Financial Data and Key Metrics Changes - Customer lending grew 3.2% to GBP 384 billion in H1 2025, while customer deposits increased by 1% to GBP 436 billion [3] - Income rose 13.7% year on year to GBP 8 billion, and costs decreased by 1.4% to GBP 3.9 billion, resulting in an operating profit of GBP 3.6 billion and attributable profit of GBP 2.5 billion [3] - The return on tangible equity was reported at 18.1% [3] Business Line Data and Key Metrics Changes - Retail Banking and Private Banking mortgage balances grew by GBP 1.3 billion, with unsecured balances increasing by GBP 2.7 billion due to the addition of Sainsbury's Bank portfolios [11][12] - In the commercial and institutional segment, gross customer loans increased by GBP 4.6 billion, driven by project finance and sustainable financing [12] Market Data and Key Metrics Changes - The bank attracted over 100,000 new customers through organic growth and the acquisition of Sainsbury's Bank, adding approximately 1 million new customers [5] - The deposit mix remained stable, with non-interest-bearing balances at 31% and term accounts increasing from 16% to 17% [13][14] Company Strategy and Development Direction - The company aims to deliver GBP 200 billion of climate and transition finance by 2030, having already exceeded its previous target of GBP 100 billion [6] - A strategic collaboration with AWS and Accenture was announced to enhance data capabilities and customer engagement through AI [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a loan impairment rate below 20 basis points for the full year, citing strong performance in the diversified prime loan book [16][17] - The company anticipates full-year total income, excluding notable items, to exceed GBP 16 billion, with a return on tangible equity expected to be greater than 16.5% [11][17] Other Important Information - An interim dividend of GBP 9.5 was announced along with a share buyback program of GBP 750 million [4] - The CET1 ratio stands at 13.6%, with a total capital ratio of 19.7% and a total MREL ratio of 32.4% [20][21] Q&A Session Summary Question: Will there be another small transaction before the end of the year? - The company has issued GBP 750 million and may consider a cleanup transaction later this year or early next year, depending on risk weights [32][34][35] Question: Concerns about the rating gap between S&P and other agencies? - Management acknowledged the gap and expressed a desire for S&P to align with other agencies, citing the punitive nature of S&P's rating methodology for UK banks [38][39][40] Question: Inquiry about issuance plans and CET1 buffer? - The company remains flexible regarding currency for future issuances, with current attractive options in dollars and sterling [48][50][51] - Management indicated that CET1 targets are regularly reviewed in light of regulatory changes, with no specific insights on potential changes to the countercyclical buffer [49][50][60]

Financial Data and Key Metrics Changes - Customer lending grew by 3.2% to GBP 384 billion in H1 2025, while customer deposits increased by 1% to GBP 436 billion [3] - Income rose by 13.7% year-on-year to GBP 8 billion, and costs decreased by 1.4% to GBP 3.9 billion, resulting in an operating profit of GBP 3.6 billion and an attributable profit of GBP 2.5 billion [3][4] - The return on tangible equity was reported at 18.1% [3] Business Line Data and Key Metrics Changes - Retail Banking and Private Banking mortgage balances grew by GBP 1.3 billion, with unsecured balances increasing by GBP 2.7 billion due to the addition of Sainsbury's Bank portfolios [11][12] - In Commercial and Institutional, gross customer loans increased by GBP 4.6 billion, driven by project finance and sustainable financing [12] - Overall income, excluding notable items, grew by 1.5% to GBP 4 billion in Q2 2025 [8] Market Data and Key Metrics Changes - The average liquidity coverage ratio was 150%, indicating a strong liquidity position [21] - The loan to deposit ratio stood at 86%, reflecting a well-diversified funding base [21] Company Strategy and Development Direction - The company aims to deliver GBP 200 billion of climate and transition finance by 2030, having already exceeded its previous target [6] - A strategic collaboration with AWS and Accenture was announced to enhance data capabilities and customer engagement through AI [6] - The company is focused on bank-wide simplification to improve customer and colleague experience [6] Management's Comments on Operating Environment and Future Outlook - Management expects total income for the full year to exceed GBP 16 billion, with a return on tangible equity greater than 16.5% [11][17] - The company anticipates two further base rate cuts this year, with rates expected to reach 3.75% by year-end [10] - Management expressed confidence in the credit portfolio, expecting a loan impairment rate below 20 basis points for the full year [16] Other Important Information - An interim dividend of GBP 9.5 was announced along with a share buyback program of GBP 750 million [4] - The CET1 ratio was reported at 13.6%, with a total capital ratio of 19.7% [21][22] Q&A Session Summary Question: Expected issuance before the end of the year - The company has issued GBP 750 million and may consider a cleanup transaction later this year or early next year depending on risk weights [34][36] Question: Concerns about rating gaps between agencies - Management acknowledged the gap with S&P and emphasized the strength of the balance sheet, aiming for an upgrade based on strong financial performance [39][40] Question: Economic assumptions and loan growth - Management indicated that while they have not provided specific guidance for 2026, they are currently operating closer to the lower end of the impairment range [60] - Project finance is described as lumpy but supported by strong relationships [63] Question: NSFR and ring-fencing implications - The NSFR is high due to a strong deposit franchise, and management does not expect changes in ring-fencing to impact the competitive nature of the mortgage market [69]

