Good morning, Ladies and gentlemen. And welcome to the Investor and Analyst Conference Call for HSBC Holdings Plc's Earnings Release for First Quarter 2015. For your information, this conference is being recorded. At this time I will hand the call over to your host, Mr. Stuart Gulliver, Group Chief Executive Officer. Stuart Gulliver Thanks very much. Good evening from Hong Kong and welcome to our first quarter results call for analysts and investors. With me today is Iain, who is going to talk to you about the detailed financial performance, we both then take questions. But let me start by pulling out a few highlights. Reported profit before tax for the first quarter was $274 million higher than the first quarter 2014, and adjusted profit before tax was up $349 million. The other banking markets had as usual strong start for the year with an 8% revenue increase in the markets business. Commercial banking continues to perform well, particularly in the UK and Hong Kong, and principal retail banking and wealth management generated increased revenue. And impairment charges were significantly lower compared to the same period in 2014, particularly in Europe and in North America. Adjusted operating profits expenses increased as expected and we continue to work on initiatives to deliver costs savings over the remainder of 2015 and beyond. The results for the first quarter of 2015 reflected a significant improvement on the last quarter of 2014 led by higher revenue in global banking markets. We generated $4.6 billion of capital from profit in the quarter, the enabled us to strengthen the Common Equity Tier 1 ratio to 11.2% to fund the first interim dividend of $0.10 per ordinary share which amounts to $1.6 billion net of planned script and also to continue to support asset growth. As we all know, we hold an investor update on the 9th of June. And I'm now going to hand over to Iain to go through the details of our performance.

Thanks, Stuart. For the first quarter reported profit before tax was $7.1 billion compared to $6.8 billion in the first quarter of last year. Adjusted profit before tax was $6.9 billion compared to $6.5 billion. You recall that the adjusted measure excludes the period and period effects of foreign currency translation differences in significant items; we'll find more details in these adjustments in the appendix to the presentation. Looking at some key metrics, the annualized reported return on average ordinary shareholders equity was 11.5%. This is lower than the return on equity in 1Q '14 primarily reflecting the impact of dividends payable and additional Tier1 capital which we issued in the third quarter of last year. The annualized reported return on average tangible equity was 13.1%. On an adjusted basis we have a negative draws of 1.5% in line with expectations for the first quarter, and our Common Equity Tier 1 capital ratio on an endpoint basis was 11.2%. This next slide shows the breakdown of profit before tax for the first quarter and the proceeding four quarters. Adjusted profit before tax for the quarter increased by $4349 million compared to the first quarter of 2014, driven by higher revenue and lower loan impairment charges partly offset by higher operating expenses. As you can see in the top right of the slide, the increase in profit before tax was driven by Asia and Europe, higher profits in Asia were driven by increased revenue in Hong Kong and Mainland China. This reflected increased insurance revenue in retail banking and wealth management from life insurance manufacturing, and part due to improved equity market performance and investment distribution. In addition, we saw increased revenue from average balance sheet growth in commercial banking and a favorable performance from our markets businesses in global bank…

Thank you, Mr. Gulliver. [Operator Instructions] And our first question today comes from the line of John-Paul Crutchley from UBS. Your line is now open.

Good morning, JP here, just a couple of quick questions if I can. The first actually on the comment I think you made on the type – Stuart, the dividend and the bank levy saying, the bank levy was bit of a hindrance on your policy to continue to [indiscernible]. And I'm just wondering if you can maybe just add a few comments there, how do you think about achieving?

