Right. Well, let's start. Good morning, ladies and gentlemen. Welcome to our full year results. I think the results overall show good progress, with our Core businesses making around GBP 6 billion profits. But of course, we're still dealing with the big challenges from the financial excesses of a few years ago that come up in our Non-Core division. And this year, we've got some very big charges for Greece PPI and others, which are largely, though not universally, legacy-type problems. Step by step, I think it's clear that this bank, this business is being fixed. I'll say one more thing, and then I'll hand over to Steven to explain how it's being fixed. The other thing I'd like to say, or really, rather, reemphasize, is that, of course, we are a very odd business in ownership terms, at once listed on the stock market but majority-owned by the U.K. government. And of course, there are representatives of UKFI with their commercial arm's-length relationship. The question is sometimes raised as to how long those arms are, and the answer is that we do engage in discussions with all of our shareholders on performance, strategy, governance, remuneration and so on. And these discussions are inevitably fuller and more frequent with an 82% shareholder whose opinions have a proper place in the judgments made by the Board and the management. But at the end of the day, all decisions in the company have to be taken by the Board and the management. And by law, those decisions have to take into account the interest of all of our shareholders. It's not, of course, just a company law issue. The clarity of decision-making and accountability is fundamental to the prudential management of all businesses and, of course, particularly financial institutions. So whilst we do engage with shareholders, especially UKFI, we have to take our decisions on behalf of all shareholders, and we have to be wholly accountable for the decisions that we take, solely and wholly accountable. So it will be obvious, I'm sure, to everybody here that this is a very challenging set of circumstances for all parties. It's certainly very unusual. But I think so far, we have been able to deal with those challenges and find acceptable solutions. I hope and I expect that we will be able to continue to do so. The Board firmly believes that running the business commercially is the only realistic way to secure the eventual exit of our majority shareholder, because clearly, investors would have a very limited appetite to invest in an un-commercial bank. So let me now hand over to Steven, who will describe the progress we're making.

Thank you, Philip. Good morning, everyone. Normal format this morning. Obviously, I'm going to go over a few matters and then hand over to Bruce to take you through the results and, obviously, deal with as many of your questions afterwards as we can do. And I'm dividing my remarks this morning really into 3 categories, one just briefly the headlines of what we've announced for the year. I think perhaps more importantly, although you could argue it's retrospective, for the first time today, since it does mark the end of our first 3 years in this 5-year turnaround plan that we set out in 2009, we've actually presented for you what the real numbers that we really thought we could achieve were 3 years ago that we haven't presented before and how we've done against them in an environment which, as you know, has turned out rather more difficult than we expected. And then I move in my final section into talking about the adjustments that we announced in January to our strategic plan that we're implementing what they were, why they were and what we think we'll accomplish by them. And so just briefly on the headlines of the results, which most of you will have seen, as you know, fundamentally, RBS is doing the job in some ways of -- 2 different jobs. We are, as I have said in the media, in the process of diffusing the biggest time bomb ever put in a bank's balance sheet, and that progress is going extremely well. And at the same time, we're running a very big global complicated bank competing against lots of other people, serving our customers. And we believe that we've made progress and could be paired -- can be compared reasonably for that effort as…

Thank you, Stephen, and good morning, everyone. I'm going to take you through our financial progress. I'm going to start with our Core results. So the Core operating profit adjusted for the sale of GMS was down 15% year-on-year, which is driven by a 9% fall in revenue. And looking at the constituent parts of Core, Retail & Commercial saw operating profit up 4% year-on-year. This bumps up to 10% on an underlying basis adjusted for the disposal of the GMS business. The R&C performance reflects a rise in income, good cost control and a decline in impairments. 2011 ROE for R&C was 10.5%, 17% excluding Ulster. GBM's 2011 operating profit fell by roughly 1/2 versus 2010. The second half of the year saw a subdued revenue environment, and we reduced our own risk appetite. While GBM delivered an 8% ROE for the year and performance was in the pack with peers, we announced the restructuring in January, which I will cover in more detail shortly. Insurance has been nicely turned around, with a profit swing of GBP 750 million over the past 12 months, and the Core ROE for the year was 11%. So looking at the Core business in more detail. First off, U.K. Retail had a terrific year. Profit was up 45%. We had a strong return on equity, and good progress was made against our customer charter. For the year, mortgage lending was up 5%. Our market share of new mortgage lending was 10% versus our stock position of 8%. Deposits increased by GBP 6 billion or 6% year-over-year, improving the loan-to-deposit ratio to 106% relative to 110% a year ago. U.K. Corporate's strong support of new and existing U.K. businesses continued in 2011. Our financial results were stable across all P&L dimensions. Impairments, though, remained…

