NatWest Group plc (NWG) Earnings Call Transcript & Summary

Thank you, everyone. I don't want to stop everyone from the boisterous conversation that we're clearly really enjoying in the room today, but we'll kick off with the fireside just in the interest of time, but thank you very much, everyone, for joining us for the European track of the Barclays Global Financial Services Conference. Delighted to be joined here this morning, NatWest Group CFO, Katie Murray. Again, I don't think Katie needs much introduction, to be honest with you, regular at the conference, and we're delighted to have you here. So I just want to say, yes, thank you, everyone, for being here, and thank you, Katie, for your time.

Thank you, very happy to be here.

Yes. So I just wanted to start top-down macro. I think this time last year, there was a bit of optimism around the U.K. following the general election result, but it's fair to say that growth has been a bit sluggish and there's some challenges around managing a widening fiscal deficit, which it feels like it's dominating focus at the moment. I was interested, given your vantage point, your assessment of the operating backdrop, in particular, if you could comment on the potential for additional bank taxes in the upcoming budget.

Absolutely. So look, as we look at it, I guess the way that we kind of receive the narrative is one of cautious optimism. When we look at the numbers, they're not always weak, I think, as they're often suggested. If we look at kind of growth, it was 1.1% for the half, a little bit below where our expectations are for the year, but not materially so. If we look at some things like the PMI or the retail sales indexes, they're actually -- in August, they were -- in July, they were at some highs that we've seen for a year. If we look at the activity of our customers, we can see that retail customers are still at 10% -- above a 10% savings rate, but we can also see that they're spending on their credit cards and they're spending on discretionary items. So you can kind of see that sort of confidence. You can also see in our loan numbers that we've shared this year already that people are continuing to borrow and so therefore, kind of continuing to invest as we go through. Unemployment is sitting at sort of 4.7%, I think, a little bit ahead of where we were. There's a lot of talk about going to 5%. That would still be relatively low on a historical perspective. And it's a number, obviously, we pay attention to very closely as one of the lead indicators for our impairment losses. But at these kind of levels, it's not one that we're terribly worried about. Inflation feels a bit stickier than we'd like it to be. And then obviously, the budget coming at the end of November, you sort of sit here at the beginning of September, and it feels a long way away in terms of the kind of the changes that are going through. When we think about things like the bank tax, we know and the Chancellor knows as well that actually the banks and the economies need strong banks. And part of that is around the investability case. There's been a lot of discussion around reserve remuneration, it pops up if we so often. Governor Bailey has been very clear. It's not something that he believes in the Chancellor has also in the past written off quite strongly. So that gives us some comfort. When we look at the tax specifically and we look at ourselves as a sector, we know that we're one of the highest tax sectors that exists. At the moment, we already have the bank levy, which for us is like GBP 140 million last year. We already have a 3% surcharge. And just to kind of quantify that, that's about GBP 160 million extra that we have paid in those -- in that kind of tax level. So as you look at us both sort of domestically against other industries or internationally against other banks, we know that we're fairly heavily taxed. I think what we'll do is not make any kind of prediction or preference as to what kind of happened. The Chancellor has clearly got a fiscal challenge that she's trying to meet, but we're very -- we are pleased that she also does understand the strength of the importance of a strong banking industry here in the U.K. So we'll see how it rolls through by the time we get to November.

Great. Okay. Let's talk about the business itself. So you substantially upgraded your revenue expectations for the year. You're now guiding for full year '25 revenues in excess of GBP 16 billion. Interested in kind of what's driven this improved outlook? And how should we think about the main drivers from here?