Look, it doesn't change our policy to make the dividend progressive, so there is no change in our view that the dividend is a core part of the reason people are in the stock and are after you to generate dividend, it's quite clear from the first quarters numbers. What we're actually looking at is the mass of it, so we paid $9.6 billion in dividend last year, and the jump in the levy with the stuff announced in the recent budget goes from about $1.1 billion to $1.5 billion, so that's 400 million that's added on. And if you think about growing the dividend at 5% on $9.6 billion, it's roughly $470 million, $480 million of growth there in that dividend. And then you think about what the chance to say that it's not permanent part of the tax system, and then remember the shadow chance that talked about 800 million pounds to the bank levy, assume it's $1.2 billion to keep this sort of FX number easy, should we seem to pick up about one-third to 40% of it, that goes another quick $400 million. So what I'm articulating is clearly the reason why – one of the reasons why we are started a process to review where the headquarters of the holding should be, is informed by that. So what I'm not saying is we've changed our dividend policy, what I'm pointing out is one of the reasons that we are reviewing where the headquarters of the holding company should be is the size of the dividend and also the size of the levy, and the size of the jumps in the levy in proportion to the size of the jumps in the increase in the dividend, and as you know this is a pre-dividend distribution, this is not actually – that it comes profit before tax, it's not a tax.

Understood. The second one was just – I just want to make a comment on the impairment charge, particularly the Latin business which still seems quite elevated, I know you've obviously had some historic issues there, and just to know how you see that playing out some of the fall back as we start to normalize by now?

Yes, I think as it relates to the loan impairment charges, we are probably seeing what is an actual fact and reasonably normalized level within Latin America. As you probably can recall over the course for the last four years, we've continued to reposition the Latin American portfolios, in fact portfolios around the world to hire proportional secured, but nonetheless, as we reposition that portfolio and loan impairment charges are somewhat lower as a consequence of that, we still hold quite a large proportion of unsecured debt within the Latin American book, and that naturally incurs a higher proportion of loan impairment charges. So I think there is a balancing point between the revenue and the loan impairment charges that we need to consider, not only within our Latin American businesses and others, and striking the right proportion now between secured and unsecured product, and the revenues that can be generated from that in a risk adjusted basis. But I think we are looking at based in the current composition of the balance sheet, a reasonably normalized loan impairment charge for Latin America, and by that what I mean is, there is nothing unusual coming through this quarter for LatAm.

Okay, it's helpful, thank you.

Thanks. Get the next one, please.

Our next question today comes from Alastair Ryan from Bank of America. Your line is now open.

Thanks, good morning and take it from me, I'm clearly, clearly hopeless in forecasting your costs as most impacted in Q1 as you were worse in Q4. Just – whether the level of noise in that clearly there was relatively low conduct charges this quarter or whether you've made early progress on that new cost target, and so is that noise or underlying progress in Q1? And second, GBM was one part of the bank that grow its risk weighted assets in Q1 until back end that it probably grew its total assets as well, so that was about 43% of total risk weighted assets. Did that head in the right direction for you, or is this not good questions for Jim really but it's growing in proportion to the total mix and historically, you wanted it to be somewhat smaller than its current staff? Thank you.

Yes, thanks Alastair. So let me take your global bank and markets risk weighted asset point first. So I think global bank and markets total risk weighted assets about $520 billion, $70 billion of that is balance sheet management, so our corporate surplus, and about $44 billion of that is legacy credit, so the six sitting with end global bank and markets. I think as everybody appreciates, when you look at our capital surplus, that's sitting with end global banking and markets, perhaps somewhat artificially in place but the view both of the size of the balance sheet in nominal basis as well as our risk adjusted, as well as risk weighted basis within that. In the current quarter, as in previous quarters, the global bank and markets team is very, very focused on managing knowing what the absolute number of risk weighted assets but more importantly the return on the risk weighted assets that business able to generate and we will go into considerably more detail about this on 9th of June that we clearly recognize that as an important part of giving clarity to the market about how we move returns for the group from the lower 10% to above 10%, the numbers we talked about back in February. Specifically within the first quarter, the main adjustment that we saw coming through was actually in market risk where a number of trades that we undertook actually impacted through the incremental risk charge model, a significant adjustment, now that model was subject to certain change as required by the PRA last year and I think it would be fair to say that they are still considerable refinements required within that model for it accurately to reflect the performance of certain aspects of the markets business and we're very focused…

Thank you.

And by that I mean, how we are doing, what we are doing, how we get from where we are and – we realize that these provide a very detail cost which we will do on the 9th.

