STANDARD CHARTERED PLC (STAN) March 2026 Conference Transcript

Okay. Good morning, everybody. Welcome to this session with Pete Burrell, who is the interim CFO of Standard Charter. Thank you very much for joining us today, Pete. Thanks for inviting me. We're going to run through – I've got some questions, but we're going to run through, and then we'll open it up to the audience for Q&A. But before we do any of that, we've got our polling question, which is going to come up now, so I'll just read it out to you. So what is the most important thing for Standard Charter to focus on in its May strategic update? answer one revenue opportunities in wealth and capital markets answer two capital return strategy three cost management or four long term risks and opportunities from AI and tokenization so if you wouldn't mind pressing the button on your little device and we'll see what the answer is okay, revenue opportunities I'm glad to see that clearly seen as a growth opportunity so we'll be able to dig into all of those as we go through the next 45 minutes or so. But maybe, Peter, we can start off and talk a little bit about sort of what's happening now. So obviously, 2025 results, you sort of exceeded or met your goals for 26. You set 26 targets of over 12% roti, mid-single-digit income growth, and broadly flat costs. So what progress have we made towards that in the first quarter?

So thanks. So, look, I think it is worth pausing a bit to reflect on the 25 outcomes and then jumping into 26. I mean, we had set out in 24 three-year targets on income, ROTE, capital distributions, cost, a whole variety, and we were very pleased at year-end to be able to, as you said, meet or exceed all of those targets a year early. We were reporting on an underlying basis then, but we had delivered the income growth. We had delivered underlying ROTE of 14.7%, well ahead of our 13% target. We had kept costs in check and credit quality in check as well. We had exceeded our distribution target, and at year-end, not just exceeded the distribution target, but also increased not just buybacks, but also dividends, increased our dividend quite a bit. So quite pleased, starting 26 in a real position of strength. To your specific question, which is how's Q1 going so far and what are we seeing, I think the trends that we saw last year continue. And in the areas of strength, continued to perform well. We called out when we did our year-end results a strong start to the year in wealth. Nothing's changed in those trends. The last few weeks haven't impacted that. We've continued to see strong net new money and continue to see growth in wealth. So please with the progress there. and markets when we when we sat down and discussed our year-end results it seems like a long time ago it was only a few weeks ago we had some slight loss in what we call episodic in q4 as we start q1 markets has been good flow has continued to grow in in in as it has last year and in previous years episodic has rebounded from q4 but q1 is obviously a bit volatile and we had quite a strong Q1 comparator last year, but pleased with the progress so far across our businesses in Q1.

Okay, thank you. And just sort of, you know, let's delve a little bit more into that. I mean, obviously, a few things have changed in the last few weeks. So how do you think of of sort of recent events and what risks that might pose to those 2026 targets?

So, as you might expect, I'm going to first focus on, luckily, our staff and our operations and everything have not been impacted, and no direct impacts there. When we think about the first-order impacts, clearly we start to think about credit quality, anything on the radar screen there, and you really have to think about and look at the types of business we have in the Middle East. So for us, we have our primary operations are CIB in UAE, Qatar, and Saudi Arabia. It's vast majority, over 80% investment grade, largely financial institutions, multinational corporations, government-related, so no immediate kind of first-order signs of concern there. Clearly, we're cautious as to how this develops, but nothing kind of flashing amber or red on that side. On our WRB side, it's primarily UAE, and almost all All of that now is secured mortgages with low LTVs. We don't have an SME business in the UAE anymore. We shut that down a number of years ago. So it's, again, feeling cautious but comfortable when it comes to what we've seen so far, the first order impacts. I think as most of the people at this conference probably would have said, when it comes to the broader second order impacts, It very much depends on how long this lasts, what the broader impacts are on oil prices, inflation, interest rates, GDP, which it's just too early to tell. But nothing that causes us, as I sit here today, to change any of the guidance that we put out for 2026 a few weeks ago. Okay, perfect.

