Good morning, everyone. It is great to see you all here. Today, we will update you on our strong strategic and financial progress, and provide details on the strategy that will transform the group for success in a digital world. We will spend the next hour going through the 2017 results, including time for questions, before moving on to the strategic update. So turning to the results. 2017 was a landmark year for the group, with the return to private ownership in May. This was the culmination of hard work by colleagues from across the group, and it is a source of great pride to all of us that we were able to return to full private ownership, with the government realizing more than its original investment. We have also made significant strategic progress in the year. We completed the second phase of our strategic journey, making great progress in creating the best customer experience, becoming simpler and more efficient, and delivering sustainable growth. we have continued to develop our market-leading digital proposition and have the UK's largest and top-rated digital bank, with almost 13.5 million active online customers, of which 9.3 million are active on mobile. We have achieved lending growth in targeted segments within SME, Mid Markets and Consumer Finance, and increased our corporate pension assets. Our Simplification program has delivered £1.4 billion of run rate savings, ahead of our original target, and further improving our market-leading cost-to-income ratio. In June, we completed the acquisition of MBNA, which gives us additional scale and the great brands in prime and secured consumer lending. And in December, announced the acquisition of Zurich's U.K. workplace pensions and savings business, which gives the group a platform to develop the next phase of our strategy for financial planning and retirement, which you’ll hear…

Thank you, Antonio, and good morning, everyone. As you already heard, the group has delivered a strong financial performance in 2017, with statutory profit before tax up 24% at £5.3 billion, and underlying profit up 8% at £8.5 billion. This performance was driven by a strong final quarter in which underlying profit was up 7% on Q4 2016, a net interest income up 14%, with a net interest margin of 290 basis points and in line with Q3. In terms of the full-year, net income is up 5% at £17.5 billion reflecting both higher NII and other operating income. Operating jaws were a positive 4% and the group's market-leading cost-income ratio has improved further to 46.8%, while asset quality remained strong with a net AQR of 18 basis points and a stable gross AQR of 28 basis points. And as you've heard, the group delivered an underlying return on tangible equity of 15.6%, up 1.5 percentage points; and a statutory return of 8.9%, up 2.3 percentage points. Looking at net income in more detail, net interest income was £12.3 billion and up 8%, with lower funding and deposit costs, again, more than offsetting asset pricing pressure. MBNA has contributed £430 million of NII for the seven months of ownership and is performing ahead of our expectations. The net interest margin for the year was 286, up 15 basis points and going forward, while we expect asset pricing to remain competitive, particularly on mortgages for 2018, we still expect NIM to be around 290. Other operating income was £6.2 billion and up 2% with a good contribution from Lex Autolease and Retail, a robust performance in Commercial, offset by reduced Insurance income due mainly to lower bulk annuities. Other income also benefited from the gain on sale of VocaLink. And as…

Good morning, Antonio. Good morning, George. It's Chris Manners from Barclays here.

Welcome back.

Thank you. So yes, just two questions, if I may. The first one was looking at your strategic update. And yes, I suppose if we look at your cost target, you cost income ratio target and what you're saying about a resilient margin, it does actually look like we need a quite punchy other income and loan growth expectation to deliver that. Could you maybe tell us a little bit about how you see the growth outlook for the loan book? And I've got one more as well.