Those were extremely comprehensive presentations. So really you ought not to have any questions, but somehow or other, I suspect you will. The usual thing. When you get the mic, there are 2 roving mics, if you can give your name, rank and serial number. Who's going to go first? The second row there.

It's [indiscernible] from JPMorgan. Could I have 2 questions, please. Firstly, on the GBM ongoing earnings power, really would appreciate some more color on the impact of the GBP 70 billion of RWA reduction on revenues. So obviously we understand what the equities contribution might have been. But clearly, there should be a negative impact on top line from the GBP 70 billion RWA reduction. If you could elaborate on that, that would be really useful. The second question is on the CRE slotting. Could you give us some indication of whether that's a fixed number, or do you think that could move? What is your average risk rate on your U.K. CRE book currently? And what is it going to in the starting approach?

Okay. I guess first off on GBM. The thing to note is that some of that risk-weight reduction has already occurred. It's happened from the numbers we flashed at the half year. And obviously, what we're trying to do is minimize the revenue reduction, so that's an ongoing effort. We do think that, that number, roughly, as we've managed through it, should be offset by an increase in the normalization to the 2011 subdued revenue levels. So there's a chance always of some breakage in that. But if that's GBP 400 million or GBP 500 million, ballpark, I think you could see the 2 offsetting each other.

Right.

In CRE slotting, that number of GBP 20 billion is our best estimate at this point. As you can see, the book is reducing, so we made it -- we took it down from about GBP 90 billion to GBP 75 billion across Core and Non-Core and in terms of the funded assets. But it comes down slow. It's a relatively illiquid asset class. And so I think I'd still call it at GBP 20 billion at this point. I don't have, off the top of my head, the exact RWA intensity. Perhaps you can follow that up with Richard later.

Just move it a little bit further back now. Third row there.

It's Manus Costello from Autonomous. You're on review with Moody's for downgrades to your short-term credit rating from P1. I wonder if you could tell us the amount of wholesale funding and the amount of corporate deposits you would expect to leave the bank if you get downgraded to P2? And secondly, more structurally, you show that 39% of the new international banking division is cash management. How would that business be impacted if you were a P2-rated bank?

Well, first off, I would say, there's a broad cross-section of banks under review. And so what happens relatively is always important in those determinations. We clearly will be presenting our facts to Moody's over the next couple of weeks and certainly feel we have a very strong case to make that we deserve to sustain our current stand-alone rating and the short-term rating based on the progress that we've made. Sometimes, the rating agencies have a lagging perception of where you were as opposed to where you are and where you're going, and that's the case that I think we'll aim to make. I would say that the short-term commercial paper and CDs that we have out on issue, if you looked at one of the slides in the book, I think it's maybe Page 137, has -- shows a reduction from about GBP 50 billion outstandings to slightly over GBP 20 billion from 2010 to the end of 2011. So as part of this balance sheet reduction and reducing short-term wholesale funding, that number is being managed down. So certainly still matters to us that we have the -- sustain the rating, but our exposure to the instruments that are rated has certainly been reduced as we shrink our dependence on wholesale funding. Second question was on cash management. There, again, I think that's a relative game, so corporates will leave deposits. They have relationships with us for many reasons, the quality of service we provide, et cetera. And if there's multiple banks that are downgraded, I think it's less impactful than if it was more of a bespoke downgrade of us relative to some of our nearest competitors. But anyway, we'll just have to see how that plays out.

Sorry, just to be clear, on that GBP 20 billion, I think you've got some ABCP in there as well. How much of that is rating-sensitive, then?

