Good morning, and welcome to our full year 2013 results presentation. Prudential has delivered a strong performance in 2013 with double-digit growth across all our key performance metrics. We are pleased to announce that we have achieved all 6 of our 2013 'Growth and Cash' objectives. As you know, we've been early in talking about cash, and we have been focusing on that metric since 2008. From a situation of great dependency on the U.K. in terms of cash and earnings in 2007, we are now in a position where each of our 4 businesses is materially cash generative. We have also been able in parallel to generate I believe more growth than any other large-cap insurance company. So we have not only talked about 'Growth and Cash', we have been able to deliver on that promise. And in the end, it is this delivery only that matters. People sometimes are kind enough to refer to the quality of our strategy. I actually think that what is really unique about this company and its team is our focus on execution and our ability to deliver consistently. A few weeks ago at investor seminar, the motto was more of the same. This remains our motto with a little twist this morning, which is more of the same, just better. The renewal announced this morning of our strategic bancassurance agreement with Standard Chartered Bank is a good example of that, more of the same, just better. The previous agreement was already a good one. In the past 15 years, our sales from this partnership have grown by 160x. The new agreement is a clear improvement on the previous one. It is longer, it is deeper and it is broader than the previous agreement. It is longer, this new agreement will run for 15 years -- where's Greg. So Greg, we don't have -- to have this banter, when does it end anymore. 15 years, I can finally take that question with a smile. 2029 it's been going on for a long -- and thank you for your patience, Greg. You've been really -- he has been really good.

This is the point, of course.

I know. I'm trying to buy some goodwill here. I know my time will come. It's very transparent. So it's a longer agreement. It's broader. It gives us access to 11 markets in Asia, and it secures exclusive rights to discuss bancassurance agreements in 7 additional markets in the near future. It's also deeper because in a number of markets, we are strengthening our existing relationship as we move to either exclusive or preferred terms. And last but not least, as part of the agreement, we will work with SCB to explore some of the huge opportunities available to us in Africa. Our teams know and respect each other. They work very well together as evidenced by the growth of our business over the last 15 years, I've said 160x. That is why we are confident that this new agreement giving us unfettered access to one of the best banking franchises in Asia, about 800 branches in the new agreement, is a milestone in our development. With that, I will follow today my usual format. I will start with the highlight of our full year results and then, we'll comment on a few key aspects of our strategy. As usual, there will be a focus on Asia, but we will also cover Jackson and our businesses in the U.K., the life businesses and M&G. I will then hand over then to Nic, who'll cover our financial performance in more detail. And I will come back at the end to talk about the outlook for rest of the year and beyond, and we will then take your questions. As always, the executive team from across the group are here and they will do their best to answer any questions you may have. And I'm sure we'll have opportunities to intervene. So…

January.

January 2013. And we've opened now a representative office in Myanmar. Moving from Asia to the U.S., we have continued to innovate as demonstrated by the success of Elite Access, which generated $4 billion of premiums in 2013, triple the level achieved 1 year before. The REALIC acquisition we announced in May 2012 has been successfully integrated, and you can see its contribution to its numbers. It's been delivering above the expected benefits and has contributed to enhancing and diversifying our revenue stream in the U.S. In asset management, we've continued to expand M&G's presence in Europe, driving European retail funds under management up 64% to GBP 24 billion. And in addition to our well-known portfolio, PCA, Jackson, U.K. Life, M&G, we have entered Africa for a small acquisition in Ghana. We also played an integral part in reaching an agreement with regulators and politicians in November last year on Omnibus II, directive of Solvency II. This agreement provides more clarity, we believe, to you our investors on the capital indications of the new regime. And also ensures that we insurers can continue to play our role in financing the long-term capital needs of the economy. Now this chart for us is just the translation in financial terms of all these actions we have conducted since 2008. And I think every year has been at least as busy as 2013, when you list everything that's been done. 2013 adds 1 more year to our track record built now over several years. And refers to bars on the left, we've let them on this chart because they're interesting. They're empty because we only started measuring our sources of earnings in 2008, and those of you who were in this presentation at the time so at the half year of '08, these…

Thank you, Tidjane. And good morning, everyone. Just about, good morning. In my presentation. I will provide you with a detailed look at the drivers of our performance in 2013, with a particular focus on IFRS profit and free surplus generation, the 2 measures that underpin our new 2017 financial objectives. I will also give you an update on our balance sheet and take you through the new economic capital information. Starting with the financial headlines. We have delivered a strong performance in 2013, building on the positive momentum of 2012 and accelerating through the second half of the year. Our disciplined execution has enabled us to report double-digit increases in all of the profitability metrics shown on this slide. So as you can see, in 2013, new business profit increased by 16%. IFRS operating profit was up by 17%, with all geographic regions delivering over GBP 1 billion for the first time. Embedded value operating profit rose by 29% and free surplus generation was also higher by 18%. The growth that we have enjoyed over the last few years in Asia and the U.S. means that the proportion of the 2013 results transacted in sterling, ranges between 10% and 40% of each total, depending on the metric. Sterling appreciated markedly in the second half of 2013, but the use of average exchange rates means that the translational effect on our reported results is relatively muted at between 0 and minus 2%. And I will come back to this shortly. Working in the other direction, though, our operating results of benefited from rises in both equity markets and long-term yields. We saw this effect come through the half year numbers and this tailwind persisted through the rest of 2013. Now I will point out the areas where this is most…