Yes, absolutely. So I mean, if we look at it, so we raised up from sort of GBP 15.7 billion -- GBP 15.2 billion, GBP 15.7 billion over to greater than GBP 16 billion. A few things going on within there, really the strength of the first half performance, and that strength is driven from the sort of ongoing growth in lending we've seen as well as obviously the strength in the structural hedge, that's kind of come through. When we go sort of from here forward, the things that we think about as a mixture as ever of kind of tailwinds and headwinds. So we've obviously got continued loan growth that we'll see coming through. The structural hedge will also be beneficial to us. And interesting, I'm sure we'll get into that in a little bit more at the moment with the volatility that exists at the moment, it's kind of helpful to us. We probably -- we are investing at a little bit higher than the rate that we would be assuming for the rest of this year, even since the summer. So that's another little kind of positive sort of nudge. And while I always hate talking about this, there's extra 3 extra days in this quarter. And it's important and it always takes, we're so complicated, but it comes down to the number of days, that's worth another GBP 100 million of income in and of itself. So it's important not to forget that. Then if you look to kind of the headwinds, we think there'll be another rate cut coming through as we kind of move forward from here. We also -- you'll see the averaging effect of the other ones that have already come through in the earlier part of the year. Noninterest income is traditionally a bit weaker in the second half of the year. Now I would say that we didn't probably anticipate there would be as much volatility in the second half as there was in the first. In reality, the market is a bit more volatile. So we might get a little bit more of a pickup from there as well, and also some of the charges that we carry in terms of our SRT or asset sales. We've got a couple of things in the plan that may or may not come through in the second half, and that would be a little bit of a headwind. So you look at those kind of together, which is what kind of supports the 16%. If I look to kind of into 2026, and it's a very loan growth, the strength of the structural hedge kind of coming through there as well, and obviously, the rate -- the final rate cut that we're expecting coming through in quarter 1 as well as that noninterest income, which will be a real factor of where we end this year as well as kind of customer activity into next year, but we've been pleased with the growth we've seen through some of that on that line in the last while.

Yes. I guess, one of the revenue drivers that you've talked about there is loan growth. It's been remarkably strong. Loans across your 3 operating divisions are up 7% year-on-year or 6%, excluding the Sainsbury's acquisition. What's driving this growth? And is this a sustainable pace for loan growth at NatWest?

I mean it's not the history is the best definer of the future, but if you look at our last 6 years, we've had loan and deposit growth of 4% over the last 6 years, and that compares to kind of 2% kind of growth overall. So what that tells me is that we can grow more than maybe is happening in the market. So we've got that ability, and I think of what's driving just now, there's a lot of activity going on. If I look to the retail side, one of the things we've really seen over this last year is the real broadening of our waterfront in mortgages. So if we look at the gains we've made in mortgages overall since 2018, we're up 2%, and in the last year, you've seen first-time buyers improve by about 4%. You've seen -- of share of flow, sorry, not of the total market, and then also buy-to-let has also increased. So we've now got an agreement with Landbay, where they help feed us buy-to-let transactions, which for limited companies. So that's another kind of stream coming through. We've expanded our product range. We're quite excited about the new offering we have in terms of family-backed mortgages. We can see that, that's working really well. So you can kind of see that, that's a mortgage book that's really continuing to evolve and for us to really strengthen the market that we capture. What we've done in credit cards, I think, has been well understood. We've grown tremendously from about 5.5% to 11% in that same period. I mean that's a really respectable kind of level of growth, helped obviously by the recent Sainsbury's transaction, and we've also taken personal lending out to the whole of market. Again, just another good kind of sign of the confidence that we feel, and then when you look to the commercial side, again, you can see the real strength that we've had across there, whether it's within TMM in terms of the deepening of the relationship. We know with our unique offering of the regional and national kind of coverage that we have that we will capture growth as it comes through, and we've also seen strong growth in C&I. We've continued to focus on sectors that we really are very strong in. So overall, it's been a good picture. We would expect it to continue. I know you'd love me to give you a number and a percentage, and we've talked about that before, Aman, as to what our views are as to how much it will grow, but we're very pleased with the level of growth that we continue to capture and the business is really focused on that as the first pillar of our strategy.

Yes. I mean, look, this is not a question. This is just an observation, but given the subdued kind of growth backdrop in the U.K., it is a remarkable level of volume growth on a sustainable basis. So I mean just to kind of build on that point then, I mean, asset quality often gets overlooked in the U.K. I mean you're guiding for sub-20 basis points cost of risk this year. I actually estimate your 10-year average impairment charge is sub-15 bps, and that covers a period where you've had Brexit, COVID and the cost of living crisis. So are you taking enough risk?

Look, it's a question, I think, that we look at often as we kind of assess where we are in terms of what we're doing, and what we can see in the -- we're very comfortable with the returns that we are driving at the level of risk that we're taking, and we can see that we don't believe that we have a need to change our risk appetite overall, but what we've done in things like credit card, personal lending, whole of market, you can see that we tweak in terms of appetite of where we want to play in different times. And I think we could all agree that if you look at COVID and Brexit and cost of living, I think none of our projections would have had our cost of risk as low as it is. But I think it's a real credit to the diversification we have within the portfolio and also just the real sector specialism when we're looking to where we are underwriting or not. So we're not looking to add risk, but we do, I guess, tweak it around the side as we develop different kind of products and approaches as well. But certainly that we were 9 basis points last year, 19 so far this year, including Sainsbury's, as you say, and we're comfortable that we'll be below 20 for the year. So it continues to be a benign environment in terms of the credit impacts in the U.K.

