STANDARD CHARTERED PLC (STAB) September 2026 Conference Transcript

Good morning, everyone.

Welcome back. It's my pleasure to welcome Bill Winters, CEO of Standard Chartered, on stage with me this morning. Bill, thank you very much for coming. So, it's been a busy few months since you set out your medium-term strategy at the Capital Markets Day in Hong Kong. How do you feel about the progress so far?

Well, first of all, thanks for having me, Perli, and thanks for joining. We'll feel good so far. I mean, we've, in many ways, the strategy that we set out in May is the one that has been the strategy for, you know, the past 15 years. But, of course, we took some steps to focus, refine, and maybe explain a little bit differently since we had many of the attentions of many of you for a longer period of time than normal. And, you know, we set out a few key tenets, which is to focus on this affluent client proposition that we've got across Asia, Middle East, and Africa. That, obviously, is continuing to go very well. There's been noise along the way. Is China imposing capital controls or not? No doubt you'll ask a question about that. But the long and the short of it is that business continues to perform extremely well. And what we're seeing is that our strategy of investing in, focusing on that set of capabilities is really paying off in terms of clients, net new money, and obviously then through to wealth income. So that's going well. The second big theme is our cross-border business, which is an umbrella for really corporate and financial institution activity, institutional, but also wealth clients who, for whatever reason, operate across border. The obvious reason is they have cross-border business or operations, or they invest in cross-border, or they want to diversify their portfolios. And while many banks have a network, nobody has our network. I'm not saying our network is better or worse. It's just our network, and it's unique, which gives us entry to lots of different institutional clients through Africa or through South Asia other than India or through ASEAN other than Singapore. These are our home markets, and that continues to go very well as well. I won't give my whole set of messages on the back of one question. Last year, you accused me of answering all your questions in my first response. So I'll take a breath. I'll let you come back and steer me where you want to steer me.

Sure. Well, wealth, starting with that, why don't we? Q2 was a fantastic quarter for you. Can you talk us through what you're seeing in terms of client behaviour, given the market movements and increased geopolitical tensions in the last few months? Any change in risk appetite?

No, no change in risk appetite. But I'd say our level of awareness and caution is extremely high. So as you've seen, and you've commented early, through the years, we've improved the credit quality of our portfolio substantially. We don't have big concentrations and we don't have troubles in the book, but we can see plenty of problems that could come if things got much worse. It's not our expectation that things are going to get much worse, but obviously we can have that debate any time. But we've maintained a very cautious stance with the vast majority of our credit book being investment grade and continuing to improve with loan losses that are very low. And we've exited, not for credit reasons, but for strategic reasons, we've exited a lot of the mass market retail business that was anchored in credit card and personal relationships. So that obviously frees up capital. It also frees up the exposure that we would have to an adverse scenario in some of these markets. But the reason we exited is because we were subscale in many of these markets, and we're just focusing on things where we have a really differentiated proposition, which is cross-border and affluent credit cards. Of course, we offer credit cards to our affluent customers. We've just sold a lot of the portfolios. So how do we feel since second quarter? Very good. Each of the trends is reassuring. Obviously, interest rates are trending up. In this zone, it's still, I would put it in for us, the Goldilocks zone. It's still a good thing. Obviously, if inflation becomes very sticky and interest rates go up substantially, we would expect a slowdown in economic activity. We're not seeing that yet.

Okay. Well, so continuing on wealth. Just in terms of client activities, et cetera, clearly some of the markets have had a bit of correction in the summer. And also, as you mentioned, there are some regulatory tightening from the Chinese authorities. So what are you seeing in terms of client flows, if any change of behavior at all?

Structurally not seeing any change. Of course, clients are responding to the market environment. What we've seen actually through several cycles now, I call it mini market cycles as opposed to the big economic cycles, is clients absolutely rotate between outright equities with or without leverage, structured products, bank insurance, which is typically the most defensive product that our clients invest in, obviously deposits is a structurally defensive product. So we've seen from an extremely frothy first half of the year where we caution that we won't be able to grow our wealth income consistently at 35%. Or 43%. Or 43%. But we do think that the underlying growth is structural. That's exactly what we're seeing. And we're seeing some rotation out of the, call it the riskier, more idiosyncratic asset classes. But we fully expect that that's a timing issue. So there's a lot of, I think, hesitation going into the FOMC meeting. Are they going to hike? Well, they hiked. It's now clear. Warsh has put his marker down. And I think we're seeing the risk appetite resume.