Thank you. Thank you, Nic. So to summarize on 2013, the group has delivered a strong performance with double-digit increases in all our key metrics, as Nic just showed you, and has been able to achieve all our 2013 growth and cash objectives. Our performance during the 2008 to 2013 period, which culminated in the delivery of our 2013 objectives, has allowed us to transform the financial characteristics of the group, which has now a high-quality and growing earnings base, with all 4 business units contributing materially to cash. This newly acquired diversity of cash and earnings is a key source of strength for the group. This is what has allowed the board, led by the Chairman here this morning, to declare a 15% upwards rebate of our 2014 full year dividend. Our dividend policy remains unchanged, and we aim to provide a growing dividend to shareholders in a sustainable and prudent manner. Asia remains core to the group's future prospects, but tailwinds of favorable long-term structural trends, a leading business platform and best-in-class execution position us well to deliver an enduring value for both customers and shareholders. Now this is all good news, but I want to reiterate that we are not complacent. Actually, paranoia and competitiveness are very well shared features in this group, and I don't think Jackie has changed that profile. He just joined us. So we have embarked on a new set of objectives after delivering the equally challenging 2013 objectives. The group has tremendous growth opportunities. We have the platform, the ability and the discipline to deliver on these opportunities and to create value for both our customers and our shareholders. We are in the right markets, so in the right place, at the right time. And if you allow me a bad joke here, a lot of people talk about being in the right place at the right time. A lot of people will be in Brazil this summer. So they'll be in the right place at the right time. It doesn't mean they'll win the World Cup. So you can only do that if you have the right people, which is why I will finish. We're in the right place at the right time, but we also have the right people. And that's the whole difference. So I am confident that we will continue to deliver a unique combination of growth and cash over the long term. I thank you, and we are ready to take your questions. So for the first time, I can say, lady and gentlemen, if you can join us on the podium, we'll start the Q&A session, please.

So for your question, please raise your hand, state your name and your firm's name, and then we'll take your questions. So we'll just let everyone settle. All right, why don't we start with Andrew.

It's Andrew Crean with Autonomous. Can I ask 3 questions, actually? Firstly, on your cash target of GBP 10 billion over the next 4 years, you're already at run rate. In 2013, you did GBP 2.5 billion. You're projecting that the Asian business will go up by GBP 400 million. So basically, the first question is, is other parts likely to go down? Or is the GBP 10 billion too conservative? Secondly, thank you for the economic capital coverage. It's gone up considerably. How should we judge when you get into a situation of having excess capital, which may not be able to be reinvested and should be returned? And then thirdly, now that you've bidded the REALIC acquisition down, do you have a further appetite for acquisitions in the States?

Okay. Thank you, Andrew. On the target, I'll let Nic answer. I'll come back on the economic capital coverage, and Mike will take REALIC. So Nic, do you want to say that GBP 10 billion was too conservative or not?

I don't think the GBP 10 billion is too conservative. The -- 2 things I would say. Of course, that GBP 10 billion is after recycling -- is after the investment that we have to make, and you've seen in the presentation today an analysis indeed, quite a lot of detail on the opportunities that exist. So it is after effectively the drag of 4 years worth of growth across all of our markets. As for the 2013 result, it is flattered to a degree by positive experience variances. I mean, we'll work hard to deliver them, Andrew. The team is committed to doing that, but we don't take that for granted. We don't necessarily plan for those. There's been, in the course of 2013, a number of items that are one-off in nature, and that flattered that particular contribution. If you go back 5 years, we've typically been running experience variances of around GBP 200 million, and that's a more realistic level as we move forward. So in short, don't extrapolate from 2013 because of these effects. And also, please bear in mind that the GBP 10 billion is after deducting considerable investment in new business.

A really, really important point, and it's a change in the way the group functions. A few years back, there used to be a lot of bias embedded in the plan. Certainly, when we started looking at things closely, so people would assume in the plan that interest rates would go this way or that way. So when very big changes has been to say, look, spot is the big predictor of our future, good planning, financial planning discipline is you just take the spot back. You don't build into your plan any headwind or tailwind, period. So that GBP 10 billion is a clean number. It's proper operational performance. No -- so when we get help, the tailwind that we've had this year, well, it's a plus and that's very nice. But there is nothing in these numbers that assumes any type of help from the markets. And these are very thin targets. Again, as Nic said, it's after funding a lot of growth. The economic coverage, yes. It has gone up for me, and I'll let Nic -- because he's done really all the heavy lifting on this. But I'll just give you maybe a high-level concept while he is preparing his answer. My experience of the group is about -- is actually in a very strong position. And I like it when a measure is consistent with my intuition of the business. How do I think about the group? Where do we profit from? So GBP 8 billion at the end of 2013. You heard us during the crisis say constantly, "There is no way we can burn through that." You can build any financial scenario. You just can't, and that's where in the U.K. you take equity risks. So we're protected in it. The other big risk we carry is the annuity book. We built the credit reserve, which we've discussed many times in the past, it's a complete buffer against credit risks. So we're in a pretty strong position. In Asia, we had a bit of equity exposure. We sold it in '09. There's basically, so to speak, no financial risk. The sovereign is domestic debt, labor in domestic currency. And another bad joke, but -- as a lot of printing machine works, we won't be able to service domestic debt. This is not foreign debt. So we don't feel that we have the biggest exposure there. We move into the U.S. M&G. Sorry, Michael, but we respect -- not worth mentioning, in terms of capital, capital efficiency, capital-light model, there's no big issues there. So you leverage Jackson. And in Jackson, we believe that we're well hedged. So that was the intuitive view of the group. So I'm not disturbed if we answer -- after we run the economic capital model comes back as well. We're in a strong position. In itself, it doesn't feel odd to me. But do you want to...