I might take that as an opportunity to turn to the ARS questions. You've got the remote. So if you could please take part, if we could run through the first three of them, that would be great. So first of all, what would cause you to become more positive on NatWest shares? One, better NII; two, better fees; three, better cost control; four, better asset quality; five, capital returns; six, better macro. Okay. That's a pretty emphatic response, better U.K. macro. I mean that doesn't feel like a surprise, to be honest with you, based on the conversation.

I mean, in fairness, it doesn't. I think -- and for me, the better NII at kind of 12.5%, I guess I read that as more surety of the continued ability to grow both sides of our balance sheet in the way that we have to kind of complement that structural hedge growth. But no, I mean, I think for the U.K., a lot of the investment we've had in us today has been because of the strength of that U.K. macro and what people are really wanting is the stability and predictability of it as we move forward from here.

Let's do the second ARS question, please. So what are you most concerned about at NatWest? Weaker earnings; weaker capital; lower distributions; reg risk; political risk; M&A. Political risk. I guess, a pretty emphatic response.

I was intrigued to where this one was going to go. So yes, that one was pretty emphatic.

Okay. Can we do #3, please? So how do you expect NatWest RoTE to develop over the next couple of years? So for example, 27% relative to this year's. Significantly higher; modestly higher; in line; modestly lower; significantly lower. Okay. Modestly higher. I don't know if you've got a comment on that at all.

Yes. Look, I mean, as we look at it, we obviously -- our 2027 guidance is greater than 15%. We're guiding you to a greater than 16.5% for RoTE this year. Look, we are comfortable on the strength of income that we see coming through in the next couple of years. We've also, as we know, we do have RWA growth that's coming in as well with both CRD IV expected mainly this year and then Basel in the following year, but modestly higher fees a nice challenge as we move on from there. But I mean, our guidance is certainly greater than 15%.

Okay. Let's turn back to the business. So the structural hedge, it's actually featured quite prominently in the conference over the last days.

I heard this, we're all going back to our roots.

Yes, exactly. It's obviously a key underpin to your earnings outlook, best-in-class structural hedge tailwind. Yes, I'm interested, how long do you expect this to be a tailwind for your business?

Yes. So when we look at the structural hedge, I mean, you know that we're very mechanistic in our approach in that. We believe that, that really is what serves us well over time. We've already confirmed for this year that the hedge income will be GBP 1 billion higher than last year, and we've said in 2026, it will be greater than GBP 1 billion. If we look at our assumptions for where we were putting hedges on this year, we're putting on slightly higher at the moment than that, it's 3.9%, that continues to flow through into '26, '27, '28 as we put that on. When we look at the 2028 number, which is one that I know you'd all like me to confirm a bit more closely. When I look at that, 30% of that hedge is written, but that 30% already accounts for more than hedge income I got in 2024. So I mean it's spectacular when you look at, there's no other way to describe it, and we're putting on a slightly higher level. So we do expect that to continue to be a tailwind into 2028. I'm probably not going to get drawn on '29 and '30, if you don't mind, as I sit here in 2025. So we do expect that, and we've given the good guidance for '25 and 2026. But it certainly is something that will continue to add value to us as we go through.

Yes. I guess -- so it kind of follows on to the next question around competition. You've seen pretty significant in-market consolidation. I observed that you've got six pretty large incumbent players in the U.K. and everyone seems to be targeting market share gains. But not entirely sure that they can all execute on this. But I'm interested in your assessment of the competitive landscape from here, particularly given the kind of strength of tailwinds that a lot of the major players enjoy.