Great. And then moving on to the CIB, the markets business has grown strongly and consistently in recent years. How's the business performing in the second half of the year? And what has been driving that consistent growth that you've seen in flow income? And how should we think about the longer-term opportunities for the business?

Yeah, it continues to perform extremely well. We know that in the first half of last year, so 25, was a very strong period, in particular for financial markets. So the comparator year-on-year in the first half was weaker in financial markets. It was much stronger in banking. In the second half of the year, it kind of flips. We had a very strong comparator last year. But cutting through the year-over-year changes, all of which are fine as an aside, the performance in the third quarter is very encouraging. And I would say it reflects, to the heart of your question, it reflects investments that we've made across a range of areas. And I've commented, I think, on this stage before that seven, eight years ago, our financial markets business was very FX anchored. And we were a good global FX house and a very good emerging markets FX house. We now are still a very good emerging markets FX house. We're, depending on how you want to measure it, top five, certainly top ten, in G3 or G7 FX. But we're also a very substantial rates house, a very substantial commodity house in our chosen areas, with a full range of derivative products and associated structure products. So it's just a much higher quality, better diversified business, which also allows us to rotate through cycles a little bit more effectively. We've done that in a very disciplined way. The flow income is increasing because we're increasing the number of clients that we cover. We're covering them better. We've built really good electronic trading and algorithmic trading platforms that those clients can attach to. And we've got much better linkages from our custody and cash management trade finance businesses. So those links were always there. We're just capturing a much higher proportion of the flows that our clients were engaging with us on, but then doing their ultimate hedging with somebody else. So without compulsion, we're bringing that back home. That is, I think, a gift that keeps on giving. So we've been growing that flow income at 10% plus for some period. That has continued through this year and into the third quarter. The episodic income, which is on average 25% or so of income, but quite volatile, had a weak fourth quarter. It had a fine first half of the year, but against a very strong comparator last year, and is having a fine third quarter against a weaker comparator last year. So percentage changes may look great, but underlying what we're seeing is good steady growth and progress in each aspect of that business banking uh of course part of what's going on in banking is the the ai feeding frenzy uh which is data center capacity being built at length we have participated in that in the huge market which is the us but a lot of our growth is coming in the rest of the world where these aren't the 10 gigawatt projects that you see consuming you know half of the state of texas but rather these are much more tactical in many cases they're not AI training model-based data centers. They're either inference or just cloud-based data centers. But there's almost an insatiable appetite for these products. We've been very cautious in terms of what we keep on our own balance sheet, but very active in terms of passing these things through. I think the other thing to note has been the surge in private financing in the Gulf. Obviously, there's a war. And they've not been accessing public markets. I think they could, for sure, if they wanted to. but they've been a little bit averse to public markets given the likelihood that they would be printing at a wider spread than they would like to have on record but they also want to bolster their cash reserves. They've been doing a disproportionate amount of that capital raising through us.

I see. What about banking then? What's pipeline looking like for the second half of the year? Any particular sectors or geographies that you're seeing particularly strong momentum?

Banking, that was the segment I was just talking about. Pipeline is good. The activity is robust. Of course, we saw a dip in capital markets activity over the summer months, also during the period when the Gulf conflict was more uncertain, which I guess is still quite uncertain, but people are getting on with business. So whether it's in the AI space, where caution has definitely become a buzzword, it spreads and widened quite a bit, even for the hyperscalers. But that build-out is unfettered. The capital raising in the conflict zones is unfettered. And our market share would appear to be going up quite a bit.

I see. Well, I mean, fee income has clearly been one of the main growth driver in the last few years. But with loan growth really picking up quite substantially in some of your key markets like Hong Kong and Singapore this year, and rates where they are, NII is looking quite interesting as well. So is loan growth something that you are leaning more into in this environment? And if loan demand were to stay strong, does that change your thinking about the mix between NII and fee income?