I guess in response to your question, Andrew, I would probably reiterate 2 points that I made in the presentation. One, it's early days. Before, we can embed this in a very formal way. We need the dust so settle. There is still some way to go, as I said earlier, a lot of work that needs to be done. A lot more guidance that needs to be provided. And ultimately, while this is our judgment, it ultimately needs to accord with the judgment of our lead regulators. So let's wait until the dust settles, until we're working with firmer numbers. And at that point, yes. Then we will come up with a range that we want to operate it within. But the second point I would make, again, reiterate from my presentation, is the fact that it is no more or no less important than any other metric. We run our business -- actually, one of the key aspects of our success is that we haven't run our business in one metric. We used a balanced set of metrics. And what you find when you're making decisions under different scenarios, something different bites every time. So it's like trying to assess -- something has to be -- it's like a Rubik's cube trying to look at different lenses and dimension, whether it's rating capital, whether -- at the moment, we have the IGD framework that is still relevant over the next 2 years, whether it's free surplus. Who knows? Whether it's pure cash -- and it's managing that matrix, and different things will bite depending on the decision. So we are -- and that's what we do day in, day out as we come to each decision. So I don't think this will the determinant, if you like, the bright light, when it comes to informing decision AOB 2016 or beyond when it comes in. We'll continue to run the business by reference to a balanced set of metrics, because we think that is the sensible and the disciplined thing to do.

The best advise we can give to anybody who are new in the insurance company, don't run it on one metric. It's just such a funny complex animal that you can really always do really, really stupid things going after maximization or optimization of one of those and get yourself in a lot of trouble. So it's almost a religious belief in us that we always look at every possible lens: IFRS, EEV, cash, rating agencies, economic capital. I was very wary of people who say, "Well, we now have the metric by which you need to run the group." That's a recipe for trouble. REALIC further appetite? Yes. Short answer is yes. We like the deal very much. We've talked about both enhancing the earnings and diversifying them. We always have a night to rebalance between fee income and -- which is really driven by the VFA group. The spread income from VFAs, historic low really in a cycle, and the kind of technical income from risk business. But it's Mike who's at the forefront [Audio Gap] of that. You want to update a little bit on...

The market has changed a bit on the buy side. I mean, you've seen some very clever private equity, one transaction in particular plays. It had a lot of synergies, and I think the regulators have sort of shut that door for what I would say are sort of non-natural owners in the space. The reasons to sell are very similar to what we've always seen. Sometimes, they're technical, the IT doesn't support the -- a back book at a strong competitor, and they want to get rid of it, that sort of thing. I would say, Andrew, the biggest challenge now in those discussions is when you look at the available spread and the rates we have to use in the assumptions. What that does to the pricing discussion early is challenging because we're going to do these the way we've done all of them. Since we've known each other, I think we've done 2 life companies, 2 broker-dealers and a bank, and I think we have done well for shareholders and all of them. But you -- I think we have to do them when they're available at a price we like, not on a schedule -- for example, we don't put them in our business plans. We just assume they're opportunistic, and that doesn't mean we don't have a lot of resources pursuing them.

Jon Hocking, Morgan Stanley. I've got 3 questions, please. Firstly, on the U.S., that seemed churlish on the operating leverage. The expenses grew 18%. But on the life slide, I think it was 57%. When you break down the drivers, the life expenses are down 5%. I wonder if you could sort of square that circle, please, and just give us an idea of how quickly you expect the expense base to grow relative to revenues going forward. That's the first question. Second question, SCB in terms of penetration, your 3% sounds quite low. Do you have pockets in that deal where the penetration rate is much higher? So can you give us some idea where the distribution or penetration rates are by branch or by territory? And the third question, the economic capital. Just on a few sort of assumptions questions. You say you're not using diversification for the U.S. position, but are you assuming the surplus over 250% RBC can be used as capital elsewhere in the group? Secondly, on that, I think you -- in November, at the investor day, when you gave the basis, the calculation, you said you're going to use quiz 5 in the U.K. funded. It looks like you did something different. And then finally, you're using 10 basis points for the credit risk adjustment. I think that's still 35% in the rules. Do you want to go through these things?

