Christopher Lucas - Chief Financial Officer, Group Finance Director, Group Finance Director - Barclays Bank Plc, Executive Director and Chairman of Disclosure Committee Robert Le Blanc - Chief Risk Officer and Member of Disclosure Committee Rich Ricci - Co-Chief Executive and Chief Operating Officer of Investment Banking & Investment Management

Chris Manners - Morgan Stanley, Research Division John-Paul Crutchley - UBS Investment Bank, Research Division Michael Helsby - BofA Merrill Lynch, Research Division Andrew P. Coombs - Citigroup Inc, Research Division Raul Sinha - JP Morgan Chase & Co, Research Division Manus Costello - Autonomous Research LLP Ian Gordon - Investec Securities (UK), Research Division Andrew Lim - Espirito Santo Investment Bank, Research Division Fiona Swaffield - RBC Capital Markets, LLC, Research Division Chintan Joshi - Nomura Securities Co. Ltd., Research Division Gary Greenwood - Shore Capital Group Ltd., Research Division Christopher Wheeler - Mediobanca Securities, Research Division Michael Trippitt - Numis Securities Ltd., Research Division Jason Napier - Deutsche Bank AG, Research Division

Ladies and gentlemen, welcome to the Barclays 2012 Full Year Results Analyst and Investor Conference Call. I would now hand you over to Chris Lucas, Group Finance Director.

Good morning, and thank you for joining us. As you know, this is an important day for Barclays. We announced the key conclusions from our strategic review this morning, and Antony will give a presentation on them this afternoon. The Executive Committee will be there to answer questions, and the event will be webcast. The purpose of this call is to focus purely on the results for 2012. As usual, we're using adjusted numbers to give a better understanding of our underlying performance. Turning now to the headlines. We've made good progress across most of our businesses during the year. Adjusted profits increased 26% to GBP 7 billion. Total income was up 2% at GBP 29 billion despite gilt gains of GBP 1.1 billion from the sale of hedging instruments in 2011. Impairment improved 5% to GBP 3.6 billion mainly as a result of favorable trends in our U.K. businesses. This resulted in net income growth of 3% to GBP 25.4 billion. We've continued to reduce costs, which decreased 3% to GBP 18.5 billion, and our capital liquidity and funding remained strong. Our Core Tier 1 ratio was 10.9%, and our total capital ratio was 17.1%. Adjustment to the statutory numbers include a GBP 4.6 billion charge on own credit, a provision for PPI of GBP 1.6 billion, an GBP 850 million charge for redress on interest rate hedges, and the gain on BlackRock. As a result, statutory profits were GBP 246 million. The provisions, which include additional charges taken in the fourth quarter which we announced last week, GBP 400 million, was provided for redress on interest rate hedges. This is based on the FSA's report after a pilot exercise conducted in the fourth quarter. A charge of GBP 600 million was made for PPI. This is largely the…

[Operator Instructions] Today's first question comes from the line of Chris Manners from Morgan Stanley.

Yes, I was just -- I had a question, which was on your Barclaycard impairment charges. I could see the -- it's actually in rising for a couple of quarters and maybe you might be able to just give us an update on what you think the trajectory there and whether that's something that we should be concerned about.

Let me ask Robert Le Blanc who is with me to add to color. But my overall view is the performance of Barclaycard in the credit area has been extremely strong, and there's nothing that I see that makes me worry about it as we look forward.

I think that's right. Chris, we've seen improvements in card impairment over the last couple of years principally in our U.S. and U.K. portfolios as the economies have improved as well. And the card portfolios, of course, are all over the world, including Europe and South Africa. So there is -- although they do move around, the trend has been positive and I'd say we expect it to remain fairly steady from this point. So no, nothing there particularly concerning.

Okay. Robert, would it be possible maybe to just ask you to expand on how you see the credit outlook across the group in that case?

We certainly can.

Yes, certainly. I'll make just a brief comment on that, if I may. I mean, you recognize that we've seen a very significant reduction in impairment over the last 3 years, but if you look closely, the general trends in the second half of 2012 were broadly steady compared to the first half. And so the strength of the improvement we've seen has started to steady out, I think, as we had expected and guided you on. I think the trend this year will be steady across most portfolios in wholesale and retail. There is some room for a little bit further improvement, but my outlook for this year is a broadly steady one with potentially some slight improvement. And we think that will come through in the impairment numbers for this year.