Look, where we start, and certainly where we start in terms of assets that we are intending to retain either in whole or in part we start and we end with returns so you know we've targeted uh 15 over 15 rote in 28 and then out to 18 plus uh or 18 to be precise uh by around 18 i think is what we're saying uh by 2030 and uh so we want to add assets that are creative to those targets if we can do that by growing our nii super but we're not going to grow nii at a dilutive level period. So we are seeing opportunities to deploy our balance sheet both tactically, i.e. underwriting positions, and structurally, i.e. buy and hold, that are more attractive than they have been for some time. And that I think reflects the fact that there's been a bit of a scramble for deposits and funding where we have some strong positions in particular in Hong Kong, but also Singapore and elsewhere. But there's also been a huge demand for borrowing. So when we see the opportunities will take them i would still fully expect that our non-nii is going to grow substantially faster than our nii and it's obviously higher returning so the equation is good but we absolutely have the ability to accrete towards that 15 and 18 percent rote by growing our assets and where we have that opportunity we're set up to take advantage and then on margins um well interest rates and expectations of rates have increased quite a lot in the last few months so how should What do we think about the impact of that on your business and with long growth demand coming back more strongly as you say, have you seen any increase in deposit competition? There's absolutely an increase in deposit competition, in particular in Hong Kong and And it's interesting to kind of probe the question, how much of the competition that we're seeing is because people need the funding and how much is because they want to show a good net new money figure because the entry point is deposits and you put a teaser out for deposits you print big net new money it gets written up by uh by bank of america and others as you know some some sort of great wealth business it may or may not stick past the deposit we are not competing in terms of net new money we're not we're not trying to hit net new money targets or AUM targets through deposits the deposits that we take we're taking because people want to put money on deposit with us we've got a very good track record now of converting those deposits over a period of time into wealth products the deposits themselves i mean certainly without because we're not subsidizing our deposit levels in any meaningful way we're very happy to take the deposits that's that's a valuable creative business we'd like the deposits we like the wealth products more so we just want to make sure that the relationship is set up for people to to keep their money with us as they go into riskier assets but I mean there is definitely competition for deposits the but but broadly are we looking to shift the mix no we're not looking to shift the mix we're looking to to optimize our returns and to To bring it all together, your income guidance for the year is around the middle of the 5-7% range.

Given your performance in half one was already up 9% year-on-year, X to solve India again in 2025, what are you watching out for the second half of the year that might explain some of that conservativeness in your guidance?

Yeah, well, I mean, the good news is we're completely focused on exceeding every target that we've set. We haven't changed our guidance, and you're not going to hear that from me today. But the focus for the team is to maximize that if we can hit all these targets earlier or better, I can assure you we're going to do that. There's none of this. Let's get it in the bag and save it for next year's stuff. It doesn't happen. If it does, it's totally invisible to me, which is... So what could go wrong? Well, obviously, we had relatively brief periods of kind of risk off when it looked like both the war in the Middle East and the war in Europe, Ukraine, was hotting up in a disruptive way. Markets seem to have gotten over that to a significant degree. I think there's probably some hope built into the markets right now that there will be some sort of a diplomatic breakthrough, at least in the Middle East conflict, during the time when UN leaders are together or global leaders are together at the UN. I wouldn't attach a whole lot of hopefulness to that. I would hope there could be some progress because this thing is going nowhere and it's very damaging to the world and all participants. But it's hard to see that anybody's ready to capitulate. But beyond that, I think we were all keen to see whether and how the market reacted to central bank action, whether they had cut or not cut – sorry, raised or not raised. As it turns out, the Fed raised. Other developed market central banks are clearly raising, led by the ECB. and emerging economies have been ahead of the curve on that. So far, no markets have taken the new rate stance badly in terms of a significant risk aversion. But we'll continue to watch that quite carefully to see if the market's at some sort of a tipping point. But you're all watching the same things as we are.

Of course. That's all I have on the income side of things. So I'm going to ask you a couple of questions on cost. Total costs are broadly flat this year on your guidance. So the operating leverage would be pretty significant at 6%, if not higher. But clearly, that reflects some efficiency investments in the last few years. And going forward, what do you think is the right relationship between income and costs? And how are you thinking about AI in that context?