Well, thank you, Jon. Operating leverage in the U.S. so it's between Nic and Mike. But Mike, do you want to go...

You've seen some technical moves, Jon, and some of the guarantees we've pulled down, and I think you'll see there. But as far as the actual acquisition cost, cost to administer a policy, normal operations everything is within pricing, everything continues to come down. We're by far the lowest in the industry. So yes, there isn't a -- having from here or something, but we have a number of initiatives that are driving down costs from here that are continuing to work and we have some things that are sort of a little further out there I think a bit more creative that -- as well. But as far as the year-over-year numbers, you're seeing reduction in expenses per policy on admin. You're seeing reduction acquisition costs all within pricing, none of it materially different than our pricing.

I'm not sure -- Sorry, let me just try and answer that. The 5% that you show, you need to go back in the detail in the packs which then breaks that out between acquisition and administration. We just haven't done it because there's a lot of detail on the slide, but the information is in the pack. What you'll then do once you have the 2 components separated out, you will see that acquisition costs are flat to negative. Why is that? Two reasons: one is we're seeing more and more distributors opting for trail commission rather than the upfront commission where you're rewarding them. And that's been an effect that's been coming through for a number of years a lot but is continuing. And the other thing it goes down to what Mike was just saying. When you're taking product actions and when you're making decisions about which products to pull, stop or promote, not promote, we tend to go after the ones that are either highest strain, lowest profitability. And inevitably, high acquisition costs also have higher strain. So that's -- those are the dynamics that you see coming through the acquisition cost line. If you take the maintenance or the recurring cost line, that has grown much more in line with the growth of the business, but there are still some jaws coming through that as you'd expect to see. And I hope that answers your question.

Okay. Thank you, Nic. Barry, do you want to -- the way we run the relationship, we have a steering committee on which Barry sits and they meet very regularly and go over the business. Do you want to give some color on the penetration?

Sure. The reality is it's been a long relationship, 15 years, the first half of that relationship even though it technically exclude -- included other markets, it was in reality mostly a Hong Kong business and so Hong Kong has always been the main driver and is the -- is where we enjoyed the highest level of penetration. Taiwan is very strong as well. Singapore was kind of a late starter. It actually kicked in with much more efficiency and better results when we renewed it last time back in 2008. So Singapore has come on quite strongly as well. Malaysia is doing much better. We've made progress there. And Thailand, even though the bank is small, less than 30 branches, they've -- we've actually made a lot of progress there over the last 5 years. So Taiwan is pretty good as well. But under the new scenario, obviously, the opportunity to do a lot better where we already are, plus tack on some things like India, like China...

India, China, Philippines, Indonesia...

Philippines. Philippines bank is very small but you've got to start somewhere.

Yes. And then we had 4 questions on the economic capital. Diversification -- will you take diversification? 250% RBC, do we take credit for elsewhere for what's above that? Would you use QIS5 and 10 basis points, is that enough for credit? Or should we be -- Nic that's yours.

So we haven't brought in diversification for the U.S. business even though we do believe economically it exists because the rules just say you can't do that. If you're going to use deduction and aggregation, in other words, bring in the U.S. using a different basis, then you can't take credit for the diversification, and that's not included. Why 250%? We used it because that is the output. We have a lot of models. We run them off. We run the business off. We include in those one-off models past experience about credit default losses as opposed to -- based on experience, we factor into those models information around realized equity volatility and when we run that off, it comes out of 250%. To give you some sensitivity, ultimately, for every 50 points of RBC, we could have -- it will come down to a discussion ultimately, what -- should you bring it in at 250%? Or should you use 150%? Should you use 300%? But every 50 points cost around 10 points on the cover. So every 50 RBC points is 10 points on the cover. On credit allowance, yes, we are basing it on QIS5. But we've used a variety of parameters to inform that position. QIS5 is one. We've used our own assessment in terms of what we're including for Pillar 1 and Pillar 2 in the existing ICA, and we've modeled, we've created our own model on our view as spreads widen how much of that we should bring in as the liquidity or as opposed to credit. And so we've modeled that and we brought that in. The outcome is included in your packs. So in the base position, we've taken effectively a liquidity premium equivalent to 46% of the spread at the end of 2013. And we've increased that to 51% in a 1 in 200 scenario. So you can get a sense of how much is brought in. In relation to the 10 basis points, what is this just for the benefit of others who may not be close to the debate. This is effectively an allowance for the credit risk on the risk-free rate. The regulators are saying, the risk-free rate is not credit free and you need to make an allowance. 10 basis points is what was used for QIS5. You're absolutely right, there is debate on that. There are different -- we don't believe it's necessarily. We just don't believe it's necessary. I think -- we think it is inappropriate to calibrate actively, using short-term instruments, what this should be when you have a business that will run off for the next 30, 40 years. And we just think philosophically that is flawed in this context, and we will continue to make those -- the case as we move on to level 2 and level 3. But it is another source of uncertainty.