Okay. And so I'll tell you, as I usually do, segment-by-segment, to give you an idea of what our targets and intentions are. So in terms of the open mortgage book, our intention is to do exactly the same that we did last year. We expect the open mortgage book to be slightly above the position which it reached at the end of the year. And in the mortgage market, given the low growth of the market, historically high house prices, uncertainty in general, we think the right thing to do for our shareholders is to continue to privilege margin and capital and lower risk, so we'll continue to focus on margin. But we will grow the open book in mortgages slightly this year. But over the plan, to your question, we think there will be growth in the open mortgage book. In terms of Consumer Finance in general, so including UPLs, Credit Cards and car finance, our intention is to grow reasonably in line with the market over the next three years. It is an area where we are still underrepresented, excluding Credit Cards, where we are where we want it to be. And therefore, my best idea is to grow in line with the market. SMEs, where we have consistently grown above the markets in the last six years and which is a critical area, we think, given the huge importance for employment and exports in the country, we have always focused a lot on SMEs as you know, our expectation is to continue to gain market share in SMEs. That's why in our Helping Britain Prosper Plan, we put out a target of growing net balances in SMEs and Mid Markets by £6 billion by 2020. So this is an area we expect to grow and gain market share. And finally, on large corporates, we don't target as we always did. It depends on how companies want to access the market, through capital markets, securitizations, you name it. We don't target Global Corporates. We expect the Commercial Bank as a whole to increase its lending and its RWAs. And finally, the closed book, which is getting smaller and smaller, will continue to run off. That gives you the coverage of all the segments, I think.

Thank you.

You had a second question?

Yes. I just had, I suppose, one more question, which is on competition in the mortgage market. If we are seeing TFS coming to an end, if we're seeing – maybe that puts a bit of pressure on the challenger banks. Just trying to think about how you see mortgage market competition at the moment. Thanks.

Right. I continue to see over the next, let's say, six, 12 months on the foreseeable future, and I'm going to be bit boring on this, but I continue to see a very similar behavior to the past three years. I continue to expect – on one hand as you said – I continue to expect TFS ending to have an effect on funding for players in the market in general, especially the ones that took the most of TFS, the smaller players. And therefore, that is going to pressure their cost of funds. That would be a reason for prices to be go slightly up. On the other hand, some other players have said that they want to increase their presence in the mortgage market. So you have to contradictory factors there. I continue to expect the leverage ratio to be announced on the second half of 2018 by the PRA on the ring-fenced bank to have a significant impact on the equity that will have to be allocated to mortgages, given it becomes a restricting factor. So it almost doubles and therefore to be another pressure for prices to go slightly up. But all-in-all, as I have been saying now for three years, I expect the trends to be the same over the next 12 months, so some pressure in mortgage prices, which we will continue to offset given we have higher costs on our multi-brands approaching certain brands. And also, given our improved and continuing improving credit ratings, our lower wholesale cost of funds, and that's why we are targeting a NIM of 290 basis points for the year, which is in line exactly with what happened in the second half of last year. More questions? Please

Good morning. It’s Raul Sinha here from JPMorgan. Can I have two please as well, maybe first to start-off on NIM and the debate? Can I ask what you're assuming in terms of rate sensitivity please, and the trajectory of rate hikes, because obviously I think what's quite important today as you've talked about resilience in the NIM beyond just the 2018 guidance as well? So trying to understand a little bit as to what is the driver of the resiliency in the NIM beyond, let's say, just the 12 months? That's the first one. And then I've got a second one on M&A, if you want it now or I can wait.

These questions are straying off the results, aren't they? Look, in terms of sensitivity, yes, I've looked at the Annual Report buried in there, I think we talk about the now 25 basis points is £80 million or something like that. And previously, I think it was about 175 or whatever the numbers were, which is a number we have to calculate, but it's a bit of misleading because it depends the extent to which you're invested and liquid. And the easy way to short-circuit that and show the sensitivity of the business is to look at things like the structural hedge, which we talk about and my £165 billion invested assets, and say 1% on that, which will come over time, is an easy bit of math to do, and the £1.5 billion and £1.6 billion. So without dissing some of the numbers that are in my Annual Report and Accounts that one's not the most meaningful number and it's more important to look at that. Our outlook is – and what we've assumed for the plan, is I think rates go to about 1.25% or something by 2020. And our original planning assumption was one rate hike this year. So we've assumed sort of a steady rise in rates over that period. In terms of what gives us confidence against that backdrop, if I start by looking back, you know the story of how we manage the business. You know the story of how we manage the NIM. You've seen that in the results. You've seen that what we've done over the years. We will continue with that operating model in terms of how we manage the spread and in terms of how we manage the detail of this. There is still more that we can do in terms of some of the Retail liabilities. We've probably got most of biggest gains out of the wholesale funding, those have come through. Although we will still be very keen and rating upgrades are fantastic and help in those respect. The structural hedge is big in size. And whilst somewhat might limit at the moment, in terms of £165 billion, let's see where balances grow. And we're very good at growing current account balances, as we have in 2017. If those continue to grow, those will add to the volumes. But also, whilst on about that £165 billion in terms of maximum, I'm short, as we've said before, and some are about three years versus four and a bit. So that gives me ability to extend and play into rate rises as well, so I can deploy that to generate. So it's a mix of how I manage the book, the structural advantage in terms of things like that, that structural hedge, and our confidence that those will continue as we go forward.