The ABCP is the conduit -- are you talking about the conduit? I mean, the conduit is a business that we are aiming to reduce over time. So that's part of the strategy for GBM, and it's only about GBP 10 billion at this point. It's not that significant.

Nice to hear that GBP 10 billion is not that significant. Not many and there's presentations there [ph] if that's the case. Why don't we go over there?

It's Gary Greenwood of Shore Capital. And I've got 3 questions. First is on the Retail Bank, which is currently generating very good return on equity, 26%, 27%. I'm just wondering if you could comment on the sustainability of that return going forward. And second question is on the restructuring costs. I think you mentioned restructuring costs for the GBM business of GBP 550 million in 2012. But I wonder if you could give some guidance for overall group restructuring costs in 2012 and also whether you expect any further costs thereafter? And then the final question is just on the asset protection scheme, which, I think, if you strip out the benefits on the Core Tier 1 Ratio, your Core Tier 1 Ratio would be sub-10% at the moment. And question is whether you would still exit the asset protection scheme in the second half of this year if it meant that your Core Tier 1 Ratio would drop below 10%?

Steven, why don't you?

Let me take the first and last and ask Bruce to talk about restructuring costs. On the Retail Bank, I think it is realistic to expect that return on equity won't have a lot of upside from this level. And frankly, if you gave me the choice, I would pick growth over high return on equity in terms of what the right sustainable mix would be. I'm not sure we're going to get any growth whilst the economy is flat on its back. But certainly what we're asking the retail bank to do is to continue to reduce costs, to reinvest that cost reduction and solidifying and improving our customer service and being first in e-channels and new sort of things. And my guess is it'll be a bit of treading water for a while until the economy will allow us to grow. But I think it would be wrong to sign both material upside and return on equity from what is already had some level and one I think that looks pretty good compared with competitors. So we're very happy with that business. On your last question on APS, of course, all of these things, as Bruce said in different context, are relative in terms of Core Tier 1 and where we should be. And obviously, everyone will be focusing not just on Core Tier 1 this year for us and other banks, but on Core Tier 1 pro forma for the Basel effects. And clearly, the restructuring of our wholesale businesses will be eating in to the Basel uplift as we get nearer to the date and as we go beyond that. So I think we would be comfortable if, in the context of the Basel increase or an APS exit, we temporarily dipped below 10%. But we're very clear that above 10% post-Basel III is where we will aim for.

Yes, and I would add to that, that the APS cover benefit, which is reducing as we run off those assets, is likely to be maybe 60 basis points by the fourth quarter. So certainly, less than it is today. On the second question, the restructuring cost has run about GBP 1 billion for each of the last 2 years. We have quite a bit of chunky programs within that, so things like moving our business out of the NV into the U.K. RBS plc is a very sizable activity. We have our retail transformation program, our Business Services transformation program, the separation for the Santander transaction. So there's quite a big thing in there that, I think, largely is a base for one more year that we will have to sustain something in that ballpark. And then on top of that, you'd have to add GBP 500 or so million related to the GBM restructure. So I think this will be another sizable year of restructuring costs. The good news is that all those other below-the-line items like APS, almost all gone. Shouldn't see any more PPI, shouldn't see another sovereign impairment. And so some of the things that have dragged below the line are cleaning, but restructuring is actually going to go up probably by GBP 0.5 billion.

And beyond 2012?

Then we'll start to see that number come down. It will come down pretty sharply.

Anymore? The central phalanx.

It's Andrew Coombs from Citi. I have 3 questions on the Core bank balance sheet, please, if possible. Just firstly in terms of loan growth looking Q4 versus Q3. I mean there's a GBP 10 billion decline in Non-Core, a slightly larger decline, the groups are just backing it out. It looks like GBP 5 billion decline in Core loans. So just a thought on perhaps when you return to growth in terms of the Core bank loan growth? Secondly, looking at the risk-weighted assets, I know there's a number of moving parts here. But adjusting for the Basel 2.5 RWA and [indiscernible] also for the GBP 18 billion decline in the APS, really, it still looks like your Core RWAs reported flat versus a decline of loan book, as I mentioned. So just kind of trying to reconcile that. And then finally, on the deposits, the face value, it looks like a 5% decline Q-on-Q. But I notice in your footnotes in Slide 38, you talk about the reallocation of deposits to disposal groups. So perhaps you could just clarify that, please?