Yes, you probably saw Sergio Bardino's letter page [ph] yesterday mentioning that, and we're now on the page [ph] and we'll continue to lobby. Not everything is resolved. That's why we caveat this communication. It gives you our view. We're not saying this is going to be the outcome of Solvency II. It's one of the areas where we may give [indiscernible]. Yes? Greig N. Paterson - Keefe, Bruyette & Woods Limited, Research Division: I'm Greig Paterson, KBW. I just want to concentrate on the standard. It's one of deal. I wonder if you could give us a cost. We can obviously work it out end of year when we look at the other intangibles? I just wonder if you can give us a cost? The treatment of the upfront costs on Standard Chartered in terms of IGD and eco-capital, do you raise an intangible then? Can you take credit for it? And just in terms of financing that, I wonder if you could just sort of give us an idea, are you going to raise some debt? Or to what extent can Hong Kong estate finance a portion of the costs?

Okay. On the financing, for instance, we -- it's funded with our own resources and there's no really direct contribution from the Hong Kong with-profits fund. It's quite different from the previous deal. But we are in a much different and much stronger position for [indiscernible]. We have GBP 2.2 billion of cash centrally. So we're very comfortable. On the cost, look, to be completely transparent, you know how the situations are. We were all negotiating very late. You saw that the RNS came out after our results, so that should give you an indication of the discussion that have been going on. Of course, in due course, you'll see in our disclosures some of those numbers come true. And you can then make up your mind. But a big point I'll make about that is the one I made during my main presentation that really please consider the upfront payment is a fraction of a financial flows on a deal like this, really a fraction; not even a material fraction. All the value is in the subsequent payments, which frankly you only pay when they sell. These are commissions. So actually, it's quite a bit of derisking in there and big incentive for them to perform, so we get their money with every sale. It's constructed like that. So that's what we have said on the cost. Impact on IGD is going to come through. Nic, do you want to...

Yes, I mean, we will follow the same treatment as we have done for UOB, Thanachart, the distribution fee will not be capitalized in either IGD or in the economic capital markets. Greig N. Paterson - Keefe, Bruyette & Woods Limited, Research Division: Just to follow up, just in terms of the Philippines, we're thinking for a while, I mean that's a big market. You never really talk about it. One of your competitors makes a lot of money out of there. I'm just wondering what your plans are or to sort of try and turbocharge the Philippines?

Barry and I are going to fight to jump and answer first. If you remember in December, we actually talked about it. I have a slide on it that showed that profits have been multiplied by 5. We've been growing the agency very, very strongly. I'm saying that because we're both strong believer in the country. It's one of a few countries on the planet that has been upgraded. The sovereign debt of the Philippines has been upgraded, better and better managed, 95 million people. And actually, Barry's too modest to say, that we are #1 in new business in the Philippines, and we don't talk about it enough. So it's not a market we neglect, and we are building there exactly the identical business to Indonesia. We follow the same general agency model. So Barry, can you...

Well, I only disagree really with one thing that Tidjane said which is that I'm too modest to say we're #1. Because I'm actually not.

[indiscernible] this guy is so modest...

Quite happy. They know better than that. Quite happy to shout from the rooftops that we're #1 there. And it's the result of a lot of hard work from Jumbing and the team there. Tidjane's point about the country's balance sheet, family balance sheet is really important. This is increasingly looking like Indonesia some years ago. And geographically, when you think about the logistics of trying to build out a business in the Philippines, it is, again, it's thousands of islands. It's an archipelago just like Indonesia is. So there's complexity in that. And that's why we have lifted many of the ideas that have proven to be so successful in Indonesia, dropped them into the Philippines, localized obviously, as you always have to do. But many of these same principles are now being executed against very well by the team there in the Philippines, and so we've gone from -- we've never had more than about 1,500 agents historically. We're over 8,000 now and moving fast. So a lot of the things that you saw in Indonesia several years ago, you're starting to see in the Philippines. So I would suggest that you should be very optimistic about it.

Back to my [indiscernible] and energy, and we also have a great CEO...

Yes, Jumbing is great...

He's really, really a star. Absolute star. Can I go? Chris? Christopher Esson - Crédit Suisse AG, Research Division: Chris Esson from Crédit Suisse. Just 2 quick questions, please. Firstly on Thailand. My impression from Thailand is that unit-linked is a product that doesn't have a huge amount of support, and yet it looks like you're IFRS payback has just -- is very fast and certainly the result from Thailand was surprisingly strong. I just wondered if you could provide an explanation for that? And secondly, a market that we haven't really heard about for some time, India, remains a bit of a sleeping giant and I just wonder if you could provide an update on that? And what potentially could happen that would make it a sweet spot market in the future?

Okay, thank you, Chris. Thailand, just a word about Thanachart. They are, I think, #1 in auto credit in Thailand?

That's it.

So when you see Barry nodding, that's what we're selling. We're selling insurance on those [indiscernible], it's very profitable. Good IFRS, good thing...

Yes, that's exactly. They are, by far, the #1 auto financed business in the market that operates not just in Bangkok, but all throughout the country as well. So it's a very strong part of their franchise. We have very high penetration rates, attaching the product to that. So that's why you're seeing the economics you're seeing.

And that's a start...

Yes, absolutely...

