Thank you, Antonio. Good morning, everyone. As you've just heard and can see on Slide 6, we delivered an improved underlying performance in the first 9 months with underlying profit up 148% to GBP 1.9 billion for the group, and broadly flat year-on-year, GBP 4.7 billion for the core business. Management profit for the group was up 29% to GBP 2.2 billion, which is after a number of broadly offsetting items, mostly reflecting accounting and timing differences and the active management of our balance sheet, funding and liquidity positions. With prevailing low interest rates and reduction in wholesale funding spreads, we've continued to reduce and shorten the maturity of our gilt portfolio. We've also been active in liability management, and we've seen an increase in the mark-to-market of our own debt, all of which have impacted management profit. Other volatile items of GBP 618 million is mostly the timing and accounting and economic mismatches as we hedge out the group's interest rate and FX exposures. And the fair value unwind of GBP 212 million is well down on last year, due to the decrease in impairment charge. Looking now at the drivers of underlying profit. Underlying income in the third quarter of GBP 4.6 billion was slightly ahead of Q2, with core income decreasing by -- increasing by 2%, and more than offsetting the reduction in noncore, which now makes up only 6% of total income, down from 11% at the same point last year. The core net interest margin for Q3 was again stable at 2.32%, with asset repricing offsetting increased deposit spreads, while the noncore margin was slightly down at 0.49%. The decreasing proportion of noncore assets resulted in an overall group margin for this quarter of 1.93%, slightly above Q2's 1.91%, and in line with our full…

[Operator Instructions] And your first question comes from Tom Rayner from Exane BNP Paribas.

I'd like to ask a question on deposit growth because obviously still continuing at quite a decent pace, and you're going to be getting pretty close to your sort of target levels in terms of loan-to-deposit ratio, both at core and for the group. And I'm just wondering what we should really expect to see once you have reached those metrics? I mean, are we going to see deposit growth slow? Might we see loan growth pick up? Or will we see, possibly, the loan-to-deposit ratio dropping below 100% in core, maybe below 120% at group? And the reason I'm really asking is I'm trying to get a sense of what the margin implications might be of those different potential outcomes? António Horta-Osório: Sure, Tom. That is a very valid question, which we have debated long enough as we are now doing our budgets for next year, and we're doing our 3-year plan. So what we think we'll do is the following: we want, as usual, to meet what we have said we would. And therefore, you can expect similar behavior in terms of us achieving the target of 100% by March, which will be at the same time, as I said, 120% at group level. And from then on, once the targets are achieved, as you were asking, we think we will probably grow savings at the lower rate in line with the markets. Because, as you say, we don't need the money, we are generating more than GBP 20 billion of actual liquidity every quarter, year-to-date, more than 60. And we do believe that by then, also assuming, as you asked, that our core loan book should start to increase by the middle of next year, as I said, at last results presentation, we should increase our deposits as a whole at around the market level, so slow it down to market level, given all these economic assumptions.

And the sort of margin implications possibly of being able to slow that growth in deposits? António Horta-Osório: Well, you have seen recently, as a result, I believe, of the liquidity rules that have been changed in July, and also, I think, from the expectations of the Funding for Lending Scheme. And I say expectations because, as you know, the drawings from the Funding for Lending Scheme have been very small up to date, just because, as normal, it takes 3 months between a loan being approved and the actual disbursement of the loans. So I think the FLS impact in the market at the moment is just a matter of expectations. The real impact has been, in my opinion, from the significant change in liquidity rules, which we have mentioned several times before, and we thought was exactly the right thing to do. Therefore, as you have seen deposit prices according to this -- to what happened, deposit prices have been coming accordingly down. Deposit prices are on a downward trend, and I think that trends will continue in the foreseeable future, given that the liquidity rules are still being executed in terms of the bank's decreasing the liquidity buffers. And the funding for lending scheme will become a reality as the approved loans will be drawn over the next few months.

I just have one very quick one. Sorry, I didn't advertise the second one. But did I hear you correctly, you mentioned the noncore one-off as being capital accretive? Is that a slight change in language? I know the constraint has been previously, as far as possible, within sort of capital neutral. Capital accretive might sound like a slight increase in confidence over how that's going. Is that better? António Horta-Osório: Well, I mean we have always said, if you remember at the strategic review, we have always said that we would do the reductions from 12 to 14 in a capital accretive way. Then we actually did 11 reductions in a capital accretive way, as well. And when I -- I think this is more from a conversation you and I had in one of the meetings we had, where I told you that if I had to arbitrate, I would go as quickly as possible so it could potentially become close to 0. It is a fact that we have been going much faster than we thought, still in a capital accretive way and also with lower impairment guidance, which I really think is quite robust and high quality results from all our teams, and we will continue doing so. I will continue to go as quickly as possible in a capital accretive way and within the impairment guidance we have just given to you.