I mean the U.K. by its very nature, is always competitive. We talk about how competitive it is any one time. And for me, it's just shades of where we are at that moment. And it will depend whether it's on deposits, in short-term outlooks as to what's happening with people's rollovers, what bits of their balance sheet are they looking to protect on mortgages, it's also what's happening on the swap curve, and where that's kind of moving around. I guess from our perspective, we've been very focused on making sure that we do continue to grow, but not growth at any cost. We want to make sure that we're adding value where we are growing and not doing big kind of cross subsidization from one to the other. So we do expect it to continue to be competitive. It will peak at different times depending on what's happening in that moment, and we'll be ready to play within that space, which is why I think that extension of the product range is really important, and then also to make sure that we just continue to bring sort of more of the bank to more of our customers so that we're capturing those opportunities between whether it's in our wealth business and referrals into -- referrals from there, from retail or what they do for the investment management within retail or making sure that we're referring customers from commercial. For example, into the wealth business and putting the right kind of connectivity between our different businesses to make sure that we can capture all the right bit of growth in the right place. So we expect the competition to continue, and that's something that we're definitely prepared for.

Kind of concentrate on yourself.

I think that's the best thing to do.

Okay. M&A has been a key area of focus year-to-date. The management have signaled a willingness to do M&A at various points, but also indicated a very high bar. So I'm just interested in kind of how important M&A is to your outlook from here. and particularly relative to the alternative uses of capital, and I'm thinking particularly buybacks.

Yes, absolutely. So if we look at kind of where we go from here in our strategic plan, the one thing I would say very strongly is our strategic plan is not -- doesn't have a basis of M&A within it. We're very pleased with the organic growth that we've demonstrated. We've got great belief that we can continue to demonstrate that organic growth and continue to deliver really good quality returns to our shareholders. We've recently done two important transactions, Sainsbury's and Metro. They're not the largest transactions, but they're important in terms of just actually making sure that we're continuing to add volume where it was necessary, and I think Sainsbury's is really important for our credit card offering. Also important internally because it actually really demonstrated that actually it was multiproduct, multi-customer, how do you bring them in? How do you make sure you don't have huge amounts of client attrition, but we do also see in that M&A world as people are moving things around, that also gives us opportunity to make sure that we are kind of capturing customers as they go forward. As a bank, we generate 200 basis points more or less of capital a year. We did 100 basis points in the first half. So that mean huge kind of capital generation. When we're looking at M&A, we do talk about being a high bar. I would say, if we look at the last poll, with returns marginally above this year in turn of 27%, that would suggest investors in the room are suggesting the bar is incredibly high. So it's got to something that's additive to those sort of numbers. So we're very aware of the commitments that we've got out to our investors in terms of those returns. We're also very aware of the distraction that M&A can cause as well as the value that it can add. So it has to be something that fits very well with us strategically, culturally, operationally deliverable without kind of taking our eye off the ball and financially really makes good sense. And we do always do the balance against what's happening in terms of buybacks at any one time. We've got a buyback in the market at the moment at GBP 750 million. It's going very well. We're happy with what it's delivering. So overall, you kind of look at the balance of all of those things. I guess the thing for me is just to reemphasize that high bar. We're very pleased with our organic delivery and our strategic plan is not dependent upon M&A. But you should also assume that we look at things that are in the market. And if it's something that really does make strategic sense for us, we will look at it.

That's great. To kind of continue this thing or evolve this thing, around deregulation, I guess, has been a key area of focus over the last couple of days. I mean, the U.K. has -- is on a drive. I guess, you had Mansion House in the summer. You had leads reforms, a package of measures aimed at reducing the burden on financial services firms. Interested in your assessment on that, and are there any particular areas that you think are impactful for your business?

Yes. No, absolutely. I think there's a lot of things that have been going -- that are going on, and we certainly welcome the leads reforms and the statements in the Mansion House speeches as well. As I kind of work my way through them, we're excited about what could be coming in terms of wealth advice. We think it's a real challenge that so few people in the U.K. are able to access advice. And actually, if you given -- if you think of our customer base in retail and our abilities within Co's, we're well placed to be able to enter that space. And we do know that when our customers take advice from us, you get to a better customer outcome. So as that evolves, we think that that's important. We've seen there's been a lot of work going on around the mortgage affordability and whether it's loan-to-income ratios or the stress testing. And I can see the impact of that coming through in my book already. So -- and it's been positive. So it's more people being able to access mortgages as they come through. If we then go to things like the Ombudsman, what they're trying to do is to get the Ombudsman back down to kind of helping people get the right outcomes and making sure the banks are there in the right way to kind of help support that outcome. So again, we're supportive of that. Capital reviews that are going on as well. We might get into that a little bit more. And of course, ring-fencing, we've been quite vocal about in terms of there are reviews going on within that. There's some small changes that have come through already, and we can see ourselves taking advantage of those. We do think there's more that should be done so that we can take away some of the cost and complexity burden of ring-fencing so that we're able to allocate that capital to investing in with our customers. So we'd like to see that to continue to evolve. But certainly, I mean, there's many different areas that they are trying to address at any one time, and we're very supportive of that and how it can ultimately lead to the kind of the strong growth agenda, which we're very aligned to.