So we'll do IFRS [ph]...

Tidjane alluded to the fast start we got in '02, but I mean -- I think it bears dwelling on a little bit because when we were getting ready to launch this deal, our partners candidly said, well, you changed some products on and so forth. So you need to expect that the sales levels will come down a little bit, but give us 6 months and the team will rally around and then it will start moving back up and we'll get back to where we were and then we'll go forward and it will be a really good deal but you have to be patient, it will take time. And what, in fact, happened was, as Tidjane said, we started selling the first day. We were almost immediately selling in almost 100% of the branches and the trajectory has not kind of dipped and then gone like this. It's actually just gone like this. So even the partner candidly is surprised at how much efficiency we've been able to bring to that deal. It's a very good outcome.

It's another great CEO and a great team...

Another great CEO...

He's done a phenomenal job...

A nice, terrific guy...

Really remarkable. The Integration, everything. We've been there many times together and it's just a -- it takes more case.

No. It's a great team.

India. You want to say a few words? India?

Oh, about?

Prospects.

Yes, well, it's a complicated environment. There's not much we can do about the environment. We can only respond to the environment. So we've seen some political volatility, if you will, effectively that translates into the difficulty in terms of getting some fundamental changes made. We've seen regulatory volatility we call a few years ago. Talk about some significant tax changes that would've been really punitive. So there's always drama but again, we can't control the drama. We can only control how we respond to it. I think we've responded to it brilliantly. The team there, again, we keep talking about the teams but that's our 2 raw materials in this business are capital and people. And we've got plenty of capital and we've got absolutely best-in-class people. So Sandeep Bakshi [ph] who runs that business came out of ICICI is running their retail bank before he came to work with us. He's just been a steady hand, done a great job. What you -- as a result seen from that business is gains in market share in a very volatile environment. So while most of the foreign sector, if you will, has been very disrupted. We've continued to just inch our way up the league tables and gain share, the profit from this business is now very good. May I remind you that we were the first business to generate the profit. We were the first business to pay a dividend as well. We've been taking dividends out of this business over 2 years, about 2.5 years now. And this year we actually got a special dividend now because of the strong financial performance of the business. So these guys are just doing a great job. If the environment improves, does that improve -- then you'd get more investor confidence in the market. I mean there, obviously, be a lot of positive effects of that. I'm not in a position to promise that. What I am in a position to promise is that whatever the environment is, we'll run a best-in-class business.

This is actually really, really important point about how we run the portfolio. You've got kind of the ideal positions, that's the sweet spot, famous sweet spot. For various reasons, we're in a really good position, with just right business and grow Hong Kong, Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam. Those are the no-brainers, it just happens. Then you've got the slightly more complicated places. And when it's a difficult environment, what we will not do for our shareholders is allow people to destroy value. So something like India that used to be significantly negative, IFRS negative. We've turned into a positive. Another story that Barry is telling us. So it pays a dividend. The same is true of Korea, a very difficult market, but we have really shrunk the business and got it into a place where it does not really actually destroy the value.

It makes money.

It makes money and then you get kind of long-term options like China. Actually, we haven't talked about it but China is up 41% in 2013. And then back to my compounding argument, 41% on top of 30%, on top of 40% and it's becoming material. It's moving up the ranks every year [indiscernible], but it's actually doing well.

Yes. If you think about it in the context of market, I mean, if we're honest, none of the foreign companies are competing with the [indiscernible] or the China Life's, but remember the numbers that you see for our business are half the business. So you double those numbers and then look at that against the rest of our businesses in PCA and you realized this has actually getting to be a pretty big business. So this is another one why you should watch the space.

Starting to march up. Farooq?

It's Farooq Hanif from Citi. I've got 3 questions on the U.S. business, actually. I want to go back to your kind of guidance on remittance. I know you got this range, but it just seems to me when you look at the U.S. business, the statutory profits are up, the book is derisking and your RBC ratio is upper end. What's stopping you from raising your remittance ratio? That's question one. Question two, related to that is you had a cash flow operating variance, which is positive, which is ALM-related, spread related. Can you just talk about how that GBP 200 million to GBP 300 million how that could develop going forward? And the last point is going back to Jon's question on the jaws. Is the trend in trail commissions net expense positive. So do we see that actually contributing to jaws going forward?

Well, we're really happy to get 3 questions on the U.S. and don't mention hedging. Shows you how the world changes. We're really pleased. Look, anyway, do you want to -- and really, yes, that profit going up, derisking RBC ratio good, this is all actually nice problems to have. Mike, do you want to talk about the...

So we showed you in December, our percentage of remittance versus percentage of book, including comparing that to U.S. companies and share buybacks, and I think we're at the high-end of anybody's ratios there. If I put my Prudential Board hat on, the general view is there's not a need to put excess capital in the center beyond the levels we need. There is some friction in moving it there. Okay? So the idea is leave it in the business units for resilience, for M&A and things like that. There is a -- in the last 2 years, we've been above or actually 3 years we've gotten an approval from the regulator for a special dividend, that being an excess of the policy rules. And they're pretty reasonable people when the businesses are doing well, and they're growing the way we are and have the earnings and they look close out our hedges and other dynamics. So it's a discussion we have every year and we wouldn't want to give you any guidance on that number going up or down, but we have -- yes, there's -- the capital is more fungible in a pure regulatory measurement, but then there is also tactical issues at the group level to consider on top of that.