Thank you.

Next, please.

Our question today comes from the line of Martin Leitgeb from Goldman Sachs. Your line is now open.

Yes, good morning. I saw there was a comment made earlier whether you continue to assess Brazil and Mexico to a key and the U.S. businesses to intense scrutiny on whether they should be kept or not going forward within their HSBC umbrella. And I was just wondering and well aware here, obviously of June 9, whether you could share your thinking in terms of what would the key parameters be on which the decision whether to keep those subsidiaries or not this meet? Thank you.

We would go into in detail during the 9th, it's a fairly obviously call by June 9.

Thank you.

Thanks. Next, please?

Our question today comes from the line of Ronit Ghose from Citigroup. Your line is now open.

Hi, thanks for taking the question. I just had two areas of questioning, one is in fee income, and the second is one capital. The fee income numbers are bit below our expectations and I'm just digging into the Europe RBWM fee income, I know Iain you said that there was change in overdraft to the practice, how much of that decline which is roughly over 20% year-on-year, and Q-on-Q in fee income in RBWM is just FX translation? How much is this change in overdraft process and how much would other factors – I'm just curious as to anymore color you can give us around that trend. And secondary question is around capital, and two sub questions here, one is your UTPLC, your UT legal entity, at the full year numbers you said at the time that it was a 9% core equity Tier 1 full loaded, an 8.7% transitional, and I wondered if there was any color you can share around that capital number in terms of what it would regulate over the UTPRA Ad because I know we've talked about the group before, I know the group – you've talked about 12% to 13% number for the group, but for the UK if you have a similar number – a go to number for the UK division. And a very small question on the capital, it looks like it was about a 10% hit in the quarter on the group capital from FX translation, is that mainly driven by sterling and euro declines, were there other EM currencies affecting that? And just looking at the RWA moves and the capital moves, it all fit to almost about 10 basis points down quarter-on-quarter. Thank you.

I'll take your last question first Ronit. It was nine basis points that came off the Common Equity Tier 1 ratio in the first quarter. Main currency is impacting that euro against the dollar, sterling against the dollar and then to a lesser extent the Brazilian real and the Canadian dollar. The composition of that was I think about 33 basis points off capital with about 24 basis point add-on back from a risk weighted asset perspective, so a net of 9 bips on capital in the first quarter from foreign exchange. Fee income, one of the drivers within fee income certainly was this change in practices that related to – as it related to overdraft. In the United Kingdom if you are with HSBC now and you're likely to run into overdraft, you get a text message from us indicating that you will and that a guidance or a suggestion that there is an opportunity to remediate that before you start into cutting fees. The impact on currency translation from currency translation within the unit retail bank wealth management was actually represented about a 10% impact on the overall fee income generated within that business in the quarter and then that was compounded by the change in overdraft practices as it relates to that text messaging approach. So that is – those are the main drivers of the fee income. From a capital perspective, the UK bank ratio, the UK bank this year for the first time will be a specific subject of the stress testing, last year it was the group that was focused from a stress test standpoint, this year the PRA has requested that we provide a submission that is specific to the UK, and as a consequence of which I think it's reasonable to assume that the regulator is turning its attention not only to group capital but the capital of the UK bank, and in that context, specifically of you to recovery in resolution presumably but not decidedly under a multiple point resolution construct. I'm not sure clearly the UK bank exceeds the minimum required from a PRA perspective, I think actually it's very, very difficult to say at this point in time whether the PRA has a specific number in mind for the UK bank, whether that would be proximate to the group to what their expectations are for the group, and I think we've been clear previously that the PRA of set data, an expectation for the group of common equity Tier 1 under the most recent internal capital guidance by 10.6%, and that includes the pillar to a buffer in that regard. So more to come in the UK bank on a standalone basis, almost certainly informed by stress testing in the outcome of that. So as that develops, we will share more but at the moment the UK bank exceeds the minimum requirements within the UK quite comfortably.