Okay. We'll do the next couple of ARS questions, please. How do you see potential risk to NatWest capital and dividends from here? One, upside risk on earnings; two, upside risk on lower capital requirements; three, downside risk on weaker earnings; four, downside risk on higher capital requirements; five, downside risk on acquisitions. Okay. Upside risk on better earnings. Yes, I wanted to ask you about capital then. So one of the many kind of bodies of work that's taking place is the FPC have committed to review the U.K. capital framework, and you have kind of suggested that if capital requirements were to fall, you could lower your target CET1 ratio. You're currently targeting within the range of 13% to 14%. So could you elaborate on this? What time frame are we looking at? And is it a realistic scenario that NatWest runs with a capital ratio starting with a 12%.

Yes. So let's have a chat with that. So if we look at it, we kind of welcome the FPC work that they're doing. We also recognize the comments they've made that they think that the industry is adequately capitalized. So we're not necessarily terribly expecting that, that's going to make a particular change. However, there still are a lot of things that are kind of in train. If we look at our most recent SREP letter, which comes out just a couple of months ago, that took 17 basis points off our Pillar 2. So then we're sitting there with 140 bps above our regulatory minimum in terms of that number to the 13%, let alone the kind of 14%. We know as we look forward that Pillar 2 will continue to reduce as Basel 3.1 comes in. So that will be another kind of reduction. We've seen a significant increase in the amount of RWAs that we've taken on and the consequent increase in the capital, but not actually seeing greater risk within there. We see continuing good performance within our stress test, as a bank, we're very capital generative. I mean I've mentioned that already as we go through, and I think the period of derisking that we've been through is kind of helpful to that. So while I would say is I'm not committing to a date or a time line or anything like that, it is something that we do actively explore through our ICAPS, through our risk assessment piece. We do continually look at what's coming, and what's also importantly now, I think, is a lot of the changes from the global financial crisis are coming to an end, and they've been implemented where we are within there. So it's something we will continue to review. We won't commit to a date or a number today, but you can see there's many different factors in play.

Okay. Yes, let's progress through the ARS questions, please. So how do you view significant acquisitions at the group level for NatWest? Very positive; marginally positive; marginally negative; very negative; prefer the capital back. Okay. So typically pretty positively.

Yes, 72%, I'll take that.

Let's do #6, please. How concerned are you by the risk of bank taxes? Not concerned; moderately concerned; very concerned. Okay. That's actually quite a balanced response. reassuring actually. I can take this as an opportunity if there's anyone who wants to ask a question, please feel free to, we've got a microphone there. Otherwise, we'll continue with -- while you guys are thinking, we'll continue with the fireside chat. Can we talk about costs? You retained your full year cost guidance despite running well ahead of expectations year-to-date.

Well ahead, 2.9 versus 8.1, yes, well ahead.

Right, in terms of the year-on-year growth.

We are doing too well.

You're doing very well, you've indicated a ramp-up in the investment spend in H2. Just interested in what is it? What are you looking to spend money on in H2?

Yes. So if we look, I guess, at where we are, we've seen our kind of cost-income ratio come down from 56% to 49%. I mean that's a great kind of improvement as we've gone through from there. I mean GBP 3.9 billion in the first half, guiding to GBP 8.1 billion in the second half. There are some natural increases that do come through in the second half. The bank levy is obviously one of them. We also see our -- in our own organization, pay reviews come in, in April, so you get 6 months versus 3 months. We also have 6 months of NIC versus 3 months as we go through. If we look into the second half, it's also when we do much of the investment in the kind of restructuring in as much as you do in the second half and then you digest it in the first half and then you kind of kind of keep going within that space. So we're very committed to that 8.1 number, and we'll continue to see the investment in the business, whether it's through some of our technology and the implementation of our investment pool. And if I look at where we are in the guidance that we've given to the market, we expect to end this year with a high single-digit draws, which I think is also something we're very pleased with, and I think will be important for us to deliver to the market.