And today's next question comes from the line of JP Crutchley from UBS.

It's a broader question, I guess, in terms of context for numbers. The last financial policy committee -- clearly, the FSA was sent away to have discussions with the banks on the 3 broad topics: Forbearance, making sure legacy costs have been properly put into numbers and risk weighting. Clearly, you've taken charges on legacy items, and that's fully apparent. You've talked about -- in the U.K. retail results, about risk assets going up because of a more comprehensive approach to forbearance. I wonder if you can discuss around that. And on the third point, on risk weighting, I wonder if you could just maybe elucidate how that discussion has progressed. And can we conclude from this -- and given that in a strategic statement you're talking about increasing dividend policy? But as far as you are concerned, those debates with the FSA on capital and the like are closed and therefore, the debate around Barclays in particular is likely to be a subject to need more capital with this debate that's going on between the FSA and FPC as done and dusted.

Let me start and I'll ask Robert to touch on forbearance, and then we'll pick up RWAs. I think, JP, in general terms, we share, as you can imagine, pretty much everything with the FSA on an ongoing basis. So they have been with us and briefed on the strategic review that we're talking about later on today, and also those areas of forbearance, RWAs, CVAs and impairment on certain areas. And whilst I don't think we'd every say that they have to make our decisions for us, that's very much our job. We have a constructive dialogue with them and over time, understand their position. They understand our position. And you can be assured that we briefed them as to these results. We briefed of them as to the forward-looking views that we'll be talking about later on. And I think it's a very constructive dialogue. How that plays out as we go into the future, only time will tell. But I'm very pleased with where we are at the moment. Robert?

Thanks. I would only add that when we look at forbearance from a capital point of view, firstly, we have been carefully measuring and monitoring the levels of forbearance themselves just disclosed in the results this year. And really, what's changed from an RWA point of view is simply the recognition of forbearance as an impairment event or as a default. And that's been changing and being adjusted through our RWA models. So it had an effect during the year.

If I want more clarity on RWAs, probably the best place to be is on Slide 33, which shows the bridge from GBP 391 billion RWAs at the end of December 2011 and GBP 387 million at December '12. And you can see in there, there are some quite sizable individual items of methodology change of GBP 20 billion, operational risk uplift of GBP 18 billion offset predominantly by business reductions, which are real business reductions, including legacy assets of about GBP 28 billion. So there are some big moving parts, but it shows that most of these things -- lots of big moving parts sort of net down to almost no significant change year-on-year.

And on risk weights, is that what happened in methodology changes? Or is that something which hasn't changed materially?

It's a mix here of methodology changes. It's a mixture of business reduction, where the returns are insufficient. And to give you a flavor, if you look at methodology changes in the GBP 20 billion on Slide 33, it's made up of an increased market risk charge, changes to sovereign loss in default and slotting of mortgages.

And today's next question comes from the line of Michael Helsby from Bank of America Merrill Lynch.

I just got a question on the Investment Bank's costs. Comp ratio is 39%, and your bonus pool was down 15%. I think one of the ways I look at it is to look at the bonus as a percentage in net revenue, and that was 11.5% versus 15.7% last year, and your deferral rates changed slightly. I was wondering if you could give us a little bit more color around how you see both the deferral rate evolving in the next couple of years and the likes of your plan? And also, whether an 11.5% sort of bonus as a percent in net revenue, if that's now consistent with the sort of the mid-35 comp ratio that you'll be looking for, i.e. can we take 2012 as a reasonable base forward because it makes quite a difference?

Let me ask Rich to start, and then I'll make a few comments.

Michael, I guess there's a couple of elements to your question. First, I've been on record several times just talking about our comp income ratio, I see, normalizing in the mid-30s over time. And you have to recall, as I know you know, that what you're looking at is the actual in-year charge that gets hung up with the actual bonus pool in the year. But over time, I would expect those things to kind of come into line with each other. Now that would mean that I would also see the deferral rate decreasing over time. We've had some extraordinary circumstances and for very good reasons had higher than, I would say, or normal deferrals in the last couple of years. But I would see those decreasing in time. They decreased this year actually. And as I say, I think over time, best-in-class investment banks and banks for that matter will have comp income ratios in the mid-30s, and we're on the journey to get there.

