue tailwind?

No, there's definitely a portion of that. When we look at our organization, what we talked about is we're in year 2 for kind of a GBP 3 billion investment into the organization. What we find is it's generally not cash investment, that's the challenge for you is the capability and the kind of availability of human resources to be able to actually put that level of change into the organization. So if we were to add and like all organizations, we have a backlog of what's if we had another GBP 20 million, GBP 50 million, GBP 100 million, what would be spent on and if we can see that there's capacity in the organization, then we would kind of seek to invest that kind of extra piece. But at the moment, the GBP 3 billion investment, for end of year 2, we're tracking very well in terms of that. So it's I think there'll be some reinvestment, but it's not going to that number wouldn't go from 3 to 6 or anything crazy like that. It would be it would be something that would be relatively marginal in terms of that piece and I think working through and making sure that you really understand what's the next thing you would be wanting to invest in is really important for us.

Great. If you could bring up question 4. How do you see NatWest position on capital and dividends? Number one, upside risk from better earnings; 2, upside risk from falling regulatory requirements; 3, downside risks from weaker earnings 4 downside risks from rising capital requirements Again, a pretty emphatic response overwhelmingly seeing upside risk from better earnings in coming years. I guess to turn more for me to this topic. I feel like '21 and '22 has been an important period for you in terms of your capital returns. You've announced your intention to deliver sizable distributions and actually are in the process of delivering on it. Most notably, your GBP 1.75 billion special dividend/share consolidation and your commitment to hit a 14% CET1 ratio by the end of the year. I guess we've always thought about you as having a surplus capital position, but it really feels like now that the capital generation that's an organic part of your business is potentially the driver of distributions going forward. I guess my question simply is, what are you planning to do with all this capital that you're set to generate?

Yes. So I mean, look, we're really pleased that we've moved from that moment of promising capital return to be really living in it and that kind of the target to get to 14% was really important for us and I think we've always talked about that I kind of think of it as I've got kind of 4 arrows in my quiver in terms of the return of capital, whether it's your ordinary or special dividends. I think doing with specialist consolidation has worked well in terms of the impact of that, and it meant the kind of delivery of the special didn't have adverse impacts on our numbers. I was very pleased about whether you do the direct to buyback. We've done 2 now. They're important to us. I think they help with one of the earlier questions, of course, in market buyback and the whole kind of dribble out that sort of activity is really important and then, of course, there is M&A in terms of that piece. We've always said that we're we look at M&A, we look to see what we've done. We've got some small history of doing things like [indiscernible], it was a tiny acquisition, but it kind of demonstrated we were interested in buying capability. We bought the mortgage book for Metro a couple of years ago now, but still interested in that kind of growth of things that kind of add to volume. I think that's something that we'd look at but I think our commitment to our shareholders is very much being around the return of capital and I think that's something that you'll continue to see as we are kind of highly generative as we move forward from here.

I mean you did touch upon the theme around M&A. I think you've indicated previously that noninterest income is an area of strategic focus view actually sort of slightly underweight where you'd like to be I'd be interested to know to what extent you think that you can address that internally or is an external solution part of that fix?

I think it's obviously always a blend in terms of these things. So when we look at we're pleased with the progression of our noninterest income, we've seen the kind of recovery kind of coming through is kind of post covid has worked its way through. You've seen us very active in the credit card market, a lot of that has to do with fees as well as obviously interest which goes into the NII. I think we've also spent a huge amount of time on our wealth business in terms of actually taking the wealth offering we have for our retail bank and having it run by the cut side of things. So now we've got in our organization, the ability for our retail customers to easily add investments. One of the things we talk about, it took us 4 years to add the first GBP 1 billion of investment from our retail customers, and that's because you have to really want to invest with us to find it so thinking that you one year to add the next the next billion. We can see that when we get it to work and we get the right connectivity with our retail base, actually, it's a very easy process for them to do. We can see the benefit of that coming through and we're pleased with the performance we've seen in what has been difficult markets in the first half of this year and also in 2021 of that piece but we would expect it's still quite small. So I think we do look at wealth things, what we're very clear about is that we'd only look to do an acquisition if we really thought to add real shareholder value so very much looking at pricing, is it filling something that we don't have in terms of additional kind of technology or ability to reach a kind of different customer base but looking through a very hard lens on kind of the shareholder return that they would add to us. we kind of look at pricing of some wealth assets, and that's not something we'd be interested in pursuing at this stage, but very active on looking to see what is in the market in that space and we've always talked about wealth and unsecured, probably the 2 areas that we are a bit weaker in so continue to look at them but with a very strong shareholder return lens added on to that.

Yes. Yes. Just take a pause for a moment to see if there's any questions from the audience. Yes, we got one from Vince.

Hello, Vince.

Can you pass the mic? Yes.

Quickly, financial investors seem to be a very optimistic group despite everything they've lived through and I'm hearing talk of 20% ROE numbers from your fine institution and can you just help us frame the optimism that seems to be thrown at you and how you're working to balance that out. The Bank of England has been pretty direct and clear about what they see and I don't hear any of that working into, not your conversations, but just a conversation around financial investors in general.