Your next question comes from Claire Kane from RBC.

I just have a couple of questions please. The first is on your liquidity management. You seem to have recorded another quarter of strong gains I think around GBP 650 million on sales of your government bonds. And I was just wondering if you could tell us how much more we could expect to come through from this? And give us maybe, an update on your unrealized gains in the AFS reserve, which I think were about GBP 1.3 billion at the end of June? And then, my second question really is on capital. I wonder if you'd be able to give us maybe a bit more color on the potential upside regarding your conservative assumptions relating to the reductions? And whether there is any change in your view relating to the focus on absolute capital levels versus RWAs? And if you could give us any color on what that absolute target is going forward through 2013?

It's George. I will kick off answering your question, a few questions there. First up, I'd like to deal with them in reverse order. So the capital position, my first comment, I have been in the business now for about 4 or 5 months. When I first came in May, I said that I thought I was very comfortable with the capital position of the company and the prospects of the company. And I'm very comfortable repeating that today after everything that sort of happened in the summer in terms of press comments and speculations. I remain very comfortable with the capital position of the business. In terms of some of the specifics, in terms of when we look at things like our fully loaded Basel IIIs, as you said, gone from 7.1 to 7.7 in the first 9 months of the year, and that's after things like the PPI, et cetera that we have taken there. Within that, we do, we think, show that on a pretty prudent basis. So within that, for example, we do share the insurance on a -- for Article 45 as opposed to an Article 46, and switching from one to the other would give you right about just over a percentage point of improvement in our ratio. We take full allowance, for example, for things like CVAs, and if there was a carve out for CVA corporate, that would give us another 20 basis points on that. We also assume that we get 90 days default, for example, of mortgages. If we went to 180, that would give us a further 20 basis points on that. And proposed -- if there was this proposed 25 discount on SME, RWAs, that will be another 10 basis points. So when we show the fully loaded…

Your next question comes from Michael Helsby from Merrill Lynch.

I've got 3 questions, if I can. Firstly, thank you on the cost guidance, GBP 10 billion this year. It still feels like you got quite a lot of Simplification benefits to come through. I've actually got GBP 10 million for next year. So was wondering if you could just give us a comment on have you got big investment plans for next year to offset the simplification benefits. So if you could give us some color on that, that would be fantastic. I think you mentioned, António, the improvements that you can still see coming through in core ROE because of all the things you set out at the strategy review. I think at the heart of that was this GBP 2 billion of incremental OOI. I know RDR is just around the corner, so I was wondering if you could give us an update on that other income improvement. Because clearly, that's something that we just see no signs of just yet. And then finally on bad debt. I note that your GBP 6 billion guidance is clearly a lot lower than what it was, and we appreciate that, but it does imply a pickup in the fourth quarter. I was just -- to be picky, I was wondering is there anything specific that you can see? Or is there anything in the forward looking credit indicators that you can see to suggest that? Or you're just being prudent because that's your style? António Horta-Osório: You are being a little bit picky, Michael. It is a very boring retail and commercial bank business, but not absolutely like a clock. It is done in the same line. But, Juan, we'll ask you -- Juan, our CRO, we'll ask you about the bad debt forecast and guidance for the first…

Your next question comes from Chris Manners from Morgan Stanley.

I had just a couple of questions for you, if I may. The first one was on risk weightings. And I know the SEC has come out saying that they're looking at potentially introducing a dual reporting of risk-weighted assets with standardized risk-weighted assets, as well as modeled risk-weighted assets being displaced by banks. And also, I know Andy Haldane has been talking about putting floors on certain asset categories. So I just thought I'd ask what you think about the chances of increasing risk weightings on any of your asset classes, particularly on U.K. mortgage size would be driven by regulation? The second one was just maybe if you could provide a bit of color on the net interest margins into 2013? I mean, should we expect that to continue to drift up? Because I guess you've got shrinking noncore, which is a margin, obviously, as well you've been able to take down your liquid asset buffer indicating that maybe there's more leeway with that. So should we be building in maybe a bit more net interest margin build into next year? And those are the 2 questions. António Horta-Osório: I will answer the first one and George will take the second one. In relation to your first question, I really think that there is a lot of noise over this issue. And I really think you should look at the facts. And I think the facts, in terms of regulatory environment in the U.K., are very clear. And when you think the financial stability, as I have said many times, is a holistic solution of 4 pillars, where you have higher capital requirements, stricter liquidity, stronger supervision and recovery and resolution mechanisms of which, ring fencing is a key part, you should think, in my opinion, that given…