I think when we look at all the different measures of comp to income, yours, Michael, is the new one that we haven't used before. We'll certainly talk that out. And if there's anything that we want to add to what we said, we'll do so.

Your next question today comes from the line of Andrew Coombs from Citigroup.

I have a question on Slide 35, please, on the pro forma CRD IV capital and RWAs. Two questions related to that, I guess, if I split it out. First, on the numerator, if I look at your tangible book value per share, you just reported 373p. But adjusting for IAS 19, the 2.5 billion shareholders equity hit, and IFRS 10, the 0.5 billion shareholders equity hit, I guess that's pro forma 350p. But I just wanted to check that both of those aspects are already captured in your fully loaded Core Tier 1 guidance on Slide 35. And then the second half of the question, on the RWA number, back at the 9-month '12 stage, you were guiding to GBP 485 billion of Basel III RWAs by the year end. You're now guiding to GBP 468 billion. And the 2 big moving parts in that look to be the CVA, which has dropped from GBP 46 million to GBP 29 million, and securitization, which has dropped from 39 to 25. I'm just intrigued what the big driver of those 2 changes has been.

I think the answer to your first question about whether accounting changes have been included, the answer is yes. They have. In terms of RWAs and -- I think if I heard you right you're talking about the GBP 468 billion. So there's a number of things in there. There is securitizations which is where the impact of IFRS 10 goes, and the net capital change flows through there as well. The other area of reduction is CVA. And I think one of the things that's becoming clear to us is the volatility of the CVA number arising from changes in spreads. So you are very correct in what you are asking, and I think the GBP 268 billion is a more accurate current view of where the numbers are going to turn out.

And the next question today comes from Raul Sinha of JPMorgan. Raul Sinha - JP Morgan Chase & Co, Research Division: Chris, can I just have one question on U.K. retail's performance? It seems to be quite good loan growth pickup there in the second half of the year. And looking at the Bank of England data, Barclays seems to be outperforming the other banks in terms of the FLS loans extended. Can you comment on how the performance was in Q4 on both absolute balances and margins and how you expect that to trend forward?

You're absolutely right that we think we're taking market share at the FLS. In terms of trends, we've seen an upward trend and it's particularly mixed with an upward increase in deposits. And I think there is not much more to say. We've got a good performance. There's couple of individual items within there that have a little bit of impact on the fourth quarter but overall, good volume growth, continued gains and asset growth. So I don't know whether that fully answers your question, but we're pleased with the performance. Raul Sinha - JP Morgan Chase & Co, Research Division: Sure. Chris, I guess my question was more towards the underlying pace or momentum within the business heading into next year and especially as deposit costs have come down and you're seeing a pick-up in margins. Or perhaps, I can follow up later in the day.

Yes. I think we can cover that in more detail later today, but I would say the underlying performance is good. We think there is growth there. We see particular area for growth in volumes of customer deposits, which will offset as sort of flat margin that we expect to see; so net-net, flat margin, increased volumes, improved net interest income and good performance overall.

And your next question today comes from the line of Manus Costello from Autonomous.

My one question, I'll get back to Slide 35, please, the pro forma impact. I noticed that you've shifted the PPA adjustment out of the transitional into the fully phased numbers as of Day 1. I wonder what's driven that, what -- and it obviously doesn't impact us on a fully phased basis. But do you think it will impact your ability to issue further contingent notes, which tend to be based on transitional measures and is -- obviously is quite a negative for that?

I think it is. This is one of the outcomes of the dialogue we would have had with the FSA, where it was thought to make more sense and simply more prudent to put this in the fully loaded rather than transitional over a period of time. Though you can debate the matter either way, but we think doing what we've done sets out the ratio at the most prudent basis of calculation rather than anything else.

And there's nothing else within the transitional provisions which could come back up into the pre-transitionals?

No, not that we're aware of.

The next question today comes from the line of Ian Gordon from Investec. Ian Gordon - Investec Securities (UK), Research Division: It's just coming back to the U.K. retail performance and, in particular, mortgages. As we heard in the previous question, your balance sheet growth has been strong. I think your mortgage growth across the full year was about GBP 7 billion, H2 weighted. In terms of your current pricing, clearly, you're being more aggressive than some of your peers. In 2012, arguably, you had it easy, while Lloyds and Santander U.K. were giving away shares as fast as they could. Is it your intention going forward to maintain your more aggressive pricing to broadly sustain the pace of balance sheet growth even in a slightly more competitive market?