Yes, absolutely. So I mean, obviously, you know us well, so it's great to see this one, but 14% to 16% ROE at a 2% rate. So you could see that as the rate rises, that number could rise. I think also what's important is to remember is what's driving that higher rate, so it is higher inflation and that will have some impact on cost. We haven't changed our guidance, but that's something that I think would be pool against that if it was to go to those kind of levels and also some kind of impairment charge. I mean we're comfortable with where we are on our cost of risk at the moment. We've said below that 20 to 30 basis points for -- well, this year, we've actually said below 10% and then even in 2023, I can't yet see the factors that are moving us up other than kind of market gloom rather than actual real kind of data points but I think if we were to see it continuing to rise, then you might start to see some of that come through, but it's not something that we are seeing at the moment. So it does kind of become kind of interest rate benefit that sort of that can flow through and I think at that point, we as an institutions then have to work ourself as are we giving the right balance of return to all of our shareholder groups or our stakeholder groups?. I talked a little bit about what is the right thing to do for customers beyond just simple pass-throughs to kind of help them with that and also, are you building in further risk. So we spend a lot of time looking at the kind of the risk parameters we have for the new business that we're writing in to make sure that is kind of looking forward as we move on from there but I we're still holding very firmly to the 14% to 16% return for next year and let's see where those rates go through. It's interesting. I find there's a lot of talk and they kind of they do pull back a little bit as well.

We'll shift to the final 2 ARS questions, if that's all right. Sorry, this is of a downbeat question but what are you most concerned about at NatWest in the current macro environment? One, weaker revenues, 2, cost inflation; 3, deteriorating asset quality 4 capital, 5, none of the above expect net worth to be resilient Again, it's a really clear standout response, deteriorating asset quality, I think, is reflective of the conversation that we opened with, take the final question on ARS. How would you view significant acquisitions for the group? One, very positive, given high return on investment; two marginally positive; three, marginally negative; four, very negative given execution risk; five, prefer the capital to be returned to shareholders. Okay. It's quite a spread of answers there. There is one notable standout at the preference around preferring capital to the shareholders. I guess the question would just be that is that something that the management team recognized that there is a pretty compelling reason to hand capital back to shareholders in this environment.

I mean I would say that that's kind of reflecting our whole philosophy. When we talk about our capital return narrative a piece to talk about at the end, is M&A it's positioning on that list is not accidental. It can be important. It comes with execution risk. You need to make sure it will be returning value to the shareholder and what we've really demonstrated and we've said very publicly a few times is our preferences to return the capital back to the shareholders and we will look and if it's something that's interesting, and we believe is really shareholder enhancing we'll look at that, but it needs to fill either volume or a capability gap within the organization.

Yes. if I could ask you about your return on tangible equity. We did touch upon it a moment ago. It was a notable highlight of your Q2 results, the RoTE expectation next year of 14% to 16%. It's orders of magnitude higher than what we've been able to achieve over the last decade.

Certainly.

I guess what I'm interested in is whether you think this is a cyclical high point in terms of return on tangible ore. Is this actually a level that you think you can build further from on an ongoing basis?

Yes. I mean when we went to the 4% to 6%, it's obviously very based on results of cost of risk, a 2% level of base rate returns. We spent a lot of time, and we continue to spend a lot of time trying to strengthen that noninterest income as we've talked about because we do see that it's misshapen compared to the NII. Guides for 2023. We're very comfortable with the being guidance for 2023. I think let's see where that macro, which we've talked about kind of land as we go forward and then I'll probably disappoint you to what I'm sure we'll talk more about it in February 2023 what we were very pleased with is we always knew we had built a bank when deposit when rates started to move, we would get the benefit of that and that's what we see coming through in that 14% to 16%. I think let's get that delivered and then we'll talk about how sustainable that is over a multiyear basis or what it might be like. I think more to work or we see that we see some leveling of the macro environment as well.

Okay great but last question for me while I've got about a minute or so with you. It's just around Ulster bank. It's been a source of strategic focus. You've announced an exit of 90% of the loan book, 75% of the credit RWAs. How is that progressing? What do you expect to be left when we look beyond '23?

So I mean we progressing well. I mean the team they are doing a fantastic job and as are the other banks in terms of working with us to make sure that we can hit our various kind of deadlines. So the time we get to end 2023, I would say there'd be almost nothing left in terms of the asset side. Our big transactions to pass through those small bits that we haven't done transactions on yet, you would expect if they're not fully executed, they would definitely have plans in places to how they will be doing that. So it will be minimal on the asset side. We know that liabilities kind of lag a little bit in terms of that piece but again, very active work ongoing in that space and then there, it's not just active work by us, but it's also by a number of the other stakeholders. If you're returning your taxes in Ulster Bank, the revenue authorities will say we see you have an Ulster Bank account you need to move it sort of things. So there's push and pull coming from different directions but that's really important from that side. I'll take a bit more time as you would expect, we're not overly worried about that Costs always take a bit longer. We still have to do returns and all of those sorts of things but I think that will be more of the 24 story. And I think when we talk next year, you'll be pushing to how quickly can you move some of those things because clearly, the main deals have been kind of dealt with but pleased with the progress. It's in line with our expectations, and the management team there are doing a very good job to continue to work to push that through.

Okay. Great. I think we're just about out of time. So thank you very much, everyone, for joining us here today. Thank you very much, Katie, for joining us here. Really appreciate your time and I think the next session is UBS. So thank you, everyone.

Lovely. Thanks very much.