The things that we're looking at quite carefully are, of course, the outright expense level. We've guided to a 57% cost-income ratio, which would be part of a steady improvement in that cost-income ratio over time. That, of course, will require us to maintain consistently positive jobs in order to achieve that. that all feels achievable. So the AI dynamic is really interesting. On the one hand, I see most of the investment capital from our bank and others that's gone into the AI space has been productivity related. It started with code completion and coding tools, which I won't say it's a no-brainer, but it's pretty straightforward to reduce the number of coders that you have and allow the coders to focus on value-added work, which is, by the way, the number of coders that we have is increased not decreased because we're building stuff but but clearly they're doing less of the mundane that kind of entry-level coding work the at the other end of the spectrum are the revenue opportunities probably the most obvious for us is deploying agentic ai capabilities into our wealth platform and doing that in a way that that is highly supportive of our relationship managers rather than displacing our relationship managers that's what our customers want they want the human but they want to know that they've got the best tools that AI allows, directly supporting them in terms of research and things, but through their RM where it requires some interpretation or a stamp of trust. And those are the areas where we have focused the most ourselves. But as I mentioned in May, and as Noel, our head of technology, and Tanuj mentioned in their full presentation in May, we've spent the past several years building our foundation layer to be fit for purpose in the AI world. And some of that was ordinary course foundation building, but very few people have done it. We have a single core banking system across which is cloud-based and proprietary. Across all of our markets, we have three to go, which is Korea, Taiwan, and Thailand. But we had completed Hong Kong at the time that we met in May and 50 other markets. So we've had no incident in any of those migrations. That and having for two-thirds of the world our data centers in the east, we have a state-of-the-art set of data center capabilities in Iraq is split between Hong Kong and Singapore that enables the quick and safe, and maybe not really underscore the safe, introduction of AI tools onto a platform that is built for that environment. We'll complete the west, which is our UK data centers, over the course of the next 12 months or 18 months or so. At that point, we'll have a really, really strong underlying infrastructure. The other thing we did, though, was we backed away from the 50 or 60 different use cases being developed by businesses and functions in AI into building a single AI platform. So our service bench, our foundation layer, which meant we slowed things down a couple years ago, but then came full speed towards the middle of last year. We've added, I think, 500 applications onto that AI factory in the meantime. Some of them are exactly the kind of code completion, technology enhancement, system testing, controls testing, financial crime compliance, monitoring, et cetera, et cetera. Some are revenue enhancing, algorithmic trading enhancements, market signaling distillation. I mentioned the agentic AI in the context of wealth advice. So things are accelerating. It's very exciting. Does it contribute to our cost and cost-income targets? Absolutely. But there's something else going on at the same time, which is the flip side of the AI opportunities or the AI threats. Cyber security concerns are enormous right now. These concerns have not penetrated the banking... We've not seen evidence of attacks on the banking sector as yet, typically because banks are the hardest to penetrate because we've invested billions of dollars to have the protections in place to prevent exactly the kind of attacks that would come in through these vulnerabilities that are being identified but as we know you know if open ai itself can be penetrated if microsoft itself can be penetrated eventually with enough time and effort they'll be able to penetrate a bank at some level uh our response to that of course is to have the ai tools ourselves um we know we get the question all the time are you in glass wing which is obviously the the anthropic mythos test case uh we are in myth we are in we have access to mythos uh we got it late later than the the americans uh but together with other others outside of the us uh but you know what we found is that 97 98 of the vulnerabilities that we we and others can identify in mythos we had already found using other frontier models that weren't as advanced but were advanced enough to spot these vulnerabilities but we also see microsoft came out a couple weeks ago with 969 new vulnerabilities many of those will attach to us as they attach to anybody using microsoft office or or azure and just to pick a couple and they had patches for 960 30 they didn't uh you know are we going to get better at spotting these things ourselves so that we don't have to hear it from microsoft i mean when i say we i mean the industry because i'm not aware that anybody had either identified or exploited these vulnerabilities before they were identified by microsoft but we don't know we don't know so definitely stepping up our our spend on on cyber in order to protect against a much more substantial threat that makes sense speaking of threats um etc so i might take the opportunity to ask you about some of the headlines today on AML would you like to make a comment on that sure yeah if those of you that have read the Financial Times the first you'll keep in mind it's the Financial Times and you read that whatever you want but the they did some actually quite good investigative work I think somebody did a data dump so somebody leaked some some documents from some investigation about a money-laundering network out of Russia called a seven the the headline was Standard Chartered and a few other banks, were engaged somehow, that we were victims or we transferred money for bad guys, which is true. Of course, we knew about this network. We identified the nodes in the network. We closed the accounts. We filed the suspicious activity reports, which no doubt helped the investigators to understand how this very sophisticated Russian money laundering network worked. That's what we do. We do that all the time. We file tens, hundreds of thousands of SARs, suspicious activity reports, when we see something untowards, and if we see enough of a pattern, we shut the account. This may be just a little bit of explanation of the way things work in the financial crime space. If a party is sanctioned, we immediately are aware of that. We put it into our transaction monitoring systems. We have no transactions with sanctioned parties. It never happens. So if they're sanctioned, some sanctioned party tries to deal through us, it's blocked. Transactions never initiated. For payments that we get through our correspondent banking network, and in these cases, I believe we're all correspondent banking situations, our respondent bank, so the bank that uses us to effectively get to some end client, they make the payment to us. We were the receiving bank in these cases. That process goes straight through. The payments are straight through process unless it's blocked because the sender is a sanctioned party. These were not sanctioned parties. These were respondent banks in China or elsewhere. We then review every transaction as it comes through to see if there's a pattern of payments or a pattern of beneficiaries that says to us we should be concerned about this. If we're concerned, we file a SAR. Like I say, hundreds of thousands of SARs. If we're not concerned, it goes straight through. Sometimes it requires quite an elaborate bit of data analysis to understand the patterns of money movement. Where was it coming from? Back in the chain. Where is it going to? Is the payment pattern unusual in some way? So it could take a day, it could take a month, it could take six months for us to determine enough of the fact pattern to warrant closing the account. In every one of the cases that were mentioned in the Financial Times, We closed the account before it was ever public, before we ever had any word from investigators or OFC or OFAC or the HKMA's Financial Crime Surveillance Authorities. So this is what we do. We did it in this case. Good for the FT to have uncovered this Russian money laundering. Why they put in the headlines, Standard Chartered, Citibank, DBS, HSBC are involved, go figure. because you have to get to paragraph 22 before you see where they say oh yeah and by the way Senator Tutter exited all those relationships and when they did exit it seems that the money laundering wearing circumvented someplace else the UAE or something anyway that's what we do we're very very happy we're very proud of it actually we have state-of-the-art systems but money laundering is a especially when you've got people who are determined to to break the law is it's a tough one to catch in the first instance but we do catch it that's great to hear um so um capital then we've gone through all the pnl lines um at the cmd you've guided to