Just to add one point, you were very thorough. As we have been repeatingly saying, a multi-brand strategy that gives what customers want in terms of segmentation, coupled together with total integration of all back-office systems and everything the client doesn't see has been, for a long time, my strongest belief that provides the best cost-to-income advantage if properly done, first point. Second point, as George says, these estimates are being given with what, I think, is quite a prudent estimate of interest rates because of the huge uncertainty that faces the UK economy on a 3-year view. And therefore, we are only forecasting interest rates to increase to 1.25%, with one base rate this year increase, while inflation is at 3%. So rates would not to be significantly higher. Why am I saying this? Because with this very low and gradual increase of interest rates is what joins the guidance. Should interest rates be higher, as George very clearly explained, we are very positively exposed to rising interest rates if they rise beyond the plan. Second question.

Yes, that was very comprehensive. On the second one, I mean, what's very clear is there is going to be a significant step-up in cash flows. Statutory profit was up 40% and, going forward, it looks very likely that you're going to have a lot more cash generation, underpinned by 200 basis points capital generation target. In the past, obviously, you have been very clear about returning capital back to shareholders, while, clearly, if there is an exceptional opportunity, like there was in MBNA, you would look at that. Could you address the question of what you would do with the capital generation? Because now you're already at 14%. If you generate 200 basis points of capital per year even after paying what dividends you have, there is substantial room, I would argue, to return capital back to shareholders. And what is your framework to decide whether you should be returning that capital or reinvesting into growth?

Well, I think you are completely right, and we have been very clear, as you said, about that. We have presented what I think is an ambitious plan. But it is exactly on the – as in the previous plan, a plan based on organic growth. If there is an opportunity like MBNA was a unique opportunity in Credit Cards that came up at contained risks with a 17% expected ROE, it is in our shareholders' interest that we take it. And by the way, it's going better than plan. The same thing happens with the smaller-scale Zurich's pension and savings business. It gives us a good platform, helped a lot the corporate pensions. The plans that Antonio has in Insurance, we could build it or buy it. It's a small amount of capital, but it shows how we consider the framework. So we don't have any – as I said in the previous plan, this will be the same. We don't have any special acquisition in sight. Our framework is exactly the same. Our plans are to grow organically. We want to grow where we are underrepresented. Should specific opportunities present themselves in areas where we are underrepresented, we'll look at it with the same eyes that we have on the second strategic plan, main target to grow organically. And therefore, the board will consider, as it is very clear on our dividend policy at the end of the year, with all available information what to do with the excess capital that we'll have at that time. And now we have very clear capital requirements post clarification from the PRA in terms of the buffer and in terms of the stress test, which is 13% plus around 1% management buffer. So exactly clear as you describe it.

Thanks very much.

Please.

Good morning. It's Andrew Coombs from Citi. Perhaps one follow-up on capital and one on your loan-loss guidance. On the capital, I think you were clear, but just to clarify, the 13% plus1% is assuming stable Pillar 2A, stable Pillar 1B and embeded in the DSIB and the countercyclical that's coming in. Is that correct?