I think we'd have to look at that on a case-by-case basis. The important thing, from my perspective, is that we look at the return we make on the products and we look at the return on equity that we make in the business. And then a decision we make would make about -- be aggressive or not aggressive in terms of pricing would be very dependent upon being able to pass and exceed the return on equity target that we've set for the business. And you'll hear more about this afternoon.

And the next question today comes from Andrew Lim of Espirito Santo.

I just got a few questions, please. Your liquidity coverage ratios, you published 126%. Presumably, that's on the new Basel III basis. I was wondering if you could give some indication on how you'd like to run that. Would that be closer towards the 100% and therefore, you'd be able to reduce your liquidity pool there? Secondly, on...

Andrew, rather than queue them up, let's try to answer them one by one. The answer to that is, it is based on the latest view of the LCR rules, and we would expect that 126% to come down. Whether it gets down as low as 100%, I don't know. We would have to look at that over time, but it would certainly trend it down. So that, of course, would have the benefit of reducing the cost of the liquidity pool, which is the important thing that we've been aiming to do. So I hope that answers your first question.

Okay. That's fine. On Page 35, referring back to the couple of disclosure, you're the only U.K. bank to have this PPA adjustment, GBP 1.2 billion for yourself. I'm just wondering with what kind of certainty can you say that that's actually applicable going forward. So I mean, how much can we take that as a concrete adjustment you made there?

It feels pretty concrete to me.

Okay. And then thirdly, could you clarify what your outstanding existing Tier 1 and Tier 2 hybrids are, how much of these are?

Bear with us. Can we look at that answer and we'll come back to you with a response? This is regarded as about GBP 9 billion.

In aggregate for Tier 1 and Tier 2, okay?

Yes.

Okay. And then just finally, very straightforward, I hope, could give a bit more color on the mix of revenues in the head office?

There's a range of things in there. I think the best thing to do is to wait until we've restated with the allocation of head office expenses and income and look at it on a go-forward basis. What I would say is that if you look at the overall head office number, it's been creeping up. But when you look at it year-on-year, it has relatively small impact on the overall group with the exception of the group return on equity. And of course, our objective will be to allocate that out more fully. And I think that will be a good time to catch up on the individual component parts of it.

And the next question today comes from the line of Fiona Swaffield from RBC.

Just a question on the Basel III leverage ratio. So I think you are saying within 33x compared to the GBP 49.5 billion. So you're talking of a balance sheet of GBP 1.6 trillion or below. Is that the right way? And could you just take us through what the adjustments are on the Basel III relative to your just under GBP 1 trillion U.S. GAAP?

I think the answer is yes. How you described it is right. But I think -- what I'd suggest we do is take that offline and get one of our guys to go through it with you because it's an art rather than science.

And the next question this morning comes from the line of Chintan Joshi from Nomura.

Apologies, I had technical issues. I might have missed some comments. My first question is just what do you see as a picture in mortgages in the U.K.? If I look at LCRs of bank, they are not 4%. Rather, if you look at -- to your mortgages, you can get them now at 3.1%. So are you seeing switching behavior from your customers move from LCR to new low-price fixed deals? And how do you think about headwinds from this repricing?

Sorry. Headwinds from...

From this repricing of moving from 4%-plus LCR to 3% new fixed rate deal.

Yes. I think maybe you missed the comment, but our view on mortgage pricing is that we will be competitive. And in particular, we want to look at returns that we make on a product-by-product basis and look at whether it meets our return on equity requirements. The duration of travel that we're seeing is very low LCR volumes, mostly fixed and tracker, and increased numbers of buy-to-lets, increased volumes, so really across-the-board increase in volumes and good performance as a result of it.

Okay. The second question was on some of the targets that you've given. If I think about the GBP 16.8 billion cost target, add to that the GBP 700 million restructuring, with a mid-50s of cost-income ratio, that seems to imply a 10% revenue growth for a 9% cost reduction. I'm just trying to tie the 2 together. What you're saying here is you'll grow revenues and yet cut cost by about 10% each.

Can I just suggest we get ready to answer that question after the strategy session we're doing this morning and afternoon because one of the things we tackle is exactly how you get that cost performance line as you've been trying to derive. So it would be easier done once we've released the slide packs and information later on today.

