Edward Firth

Edward Firth asked if the HIBOR benefit in Q4 NII was temporary or sustainable, inquiring about HSBC's repricing of CASA accounts compared to peers. He also questioned why the 5% revenue growth target is set for 2028 and not sooner, asking if specific factors are anticipated from 2028 onwards.

Answer

Group Chief Risk and Compliance Officer Pam Kaur explained that Q4 HIBOR stabilized, impacting NII positively, and noted a benefit from lower betas on savings accounts in Hong Kong and strong deposit franchise. She acknowledged HIBOR fluctuations in Q1 2026 but within a narrow range. Group CFO Georges Elhedery clarified that 2028 represents a long-term structural growth opportunity, not a specific year, noting 5% revenue growth was achieved in 2025 and 4% in 2024. Pam Kaur added that guidance is cautiously set, considering plausible downside scenarios.

Edward Firth from KBW questioned the 2026 target for Investment Banking RWAs at 50% of Group RWAs, noting it's significantly below current levels and that the Investment Bank's returns are lower than other divisions. He asked for clarification on how this target would be achieved, whether through a large reduction in Investment Banking RWAs, risk transfer, or much bigger growth elsewhere.

Answer

Anna Cross, Group Finance Director, Barclays, explained that the 50% target was set in a different regulatory environment. She highlighted two controllable factors: holding Investment Bank RWAs flat (achieved for over three and a half years) and growing UK RWAs. The third, uncontrollable factor is the implementation date of the AIRB model and Basel effects, which impacts the percentage. She reiterated that the strategic intent remains the same, and the flat RWA for the Investment Bank is the important point. CS Venkatakrishnan, Group Chief Executive, Barclays, reinforced that holding Investment Bank RWAs flat and growing in the UK are within control, while regulatory calculations for the rest of the book affect the percentage. He emphasized the Investment Bank's focus on returns, which are approaching the group average.

Edward Firth questioned how Barclays plans to achieve its 2026 target of Investment Banking RWAs at 50% of group RWAs, given the current position. He asked if this would involve a significant reduction in IB RWAs, risk transfer, or much larger growth in other divisions, emphasizing the target's importance for the bank's strategic intent and valuation.

Answer

Anna Cross, Group Finance Director, Barclays, explained that the 50% target was set in a different regulatory environment. She highlighted two controllable factors: holding Investment Bank RWAs flat (achieved for over 3.5 years) and growing UK RWAs (showing progress). The uncontrollable factor is the implementation date of the AIRB model and Basel effects, which impact the percentage outcome. She reiterated that the strategic intent behind the 50% target remains, and the Investment Bank's year-to-date ROTE of 12.9% shows good progress towards group average returns. CS Venkatakrishnan, Group Chief Executive, Barclays, reinforced that holding IB RWAs flat is the important point, and the percentage is an outcome of that discipline combined with UK growth and capital assumptions for other parts of the business.

Edward Firth of KBW questioned the weakness in UK non-interest income and its outlook. He also asked why Investment Bank RWAs declined in a volatile quarter and followed up on the potential for larger buybacks given the high CET1 ratio.

Answer

Executive Angela Cross reiterated guidance for UK non-NII, attributing the Q1 result to normal lumpiness. Executive Coimbatore Venkatakrishnan explained IB RWAs are managed for stability, with some quarterly volatility reflecting client activity. Angela Cross then confirmed the high CET1 ratio is a positive outcome of the strategy, reiterating the commitment to progressive capital distributions.

Expressed concern about the 2024 outlook given the low U.K. NIM exit rate, asking if the planned cost program is intended to offset the NII pressure to maintain a 10% RoTE, and questioned where these cost efficiencies would be targeted.

Answer

While U.K. NIM faces pressure, there are offsets like the structural hedge and potential recovery in other business lines like investment banking. Efficiency is a key part of driving returns. The cost actions are a long-term approach to increase growth and will be sought across the entire bank, not just in specific divisions, despite the retail bank's already strong performance.

Edward Firth of KBW asked for clarification on the expected timetable for the Supreme Court's motor finance judgment. He also questioned the 2026 capital generation target of over 200 basis points, asking how it reconciles with the bank's stated growth ambitions.

Answer

Executive Director & CFO William Chalmers clarified that while they expect the motor finance judgment before the court's summer recess, they have no special insight into the exact timing. Both he and Group Chief Executive Charlie Nunn affirmed that the 2026 capital generation target of >200 bps is consistent with plans for profitable balance sheet growth, supported by investment in capital-light, high-return businesses like wealth and transport, which drives OOI.