And then on the NIM stuff, I mean you've obviously seen from Slide 7 of the presentation in terms of progress to date and the 1.93% and how that breaks down between the discreet quarters and the sort of core and noncore. As you've seen, I mean, our expectation is still for the full year to come in round about for the group, round about 1.93%, and that's on a year-to-date basis rather than discreet looking forward performance, but we would be about 1.93% for the year-to-date for 2012. In terms of the look forward after that, I think we have been speaking about, we would expect to see the margins improve as you move through 2013, starting from about sort of Q1 onwards. That's our current expectation. What's driving that? A number of things, which we've also alluded to or covered. Part as you say is the proportions between the core and the noncore. And again, you've seen that the core being constant at the GBP 232 million and the decreasing proportion of the noncore book, which will continue to run off and continue to run off in an accelerated accretive way. That's part of it. Then you have the overall sort of funding mix of the group. And in terms of the shift to the 120% loan-to-deposit ratio with the core at 100%, which we would expect to hit around Q1. And then within that, again, as Antonio has mentioned, the sort of pricing of those funds in terms of easing the pressure on the deposits and the improvement that we've seen in our wholesale funds as well, so we should get a benefit come through from that. Variables around that would be things like -- I mean, in answer to one of your earlier questions, yes, we've been coming out of some of the long-dated gilts, because we think that's the right thing to do. That has slight drag going the other way. We've been deploying funds to obviously buyback the Wholesale funding, which is a contra to that. So those are sort of variables that sit around that. But it's -- we would expect it to start the margin to increase, predominantly driven by the sort of fundamental change in the balance sheet structure of the business.

Okay, fantastic. So maybe a few basis points a quarter or something but nothing really sharp?

I'll leave you to decide.

Our next question comes from Jason Napier from Deutsche Bank.

Two questions, please. The first, I notice in the disclosures around noncore run off you make the comment that you think that full year capital accretion from noncore be at a lower level from that of the first 9 months. I was wondering whether you could say, whether that's just caution or whether there are deals that have closed in the first month of the quarter that sort of make that a fact. And whether you'd be comfortable saying that you feel 2013 would also be executed on a capital neutral or capital accretive basis. And then secondly, the disclosures around NPL ratios and so on are sort of absent from this quarter, and we always appreciate sort of balance of quantity versus quality on disclosures. But I just wonder whether you could give us a number, the proportion of loans that were impaired at the end of the quarter, as well as the pound figure, just so we can sort of track the sort of roll off of impaired assets for the group. António Horta-Osório: George will address the first one, and Juan will address the second one.

Hi, Jason. George here. Yes, to answer your question, part caution, part fact would be the answer to that. We will be accretive in regards to the disposals of the duration of the year. Obviously, as you might expect, there is a multitude of transactions that span those 12 months. And the commitment is that in aggregate, we will be accretive, which might change from deal to deal and from day to day. So I would expect it to come back slightly from where we sit in terms of the net accretion of the 9-month stage. But please, please, please, don't read anything into that in terms of trends, doability, all those sort of things. It's just in terms of actually how these deals come along. And I suppose, just to reinforce that, our expectation will be that our commitment will be that in terms of the noncore run down for 2013, yes, that will continue to be accretive, Jason. Juan Colombás: On impairment levels, you can see in the IMS that we have disclosed a coverage ratio for the noncore book that is going up by 4 points since the beginning of the year. The total impairment levels for the group are coming down as a consequence of cleaning the balance sheet that's going in the noncore book. In retail, I would say that we are having flattened impaired assets. The good news is that more complicated portfolios, such as, especially, lending that we have in the mortgage book, as we told you in the previous quarters, is flattening as well. So they are performing as we are expecting in a good sense. And so overall in retail, I would say it's more of the same, so flattening in mortgages and improving performance in the unsecured books. In the Wholesale book, as I said, nothing new, so also increasing the coverage ratio of the Wholesale core book. So that would be my summary.

