You could do a lot with that. So anything you can do to be helpful on what the payback would be for the charges that are already in mind and which are triggering these provisions, that’d be the first and then secondly linked to that at your conference in New York last September. Last month, before, you said you were happy with the mix of business for the group. And so I wonder whether you’d give us a sense as to when you talk about updating investors on capital allocation priorities, whether you’re really just talking about what grows faster in future or whether we should have in mind a sense that the present mix of capital allocation is up for debate. Thank you.
C.S. Venkatakrishnan: Yeah. Good questions. Thank you. Let me begin on both of them and then I’ll let #### add on on any details. So on the capital versus the spending, look, this is not the right place to be giving think you. Know, as I said in the answer to the previous question from ######, we started a good point on capital. We’ve been accretive on capital and view the spending and the restructuring in the larger term context. I’ll let #### add to that in a minute. And on the second thing, what I would say mean I view the investor update in a simple way. It’s obviously complex to analyze and execute, but I view the question in a simple way. It is what do you think is the target return that this bank can generate for its shareholders?
So what’s the rote ambition? How is it comprised at the group level and in the individual businesses? How much can it improve in the individual businesses and therefore, what is it that you wish to fund in that improvement? I also said in New York, it’s very, very clear that the market values different businesses differently and we obviously have to take that into account in the way in which we think about our capital. So, you know, you sort of put it all together and you get the picture of where we think we want to go. But obviously more details on that later. And then ultimately, once you do that, then to be targeted about saying what of that growth and return you wish to you target returning to investors? Because I do absolutely take the point that we announce the buybacks on a half yearly basis and we don’t have a target out there for that.
And that would be something that I think our investors would find desirable. ####?
Anna Cross: Thanks. We’re still going through the process of evaluating those actions, as we said. So we haven’t come to a finalized list yet. We have called them material. Let me help you a little. You’ll note that from our RA we have called out the year to date restructuring charge is around 120,000,000. So we’ve shown that to you and told you that it’s largely in the UK. In any typical year we run at between two or 300 million. So by calling this out, we’re indicating to you that it will be higher than that. But I can’t comment on specific levels simply because we haven’t finished the work. But as ###### said, as we take those decisions, we’re extremely focused on future returns and we understand and are committed to shareholder returns.
So that’s very much in our mind. The other point around sort of the strength of the capital position. We’ve been operating with good cost and capital discipline all year. That’s clearly the foundation of where we step out from in February and we’ll tell you more then.
Jason Napier: Thanks very much.
C.S. Venkatakrishnan: Okay, thank you. Can we have the next question please?
Operator: The next question comes from [indescribable ]from bank of America, Merrill Lynch. Please go ahead. Please go ahead your line is now open.
Q – Unidentified Analyst: Hi, good morning. Thank you very much. I just wanted to sorry, come back on the Buk NIM and really the trends that you were seeing on deposits through the third quarter and then what you’re seeing so far in October. So, you mentioned that the averaging effect was actually worse than the endpoint position, suggesting that actually things got better in September, perhaps. So I was wondering if that’s continued in October. So really how we should think about sort of the trajectory of those deposit flows through the quarter and then into Q Four. And then, just to clarify that when you say if Q Three trends continue, then expect to be at the top of the guided range, is that essentially taking the margin bridge on slide 15 and excluding the five basis points impact from pricing is how to think about that. Thank you.
Anna Cross: Thanks, Why don’t I take those? So what we really mean by the averaging point is that the outflows were probably a bit more evenly spread through the quarter than they were in the second quarter, where we saw somewhat of an increase in intensity towards the second half. I don’t think it was lessened in September at all. There were certainly quite a few headline rates out there that were extremely competitive in terms of October. I just call out the fact that we haven’t yet seen the first month’s end, so we’re still midway through the first month. There’s nothing in what we can see so far that’s really sort of beyond our expectations. All right. With our own forecast, that’s all I can really say at this point in time.
But I would just sort of highlight that what we’re seeing is the impact of the pricing in terms of the sort of range of guidance. What we’re really saying, rather than any particular point on the bridge, is that depending on where those deposit flows go, you could end up with a very different exit rate. So that’s what we’re really calling out to you. And clearly, if we saw trends similar to what we saw I e. The deposit trends continue similar to what we saw in Q Three, we would be towards the top end of that range. And that would give you a particular jumping off point for 2024. What I would highlight, though, is that the structural hedge continues to protect the NIM overall. And what you have seen over the last quarter is that we’ve been able to lock in another large chunk, both of 2023 income, but another three to 400 million of 24 and 25 income just because of the way that hedge is rolling month on month.
Thank you.
Q – Unidentified Analyst: Yeah, that’s very helpful. Thank you. Just a quick follow up, if I could then. So given that you talked about the hedge into the coming years and you were expecting this deposit stabilization in Q Four, do you have a view going into next year in terms of deposit trajectory, given what you’re seeing in terms of competition in the market? What this year has taught us is that customer deposit behavior is quite difficult to call. So what I’m not going to do is give you a 2024 NIM outlook. What I can tell you is that there are three factors that we’re looking at. One is positive, one is neutral, and one is more negative. So the positive impact is clearly the impact of the structural hedge. And remember that two thirds of that goes into buk.
The more neutral impact is that we do expect and we are seeing that the impacts, quarter on quarter of mortgage churn are starting to dissipate called that out for some time. What is more difficult to call is the impact of this ongoing deposit behavior, both the reduction in deposits because customers are using them in order to manage the broader economic environment, but also then seeking higher rates, difficult to call out when that would stabilize #####. But all I can say is that there are other factors in the mix, most importantly, the structural hedge. SPEAKER A Okay, thank you very much for that. Okay, thank you. Next question, please. Our next question comes from ##### #### from Autonomous. Please. Go ahead, #####. Your line is now open.
Good morning. Thanks for taking my questions. Two please. One on NIM and one on #####. So appreciate everything you’ve said about the difficulty in predicting deposit behavior and the fact that the UK NIM is not the be all, end all for your group revenue dynamic. But obviously we’ve had some pretty dramatic shifts in your NIM guidance over a few quarters. And there’s a huge range of possible four Q exit levels implied by the range you’re now giving us. So a very simple question. Please help us own views on what might happen. What’s the average cost of your deposit balances in the UK and what proportion? And then on Roti in terms of the risk to the 10% Roti target, inclusive of restructuring charges, if I just kind of run the numbers on your equity for the year to date and Wave are out of four.
Q to get to, say, a 9% Roti, including restructuring charges that would imply sort of a negative bottom line number for the fourth quarter. You’ve obviously delivered pretty strong Roti year to date. The fact that you’re flagging potentially not being able to hit the greater than 10% Roti inclusive of restructuring charges implies fourth quarter could be a net loss. Is that the right way for us to be thinking about this? And within that, when you’re flagging the 120,000,000 of restructuring charges year to date, is it the case that when we get to the fourth quarter, the catch up to the normal 200 to 300 is going to be excluded from your Roti calculation as well? How are you thinking about that? Is two to 300 in the Roti calculation and then the exceptional charge on top of that excluded?