Fair enough. Just one final detailed question, what was the driver of the quarter-on-quarter move in risk-weighted assets?

For the -- particularly, the quarter-on-quarter operating risk eventually gave rise to an increase in RWAs.

And your next question today is from Gary Greenwood of Shore Capital.

It's Gary at Shore Capital. I just wanted to come back to the issue of bonuses because I didn't quite understand given the sort of current hype around bonuses and banks' attitude towards bonuses. Why you've increased the current year cash bonus? And again, why you're talking about reducing the amount of deferral? I'm a bit surprised. I would have thought the route to be going down would be the opposite to that.

Gary, it's Rich. It's good question. I think that what I'm referring to is we've had extraordinary events. We clearly have a conservative deferral profile. But because of some of the events we've had, we've increased deferrals. What we want to do is try to get the balance right between making sure the interests are in line but you're not overloading your deferral rate in any one year that's irrational for the shareholder because you want to make sure because you have the constant roll-in of deferral. So that rates too high in any one year if you're working to a cost to income -- comp to income ratio. It could really limit your flexibly one way or the other. So it's about getting the balance right. And I think we just had a couple of extraordinary years where we've been particularly conservative in our deferral rate, which might not be in the interest long term to shareholder in terms of what we can pay to franchise versus pay them.

Surely, it's the cash rather than the P&L that matters there, P&L?

Yes, of course.

It's both.

It's both. But the cash payments -- we're not talking about a significant increase. The way we skewed our deferral this year, it's mostly towards the top of the house. So we're trying to get the cash that is released into the hands of the more junior people in the organization.

And the next question today comes from the line of Christopher Wheeler from Mediobanca.

A question really I suspect for Rich, I think. And it's really looking at the fixed income trading numbers. I mean, if I look at the big banks who have reported to date, we see, quarter-on-quarter, the average decline has been 24%. You managed just 8%. And also, I think for the first time in a long time, you actually earned more than Deutsche Bank in fixed income trading. That's quite a remarkable performance. Could you perhaps comment a little bit on the skew of that? How much perhaps was due to the U.S. business and your strength there? And how much perhaps just to your taking market share and where you took that?

Sure. We like your comparisons, Chris, so I'll let Rich to...

Chris, can we talk about first what we did gain. We certainly saw a market share gain in credit and rate. We saw some reduction in securitized products. There was a reduction on FX. Certainly, the U.S. was strong. Lower market volatility more broadly reduced the quarter. But we've said previously that we've been very consistent in our income. We're not running a lot of inventory. We have been taking market share. You've seen some players drop out of the space. But certainly, in the quarter-to-quarter comparison, it was really down to improve performance in credit rate, mainly driven by the U.S.

And the next question today comes from the line of Mike Trippitt from Numis.

Chris, just a quick question on the provisions that you've now taken on PPI and interest rate hedging redress. I just wonder if you could give a bit more on interest rate hedging as to what sort of share that would represent. And what I'm really looking forward is sort of degree of comfort now around the level of those 2 sets of provisions.

Yes, it's difficult because they are moving targets, but we take them individually. The -- that's on Page 91 of our results announcement. But if I look at the interest rate hedging redress, you know that we've had the guidance from the FSA. So we've got a pretty clear route map as to what we need to do in terms of the number of customers we deem not to have complied with relevant regulatory requirements, the nature of redress offered and the look at the reasonably foreseeable consequential loss. So all of those are estimates we had to make to include in the provision that we've made. It's our best view, and I should say that out of the GBP 850 million we've spent, something like GBP 36 million -- so it's a very big provision against a very small cash payment at the moment. And we think now based on the best available information that the GBP 850 million is a good number. If I look at PPI, it's a different product range. It's much greater number of individual claims. And therefore, it's a more volatile set of statistics if we look at trends of claims that are coming in. So I feel pretty comfortable about the interest rate hedging. It's less easy to be comfortable on the PPI. But in both instances, we've taken out best view of the situation that prevails and provided accordingly.

We have a follow-up question coming through from Chris Manners of Morgan Stanley.

So I just have one more question. I was wondering how do you think about the 2 related proposals from the Fed about the subsidization of the U.S. operations into an intermediate holding company. And have you sort of thought about how much capital and liquidity could be trapped there, what the potential costs could be and what the impacts of the business would be if you try to mitigate that?