And then if we look beyond 2026, I mean, you know, there's obviously all sorts of things changing. I think increased business disruption is sort of how we think of the world going forward. As we move to a multipolar world, obviously we're getting disruption from tech and the like. So longer term, how do you think about that when you are sort of constructing credit portfolios? How are you embedding disruption risk into your sort of credit policies? And, you know, you've obviously guided about sort of 30 to 35 basis points, medium term or through the cycle credit charge. Like, is that something that maintains in a more disruptive environment?

So, well, I would argue it's not a beginning of a disruptive cycle if you look at the last number of years. And I was reflecting, actually, the last time I sat on this stage was a number of years ago after Silicon Valley Bank had gone down. So we've been through quite a few cycles. And I think I would focus on a few things. One, our CIB business, the focus has been much more on origination and distribution and much more investment grade, large multinationals, et cetera. Our loan losses last year were 19 basis points overall with virtually nothing in CIB. It was a $4 million charge in CIB. The year before, we had net recovery. So our 30 to 35 basis points bakes in some unforeseen events that we don't have line of sight. We haven't called out any particular risks, but we do recognize that zero is not normal. So we feel comfortable that that 30 to 35 basis points caters for a wide variety of potential outcomes. On the WRB side, we've really been shifting that business to focus much more on affluent and wealth management. and within that we've had both geographical exits as well as portfolio exits that are focused on the consumer unsecured space so we're kind of reducing risk in consumer unsecured portfolios and as i mentioned our kind of sme type lending is not a main portfolio in either our wrb or cib business so we feel comfortable with that through the cycle there's nothing that we see today that would change that it's not a 26 kind of specific we've had that guidance out for a number of years and and we feel comfortable with the diversity of our portfolio. We pay a lot of attention to concentrations, be that geography, be that industry, quite cautious about going into kind of the new exciting next big thing unless we really understand it and can get comfortable underwriting it. So while I do expect unexpected things to happen beyond 2026, we think we're well positioned to weather that within our existing guidance.

Perfect. So let's maybe go on and talk a little bit about some of the revenue opportunities. I mean, that was obviously the number one thing that people want you to focus on at your strategy day. So let's start off and just talk about wealth and retail banking. I mean, obviously, very, very strong momentum, especially in the wealth management lines in 2025. I wonder if you can talk a little bit to sort of the sustainability about what's driving that. And also if you can talk a little bit about how the competitive environment is changing in that Asian, Middle Eastern wealth management market.

So we are very pleased with the growth that we've seen in the wealth business. And if you take a look, if you zoom out a bit, that business has grown for us. I mean, it was exceptional growth, I guess I would say, or very strong. I don't want to use the word exceptional in the last couple of years. But it's been on a, for the last 10 years, it's been roughly 10% growth. So it's not a temporary phenomenon. It has accelerated recently. And we've obviously made it a key core of our strategic focus in WRB. Competition is there. for sure. But we are, as it stands, the third largest wealth manager in Asia. And we've been growing faster than the competition. We had our net new money growth last year of 52 billion was 14% of AUM in one year. So we are confident in our ability to compete. We continue to see structural tailwinds, I guess, when it comes to the growing wealth in our footprint, in our markets across Asia. So we do believe, and we are investing heavily into that. We announced when we had our, I think it was 18 months ago or so, when we had a WRB Focus that we were going to be investing 1.5 billion into that business, both in RMs, but also in technology platforms, real estate we've got priority private centers across a number of our markets i was in one in korea a couple weeks ago and really trying to make sure our brand is premium in that marketplace and we have that in a number of markets in asia and we're confident that we can continue to grow so we do think it is sustainable obviously our revenue guidance for the year while we don't have a specific wealth well you you mentioned in your opening question mid single digits that's with guidance to be flat on NII, which implies, if you do the math, and everyone here is a numbers people, continued confidence in the ability to grow non-NII, of which wealth is a significant contributor.

And you're, I mean, in terms of the, I mean, just digging a little bit more into that, I mean, as you say, your net new money growth is ahead of peers. I mean, And what would you attribute that to, do you think?