So you said that the proportion of group impaired assets that were noncore was sort of roughly the same number last quarter, and coverage was about a percent lower. So just to sort of be clear, the 9.6% of loans that were impaired at the half is down again in aggregate? Juan Colombás: The loans are close to 9%, and the provisions are slightly up as a coverage ratio.

Your next question comes Arturo de Frias from Santander.

I have 3 quick questions, if I may. The first one, the kind of long-term strategic question is on core returns. Looking at your quarterly numbers in terms of what the return on risk weighted assets have been doing at core, we have seen after a few quarters in which it looked to be fairly stable in the region of 2.3%, 2.4%, maybe 2.5% return on risk weighted assets. We have seen in this Q3 a substantial increase. We have gone to nearly 2.9% on your disclosure, which is, obviously, an extremely interesting return of close to 30%. Listening to your items in terms of stable margins, increasing volumes, falling cost, on falling impairments, one would think that there's only one way for this return on risk-weighted assets at core, and that's up going forward. So the question would be, do you think this increased RoRWA at core in the region of 2.9% is sticky and will remain in that ballpark in coming quarters? That will be the first question. The second question is if you can update your position on dividends after all these noise, as you call it, around capital, around RWA, et cetera, you look increasingly comfortable with your RWA trends, and with core Tier 1 trends, and with the positive impact that we might see from CRD 4. So what is the impact of all that on your dividends? And, well, obviously, if you could tell us when you expect to start paying dividends, that would be fantastic? And finally... António Horta-Osório: Like how much?

Exactly, how much per quarter. And finally, at Wholesale, there's no information on the different divisions within core, Retail, Wholesale, et cetera. I remember that in the previous quarters, we have seen a clear weakness in Wholesale with disappointing returns, et cetera. Could you give us some quick comments on how Wholesale is performing in Q3? António Horta-Osório: I will take the first question, and George will take the 2 major questions. So in terms of your first question, which is quite comprehensive and very important, by the way, I think you are basically right. Our core returns, as I said in my speech, are behaving very decently in a difficult economic environment, both from a GDP perspective and from an interest rate perspective. And the way I see it, going forward, is impairments have substantially come down. We are around 40 basis point in the core book, which is within the guidance we gave you on a long-term view for '14, where we said 50 to 60, the core being on the lower end of the range. So we are inside the guidance, which means we have high coverage on the core book than we thought 15 months ago given all the work that has been done. And we think it will be around that number, so we are foreseeing, if you want, stable as a percentage in Q1 going forward. Cost will continue to come down and eventually stabilize. But revenues, as you said, which are coming down, although being more than offset by costs and the impairment and therefore, the return on revenues, has been increasing. The revenues will start flattening as you see in the quarter. NIM will start to increase, as George said, in our view. From Q1 onwards, the group NIM will start to increase. And I believe that the core book will start to increase, as I said, in July, around June because we will have finished our repositioning of the mortgage market share, and we are having the impact of good growth in net lending for SMEs. Mid corps should start going up by January, as I said, in July. And large corporates will start to increase again, given that we no longer have the cost of funding disadvantage with the FLS scheme. So revenues will eventually start to increase, probably after the core book starts to increase in June next year. And therefore, when you combine all of these, so you have positive jars going forward, and stable RWA are slightly increasing as the core book increases, I do believe that the core returns will increase over time. I think you are absolutely right about that. George?

On the dividends, obviously, it's going to be an ultimately frustrating answer for you. But I mean, as we've said before, I mean there are a number of pieces that need to fall into place. We have the ICB paper. We're still waiting for the CRD 4 and the detail on the CRD 4, which I know is now being pushed into next year. But it doesn't mean we're sort of waiting and doing nothing. I mean the -- going back to an earlier answer, the strategy that we pursue is the capital generative strategy, we add through managing profits 20 or 30 basis points per quarter to the capital ratio. We add to the ratio through the deleveraging of the balance sheet. Yes, those have been mitigated by some of the one-offs, PPIs, et cetera over the last few quarters. But the strategy we pursue is the right one. And what we await is clarity on the calibration. We'll be able to respond, I think, more specifically after that. António Horta-Osório: And just to be very clear, we really think the noise that you saw in the press, we have, as we told you in July, we have spoken to our regulators and told them we would like to have the discussion as soon as we have visibility on the CRD 4 details, which, as George said, may have significant upside impact on what we are assuming at the moment. And they said yes, so will have that discussion with the regulator when the CRD 4 paper is out, and we will then have a path to dividends, which we'll share with you. unfortunately, and this is totally out of our control, this paper is being [indiscernible] consequently has been repeatedly delayed, which is a bit annoying. But we are, as George is saying, following a capital maximization strategy, which is generating significant capital. So we are, as I have said many times, going absolutely in the right direction. We have to see the intensity with the CRD 4 paper details, and we will then have a discussion with our regulators in terms of the light with path to dividend.