Yes. As a management team, you've kind of hinted towards lowering your group cost-income ratio over time. I think you've referenced European peer leaders. I note that you've got a bunch of collaborations that you've announced in the last year. There's the notable one with OpenAI, more recently with AWS and Accenture as part of a kind of broad bank-wide simplification model. I'm interested in like is there an opportunity to dramatically reimagine the operating model? Is that how you're thinking about that?

I think when we look at our tech and data and AI investments, what's really important is it works across all three aspects of the strategy. If I look at the growth agenda and what we're kind of delivering there, it enables us to get product out to customers much quicker. We're able to give better insights into our customer base. We're able to react real time to things like credit limit changes because of the fluidity of those kind of tech investments, and then also on the -- if I look at the kind of risk and balance sheet management side, it's how do we bring things like AI into kind of real active risk-making decisions. So that kind of investment works across all of the strategy, but it particularly works in the simplification area there, and the AWS and Accenture work is very much about getting -- making sure that our data is in the right place and that it's in cloud and it's easily accessible and that you don't have people kind of creating data models over here, which aren't the same as the models over there. So it's really about making sure you've got the right firm base on it because that's also -- which is what will then enable our AI kind of investment to kind of really deliver on, and what we've done with both OpenAI and also some of the really senior recruitments that we've brought in that are real kind of AI specialists within the organization, we can see that how we can take what's already been a strong AI journey for us and things like Cora, how we can take it to the kind of next level. One of the areas that excites me is around on the tech side, as I see them working with AI, the number of engineers, and we've really increased our engineering capability from 3,000 last year to 5,000 this year, and across sort of Python and Java, there 30% to 40% of that first level coding is all done via AI. So you've got more engineers, you're lifting up their abilities by getting their first level done by AI, and that just enables you to increase your delivery and the throughput that you're doing out to the customer base. So we see it as really important and it's something that really drives the simplification of the bank and really helps us kind of work with our -- both for our colleagues, but also for our customer base. So we're quite excited about what it could bring as we move forward from here.

Yes. I'll just open the floor again if anyone has any questions for Katie, please feel free. We've got one on the front here.

Thank you. Katie, I just wanted to hear a little bit more about the competitive dynamics. There's obviously quite a bit of debate around some of the fintechs, the neobanks that are taking share on the current account side, but also names like Chase, obviously, are very prominent, and interested to hear if you've got any further color on that and on maybe certain products as well.

Yes. No, absolutely. Look, I think it's very important to be aware of who your competitors are and what they're doing, and what we can see is that level of competition has lifted the U.K. banking industry tremendously over the last number of years, not just for choice of customer, but also the offering that we all give. So we do see competition in that, and we see the changes in terms of whether it's in deposits as the impact of the kind of ring-fencing real change comes through and as people are just gently building their deposits up. So we see just a general kind of impact on that. It will take time for people to get to those numbers. We do look a lot at what the activity is of our current account customers and what they are using elsewhere and why. And I think historically, we always talk about you always have one relationship on your current account and if you had more than one, then that was that was a bad thing. I think the reality is actually what we've got to work with on a retail basis, how do we manage the multibank to make sure that actually who are the customers that are really valuable to us out of our 19 million base of customers and how do we make sure that we're really embedded within them. And I guess that's also, if I think back to my AI question of a moment ago, that's actually will we make sure we're getting the right prompts out to the right people and reacting really at speed as we go through. So we do see -- it is a very competitive market in the U.K. and will continue to be so, and we see that competition kind of coming off across different product ranges by different people. We're very mindful of what's going on across the market at any one time.

Are there any other questions? If not, I have one on targets. We touched upon RoTE beforehand. You've got a greater than 15% RoTE target. You are well ahead of that at the moment, and I think, in most reasonable plausible scenarios set to comfortably exceed that level of return on tangible equity over the coming years as well. Is there any scope to refine your targets and guidance to reflect?

Yes. So as we look at the targets, we've talked already this morning around the 2025 and the 2026 kind of income growth that we see coming through and also on the structural hedge that it continues to be a positive and where we are on that. So -- but it probably won't surprise you, it's not something I'm going to get into too deeply this morning here as we go through. I mean we'll talk in February more about 2026, and we'll look at 2027 if appropriate. What I would remind you is our target is greater than 15%, greater than a 15% kind of target. There are some dynamics around extra capital and things, which has an impact on that, but it's something we'll continue to monitor and look at as we move forward.

Okay. Great. All right. I think we're just about on time. So with that, we'll bring the session to a close. I just want to thank everyone for your time and Katie.

Lovely, thank you very much indeed. Have a good day.