Thanks for that Iain, that's really helpful. And just to follow-up on the question the UK capital, I'm just thinking about if you last reported 8.7% flash 9%, I get the direction of travel is clear at the group levels it's going up, but I guess at the UK, shall I assume that's going up even faster because – and I'm looking at where Lloyds and RBS want to get to 12-13 number, I mean it can maybe – your balance sheet is higher quality than those two banks in UK but it feels like there is going to be a clear uplift in the UK capital compared to an 8.79%. I mean is that a fair assumption that your UK ratio has to go up more than your group ratio going forward?

I don't know, I can't answer that question for you. I really don't know – I don't know what's informed Lloyds and RBS, it will be under quite close scrutiny for the last six years. So I'm – we're not having similar conversations with the PRA but I think it is reasonable to assume that as the PRA have requested us specific of the UK bank under stress testing but that will in some way inform their view as to capital requirements for the UK bank going forward.

Got it, that's clear. Thank you.

Thank you. Next, please.

Our next question today comes from Tom Rayner from Exane. Your line is now open.

Stuart, can I just ask a little bit more on some of the comments certainly you attributed in the media call this morning reports you were saying that you do believe the HKMA would be more than capable of regulating HSBC. So just on that point I wonder if you can comment if that were the case given the size of balance sheet versus the size of domestic economic, what you might be thinking in terms of sort of domestic, systematic buffers that might be then put in place. So that's the first point. The second thing is back to the bank levy, because I'm just interested in why you're sort of mentioning the dividend policy at this stage. I'm trying to get a sense of is there any sort of concern building that with the revenue pressures plus the inflation in the bank levy that you just might not able to maintain this policy or is this trying to give more sort of strength and support to your view that if something doesn't change then the whole domicile question becomes a very real one, I'm just trying to get a sense of what message you're trying to put out there from those comments this morning. Thank you.

So I think in terms of the second one, it's all of those things, I mean if interest rate to near the zero bound and you're a big deposit funded bank and therefore revenue is hard to generate and even an activity which is core such as payments and cash management if you got interest rates near the zero bound and wholesale liabilities is subject to a bank levy that itself therefore becomes a dilutive business but its core to the stickiness of your global banking and market relationship. So you probably have to persist with it. You don't have a loss of leavers to cover off big jumps of 0.5 billion apart in your bank levy. So it's basically a reflection of the reality that we see and I think someone somewhere else said that maybe there will be less issues around the levy if interest rates were 4% and we were making a hell of lot more money and that's probably true. But I think we're in the environment, we're in a quite bit of time that comment I've just made is even more acute if you're dealing with euros where actually interest rates are negative. So there is nothing more clever in it than pointing out that one of the factors that clearly we will be looking at in terms of where we headquarter the company is the size of the levy, the fact that is applied on our global balance sheet, the fact that we're it's been put on what nine times and we're a very proportion of raising a fixed amount for reasons that you will understand. It is not in any way shape or form inform our viewers to our own intent to make the dividend progressive. So I want to be crystal clear…

Sure. Is this a red line that you're drawing there Stuart, on -- by making something that is so important and everyone knows it's such an important thing to management, the progressive dividend policy by attaching that to the bank levy. I mean it feels like it's going a bit of red line and making it even stronger maybe than you've in the past. So is that just trying to read too much?

I think that's trying to read too much, I mean it's part of a number of things that we will look at and analyze as to what we might do by some strange situation and just rates raise and we were making a ton more revenue than some of the pressure that comes from that bank levy drops away. But the bank levy is clearly one of several things that we will examine. I think you're getting beyond what my intent in the media call.

Our next question today comes from Raul Sinha from JPMorgan. Your line is now open.

Can I've two please, first one that to illustrate forward – so the first one is regarding straight forward on balance sheet management, you had a very strong quarter there but it looks like you had some EFS gains, could you give the sort of underlying amount for BSM this quarter so we can form a view on what it might end up for the rest of the year and if you've got any thoughts on what it should be for the rest of the year, that would be great.