We're working on it, Chris. As you know, the requirements are still being completely developed, and Antony will talk more about it this afternoon. But we're looking at different options in intermediate holding companies, what the funding cost will be and what we need to do to be able to comply with it. Let us get through this afternoon and then we'll come have a conversation with you, but a lot of work has been done in the area.

And we have a follow-up question coming from the line of Michael Helsby of Bank of America Merrill Lynch.

Yes. Just -- I was wondering if you could give us a little bit more color on your comments on January. It feels like fixed income, equities and primary are all off to quite a very good start certainly relative to January of last year. So I was wondering if you could just give us a little bit more color to be helpful.

We'll certainly be helpful. I think -- as I said, it's been a good month, but 1 month is a relatively short time frame to compare it over the whole year. But across the board, different products have been doing well. Different businesses have been doing well. So I think it's a good base to go into the rest of the year and the strategic review.

Okay. And just on bad debt, I think you mentioned you had this sort of bottoming out process. But I think clearly, Africa, you mentioned, still inflated; Spain, Western Europe still inflated. Could you just sort of drill down into those 2 areas and maybe talk a little bit about the outlook, please?

Let me ask Robert to do that.

I think those are areas where there is still -- particularly in Western Europe, still risks driven by the economies there and we've seen increasing rates of impairment. Remember, our businesses in Western Europe -- our largest books are on the mortgage side. So that went up last year, potentially could go up higher this year. So the rate is higher although the absolute numbers are relatively small for the overall impairment performance. Africa had some impairment in mortgages in South Africa last year, which was an LGD or a legal recovery increase, and we don't think that continues this year. But I think the Western Europe portfolios will remain under pressure.

And the last question we have time for today comes from the line of Jason Napier from Deutsche Bank.

I had 2, if I could be cheeky, please. The first for Robert, I think. Thank you for the new disclosures on forbearance on the wholesale side. I just wondered, could you confirm that there isn't really much contention around the definition of forbearance considering this is one of the things the FPC wants the FSA to look at. The numbers don't look particularly large, and the provision coverage looks pretty high. So I just wondered, is there an issue around definition of forbearance? That's the first question, please.

I think there is always a question of -- there has always been a question of interpretation of forbearance on the wholesale side. I wouldn't -- you may not be choosing your words too carefully, but call it -- I wouldn't call it an issue. But I think there are interpretations and refinements we've made. We've done them also, together with the regulator, in terms of what we think the RWA effects will be. But we think it's a fairly wholesome picture, and we'll continue to update on that as we release these on the regular basis. So there are interpretations you have to make on the wholesale side. I wouldn't call them issues so much as interpretation.

Okay. So your broad definitions are in line with the way the regulator looks at these sorts of things?

We believe so.

Great. And then a question for Rich, please. The gain in market share of Barclays in the IB is obvious. So I just wondered to what extent you look at the loss of traction at the likes of CS and UBS and other banks that have perhaps been at cost-cutting for longer. And I wonder whether the sort of targets that have been set for the overall group, how much of that is sort of already done? Or how much do you feel some retrenchment to the gains that you've made as you embark on this? I mean, how far along the road, I guess I'm asking, are you at this stage?

Well, I think, Jason, what I would answer to that is that over the last few years, we haven't been standing still and we really started reductions enforced across the business as far back as 2009. So I think ours has been more of a steady focus on costs. I think that the cost reductions that we are at a point now are certainly more targeted and I think towards areas where we need to rightsize for opportunity. You're right about some of our competitors exiting in a larger way. I think for the scale players, which is 4 or 5 of us, will continue to pick up passive market share and it's good news. I think there is more to come as others continue to retrench, but I think as far as we're concerned, I don't see any retrace-ment, if that's your question of our gains.

So as to the savings, do they relate to areas that you like to deemphasize rather than just reducing -- sort of resourcing across the board?

No, I wouldn't say deemphasize. Certainly, I think that when we built out our equities and Investment Banking businesses around the world put the estimates for what fee pools might be were quite large at the time. I think as those fee pools estimates have reduced, we reduced our size and scope. That doesn't mean we're going to be global or disinterested in the business. But certainly, I think we want to rightsize for the size of the opportunity. So that's where the cuts have been made. You'll hear more about that this afternoon.

I think that's all we have time for. I know we'll be seeing many of you later on today. So thank you for joining us, and we look forward to continuing the conversation over the rest of the day. Many thanks.