In the last -- but on Wholesale, you're right. In Q2, remember Wholesale had a weak second quarter, mainly following market activities and low levels of activity. And it was well done. What I can say, you're right, we don't disclose divisional information, but in Q3, Wholesale has come back, good forms in rates, good DCM positions, and you've seen a very material impact -- pickup in Wholesale's performance, if I look at Q3 2012 versus Q2 2012. So it's a very significant pickup.

Your next question is from Manus Costello from Autonomous.

I had a couple of questions on the NIM, please. One near term and one longer term. In the near term, I wondered if you could give us some color on what moved the NIM in 3Q versus 2Q? Particularly, how much benefit you gained from the change in the base LIBOR spread and the SVR repricing, which had a solid quarter. If you could break down how that moved will be helpful. And on the longer-term NIM, you talked about the benefits the FLS could have on the deposit pricing side of the equation. I wondered if you had any thoughts on what might happen to asset repricing with the FLS. Because when you were talking about the variable, George, you did not mention asset prices as a variable for NIM next year.

It's George. In the short term, for example, on the short-term on NIM, if I look at the 9 months, if I start there, I think some asset pricing has been offset by deposit pricing if I look through the 9 months. If I look, though, at -- in terms of Q3 in isolation, asset pricing was about double that, actually, over deposit spread and mix. So we actually saw asset pricing pull ahead....

And that was SVR driven basically?

In the third quarter. SVR has been part of that. Just remember SVR was May, so that's been flowing through that. So we saw in Q -- as you say, in Q2, a bit of asset pricing pull ahead. António Horta-Osório: And relating to the FLS comment, Manus, what I think is the following. I think that Funding for Lending should be, as the name indicates, funding for lending, and that's what we're doing. So we are estimating that we will have around 100 basis points advantage in the Funding for Lending costs, which we are passing through to customers. And we are using our previous governance and controls of the NLGS scheme, which was, by coincidence, exactly at 100 basis points passed through to customers. We are using the same scheme, but more broadly because we now use FLS for all customers in SMEs and mid corps, so without exceptions, which is much broader than NLGS. Therefore, I do not think that, in itself, it has a big impact our margins. It will have an impact in volumes, as is our intention. And therefore, in terms of prices, you can expect, in our case, that our prices to customers are having debt passed through of 100 basis points, which I think is broadly margin neutral. As I said in the beginning of this call, I think that both the expectations of the FLS scheme and the big changes to the liquidity rules are correctly bringing deposit pricing down, which has a positive impact on our margins, both from a deposit, pricing perspective and also from the possibility of moving this huge amount of liquid assets we have in gilts, as we said, and in banks, central bank deposits into buybacks of our debt, where we have an average pickup of around 150 to 200 basis points.

You think the FLS will only benefit or only bring down prices to the marginal lending, which is FLS funded? It won't have any impact on other lending in the economy, which is not necessarily directly FLS funded? António Horta-Osório: No, I mean I don't think you can see it that way because it's not on the marginal lending. It is on the gross lending, which is the new lending because the net lending is the objective of this scheme. But for you to pass through the 100 basis points to customers, you have to do it in all gross new lending. And that's why as also, Paul Fisher from the Bank of England said, he expects the drawdowns of the FLS to be significantly higher than the net lending increase in the economy. Because for you to pass through the price benefit, you have to do it in gross lending. And given that customers will pay loans, as you know, the net lending impact is much smaller. So I do expect, at least in our case, all gross new lending to SMEs and to mid corps to follow the Funding for Lending Scheme. All the mortgage market, which is a different story, what we have done is to allow -- to allocate GBP 500 million to a new 7-year fixed rate mortgage to first-time buyers because we do think that it is the best option for clients at the moment, given the very low level of interest rates is to lock out rates for longer. And that's why we have made the 7-year first-time buyer mortgage fixed rate much cheaper than what we had before, and also, much cheaper than what we had for the 5-year one.

I think at that stage, we'll conclude the call, actually, because we're slightly over our time. So Thank you very much, everyone. If there are further questions, please do come through to the Investor Relations team.