You know, it's always interesting sitting here in London talking about Standard Chartered. And you mentioned it earlier when we were discussing. I mean, if you go to Singapore or Hong Kong, which are the two major centers for us, we are quite a prominent brand. We are, you know, we're on the money in Hong Kong. We're quite visible in that connectivity to China as well. and we have an on-the-ground retail business in China. So we do think that that brand presence is really important. We also, our diverse product offering, our open architecture, the fact that we don't manufacture product, it's not completely open. We select products, but we... And the clear focus, I mean, that is our reason for being in WRB, right? It is, when you think about all of our strategic focus, it is cross-border and affluent, cross-border and affluent. And all of our businesses across all of our markets are really focused on that as the key driver rather than trying to be everything for everyone in WRB. Okay, brilliant.

And then if we maybe move on to the other part of the business in terms of the corporate side, I mean obviously you know trade and again that international connectivity you mentioned is is an important driver of growth and I guess the markets business and your fi business and these are all the drivers of that so I just wonder if you can talk a little bit about how you continue to progress that business in an environment where maybe we get trade disruption You know, traditional routes are less sort of clear, where capital flows are beginning to change as well. I mean, what are, and, you know, geopolitics, I think, continues to be a challenge. And then people are talking about sort of, you know, technology threats and stable coins and the like. So, you know, what do you think are the things that you need to do to, you know, continue to drive growth in that business? and what would be the threats to growth in that business?

So it's interesting. If we were sitting here a year ago, all the focus would have been on tariffs and how that was going to disrupt and stop global trade. And I remember IR's favorite ribbon chart that we put out to show basically our cross-order flows from kind of the catch and the throw and the to and the from countries. And I think if you go back and you look at that, But what's somewhat unique about Center Chartered is that there's not one corridor or one geography which is kind of the key driver of our outcomes. The power is really in the network, and we have a strong belief that trade will continue to flow. It may change directions. It may change corridors, but we believe that with our footprint and our network, we're well-positioned to capture that so long as it continues to flow. And we've seen through the tariff – I don't know what to call the tariff situation – the tariff noise, shall we call it, that global trade has continued. And we have seen strong growth in both our banking and our markets business and across our CIB businesses more broadly with the exception of rates hitting our transaction services business. So I think history and the variety of shifts, whether that's China plus one, whether that's tariffs, whether that's our network and the value of the advice that we can provide to our clients in trying to navigate those challenges positions as well for whatever that turbulence, geopolitical, trade, tariff. Otherwise, clearly that's not to say that nothing could happen, but we are strong believers that global trade will continue, that the areas where we have the biggest footprint, so we are across pretty much all markets in ASEAN, we are quite big in North Asia, China, Hong Kong, etc.

Middle East, we are well positioned to capture those shifting trade flows wherever they may come. and then and then if we sort of look at the markets business i mean that's obviously been a big driver of of growth um on the ccib side i mean you know what how can you give us assurance on on sort of growth prospects there what's going to drive growth there so when we when we think about our markets business and it's always um you know we we disclose and split it between what we call flow and what we call episodic.

And flow to us is off of the back of that trade activity or capital movement. Our clients wanting to hedge, whether that's rates, FX, commodities, we've got a commodities business as well. And that activity has been growing 10% double digit per year over a number of years. So we think that that flow business will and can continue to grow alongside those trade flows. That is a natural extension of the business and one that we have been leaning into and expanding our product offering quite a bit to make sure that we can continue to capture those flows. The episodic bit is by nature episodic. It's been largely range bound, if you will. If you look at our history, it's between 0.7 billion and 1.1 billion. So it bounces around from quarter to quarter, but over a trailing 12-month, it tends to be quite stable and less important to the overall markets business as a percentage terms, as the flow continues to grow in the episodic. So we feel comfortable and confident.

It's quite a capital efficient business, which is why we're comfortable growing that and are happy with the results that we've seen to date so i think it's a natural play to our um to our offerings and our client base and we're happy with the growth so far right can i can i move a little bit down the pnl now and i guess to to the cost line um obviously good performance in in 25 4 jaws i think um and you know we've still got savings to come as the fit to growth program sort of comes to its