Sorry. Could you say that last one again?

Yes. Slide 38, you flag in a footnote a reallocation to disposal groups for the deposits, which would explain the decline Q-on-Q. So just a bit more clarity, please?

Sure. I guess the loan growth is going to be dependent on more vibrancy in the economy. So it's hard to call when we start to see that picking up again. The one place that we are seeing some loan growth is in the U.S., and I think we're seeing a little bit of mortgage growth in the U.K. But the corporate book is tracking the deleveraging that's occurring generally as companies try and improve their balance sheets. So that kind of would cover your first one. The second one, I'm not exactly sure, I haven't done the math the way you've looked at it. But we can follow up with you afterwards. Richard can go through that one. Slide 38. Richard O’Connor: What is it? The Santander branch sale, so all the deposits certainly with Santander branch sale have moved into disposal group. So deposits went up quarter-on-quarter on a like-for-like basis.

Yes. Okay.

Okay. Let's go bang in the middle.

It's Tom Rayner from Exane BNP Paribas. Can I just push you a bit more on the deleveraging cost versus the normalization of revenue? Because, I mean, it's quite a big statement, I think. I mean, the nominal balance sheet for the old GBM is going to be falling by 25%, 30% in nominal terms. I mean, that's going to have a fairly material impact, and I'd just like to get a better feel for what is going to be normalizing from here. I see you say that the year is off to a good start. Maybe you can elaborate on what that means Q1 versus similar period last year. But I'm just trying to understand a little bit better, if you fill in the gaps, if you like, on Slide 25, what you really think the different revenues might be and then what you can do on cost to get you back to the 12%?

Well, Stephen can have a go at...

Well, I'm going to have a go, but I'm going to probably have a go at not being helpful to you. As you know from having listened to me before, I consider it a mug's game to forecast very precisely market revenue streams, and that's been proven right in both directions over the last 3 years for us and for everyone else. And so I think the most responsible thing for us, really, is to say we're going to keep working in these businesses until they cover their cost of capital, and we'll use every lever that's open to us, whether it's the amount of capital they use or the expense base or the revenue base. And frankly, that's the way I look at it and I really pay relatively little attention to guesses as to what [Audio Gap] what the market is going to deliver us in any one quarter. All of that said, [Audio Gap] use them on the balance sheet. There are a whole series of things that are incredibly expensive in new regulatory capital regime. Let me give you an example. Long-dated corporate derivatives or long-dated derivatives of any kind. And so there will be a massive amount of restructuring work in the derivatives world to take out capital intensity, which hopefully doesn't take out a lot of revenue but really is largely about the restructuring of past trades have become very, very penal. So in those ways, our attempt is to take resources away from things that, for one reason or another, are not going to take a lot of revenue away. On the other side of things, I guess the area that was particularly below 1/2 for everyone last year was the credit area. And so our expectation would be that the credit area doesn't have a loss but has a profit in a normal year, and that produces some revenues back. The others will all bounce around up and down with market. So that's kind of the best that I can do. But we're really not very excited about getting sort of tied down into precision which, I think, will give you false confidence.

Yes. It would be credit, and also counterparty hedging had tough impacts in 2011. And clearly, we've gone through business by business, desk by desk and tried to optimize for RWAs and also look at where we think sustainable revenue performance is and how to reduce the cost of support for each of those activities. But as Stephen said, you've got a little bit of guesstimate in that and looking at we were historically and where we think markets are going. But it has been done on an excruciatingly detailed and rigorous basis.

Can I just have a quick sort of follow-up, because some of your competitors are pointing to some of the legacy 2006, '07 structure credit positions, which will be maturing, some of them, in the next few years. And under Basel III, that will be a particularly onerous asset to hold, and, therefore, the capital benefit of those assets just being run off is very attractive in helping the whole story. I mean, I'm suspecting for you a lot of those things are sitting in the Non-Core and obviously sitting in the...

They're all in Non-Core. And part of the accomplishment of last year in Non-Core was actually spending a significant amount of money that we were planning for later early, which achieved some benefits last year but achieved bigger benefits on a pro forma for Basel III. So those benefits will overwhelmingly be in Non-Core from the removal of those assets or the removal of the uplift that would otherwise have occurred.