You ask a lot. Look, it’s - that is our guidance. We are confident in that guidance. And that reflects the countercyclical of about 1%, that reflects the systemic risk buffer coming in, that reflects the capital conservation coming in. And we've got a, currently, Pillar 2A of about sort of 3%. You will find out what that is as that moves. As we go forward, we think as we continue to derisk the business, then actually, there could be some more opportunity there in that, we'll come to that. The Pillar 2B, as Antonio said, we had our review of this in January. We're pleased with that review. We're not allowed to tell you the consequence of that review, but it certainly is reflected in the numbers that we're talking to you today.

So you’re not relying upon reduction in the 2A or 2b to absorb the DSIB; it's all factored in there?

We are very confident in our numbers.

Okay. And just following on from that, buyback versus special dividend, the rationale there? And then my final question is on loan losses after that?

Look previously we won’t 100% privately owned the number were smaller et cetera, the ordinary dividend was smaller. So I think special as a supplement suited at that time. Now we're fully privately owned the ordinary dividend is of a more significant, normalized level, doesn't need the buttress of a special dividend alongside it. So we think a buyback is more appropriate to where we are now and just brings a bit more flexibility as well.

And then on the loan-loss point, if you look at your second half loan losses Q3, Q4, 23 basis points, 24 basis points, you’re guiding to sub-30 for 2018. You're also guiding for sub-30 between 2019 and 2020. So you're not looking for much of an incremental uptick in loan losses at all despite what you're saying about a higher rate trajectory. Admittedly small increases, but nonetheless. So what gives you the confidence given that at the point we're at today, unemployment's very, very low, rates are at record lows or close to record lows, what gives you the confidence that you're not going to see any form of real uptick in loan losses?

Well, I think you have to look at our guidance holistically. There is a small uptick in interest rates, but as I just answered in the previous question, very small. With a 3% inflation, you would expect the loan bonds to yield 4% in normal conditions. So we are expecting the base rates to increase from 50 basis points to 125 basis points in three years. As I said, that's quite mild. As you know, with low interest rates, normally, you have an association of low impairments. And on the other hand, we are at 18 basis points net this year, so we expect some increase. We think that the bank is continuing to derisk. So the 40 basis points through the cycle that had been 60 basis points in our first strategic review, fourth in the second, will now be lower, 35 basis points, so continue to derisk of the bank. But given the outlook that we have for the UK economy, so holistically speaking, what we see is you have these tailwinds that I mentioned to you. We see pressure on consumption given disposable income is growing less than inflation. But employment is going up, so you have more people consuming. You have exports being positively impacted by the devaluation of the pound given we continue to have complete free trade with Europe. Earnings from foreign assets are increasing in pounds. The world growth has increased. We are a big open economy that helps the UK economy. So for me, it looks quite clear, subject to any major political problem in the world, that the next 12 months will be very much like the past 12 months. When you ask – and beyond that, obviously, that's more difficult to predict. The holistic guidance we give is coherent with the following view. The government agrees the transition with Europe in December, which we welcome like all businesses. That should be in writing in March. By the end of the year, it will be clear what the agreement with Europe will be. And we will have, as businesses, two years to plan for that transition, which I think for most businesses is critical. For us, as you know, it does not impact anything given that we are completely positioned in the British economy. But for the economy itself, it's very important. So people, from year-end, they will have two years to prepare for whatever the agreement will be. And therefore, for the next three years, our holistic guidance, I think it's very coherent with that assumption. And given the tailwinds in the UK economy and the world economy, we see a continued resilient economy going forward.

Thank you very much.

Let's go to this side now, please.

Thanks. Hi, it’s Edward here from KBW. I just had a couple quick detail points, actually, and one slightly broader one. Could you just update us on the back book of mortgages again? You normally give us a sort of quick rundown as to where it's been, how it's progressing during the year. Yes, SVR book, and I guess the HVR book and all the other names. And then the second one was you mentioned you had a – you've revised your actuarial pension deficit. It might have been in the numbers, I apologize. Could you just tell us what that actuarial deficit is now?