conclusion uh in 2026 but longer term i mean what what are you doing to make sure that you can keep that cost discipline and how are you going to sort of pace that cost growth with with revenue growth in the future so i think you're pointing out the the four percent positive jaws last year is important we also had six percent positive jaws the year before that so so i think it is It is kind of a mindset that we have that we recognize our ROTE needs to go up, our cost-income ratio as a result needs to go down, and we will continue to drive that. But you also touched on another important point, which is we do have growth opportunities. So for us, it is about the productivity of our cost base and making sure that we're able to invest into areas of growth while continuing to maintain cost discipline and focus on how to get more productive. So Fit for Growth was a big contributor to that, but cost discipline and focus on productivity across the bank will continue so that we can continue to make progress on positive jobs. I think positive jobs is a bit of a mindset for us. that we need to make sure that we are tailoring our investment profile depending on those growth opportunities that we see rather than it being some natural growth of the cost base that is passive rather than active. So we will maintain the discipline. We've provided specific guidance for 2026 of costs being broadly flat, and we will continue to be disciplined thereafter. But for any guidance beyond 26, you'll have to come to our Capital Markets Day in May or maybe dial in to our Capital Markets Day as the IR guys will tell me that we're probably full. And I can't invite anybody else to our Capital Markets Day in May.

And, I mean, if we think about cost discipline, there's obviously, I guess, a couple of different elements. I mean, I think Fit for Growth was very much focused on finding lots of pockets of inefficiency that you could drive out of a business. I don't know how far progressed you, like I don't know if there's still more to be done there, but obviously there's technology side as well, and that helps you control BAU. So what will be the drivers of that discipline? How do you maintain that discipline?

So Fit for Growth will not be the end of our search for productivity. I mean, we have, through Fit for Growth, done a lot on standardize, simplify, digitize. a key component of that is also technology simplification to that point and automation that while there's been a huge emphasis in fit for growth that will not stop when fit for growth stops technology continues to change, offers us new avenues to pursue when it comes to streamlining operations making sure that more of our cost base is focused on revenue generation and less of our cost base is focused on, if you will, back office for lack of a better term and that continues and I think technology can be a key has been a key enabler and will continue to be a key enabler to that

so I don't know that productivity that search for productivity ever comes to a complete stop as we will continue to ensure that we invest into that productivity and drive it beyond fit for growth If we sort of move onto capital obviously you've paid back more than the original 8 billion which you targeted the 1.5 billion share buyback announced with the 4Q results and a big step up 65% increase in the dividend which I think you mentioned before as we go forward how do we think about that capital that you're generating how much of it goes into growing the business what are the opportunities there and And, you know, what's left? How should we think about the framework in terms of buybacks, dividends, and the like?

So we have consistently said our first priority is to give the business the capital it needs to grow and to drive the revenues. Now, over the last number of years, we have shifted our business model to be much more capital-like, which means that we have not had to grow RWA a lot. We've been able to really rationalize and look at suboptimal RWA, where we're deploying RWA, we're deploying our balance sheet, and we're deploying our capital without getting the returns from our clients. So that has allowed us to grow revenue. And again, some of the things we're talking about, wealth management is not a capital-intensive business. It doesn't need capital in RWA to grow that business. So there's been a mixed shift. But our first priority has always been, if we can generate the right returns, give our businesses the capital they need to grow. Dividends, you mentioned. Dividends, it's been important to us to have a dividend and to increase it. We found we were a bit lower than most of our peers, so we did make a sizable increase in dividend at year-end because we recognize that it's important to have a dividend, but that it should be sustainable and it should grow kind of as earnings grow. Buybacks have been a critical component over the last number of years, and we continue to think buybacks are important. and we don't have a particular trigger point on either price to book or whatever where we say, oh, we stop kind of doing that. Obviously, we need to consider what opportunities are there at the time, how we view our share price in relation to other opportunities. But I would say it's kind of business growth, sustainable dividend, and growing as earnings grow, and buybacks continue to be a tool in our arsenal. Any further guidance beyond that, we'll have to defer to May to talk a bit more about how we think about that going forward.

I'm going to just pause for a minute. I've got a lot more questions, but I just want to check if there's anybody in the audience who would like to ask a question. I'm sorry, I'm going to have to put my glasses on so I can see you. Yeah, that gentleman there.

Thank you. Wondering if you could drill down a little bit into your credit exposure, particularly in the Middle East, and mortgages in UAE and things like that, and just elaborate a little bit more on that.