Good. Why don't you just pass it to next door?

Rohith Chandra-Rajan from Citi. If I could stay on Slide 25, actually. Just wondering if you could give us any indication of your expected phasing of the asset reduction, not only guidance. I mean, you've mentioned a couple of business areas, but any more specifics on the particular business areas? And also whether what we should expect in terms of the phasing also of cost reductions, so phasing of asset reduction, cost reduction in particular areas of asset reduction on GBM?

Yes. I think, broadly, it's going to take us 2 years to get down to these targets or substantially close to those targets. So that's what you should be thinking.

And the cost reduction phasing similar, too?

Yes.

I mean, any difference in balance between the 2 years on either assets or costs?

Well, we'll work as quickly as we can. We'd obviously like to bring the cost side in as fast as we can. But I still think it's going to take us the better part of 2 years to make that happen.

Okay. And the GBP 550 million restructuring costs, if I rightly understand you, that's just an expense cost. It's not a disposal cost. Is that what you were...

That's correct. It's expenses, and about 1/2 of that is people cost, people-related redundancy costs. And the other 1/2 is space and other operating costs and write-offs of software and equipment.

And then in terms of the asset reduction, what is your anticipation in terms of how much is runoff and how much is disposal?

Very little is disposal, so we're not looking for friction on this rundown. We're looking just to gradually trade out of positions and reduce positions.

Okay. Can I ask a slightly...

A 5-parter?

A separate question, so question #2 on Non-Core. I think you've been guiding to sort of GBP 25 billion to GBP 30 billion reduction in Non-Core assets this year. If I understand your comments correctly, broadly, they split between disposals and runoff. And that wasn't much commentary on disposal costs in the fourth quarter for Non-Core. I was wondering what you should anticipate in that respect this year.

I thought I covered that a bit. I had a slide that said GBP 65 billion to GBP 70 billion is the TPA target for next year, which is roughly GBP 25 million, and the recognition that roughly 1/2 of that is disposals and 1/2 of that is runoff. So call it GBP 12.5 billion of disposals for 2012, of which GBP 4.5 billion is in the bank with the aircraft leasing signed transaction, which will close in the first half. We're probably active on north of 80 transactions. But we're down to small transactions. They're individual assets or clusters of assets, which is how a lot of this rundown to now has taken place. There's few kind of large-signature assets like aircraft leasing to move the needle. So it's going to be lots of people working on lots of deals that we have a good pipeline. We know how to do this, and so we have a reasonably high degree of confidence in that future trajectory.

Cost of doing it?

The cost of doing it, I think, in the contours of -- we said that the total loss from Non-Core should reduce by about the amount it reduced on a percentage basis from last year. I think consensus has it roughly around GBP 3 billion, which I kind of guess you can do the math and you can get to that. Embedded in that, you have impairments coming down because you won't have the same drag from Ireland, given that the partial real estate book is now pretty heavily provided. But you will have an uptick in disposals, and you can -- you have to do something. You can go do the math on that, but anyway.

You have a third or a tenth question?

No.

Okay.

[indiscernible] Securities. Just 2 questions -- sorry, it's coming through now. Two questions. On the recast ROE targets, I wonder if you could just sort of give us a bit of guidance what you're thinking about the banking commission impact, given that you've got a sort of wholly 100%-funded Core bank. Do we assume all of that in your thinking sits within the ring fence? Or would 12% actually potentially take another hit from the banking commission recommendation?

What I hope happens is that 12% takes a hit down from the final bits of the Banking Commission but takes a boost up from renewed economic growth, interest rates start recovering as we get towards that period. And so our goal will be to return at least what our cost of equity is. Who knows what that will be then, but that's -- and from those opposite effects, with the restructuring of our wholesale business and the further sharp declines in our usage of wholesale funding, we believe we are getting ahead of the game in a way that not everyone is in being able to make that final transition to a ring-fenced world less painfully than would have otherwise been the case. So, of course, it's always going to be painful. So we're directionally going that way. But I do think that we're going to need some economic growth and higher interest rates if we are to make our cost of capital in a ring-fenced world.