Just to be clear you're paying below potential regulatory policy level. You're paying...

Above.

Above. That's why we said 3 years, we got 3 times permission to go above. That's what he just said.

And again, that's just strength of the business, growth of capital, growth of cash flow. I mean if you look at last year, funding the sales, funding the dividend, closing REALIC and still growing net capital. That's a strong discussion with the regulator on the health of the business.

So thanks for allowing us to make that point because really that's what sensitivity Mike is alluding to. In the post crisis world, we really have quite advanced discussions with regulators around dividend and rightly so -- absolutely, I have no issue with that but because we tend to be above that threshold, we're not going to start giving you numbers or targets, I think, implicitly force the hand of the regulator. We have to be very mindful of the relationship there. And -- so think about what we tell you as something that takes into account that contract because we've been lately above that.

Can I just make one point, just to reiterate something that I said in December, that when it comes to Jackson, using the pure operational free surplus isn't the right reference point. You need to factor the below the line there. And I illustrated back in December that, that is a very good proxy of mimicking what's happening in the underlying total adjusted capital development on the local RBC. And generally, we've paid around the mid-60s, which is not a bad ratio for a business that is growing so phenomenally, has spent the last few years trying to repair the balance sheet to a degree from the earlier crisis and, of course, absorb the acquisition of REALIC. So all that is working well.

And the below the line is the hedging question which I didn't asked, basically.

Correct. I mean, that is -- that has a -- it is certainly on the stat basis, the hedges will also come through but the reserves, given the cleanliness, if you like, although the clean position of the -- of the book, the reserves are flawed. So you're getting a mismatch coming through that particular ratio, which will sort itself out because the higher fee base will give me you more operating performance going forward.

In page 102 in the supplements has the normal realignment to economic capital. We want to make sure we're consistent with the presentation. You asked a question on the impact of that allocation of trail commissions versus the front end commissions. It's coming from a couple of different things. It's coming from distributors. Different firms have different structures and so as the business is a little less independent channel. So you get a more firms that prefer and push towards, not necessarily levelized commission, but at least they'll be in some of the C share products. There is -- so that's just mix of who were selling through. That's in our pricing, so I wouldn't look for that to be an event, either way. The other element you get with that is point in the cycle. And so you tend to have age of advisors and how well the markets doing and how well they're doing they tend -- if the business is going well for retail advisor, they can to be thinking about deferring revenue and growing the value of their book. If it's a difficult time, you tend to see more A share in smaller practice, okay? So those are both factors, but again it's in our pricing. You had a third question, I'm sorry, I missed it.

[indiscernible]

You're right. So we have some additional experience contribution to free surplus this year compared to last. In part, that's coming through our spread profits. The same effect that you've seen on IFRS and on EEV is coming through that one. The second one is to do with one-off type tax credits that we've received over and above what we were counting and expecting at this point in the cycle. So that's what's driving, if you like, the slight blip. And this is why, when I was answering Andrew's question earlier, I said there are some elements in there that are one-off in nature in that result across our businesses, not just the U.S. Okay? We'll take 2 more because we're well into the lunch hour now and you know where to find us anyway.

Before we go, Andy and then Gordon.

I have 3 questions, if I could. The first one is in the U.S. spread profits. And I think you're still making well over 220 basis points profit on the spread book and certainly that's going to come down to 200 in the short term. Where is the credit rate right now? Where is the reinvestment rate on the U.S. spread book? Just to tell me how far that's going to come down because it doesn't stabilize the 200 basis points. And second question was about the kind of tangible -- movement in tangible NAV of the group and obviously GBP 1.3 billion of net profit but if you look at the Page 57 at the back and goodwill segment, that kind of increased by GBP 1 billion. And so should we ignore kind of tangible metrics on the balance sheet? And the third question was about the kind of SCB transaction and obviously, could you give us some sort of cash flow payback period on that, even if you aren't prepared to disclose it or IRR that will be very helpful.

Okay, thank you. Another 3 good questions. We have that, I mean, the numbers on the crediting and the...

Yes, I mean crediting rates are running around the 320 basis points level. We are -- I don't have the figure in terms of the reinvestment yield that we get on the maturing bonds. It will be [indiscernible]. 4.25, 4.5.

[indiscernible]

So that's part of the pressure that we see bringing the number down.

So it should drop to 1% over time, that spread margin?

Well, it depends on mix. Remember, if you make the assumption that we've got our estimates of how long people will keep their money with us wrong, then it should do that. But remember people are saving for a purpose. They're saving because they're in their 60s and there comes a point where they want to de-accumulate. So I don't think the scenario would arise. That's the first point. The second point is that all the new monies coming in is coming in at either 1.5% on the fixed annuity or at 1% if you go fixed annuity option on VAs. So all of these things are working in a way that will -- we've done detailed complex calculation for you and we've translated into a very simple guidance of 200 basis points.