a broadly even split between growth dividends and buybacks um so starting with growth where are you most actively deploying capital at the moment and you know you've talked a lot about ai spend and you know resources that need to be spent on um cyber security etc um so how are you deploying that capital at the moment and over time how are you thinking about a balance between dividends and buy bags yeah well i mean there's capital and there's expense so obviously they're they're correlated but they're not exactly the same uh the uh expense is clearly going into our growth areas of all things cross-border and and affluent so that's continuing to build out our fx capabilities continuing to build out our transaction banking with a particular focus on what's becoming you

know quite a substantial area of activity around digital assets as you know we've been invested in that space for quite a while and now we're seeing that the real use cases come through in the institutional world, well beyond the crypto world. So these are areas of ongoing focus and expense accretion. In terms of capital, as you mentioned before, we have seen some modest loan growth in a very attractive environment. More of that is showing up in our trading book than our banking book, and more of that is transitory, either underwriting positions rather than buy and hold. but frequently we'll have an underwriting position where we retain a piece. So those opportunities which are supporting the big growth in banking are interesting incremental areas to deploy capital. And of course, we're always weighing the trade-off between using capital for underlying business growth, keeping in mind that the fastest-growing RWA area is actually operational risk for kind of all the obvious reasons. The business is growing, transaction volumes are growing, the threat environment is substantial. But we also have some loan growth and we've had quite modest growth in markets despite the growth in the business. But we'll always look at any incremental growth of capital deployment against what we could do alternatively in terms of returning that to shareholders. Different calculation at 1.7 times book than it was at 0.6 times book, but nevertheless we're very, very, very comfortable buying back our shares at this price because we think we've got quite a long way to go. But it does cause us to think about how we balance buybacks versus dividends. We're 2.3 or 2.4% dividend yield right now, which we're fully aware is below the level that some income funds would be comfortable engaging. Obviously, we're at 2.4% because our share price has gone up, not because we've dropped the dividend. Would we think about how we balance that as we go through our dividend versus buyback versus organic growth, yeah, we'll consider all those things.