Sure. Our mortgage portfolio in UAE, I believe, is LTVs are sub-50. So it's quite a conservatively underwritten portfolio, and we're a retail bank, we're a wealth and retail bank in UAE and I've been there for quite a while. So not seeing any particular signs of stress. And the vast majority of the portfolio in WRB is that UAE mortgage portfolio. So nothing that would cause me to change any of our guidance or call out any particular area of concern in our Middle East portfolios. So the rest of the lending book in the Middle East is primarily CIB. Our CIB lending is primarily UAE, Qatar, and Saudi Arabia. The vast majority of that, over 80%, is investment grade. It's largely financial institutions, government-related, and investment grade. So, again, no particular signs of challenge that we've seen to date.

Okay. I'll take Rob next.

Yeah, and just on the kind of private credit kind of question, I guess like on balance sheet, asset exposure may be low in Asia, not the US, but in terms of the wealth business kind of client exposure and what they're doing, obviously lots of headlines.

So we do distribute a small amount of that, but it tends to be the larger names. We haven't seen any unusual outflows or activity in that, and it's not a major part of our offering in wealth. So we do have some clients that invest in that because clients want to invest in that, but it's not a major offering and we're not seeing any unusual outflows.

Maybe I can broaden that out because I know you've been active and working with private markets players on sort of originate to distribute type dynamics and that's also been great for improving the efficiency of the balance sheet. I guess that gives you an interesting insight into that ecosystem. What are you seeing? what are you thinking? Is there anything changing your outlook for the ability to continue to sort of recycle the balance sheet the way you've been able to?

So thanks for the question. I do think you know when we look at our originate to distribute it's a variety of different types of distribution. In Asia a lot of it is whole loan sales. There's also credit insurance and when it comes to private credit I guess it's not one size fits all. I think we continue to focus on our underwriting criteria when we get involved in a transaction and make sure that we're comfortable with the transaction, not just from a distribution angle, but also to hold a component of that. So we're aware of what's going on. We're thoughtful about what we underwrite, but we're comfortable with our position and what we've seen to date and are thoughtful about which transactions we get involved in on the hong kong business can you comment on the situation in the commercial real estate i know your exposure is not large but what are you seeing there in terms of provisions and price performance so for for our for our book as you mentioned i mean we we our exposures are reasonably limited they have not deteriorated we are well provided where we need to but we don't have a lot of stage three it's mostly uh stage one and two and we've got we still have overlays for for potential any any potential downgrade so it's um and we think that the the market especially office buildings is is recovering is showing signs of recovery um our exposures tend to be to the to the larger players um in that so we're we're thoughtful about it uh we have overlays in case things develop but i think if anything we're seeing signs of recovery rather than deterioration in the areas that we're involved in.

Yeah.

Could I get your thoughts on stablecoin and the LIBs and what does that mean for liquidity margins or even the broader tokenization, what that means for fee businesses? Thank you.

So I think we've been quite active and proactive when it comes to digital assets more broadly. We launched Zodiac Markets, Zodiac Custody. We have a tokenization platform as well. We are applying for a stablecoin license in Hong Kong with the HKMA. So we want to be and expect to be part of that ecosystem as it develops. As far as U.S. dollar stablecoins, as far as what we're seeing so far, While there's an increasing interest from clients, it has yet to really have a significant impact. But we want to make sure that we're prepared to participate in that ecosystem. Again, not necessarily as an issuer as we are in Hong Kong. That's a bit of a unique situation. But that we are prepared that when our clients want to use stablecoins to move money cross-border or to make payments, that we are able to facilitate that. And the stablecoin to fiat leg is still going to be an important component of that, where we expect to continue to be able to serve our clients. So it's one of our core thesis that kind of digital assets and stablecoins are going to be part of the future.

And we've been, I think, very proactive in leaning into that and making sure that we have the capabilities to serve that ecosystem as well as the current, but not seeing a significant impact to date. kind of deposits on your balance sheet and therefore, you know, if I think about the flight of deposits from the, you know, the bank, potential cost of funds, liquidity, how that plays out?