Yes. I'll start with the pension. Yes, I mean, it is in the numbers. But it was – previously, it was 5.4, and I think it's gone about 7.2, which it doesn't sound like a good result, but that is a good result, in terms of what's happened to interest rates, et cetera, inflation expectations. And it reflects the significant derisking that we've done over the last few years in terms of hedging ourselves, rates and inflation, so in terms of capping and managing that. We also talk about – it's in the RNS in terms of the deficit contributions, which we've agreed with the trustees. And as I said in my presentation, all that is factored into our ongoing capital guidance. On the first bit in terms of the mortgage back book, with the pickup and rates, we've seen a slight pickup in the attrition level. So I think in Q3, we were talking about 11%. It's now around about a 13% attrition rate. And I think it'll probably stay around that level, might touch up 14%, and it’s just the other side in terms of the pickup in rates, which is going to cause some greater attrition there, but it's obviously going to help me in terms of things like reinvestment rates on structural hedge. So it's ticked up to about – as I say, about 13% in terms of the attrition rate.

That's an annualized 13%?

I think that's Q4-on-Q4, so yes.

And then I guess my final question, was just on tangible book. Your TNAV per share continues to be, well sort of I guess down/flattish, which I guess is the reverse of the rising rate environment and the repricing of your hedging, broadly speaking. First, I guess, is that a fair analysis? And secondly, can you give us – have you got some sort of idea of what you expect TNAV per share to do as you look going forward, because you're obviously factoring in these rate rises into your margin. Should we expect the TNAV, therefore to be somewhat disappointing as you reprice the hedge?

The reprice the hedge is going to be an adverse impact upon it and you will see that a rate rising is a good thing. What's the immediate impact of rates rising in terms of my balance sheet? Well, two things happen actually. In terms of the group balance sheet, it is a – it hits TNAV as I reprice the hedge. Actually, it helps me in insurance and helps the capital position of insurance, which you don't get visibility of, but that's a big plus from a capital perspective that outweighs that. So that will – as rates rise up that will be a headwind. But going the other way, I’ve talked about and we will talk about more again today and later, the strong statutory profit growth that have come forth, that will obviously feed in. And obviously, the big counter to that will then obviously be what the distribution policy is. But I should expect to see in terms of TNAV going forward with that strong stack profit, restatement of the being obvious that will drive the TNAV, offset by what we determine in distribution. But you're right, in terms of rate rises, you will get a headwind as I reprice that hedge.

And just to comment on this. I mean, last year, we had an impact from MBNA. Given the high profitability of MBNA, there was some goodwill. So if you do a pro forma, as George showed in a slide, for MBNA, the TNAV increased by 3.1p, and we basically are distributing 3.2p. So basically, what we commit to be distributed, with ROTE of 8.9%. Our target ROTE starting in 2019 is 14% to 15%.

You will get in terms of IFRS tick-over. Whilst, we've talked about the capital, that it's more limited because you get EEL offset and then you've got transitional rules, it'll hit your sort of TNAV from an accounting basis as you step up provisions, as you move into an IFRS 9 world as well.

Thanks George.

Please, can we have the microphone there?

Hi, it’s Claire Kane from Credit Suisse. A couple of questions from me, firstly, on the CET1 capital calibration, you’ve moved back to kind of plus 1% buffer. And just to ask, if we're sitting here at the interim and we have another 0.5% countercyclical capital buffer and your PRA or your Pillar 2A buffer doesn’t go down, and will we be then looking at 2.5% CET1 or should we consider that your management buffer would adjust to accommodate a higher capital stack? That's the first question. And my second one is just on the buyback. Historically, you've assessed surplus capital at year-end. Do we think now this could be more of an interim assessment given your pretty steady capital generation? And then, finally...

How many questions do you have?

Just the last one, on the insurance side, you paid up a much larger insurance dividend this year, I think [6.75] and just what's the outlook there, please?

George will take one and three. On the second one, the answer is no. I mean, the board will continue to assess the capital at the end of the year with all the available information. We decided a buyback with the 12-month horizon, so we will continue with the cycle of addressing capital surpluses at the end of the year with all available information then.