Sorry, there was a second question.

Just on -- you've obviously highlighted that dividend block has come off this year. I wondered if you could just sort of give a thought as to what you're thinking about would there be capital emerging from the GBM deleveraging Non-Core, maybe the IPO insurance business that puts you in a position to buy back the B shares? Or secondly, would there be an option to -- given 65p seems like now like a long way off, is there any scope to renegotiate the trigger on the dividend access share?

As you can see, the direction from regulators is unashamedly to ask for more and more capital, whether it's through banking commission, whether it's through commercial real estate slotting, whether it's through Basel III. And so I think you would have to be an extremely bold person to forecast near-term capital services for us. And I think that's just the reality. I've said that for some years, and I think it, sadly, it's proven true. And that said, obviously, we are nevertheless proceeding fast to a cash-generative business in the short run, and that cash generation has taken cleanup costs and reducing risks. But as and when that cash becomes available for other purposes, I think one of the things that we would like to think is that we will be very shareholder-driven and we won't squirrel away cash that has a better use elsewhere once we have the right levels of conservatism in our balance sheet.

Okay. I think we're starting to thin out a bit.

Robert Law of Nomura. Can I ask 2 brief questions, please? Firstly, just one more on GBM. Can you comment as to whether the restructuring costs you've given the indications of this year, would complete them for the restructuring you had planned for the period to bring the costs into line with the targets that you've set? And secondly, away from GBM, could you comment on the prospects for net interest income at the group level? You've given some margin indications for the current year, which, I think, is a modest attrition year-on-year with the balance sheet falling. Also, that gives you an indication for this year. If rates stay where they are for a 2- or 3-year period, as indicated by money markets, would you expect those trends to continue for that period?

On the GBM restructuring costs, I would expect those to be taken this year and get us to the cost position that we need to get, although the full run rate savings will phase in over 2 years as to the earlier question. So I don't think there'll be additional restructuring costs associated with that in 2013. I think we'll take all of those in 2012. Your second question. Was that about group NIM or, was it on GBM NIM?

Group NIM, but specifically group net interest income.

Well, net interest income should continue to decline based on the rundown in Non-Core. So at a headline level, I think you'll have the same forces at work of smaller balance sheet reduces average earning assets. But NIM, we're calling out to be stable with where it was in the second half of the year, and then we'll pick up, I think, an upward bias clearly as rates move up, as we pay off higher-cost funding, as we reduce the liquidity buffer. Kind of looking out farther, I think we're looking back to resuming an upward bias.

And in the meantime, do you see Core net interest income also shrinking? And in the comments you made about margins having an upward bias, does it take rates to rise for that to happen?

Yes, I think in Core R&C, which is really what drives the net interest income, to actually see that NIM start to improve, you'd have to see rates move. What we're doing now is we're trying to reprice assets as aggressively as we can to offset that impact from the flat-yield curve and low rates. And so as the hedges are rolling off, that's a drag. How do you offset that? You offset that by some level of pricing. So that's -- kind of keeps you in a tread-water position until you see higher rates.

Okay. Right at the back there.

It's Ed Firth from Macquarie. Just a couple of quick questions on risk-weighted assets, if I may. You mentioned there was a GBP 32 billion saving in the Non-Core just from the monoline restructuring. Could you tell me how much of that came through in Q4? So that was one question. The other one was you also mentioned that some of the GBP 70 billion benefited the restructuring of GBM is already in the numbers now, the full year. Could you tell us how much of that GBP 70 billion is already in? And then I just finally, I guess, the Basel III impacted change, are we saying that it's basically a GBP 50 billion benefit from the GBM restructuring offset by the GBP 20 billion of slotting? Am I broadly right there? Is that -- I mean, that's my understanding.

I might have to come back to you on those. I don't think I copied them down fast enough. The first one was RWAs, the reduction in Non-Core, right? That was -- I think a sizable element of that saving was in the fourth quarter, because that's where we did commute a major monoline exposure. Earlier in the year, as Stephen had indicated, we also sold off our restructured correlation trading book. And that was in the second quarter we got some benefit from that. So it's the combination of those 2 things, kind of a fourth quarter and a second quarter impact. Second question was around GBMs...