So it really depends on the market. I mean, if you look at, you know, Hong Kong, for example, the HKMA is the one driving the stablecoin process and they want to make sure that it's appropriately regulated. And I think in a lot of markets, regulators are quite thoughtful about the interplay between stable coins and the banking deposit base. So in tokenized deposits, we're yet to see, obviously, that could be another area where it's using similar technology, but stays within the banking system. And we're also experimenting with that.

So not seeing any signs of that to date, especially in our footprint and where they are but thoughtful about how it may develop going forward and want to make sure that we are prepared for that okay have we got any more questions can i just maybe follow up a little bit on on that question there on on tokenized deposit and stable coins i mean in terms of the hkma stable coin i mean is its use case primarily going to be an on-ramp and an off-ramp into sort of digital investments or do you sort of see wider use cases coming about um i expect in the

in the hong kong situation could have wider use cases but it's a hong kong dollar so it's primarily domestic there's not a lot of cross-border activity in in in hong kong dollars um but we'll see how the market develops i think ultimately the the i think the hkma wants to make sure that the appropriate safeguards are in place or sorry it's not the hkma i think is the hong kong exchange but that the regulators in hong kong want to make sure that you know it's not a way around checks and controls over things like kyc and aml and all those types of things so i don't think it's exclusively going to be for digital assets i think it should have a broader utility but we'll have to see how the market develops and on have you got are you doing tokenized deposits yet have you got we have the capability we have we have experimented and done some pilots on tokenized deposits i think again we haven't necessarily seen that big take up from from from clients but we want to make sure that if that is the direction of travel and that is where our clients want to utilize that we have the capabilities um to be able to transact in that way.

And I guess, staying on that theme, if we look at AI, which is obviously another topic du jour, how are you using it? And how do you think that will change over the next 12, 18 months?

So AI, I think it's fair to say for us, we're in the early innings of AI adoption. I think we have, where it's been most impactful for us so far, has been in enabling our RMs in the wealth management space. So not in the direct interaction with the client, but allowing our RMs to be more productive in the way that they prepare for client meetings and the way that they propose ideas to the client. So we have kind of invested to make sure that we are on the front foot when it comes to AI in our wealth business. I think on the use cases that are more efficiency-related or more broad use, we have a lot of pilots in train, but we have not yet kind of seen the big impact. But we are continuing to focus on that, and I do think that that is an area, if you will, on whether that's transaction monitoring screening, whether that's the things that require a vast amount of data in AI is very suited to, we will continue to look. I think when it comes to banks and AI, the regulatory dynamic is one that has to be very thoughtfully considered as far as being responsible for the decisions that are made by AI as well as the access to confidential client information, et cetera, across the footprint. So really, I think there are lots of opportunities to come. I'm pleased with what we've seen to date, primarily in the wealth space as far as... And that efficiency that we've seen on the wealth space has enabled us to grow revenues faster than assets under management, faster than RMs. So I think we are seeing the benefits from a productivity standpoint on being able to do more business with our clients as a result of enabling our RMs with AI.

And just in terms of one of the things you did at the reporting or in the last of the results is you announced that you're going to fold ventures into the main business units. And I guess the bigger part of that operation is going to be trust and mocks. So I just wonder if you could comment on what some of the advantages might be of moving those businesses into WRB. And also, sort of, what have you taken from the ownership or the build-out of those businesses back into business and, you know, what has WRB learned from this?

So we launched Mox & Trust. Mox is our Hong Kong digital bank. Trust is our Singapore digital bank a number of years ago when digital banks were kind of new. And I think for us it was an exciting opportunity to try to participate in that market and, as you said, take learnings from what can you learn in setting up a digital bank. So I think now, four or five years on, depending on how long, the digital banks are at a point of maturity where that kind of interaction with our WRB business makes sense to help serve our clients across the various offerings from, you know, mass being better served through digital banks, lower cost to serve, lower cost to onboard, but not suitable for all product types. I think the more you get into individual wealth or advisory, that tends to be more in the main bank. So we're seeing some synergies of working more closely and collaboratively between our digital banks and our kind of standard chartered brands in those markets. We even had one portfolio transfer in Hong Kong where we, you know, digital banks are very good at raising liabilities. It's a bit more of a challenge on assets. So we did move some assets in Hong Kong from the main bank into the digital bank. So that kind of broader service offering, we think there's some benefits. What did we learn in the WRB business? I think that kind of digital-first mindset and that interaction with the client through digital channels, I think there was a lot of learnings there, which has pushed us to be much better in the mobile offering and the digital offering that we have in kind of the core bank as well. So we do think now is the right time, both based on the maturity of those digital banks as well as the collaboration possibilities that we have between the digital banks and the main bank, that it's a good time to manage them a bit more cohesively and collectively rather than treating them as a separate thing from a reporting standpoint. As a result of that, we also took the remainder of what was in our ventures. As you mentioned, Moxon Trusts were the vast majority, and what's left is kind of experimentation, innovation, but it's not a material number, so we just decided we'll move that into C&O, Central and Other, sorry, to report on that going forward.