And on the Insurance, without being sort of too vague about it, it's a balance between opportunities we see in terms of writing new business, market rates et cetera. Seven is probably at the sort of top end of what you'd expect, benefits expect, benefits from both, it's the sort of counter to some of the things you see in OOI. And I've talked about the lower bulk annuities. If I'm not putting the capital to work there, then that feeds into the surplus position, we've distributed it. We also benefited from market movements at year-end. We also benefited from market movements subsequent to year-end in terms of what you've seen. And something like the 15-year swap rate is probably the key thing to look at. And as that grows up, that will help my capital position. But 700 is at the sort of top end, I would have said in terms of run rate type expectations. And then asking me for the future in terms of what the board might do, I always find those questions a bit tricky. I'm not going to commit on what we might or might not do. And we currently assume around 1% in terms of the countercyclical within our 13%. If it goes up to 50 basis points, we'll have to assess it in the circumstance at the time. So I know it’s not a definitive answer to your question, Claire. But I can't answer in terms of what we might do in a future circumstance. The 13% assumes the 1%. Yes, one more question. I have not gone to that side of the room. So, please.

Thank you. John Cronin from Goodbody. Two questions from me, one in relation to the Pillar 2A again and where – I suppose going in the opposite direction to the last question, to the extent that as you mentioned derisking from a P2A perspective, with potential reduction from the current circa 3% level in the future, to the extent that everything else were to remain equal, would you bump up the management buffer? Or would you reduce your minimum target CET1 capital ratio were that sequence of events to unfold? And secondly, on the PPI. You mentioned that the lock-in average over the last 9 months now was 11,000. So if you could give us any more information in relation to how that's evolved since the third quarter, that would be very super helpful? Thank you.

Okay. So I'll deal with PPI before we come to the hypothetical one. The – yes, so PPI, we've gone up to 11,000. I think as we disclosed, the extent to which, if it has to go up again, or 12,000 whatever is about for 1000 now it’s about £200 million. And obviously, the closer we get to the time bar, the penalty, if you like, for being wrong or the benefit from being wrong diminishes. So 11,000 it’s moved around a lot. As you might expect, this is a – what we assume is a completely static – every week of the year, 52 weeks of the year, I'm going to get 11,000 now. And the most previous experience, that includes December and early January, which are fallow periods because not much happens, so you've got lows there. The most recent we've seen slightly above that most recent week was about 12,500. That's what we saw last week, so that's the most recent. We will remain susceptible to what comes through the door. If you look at the go forward, the FCA had those – with the Arnold Schwarzenegger ads or whatever, unfortunately, something's going to follow that. And so we've got one large campaign and two small campaigns to come so that we increased publicity. But the same time, we’ve got the PPI CMC fee cap that comes into play in 2018, so it'll be interesting to see what impact that has. So there are still a number of variables out there, and there's the behavioral consequence as you get near sort of closing time. So those are still out there. We've budgeted for what we've seen or provided for what we've seen, but there are still uncertainties around that. And then, unfortunately, a bit like Claire's question. I can’t give you hypothetical. I mean the Pillar 2A which again I am restricting what I can say to you, but it reflects those risks that aren't captured. Look at the things that we're doing. We've talked about the earlier question to pensions. As I put money into my pension scheme and make those deficit contributions, then, theoretically, your charge in terms of Pillar 2A should go down because you are actually mitigating that risk through contributions. I have been a seller of things like gilts, et cetera, you get charged for things like asset swap risk. If I got less gilts I should so I can give you the reasons why as I derisk you should see a smaller amount I can’t guarantee that and I am afraid what I can't do is tell you that if that happens, what the response of the business would be because it will depend upon the circumstance at that time. But it's certainly an area of opportunity.

Okay. Look thank you very much. We have to stop now for the breakout sessions. But any remaining questions, we'll take at the end of the breakout session and strategy review. So you have time to address the remaining questions. Do you want to give any indications?