Yes. That GBP 70 billion, in your answer to the first question, I think you said some of that was already in the numbers in the second half.

Yes, yes.

Could you give us an idea of roughly of how much of that...

Sure. So we have business movement in the second half of the year that is around GBP 15 billion. So I don't know percentage-wise, a little over 20%. It's in the numbers. And then your third one was...

Sorry, on the Basel III guidance, the revised guidance. Do I get to that broadly by -- is that the GBM restructuring offset by the slotting?

No. I think the way we were saying there is an offset in there is if you looked at where we thought we were a year ago in terms of the CRD IV and model impacts, that number was around GBP 20 billion. It was GBP 15 billion to GBP 25 billion higher than it actually looks like it's turning out to be, based on some of our mitigation. And so that seems like it's good news. But then you have CRE slotting, which is GBP 20 billion, going the other way. So that initial view is largely flat now because of something else, which is the CRE slotting, which we didn't know at the time.

It's Michael Helsby from Merrill Lynch. I just got 2 questions. Firstly, I was wondering if you could just drill down a little bit more on your impairments outlook. I'm just particularly interested in what your forward-looking indicators look like in the U.K. And I note that in Ireland, NPLs were pretty static, actually, Q4 on Q3. So if you could comment on that, that would be appreciated. And also, I was just wondering if you'd give us an idea of how you think about the LTRO and the up-and-coming LTRO? I'm very aware that you've got quite a large CGS maturity still to come through. I wonder whether you'd consider refinancing that with LTRO and just spread out the pain for a little bit longer? I think that would be sensible.

Okay. Two questions, first on impairments. I guess what we called out in Core is that we think we'll still see a positive trend across R&C led in 3 areas. One is the U.S., where we've had good trends so far through 2011, and we see that continuing into 2012. The economy's improving, asset values are stabilizing, and so that should be positive. The second one was GTS. In GTS, we had this large one-time -- I won't say one-time, but it's very unusual to lose the kind of money we did in GTS last year. It's like a 1-in-25-year event, so I don't expect that to repeat in 2012. And then the last area was Ireland, and Ireland has been a tough one to call. You kind of have to bifurcate within Core. There's 2 major books. There's the corporate book, which has some elements of real estate linked lending in it; and then there's resi loans. On the resi side, the positive note is that the economy appears to be stabilizing. So they had growth last year and expect to have growth again this year. But employment is kind of -- unemployment has stayed stubbornly high. So the export sector is growing. But the government and banks, including ourselves, are reducing employment. And so that's actually not changing the dynamic around the individuals, which translates over to still softening values in the resi asset market. So I think you'll start to see that improve, provided the Irish economy continues on its path that it's on and we don't have any Eurozone explosions. And that should translate into better numbers I'd say by the second half of the year on the resi side. The corporate side, I think we are pretty heavily proficient at this point, and we should start to see those numbers come down on a year-over-year basis. In the U.K., I'd say, again, we've seen huge improvement already in U.K. retail. And so the metrics around the impairments to L&A in both the mortgage book and in the unsecured book have traveled quite far. And so there might be a little more to squeeze out, but we're not really seeing any signs that things are reversing at this point. On the corporate side, as I indicated, we've been stubbornly high for the better part of the 3-year recovery plan. And so I don't necessarily see that changing. I don't see things getting appreciably worse, but I don't see them getting appreciably better either. On the LTRO, again, we don't comment publicly about whether we do or whether we don't. We just make a personal observation that I think it's attractive money, its term money, and it's relatively cheap, and so -- and then there's very little stigma around it as long as it's done in moderation. So there's certain countries where the banks have taken a lot of it, and that's not seen as a good thing. But I think in small doses, it's fine.

Sorry, Bruce, can I just add one thing to that? I want to be very clear. If we were to take any LTRO, it is for the funding of our European bank, DNB or Ulster Bank. No LTRO would be for the funding of our U.K. bank, which is where we're paying back CDS. So we expect to meet the CDS paybacks comfortably from our existing excess liquidity resources, and there will be absolutely no relationship of one to the other.

Okay. 1 or 2 more. You?