Of course. We've got about 10 minutes left so I'll take the opportunity to ask the floor for questions. There's one over there.

Hi, yeah, thanks for the discussion. Quick question with respect to the, what's your thought or view around how the risk management landscape or transformation is happening to keep speed with the pace of AI adoption and digital capabilities?

I feel like I missed the operative word. The what risk management outlook?

Just your thought around how the risk management landscape is evolving, transforming. Keep up with the pace of AI adoption and digital capabilities.

Well, I don't think we've changed anything in terms of our orientation. I know when I speak to our CISO, Cyber Information Security Officer, probably every other day these days and whenever there's an event or a piece of news. And, I mean, going back two years when the Frontier models, it was becoming clear that this was a new threat or at least a new form of threat. His response to me was, you know, what part of this do you think we haven't been preparing for for the past five years? What part of segmenting our network, layering our defenses, monitoring network traffic, like, nothing's changed. The only thing that's changed is it's happening faster. The time between the identification of a vulnerability and the ability for a bad actor to exploit that has gone from 10 to 12 days to 10 to 12 minutes, as a practical matter. So what we have to do to respond to that is to have AI tools that ideally are identifying the vulnerability before the bad guys do. But if we have no edge in identifying that, then we have to assume we're going to find it at about the same time as the bad guys do, which means that we immediately have to put a mitigating action in place. And we used to, I remember when I first joined standard chartered ours, our internal SLA for addressing a high risk vulnerability was four days. Well, now it's four minutes. So, and if we don't have a patch for the vulnerability that's been identified, which typically is going to come from a vendor or some Microsoft or somebody else, then we have to put some mitigants in place in terms of monitoring the network traffic. and we have to be prepared to pull the plug on that internet facing whatever it is whatever wherever the vulnerability is embedded in we may just have to shut that channel down if it's if we're shutting down you know some sort of internal data communication channel it may not matter if we're shutting down online banking to our customers in Hong Kong it matters so we obviously take that very seriously but we will we'll shut down a channel if we haven't built the resiliency to failover to something else, which in some cases, that may be the case in some cases, then we'll put the mitigants in place to address that as best we can. So nothing's changed in the risk management framework, but kind of everything has changed in terms of the speed that we have to respond and address these issues.

Any more questions? Well, if not, maybe I can ask you a question, maybe just stepping back on the regulatory environment, because obviously we've seen some headlines on various Chinese authorities tightening. But if you look at things like the Hong Kong's new five-year plan, the direction of travel regarding structural themes like RMB internationalization is still very much supported by the government. So maybe from your perspective, why do you think we are seeing a slight disconnect in some of these things?