Financial Data and Key Metrics Changes - Customer lending grew by 3.2% to GBP 384 billion, while customer deposits increased by 1% to GBP 436 billion [4][5] - Assets under management and administration rose by 5.9% to GBP 52 billion [5] - Income increased by 13.7% to GBP 8 billion, and costs decreased by 1.4% to GBP 3.9 billion, resulting in an operating profit of GBP 3.6 billion and an attributable profit of GBP 2.5 billion [5][6] - Return on tangible equity was reported at 18.1%, with earnings per share up 28% to 31p [5][6] - An interim dividend of 9.5p was announced, reflecting a 58% increase [6] Business Line Data and Key Metrics Changes - Retail Banking saw a 3% increase in lending and a 1% rise in deposits, with a 4% increase in application share for mortgages [8][10] - Commercial and Institutional lending grew by 4% and deposits by 2%, driven by project finance and sustainable finance [10][11] - Private Banking and Wealth Management experienced a 2% increase in lending and net new inflows of GBP 1.5 billion, representing 8.1% of opening assets under management [11] Market Data and Key Metrics Changes - The bank attracted over 100,000 new customers through organic growth and the Sainsbury's transaction, which added approximately 1 million new customers [7][8] - The bank's share in credit cards increased from 9.7% to 11% due to the Sainsbury's acquisition [10] Company Strategy and Development Direction - The company is focused on disciplined growth, simplification, and enhancing customer experience through digitalization and technology upgrades [11][12][14] - A new target of delivering GBP 200 billion in climate and transition finance by 2030 was announced, building on previous commitments [11] - The bank is actively managing its balance sheet and has reduced its cost-to-income ratio from around 56% to 49% [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue driving lending growth despite a challenging UK economic backdrop [50][51] - The bank upgraded its 2025 guidance for income to over GBP 16 billion and return on tangible equity above 16.5% [16][30] - Management noted that the diversified prime loan book is performing well, with expectations for a loan impairment rate below 20 basis points for the full year [27][30] Other Important Information - The bank's CET1 ratio remained stable at 13.6%, with strong capital generation allowing for investments and shareholder returns [6][29] - A new share buyback program of GBP 750 million was announced, bringing total distributions to shareholders in the first half to around GBP 1.5 billion [6][29] Q&A Session Summary Question: On deposit flows and management of yields - Management acknowledged the impact of the Sainsbury's acquisition on deposit growth and confirmed that overall deposit share remained stable despite some current account losses [39][40] Question: On lending outlook and economic backdrop - Management expressed confidence in continued lending growth, supported by strong performance in both retail and commercial sectors [50][51] Question: On capital management and potential M&A - Management clarified that there is no intention to build a buffer for M&A, focusing instead on organic growth and shareholder returns [53][54] Question: On revenue guidance and drivers - Management indicated that the upgraded revenue guidance is supported by continued volume growth, the full run rate from Sainsbury's, and higher structural hedge income [78][81] Question: On mortgage spreads and market dynamics - Management noted that mortgage spreads are stabilizing and emphasized the importance of broadening the mortgage proposition to capture market opportunities [64][66]

Financial Data and Key Metrics Changes - Customer lending grew 3.2% to GBP 384 billion, while customer deposits increased by 1% to GBP 436 billion [3][4] - Income rose 13.7% to GBP 8 billion, and costs decreased by 1.4% to GBP 3.9 billion, resulting in an operating profit of GBP 3.6 billion and attributable profit of GBP 2.5 billion [4][5] - Return on tangible equity was 18.1%, and earnings per share increased by 28% to 31p [4][5] - Interim dividend announced at 9.5p, up 58%, with TNAV per share growing 16% to 351p [5] Business Line Data and Key Metrics Changes - Retail Banking saw lending growth of 3%, with deposits up 1% [7] - Commercial and Institutional lending increased by 4% and deposits by 2%, driven by project finance and sustainable finance [8] - Private Banking and Wealth Management experienced a 2% growth in lending and net new inflows of GBP 1.5 billion, representing 8.1% of opening AUM [9] Market Data and Key Metrics Changes - The bank attracted over 100,000 new customers through organic growth and the Sainsbury's transaction, which added around 1 million new customers [6][7] - The bank's share in credit cards increased from 9.7% to 11% due to the Sainsbury's acquisition [8] Company Strategy and Development Direction - The company is focused on disciplined growth, customer base expansion, and enhancing customer experience through digitization and simplification [6][10] - A new target of delivering GBP 200 billion in climate and transition finance by 2030 has been set, building on previous achievements [9][10] - The bank is modernizing its technology and operational model, including a strategic collaboration with AWS and Accenture to enhance data capabilities [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue delivering broad-based lending growth despite a challenging UK economic backdrop [49][50] - The bank upgraded its 2025 guidance for income to greater than GBP 16 billion and return on tangible equity above 16.5% [15][29] - Management noted that the diversified loan book is performing well, with expectations of a loan impairment rate below 20 basis points for the full year [25][29] Other Important Information - The CET1 ratio remained stable at 13.6%, with strong capital generation allowing for investments and shareholder returns [5][28] - The bank is actively managing its balance sheet, generating 101 basis points of capital in the first half [14] Q&A Session All Questions and Answers Question: On deposit flows and current accounts - Management acknowledged the growth in deposits but noted some loss in current accounts, attributing it to a disciplined pricing strategy amid competitive conditions [34][39] Question: On lending outlook and revenue guidance - Management expressed confidence in continued lending growth, supported by strong volumes and the full run rate from the Sainsbury's acquisition [46][49] Question: On capital management and potential M&A - Management clarified that they are not building a buffer for M&A but are focused on organic growth and maintaining a balanced capital allocation strategy [52][53] Question: On structural hedge and mortgage spreads - Management indicated that the structural hedge is performing well, with expectations of continued support for income, while mortgage spreads are stabilizing [57][63] Question: On FX risk management derivatives - Management explained that FX risk management activities are designed to take advantage of market volatility, contributing positively to overall income despite appearing as negative NII [98][101] Question: On lead reforms and mortgage market opportunities - Management expressed support for lead reforms, anticipating positive impacts on the mortgage market and increased borrowing capacity for first-time buyers [104][106]