So to make it easy I think rest of the year between 2.6 and 2.9 for total year. So total year is 6.29 billion [ph].

And to be clear Raul, balance sheet management has in any given month, any quarter, AFS dispositions and gains or losses on that, it is an actual said part of how BSM is invested.

Yes it's part of how we manage the liquidity but as the portfolio 2.6, 2.9.

I mean the second one is just going back to discussion you're having with Tom about redomicile, firstly so that we're informed about how you're looking at this issue. Can I ask a couple of questions about firstly how much of the levy you would expect to lose if you became a foreign bank in the UK? My understanding is that the levy applies to the GBM balance sheet effectively looking at the details off Fitch. So would you be considering moving a large chunk of GBM balance sheet out of the UK sub in your analysis? And then clearly it looks like you would still expect to run with TLAC rules as they apply if you move to an EM country as you know TLAC doesn't apply to EM countries as the current rules are set.

So look whatever decisions we make around the headquarters of the holding company it's not going to be about requirement of arbitrage, I don't think it has any advantage for a bank of our size and scale whatsoever. So this would not be motivated by any attempt to avoid TLAC by going to an emerging market and actually if you think about it, the big emerging market that does have this is China because the state owns the banks. So that's a different set of criteria and that would be applied to us. You're right, that GBM will attract the levy come what may and we will be talking on June 9th about what we're going to do to GBM in terms of improving returns generally and that may involve moving some of the GBM activities out of the UK, you're entirely right because whatever non-ring trans [ph] bank we leave behind we will be subject to the levy because it will have wholesale liabilities that aren't subject to deposit and insurance that's kind of the point about payments and cash management that I was mentioning earlier. But if you just look at sort of how much of the levy applies of the amount say 1.2 that we currently have to the non-UK, about 50% of it.

Our next question today comes from Manus Costello from Autonomous. Your line is now open.

I just had a few questions following up on some guidance you had previously given for the year, you talked about run-rate with that 9.5 billion of cost per quarter this year in our post results meeting and I wondered if that was still standing or if you now thought you are out to achieve that and you also talked about provisions being higher in '15 and then in '14 and I wanted if you were sticking to that guidance as well?

So I think the gains we actually put out there was that we will be looking to maintain a cost run-rate in 2018 which consistent with '14 on an adjusted basis which if you do a straight division of the quarters would be 9 to 9.5 but you got to reflect in the fact that the bank levy always falls in the fourth quarter in 10s [indiscernible]. I think if you normalize that out excluding the fourth quarter you're looking at something that sort of sits between 8.8 and 9.2 from a quarterly expense perspective and I think our guidance in that regard will consistent. Clearly our focus is to continue to improve the overall cost position of the farm and we will give you more details as to how we're going to accomplish on the 9th of June but in around, in terms of big numbers for the total year, what we're targeting is an investment profile over '15, '16 and '17 such that as we exit '17 with a run-rate that would give us an adjusted cost base consistent with that of adjusted cost base in 2014. On the LICs this is incredibly difficult number to forecast, we have obviously got our first quarter which shows a very, very stable credit environment around really all the operating regions. There is nothing particularly unusual coming through any of them. We do have some recoveries and credits coming through, loan impairment charge line specifically within global banking and markets relating to prior periods as we have experienced recoveries through restructuring. Areas where we continue to monitor very, very closely, obviously it's the oil and gas sector is Europe in the round but specifically Greece notwithstanding the fact that our exposures in terms of balance sheet fits is actually very small within this and we continue to monitor an enhanced level of what's going on in the Asian markets but again what you see in the loan impairment charge in our Asian markets in the first quarter is a very, very stable credit quality picture. So we were sitting at very lows in the around of loan impairment charges in 2014, we have got a good start to 2015. Very, very difficult to guide in this, when I think logically based on coming out of '14 you would have seen something a little bit higher but you just continue to be amazed about how well overall credit is holding up.