Mike, do you want to comment?

Nic, the key point -- the products being sold, Andy, at this point of cycle, have a 1% floor, okay? So you're at a very different guarantee than you saw pre-crisis. You still have 23 to 25 basis points between our current crediting rates and the floor is on the entire book, so there's still plenty of room to move. And as we've told you we're high in quality, low in duration of the portfolio. Our ability to reinvest or just hold the duration on those positions, I think, is about as good as anybody in the industry. And in the scenario where the compressing -- if spreads never widen, our new sales would affect the equation you're throwing out there as well because you have different math on those.

All right, and there was then tangible net asset value, that goodwill, Nic, do you want to...

I think we've rehearsed this many, many time. The reality is there aspects of value which generates profits, IFRS profits that are not captured by shareholders equity. We gave the example earlier of the with-profit transfers. That's not -- Accounting convention today prevents us from recognizing that aspect in our results. A lot of what we write in Asia is health and protection. That's like writing GI business. We don't need a lot of tangible net assets to deliver a high return on a GI business. So I think -- so those are some of the dynamics that are coming through which is why you end up with an IFRS basis, equity basis, which is not representative of the income generation power of this organization.

On SCB, this is actually an interesting point because there used to be a strategy discussion in the group. The old view in Asia book was that bancassurance was less profitable than agency, so margins were lower. And that actually it wasn't a very desirable business. Well, in the way, we look at finance, good business is business that is written above its cost of capital. We don't run the group on margin. Actually, a lot of companies with high margins cannot grow because they fall into that trap of saying, well, if I do this, is going to dilute my margin and this is something that I fight with a passion because it's just wrong thinking. We are in the business of creating the maximum amount of value for our shareholders. And sometimes that involves going into a business with optically lower margins but you've seen that we've actually de-emphasized margins in all our communications to kind of root out that mentality. If we write the business above the cost of capital, we should absolutely do it. That creates value for our shareholder. So that's really how we approach it. So what I can tell you about the contract, that's been all negotiations. We are very confident that the return on capital will be comfortably -- and we've given the Board this comfort and it's been seen by everybody and the advisor. We'll be comfortably above the cost of capital. So it's going to be significantly value-enhancing for our shareholders. But frankly, there is no mileage -- again, think about shareholder value, not management comfort, in opening the hood of that, given what's going on in that region and the commercial dynamics, absolutely no upside. So it's not as, you know, I hope that we have been very transparent…

Just two, Tidjane. Gordon Aitken from RBC. So first question is on the holding company cash. It's gone up to GBP 2.2 billion, it's a big jump from GBP 1.4 billion and as you raise the GBP 700 million of hybrid debt in December. And you've shown today that you don't need the cash to grow the balance sheet is strong. I'm just wondering what that cash will be used for? And second question on the U.K. I mean this week you've announced the GBP 100 million buy-in with the Church of England scheme. I mean the bulk market there's a very good demand. There's really lack of supply and you presumably expect margins to remain very positive in that market. Just what sort of appetite do you have in the bulk market going forward?

All right, thank you, Gordon for only 2 questions. Do you want to say a word about the cash balance at the center?

Yes, I mean, we touched on that in December. I mean candidly, the one good thing about the low-interest rate environment is that you can raise a very high-quality debt. We've been able to raise very long debt at very attractive prices so we took that opportunity, that opportunity is not going to be available forever. We've locked that in and that gives us, I guess, also all sorts of flexibility as we move forward to either pay some of the debt that we carry or to deploy in other areas.

Yes, and just transactions like SCB, which I know you have a lot of interest in the cash payment but we want to have that flexibility and believe me, it's comfortable to be able to go into most types of conversations with no real cash, no real cash constraint. That's very comfortable. Jackie, do you want to talk about the bulks and the recent buying?

So Gordon you're absolutely right. I think a recent deal has been publicly announced by a counterparty. In terms of the market itself, I would see it very similarly to how you set it out. I think there's a great deal of demand or opportunity. I think supply has become relatively constrained until we do see some interesting deals coming to the market back end of last year and certainly in the first quarter of this year. I talked into December about the opportunity we had to put this bit more fully. We've got some key competencies, we've got a great brand that's really important to our counterparties and they deal with the business that has a good reputation. We tend to deal at the top end, so above GBP 100 million. That sort of range in large part. These are more complex deals and we have the capabilities to perhaps participate in deals that some others may not. So we see it as an attractive opportunity. We are very disciplined about how we actually use our capacity, obviously, these do bring with them longevity risks and other types of risks that we do want to make sure we get a proper return against. So you should expect to see us participating more aggressively, but within the constraints of very strict capital return hurdles. We certainly won't let go of that particular discipline.

Well, Jackie has a very balanced portfolio because she is also in charge of Africa. She's got 2 very different jobs. So thank you, thank you very much for your patience. In this team, many of us have seen GBP 2. I remember seeing GBP 1.95. So to close above GBP 14 is a good day but please keep in mind as we hope we showed you with plenty of potential and upside here. So I leave you with that thought and thank you very much. Thank you.