And how do you manage? I mean, obviously, you've got other shareholders in Moxon Trusts, so how do you manage that relationship as you merge it in?

Well, it's not merged in. I mean, it's a reporting change, not a merger change, right? There are still independent entities with different investors, and if we do transactions between the main bank and the digital banks, they have to be at arm's length. We have to make sure that the pricing and everything is on an arm's length basis. So no change from that. It's a reporting change, and how do we manage them internally rather than a structural change from an entity or governance standpoint.

So we've got a few minutes left. have we got any more questions in the audience yeah gentlemen wanted to ask about digital currencies mentioned before that it was one of the threats to the banking system and they were loving to Europe part of it so the Enbridge project in Asia how is it evolving and you know what's your participation there Can it be a threat? Can you update us on what is going on?

Sorry, I didn't hear correctly. Which project is that?

Well, the project of the central banks to do a digital currency, you know, Hong Kong, China, UAE, et cetera.

Yeah, I think regulators across the globe are thoughtful and conscious about introducing digital currencies and what that could mean to central banks, what that could mean to banking systems. And so I think it's going to be market by market. The one particularly, I don't view that as a huge disruptor in the near term. We'll have to see how it develops. So I think it's still early days, and there's not a cohesive effort across – there's not a clear direction of travel yet, I think, when it comes to central bank digital currencies, stable coins, tokenized deposit, and what role each plays. I think a lot of countries are quite cautious on central bank digital currencies as far as disruption of the banking industry. And I think a lot of consumers are quite cautious about central bank digital currencies and the amount of control that that may lead to. So we'll keep an eye on it. We'll stay engaged in it. But nothing I would call out specifically on that one.

Just one last one from me. Net interest income, obviously very strong in Q4. We've seen highball come off a little bit into Q1. How should we be thinking about the drivers of that going into 2026?

So we put out guidance with our year-end results on NII being broadly flat year-on-year, and it's a variety of things. I think, at least as we said a few weeks ago, rates were a headwind to that. We publish a currency-weighted average interest rate curve, which was negative 44 basis points kind of year-on-year, so rates are a headwind. That's changed slightly in the last number of weeks, but not directionally. So rates are one headwind for us when it comes to that. The other headwind that is probably more unique to us or is more unique to us is our portfolio actions where we have taken both geographic as well as portfolio-specific actions to reduce our unsecured portfolios. It's good from an ROTE standpoint. It's good from a focus standpoint, but it does have a negative on NII. So we've called that out as about a 2% headwind to NII. Now, offsetting, we've also called out the fact that our pass-through rates have been higher than our historical average, and that may prove to be a headwind if rates come down and we're not able to hold those pass-through rates. We are assertively managing those pass-through rates, but we're conscious that that may change. Against those potential headwinds, we have volume growth because we do believe that we grew volumes at roughly 5% last year. We're not calling out a specific volume growth, but we do believe that we've got the ability to grow volumes and that a lower – if rates do go lower, that there should be some offset in volumes. We've also got potential mixtures as far as both liabilities, quality liabilities, growth and liabilities, and deployability of those liabilities, as well as on the asset side. So we think they tend – those various factors balance themselves out, which is why we've given guidance to Broadly Flat. nothing that i see as we sit here today would would change my views on that guidance cool all right well pete thanks very much for joining us today thank you for your insights and thank you everybody for listening in thank you