Alvaro Serrano Saenz de Tejada

Alvaro Serrano Saenz de Tejada asked about the substantial EUR 800 million cost synergies, which represent over half of Webster's cost base, and sought clarification on the rationale for a 15% return on invested capital (ROIC) in the U.S. given previous 20% hurdle rates for disposals and the U.S. market's mixed historical results.

Answer

Ana Botín, Executive Chair of Santander, explained that the synergy figure is comparable to TSB's, supported by extensive due diligence, with significant reductions expected from headquarters/overheads and technology integrations. She highlighted that revenue synergies are not included in the current projections. Regarding the 15% ROIC, Ms. Botín stated it aligns with their capital hierarchy, offering a 6-point spread over share buybacks. She respectfully disagreed with the 'mixed results' assessment, noting the U.S. has been a top 3 geography for Santander's value creation over the last five years, with profits growing over 30% in the last three years and an adjusted ROTE of 15%.

Alvaro Serrano Saenz de Tejada asked for the drivers that will lift the H1 RoTE of 16% to the full-year target of 16.5%. He also followed up on the Consumer segment's return and inquired about the expected peak for provisions in Brazil.

Answer

CEO Héctor Grisi Checa pointed to the Q2 RoTE of 16.2% and the benefits of the new business model, which is increasing customer penetration and driving fee growth. Regarding Brazil, he noted the provisions were a conservative move due to high interest rates affecting some corporates. CFO José García Cantera added that Brazil's cost of risk is expected to remain around 5% for the year and should improve as interest rates fall.

Alvaro Serrano Saenz de Tejada asked about Barclays' capital position, questioning the balance between increasing shareholder distributions and retaining firepower for potential M&A. He also inquired about the Investment Bank's outlook, specifically whether a pickup in banking fees could offset a potential normalization in markets revenue in a lower volatility environment.

Answer

Group Finance Director Anna Cross stated the capital position is as expected and the capital hierarchy remains intact, prioritizing regulatory requirements, then shareholder distributions, and finally organic investment in UK businesses. Group Chief Executive C.S. Venkatakrishnan explained the Investment Bank's strength comes from both sustainable structural improvements and cyclical tailwinds. He noted that headwinds for banking fees are dissipating with increased deal activity, and he expects the bank to benefit from longer-term positioning in markets.

Alvaro Serrano Saenz de Tejada of Morgan Stanley inquired about NatWest's deposit flows, specifically the reduction in current accounts, and the drivers behind the bank's strong cost performance despite upcoming restructuring charges.

Answer

CEO Paul Thwaite acknowledged a competitive ISA season but noted that overall deposit share and mix remained stable due to disciplined pricing. CFO Katie Murray confirmed the structural hedge notional is stable and not impacted by deposit flows. On costs, Murray reiterated the full-year guidance, explaining that cost savings in H1 create capacity for planned investments in H2, leading to some expected lumpiness.