And just one follow-up on a different point, you had also talked for the results about potentially hedging your exposure to sterling through the election period and we saw as you referenced there was some volatility from FX on the capital item. I wondered if you can update us on how you're positioned into first day in Friday?

Long before the election we have undertaken significant hedging activities of the sterling structural FX position to the point that almost 90% of the precision is hedged and an actual fact that the volatility that you saw which was somewhat muted in the quarter I think there is also nine basis points, I think two basis points of that volatility came from sterling and that was reflective of the 10% that remains unhedged and the proportion that we hedged about half way through the quarter.

And any sterling weakness wouldn't lead to capital weakness or raw material capital weakness?

Muted. It would not.

Our next question comes from Chris Manners from Morgan Stanley. Your line is now open.

Two questions if I may, the first one was on revenues obviously Q1 revenues in CVM and RBWM were down year-on-year but then you adjust for FX they were actually reasonable repulsive. Maybe you can just give us some sort of like outlook on what you expect for sequential improvement both of those two business lines for the rest of the year and the second one was just on the cost again. I might take it that when you say that you take the 2014 adjusted cost base, if I look at slide 8 and I add up all of the cost numbers there, I'm getting to $36.3 billion adjust cost base just looking at sort of dark bars there. So will that be the number that we would be consistent within our 2017 exit rate now, i.e. a bit lower than it was before? Thanks.

So we're always going to talk about this on a constant currency basis and that moves obviously with the composition of currency against U.S. dollar which is our reporting currency. I think at the end of the year when we were talking as we're talking on adjusted cost base about $38 billion.

I might have slipped down quite a bit given it all the move.

As far as revenues, we had a good quarter with some revenue growth coming through each of the global businesses, we obviously continue to reposition global banking and markets but as Stuart mentioned we have seen net new money coming into those parts of private banking which we're particularly focused on growth and a lot of that net new money came through collaboration with the retail bank, wealth management and global banking and markets as well as commercial bank. Retail bank growth management reasonably encouraging, CMB reasonably encouraging with the usual characteristics of the first quarter from a global bank and markets perspective. Again we're not going to sit and give you projections for revenue for the year. Every time we give you a projection something happens and one of the economies that we're operating in were almost invariably invalidates within 2 or 3 weeks. So look we're very focused and continuing to enable each of these businesses to grow in their markets, that growth in-line with the risk appetite. We're encouraged by the first quarter and the businesses are focused in continuing to grow their businesses.

I guess just a couple of bit additional color. So in CMB, a lot of this comes off the fact that we have got much higher balance sheet growth the year ago which is now coming through in net interest income. In RBWM there is a strong performance in the first quarter in wealth management products particularly in Asia from life insurance manufacturing and because we had a big equity market rally here in Asia pacific so a lot of its wealth, but as Ian says we have got revenue increase and principle RBWM of about a couple 100 million in CMB, of couple of 100 million since first quarter last year and then global banking markets of about 400 million. So it's being a good first quarter for revenue.

Our next question comes from [indiscernible]. Your line is now open.

Just had a follow-up on the revenue point, on the net interest income obviously the net interest came down, a chunk of that probably is FX in 1Q, '15 and 4Q, '14 but on an adjusted basis your balance sheet looks to be slightly up. So just want to understand the margin guidance or the margin commentary you gave, sort of margin was flat on 1Q and 4Q, '14 but your cost of funding is not moving, your gross yields on customer lending are coming down and there was a reverse repo offset in that margin analysis as well. So I just want to see I mean how much if you can kind of put that constant FX basis, how are you going to square the NII coming down slightly, the margin is flat and the balance sheet up and is that reverse repo margin benefit, is that kind of sustainable thing going forward looking to offset your gross yields on lending or is that kind of one-off in this quarter. Thank you.

So on an adjusted basis net interest income was up 2% in the quarter, on adjusted that's constant currency and any significant items. So we're about 2% up in net interest income. Broadly net interest margins are stable, we have actually had saw some positive progression within the UK bank. Asia is broadly flat, Latin America some downward pressures both the yield on a mix to more secured product and higher cost of funds comes through to offset some of the headway that we have been making within the UK bank. Broadly stable within Middle-East North African businesses and North America I think that's where we have tend to seen both in North America and the UK as where we have seen some of the offset coming through various REPO business. But broadly speaking a positive performance in the UK without some offset coming through Latin America and North American mix.