As Antonio said, there are going to be plenty of opportunities for questions through the rest of that day and after the breakout question. So don't worry, there will be that opportunity. We'd now like to move on to the strategic update. And I'd like to introduce our Chairman, Lord Blackwell, who will provide a brief introduction to this transformational strategy that we're about to implement. Thank you.

Thank you very much Douglas. And welcome to the second part of our presentation this morning where Antonio and the team will set out. The next chapter of our strategic development. This does mark an important inflection point to the group, with the significant change in gear in the transformation of our bank. As you know, the last two strategic plans have focused on the recovery of the group's financial strength and on restoring our customer focus. But both Antonio and I have repeatedly said that we could not be complacent. We've recognized that the environment we face in technology and competition is moving at pace. So two years ago, the board and the executive set out together on a major exercise to create a vision for the bank of the future. And as that clarified, we've translated that into an ambitious transformation program to meet that challenge, a transformation program to which the board and the executive team are totally committed. And the whole, we believe this scale of ambition is the right approach to enable us to maintain our core purpose of supporting the UK economy, Helping Britain Prosper and to sustain our long-term competitiveness as the best bank for our customers, colleagues and shareholders. So with that, let me hand over to Antonio to take you through the components of that transformation and how we will deliver it. Thank you. Antonio?

Thank you, Norman. As you have heard in the results section of the presentation, 2017 closed the successful delivery of our second strategic plan and provides solid foundations for our third strategic plan, GSR3. We have a number of structural advantages which are difficult to replicate in terms of how we meet customer needs, including our differentiated multi-brand and multichannel propositions, our customer reach as the largest banking franchise in the UK and our leading digital capabilities. Together, these have seen our customer Net Promoter Scores increase by almost 50% since 2011 to 62%. At the same time, our market-leading efficiency, which is both a strategic- and culture-driven outcome, fully embedded in the organization, allows us to significantly increase investment again in our next transformation phase. Our prudent, low-risk participation choices and strong capital position have been reflected in the recent improvement in our external credit ratings and cost of funds, and should also decrease our cost of equity going forward. Finally, our management team discipline and rigorous execution capabilities have enabled us to deliver capital generation and profitability that are markedly stronger than our peers. Looking ahead, it is these qualities that underpin our confidence and scale of ambition. GSR3 represents an exciting opportunity, and the entire management team is energized, committed and determined to deliver the next phase of our transformation. Our confidence is built on the fact that we are already delivering a market-leading digital experience. We are, by far, the UK’s largest digital bank and are able to meet 68% of our customers' banking needs online, which is at the top end of the targeted range we set out three years ago. This scale has been achieved through the best-in-class experience our customers enjoy, with market-leading functionality, resulting in being rated number one digital banking app…

Thank you, Antonio. As Antonio has just outlined, GSR3 constitutes an ambitious transformation for our group. I would like to briefly explain to you how we have prepared successfully to deliver our transformation of this scale. Let me start by introducing our current model, which distinguishes us from our peers. We are focused on a single geography. We have a simple operating model, and we have a centralized management team who have a proven track record in managing transformation. In a world where you need to be nimble to respond quickly to external changes, we believe our model gives us considerable structural advantages. Last July, we announced changes to our organizational design to prepare us for the successful delivery of GSR3. As a result of these changes, we have brought together under one umbrella all the critical components needed to implement the transformation. This simplified structure is unique and provides a more consistent approach to the end-to-end transformation of customer journeys, alongside our greater focus on our digital and transformation agenda. Investment decisions are now organized around customer journeys. This ensures better allocation of resources and a greater focus on group-wide outcomes. We have also moved from the traditional annual investment allocation process to one where investments are reviewed more frequently. This will allow us to adapt to a changing environment and reprioritize if required, depending on customer behavior and market dynamics. On the ground, we are co-locating teams from across the business, bringing together all the capabilities required to deliver the transformation. These teams are adopting an Agile approach and focusing on outcomes to be achieved rather than initiatives to be delivered. This helps to ensure faster and more efficient delivery of change for our customers. As an executive team, we are committed and excited to position our group…