Yeah, well, I think you're right that the headlines are the headlines, and they came in waves. We saw the crackdown on what would appear to be illegally operating Hong Kong-based securities companies that didn't have a license to operate in China, but were harvesting lots of money through third-party agents in the mainland into their accounts in Hong Kong. Well, they were identified, sanctioned, fined. They're still there, but I'm sure they're much more careful about the way they go about their activity. We have a bank in mainland China. The majority of the clients that opened up with us in Hong Kong or Singapore already have an account with us in Shenzhen or Beijing or Shanghai. We've never done things the wrong way in terms of opening up accounts offshore China vis-a-vis the onshore authorities. So there's no change in our activity. There's no change in our protocols. And we actually saw a slight increase in the levels of activity, I think, because clients were probably a little bit wary of going with some of these other companies. That's normalized, but still at quite a high level. There's a crackdown on various offshore disclosure and tax issues, in particular offshore trusts. This to me is normal stuff in a maturing economy. And of course, China has the same fiscal pressures that everybody else. And they say, OK, we're perfectly willing, I don't know if they're happy or unhappy, but perfectly willing to have their citizens diversify their wealth holdings across a range of instruments. there are capital controls internally currency controls internally so if they if they're going to get diversification it's going to be offshore they clearly are comfortable with that trend but they do want people to pay taxes on the things that they're obliged to pay taxes on in some cases the tax rules were unclear they clarified them in some cases there was active avoidance the trust structures in particular no material impact on our business we've we've never organized or oriented ourselves to tax avoidance or certainly not tax evasion and our trust business is relatively small and that trust business itself has a small proportion of mainland Chinese customers. So no material impact for us. But when you string the things together, you could think, it looks like they're cracking down on offshore money. But at the same time, the instruments and tools that they're putting in place around the internationalization of the R&B, the substantial issuance of R&B-denominated bonds offshore China, typically in Hong Kong, the active promotion of payment platforms that will have the effect of encouraging the deployment of RMB and a diversification of other currencies offshore. That's all happening. So I think it would be safe to say that we're not concerned at all. But of course, we have to watch because China is gradually relaxing its capital controls. They're gradually relaxing their currency restrictions. They're gradually increasing the attractiveness of the RMB as an international currency of trade and investment. They're allowing for a portfolio or collection of R&B instruments to be created offshore. Thankfully, these are all things that are right in our sweet spot. And, I mean, Dary B. Mercantile is about it, so we make a lot of money. As China opens up in this way, we are the primary, we are the leading R&B bank in the world. And I say that recognizing that there are other big banks that might make a similar claim. But every indication is that we are at the cutting edge of the internationalization of the R&B. You may ask, is that going to get you in trouble with the U.S.? I think not, because the way we're going about this business is highly responsibly. So when the EU or the U.K. or the U.S. imposes a sanction on some party that may have some Chinese connection, we impose that sanction. We file the SARS. We engage. So I think we're seen as a force for good by all sides. and keeping in mind that the United States still buys a lot of product that either comes directly or indirectly from China. And those trading relationships need to remain strong and strong enough that the two presidents are meeting together this week. So, yeah, overall, I would say keep a watchful eye, but there's nothing that we're seeing that's concerning.

Okay. Any last-minute questions for Bill? If not, then we are almost out of time. Oh, there is one.

Carlo Moccia from Bank of America, we've seen that in Europe the ECB has recently launched its digital euro through the wholesale banking channel, do you see any governments in the countries that you operate in following suit and if so is that a threat or an opportunity for you?

It's an opportunity, I think everywhere, I think you know our view that money will will go digital one way or another, faster or slower. And Europe and the UK had been pretty slow in terms of adoption. The UK, as you know, is not adopting at a government level. The EU said we're only adopting at a government level, so it's been difficult for stablecoins to operate in the same way in the EU as they have elsewhere, or in some other markets. So I think the wholesale digital euro, it's good. It's extremely well-designed. It's consistent with the regulatory format. in Europe, Mika, and there will be take-up over time. But I think it will be sitting side-by-side with U.S. dollar stablecoins and perhaps other countries' digital currencies. China, of course, has had a central bank digital currency for some time. It's not actively used, but it is used, for example, on their Enbridge platform, which is central bank to central bank. And they've got a new platform, of which we are a pilot member as well, that's bilateral, but still central bank to central bank. So I think the central bank issued digital currencies have a place in the armory of tools that people will use to move money. I think we could assume that they'll be safe and well-regulated. And we could also assume that they're not going to be as flexible or agile in terms of adapting to customer needs, which is why we'll have privately issued stable coins. We're issuing stable coins in Hong Kong, and we're finding hundreds of use cases. We just got the license two months ago. We're up and running now. with the with the initial transactions hundreds and hundreds of use cases in the crypto world which is where stable coins are native but also in terms of of cross-border trade cross-border payments treasury operations um so i'm i'm you know i'm very optimistic about there being a plethora of digital forms of digital money that will work for different people in different circumstances central bank digital currency has has one place great um we're almost out of time now thank you Thank you very much, Bill, for joining us today.