I see. So just to understand you have offset by the various repo business but they have a yield increase in the [indiscernible] business but basically your cost of funding increased in your [indiscernible] business so basically your cost of funding increased and your [indiscernible] burden that offset the asset yields but otherwise your margins kind of ticking along nicely.

Yes and the margin is fairly stable, I think what we have seen particularly in the U.S. is that there has been an increased impact in 1Q in the first quarter from surplus liquidity in the marketplace which has come through very frequent but other than nothing of particular note.

We will take our last question today from Chintan Joshi from Nomura. Your line is now open.

I've few follow-ups, the first one is on cost, second one is on UK margins and the third on TLAC, hopefully they are all great. On the cost Iain you mentioned 8.8 to 9.2 this is still higher than the first quarter run-rate and you've generally attended to whole the first quarter run-rate in previous years broadly speaking. So just wondering why 8.8 to 9.2? Should we expect inflation quarter-on-quarter over the next few quarters. Then on UK margins, you said UK margins were positive, HSBC has got one of the lowest rates on mortgages amongst the UK banks. I would have thought there would be pressure on UK margins, I suspect cost of deposits is falling. Can you give us what the weighted average cost of deposit for UK just to get a sense of how it's moved and finally on TLAC, just following up how important is the TLAC relaxation on the EM balance sheet in the debate around redomiciling. Thanks.

So the last one, there is no reg arbitrage deal heat on TLAC, Chintan, at all.

But even without that reg arbitrage there is substantial savings to be had if you get the EM relaxation.

Well there might be but as far as we can see the EM relaxation in this part of the world where we are sitting tonight is partly there because China owns the banks. That's why they got the carve out is actually they are state owned. I mean kind of what you want to call, the regulated politics behind this, it's not because it's yen it's because the Chinese own their banks and pre-fund resolution if you like in that regard, it's an ownership structure which is fundamentally different in that regard, Chintan. So I don't think simply where we to contemplate following all the analysis and make a decision, A, I don't think the special administrative region of Hong Kong is included within the emerging market definition. B, the ownership structure of the bank is entirely different. So I'm not sure there is reg arbitrage play there from a TLAC standpoint. From a UK margin perspective it is principally the cost of funds which has given us some margin expansion within the UK, we have obviously seen some pressure on yield and on UK mortgages but that generally speaking has been more than offset by a lower cost of funds coming through the UK bank. I don't have the average weighted cost of funds sitting right in front of me, [Technical Difficulty] but that's the explanation behind it. From a cost perspective, again some of the things that we talked about in February was a need to make continued investment in the growth of the business, the regulatory programs and compliance with a lot of the regulatory compliance and phasing in through, 14, 15, 16, 17, 18 and 19 influenced also by the continued investment and meeting requirements of its prior prosecution agreement and broadly the deployment of global standards and conduct compliant and so it's really catering towards that investment profile in recognizing that we have got inflationary pressures coming through particularly our Latin American and Asian markets and most notably in Latin America where there each year negotiated union settlements which are factored into cost basis in a matter of course. So a lot of what we will speak to you are some of what we will speak to you about in the 9th of June is going through that investment profile, looking at the inflation that we got to be able to fund through cost efficiencies, looking at some of the investment profile that we have got there and what we need to do to be able to fund that as well. So the guidance I gave around cost factors in inflation, factors in the fact that we're going to continue to invest in growing this business over the coming years whilst recognizing that we will in the longer term get benefits from some of the technology that we're deploying particularly within the global standard space.

Thank you. That concludes today's analyst and investor call. Thanks very much for joining us.

Thank you, ladies and gentlemen. That concludes the call for the HSBC Holdings PLC earnings release for first quarter 2015. You may now disconnect.