It's Claire Kane from Royal Bank of Canada. I just wanted to come back to the guidance on GBM, just to check I'm clear. So of the GBP 1.6 billion restructuring for 2012, we expect GBP 600 million for GBM. And that's kind of one for one with the expected cost savings you see in that business going forward. And then if we're looking for a 60% cost income from the GBP 66 million, and you've then said your income expectations are for cyclical recovery to offset the RWA mitigation loss. Where are we seeing the cost income trend moving down?

Well, the restructuring costs go below the line. So the actual expenses reduce, which improves the cost to income ratio, right?

Just accounting. Okay. Out at the back.

Bruce Packard from Seymour Pierce. Just a quick one on the deposit trends in the Retail Bank and the Commercial Bank seem quite different. You've got flat deposits in the Commercial Bank and 6% growth in the Retail Bank. I just wondered is there anything particularly that's driving that?

No. I just think that we have probably not been as aggressive in pursuing deposits on the retail network. And so we've had a drive on to move that loan-to-deposit ratio back to 100%, and so either through programs that incent our branch people to get a better share of wallet or sometimes specials that are bond yields or other things that attract deposits. I think we've been a bit more aggressive on the retail side than we have on the corporate side. Partly, we're getting to 100% loan-to-deposit ratio a little bit on the corporate side. As we said earlier, there's some deleveraging taking place. And so the loan demand is coming down, so the need to fight and build up deposits is less intense on that side.

This must be a very aggressive question, if it's delivered from so far back. So we can't miss out on it.

It's Arturo de Frias from Santander. I don't want to be aggressive at all. Two quick ones, if I may. First of all, again on GBM, I fully understand that you don't want to give us any guidance on revenues. So let's look at costs, then. And my question is very simple. Trying to put together what the costs will do and what the RWAs will do, which I think is the essence, given the ROE target. What's your impression in terms of future costs on RWA ratio? Is that coming down? Is that improving? Or is that staying stable from where we are now? And then the second question on Core Tier 1, it is useful to have a new above-10% target, thank you very much, but I think the uncertainty is not whether it's a bolt-on [ph] or if it's going to be substantially a bolt-on [ph]. So can I ask you to be more useful or more helpful on your guidance and tell us whether you expect slightly more than 10% or substantially more than 10%?

You're quite right to observe there I'm not very useful. But that lets me off answering your question as well, doesn't it? Look, I mean, I think that probably that ex the closing of the businesses probably will bring costs down slower than the RWA growth. But the one reason I don't want to get tied into this is I regard us as having a target, and that is to get this business to the point where it returns its cost of equity. And we're going to call -- and anyone who can tell you they know what the investment banking market is going to be like over the next 3 years is lying to you. And so we're just going to have to keep pulling whichever of these levers works to get to the right place. And I really would be giving you false guidance to build a model that's going to work. I don't know what it is. But I do think that we have enough levers to give ourselves a sporting chance that over the medium term, I think I would say 3 years rather than Bruce's 2, but that's a bit off a spread [ph] from between us, that we should get there. On the capital ratio, ex the special situation in the U.K. of superequivalence from the bank commission, I think we would be aiming to stabilize at a small amount above 10% in terms of Core Tier 1 ratios for the group as a whole post-Basel III. The extent to which we have to be more than a small amount above will depend on exactly how the ring fence pans out and where the credit rating agencies require capital ratios from the non-ring-fence bank to be. Of course, our non-ring fence was rather smaller than it once would have been because of what we're doing in terms of RWAs and the wholesale businesses. But that's the calculation which even today, I think, it's at least 2 years before we have legislation that tells us how this thing comes together in technical terms. And I think it's at least 2 years before we know how rating agencies rate banks again, because they're working through that rather publicly. And so that's why I regard us as having -- as making absolutely the right steps to make this a transition that happens smoothly rather than with a big jerk. But I do think that we are likely to need some benefit from economic recovery and higher interest rates to offset some extra capital consumption. And how that will precisely pan out, we really don't know.

Bruce, anything to add or are you...

No, that's good.

Okay. Any more questions? Fantastic. Well, thank you all for attending. That's the end of Results Day. The rest of the day, I think, is Remuneration Day. Thanks for giving this time.