uh we still like some of the IB plays and they have some good cost measures etc such as Deutsche Bank uh UBS we like the UK which is a little bit controversial in this environment uh from a macro perspective clearly we like uh uh Bclays which is trading at roughly seven times earnings one of the cheapest stocks just to put in context Goldman is trading at 15 times earnings um yes we believe there should be discount to the US IBS but it's still too cheap in our view. Net West, a pure retail bank in the UK ma ...

Core Insights - The Bank of England aims to support innovation in payments through the introduction of digital money while ensuring the stability of the UK monetary system [1][12] - The consultation paper outlines a proposed regulatory regime for systemic stablecoins (SSCs) and the potential digital pound, which would be issued by the Bank and fully backed by central bank deposits and UK government debt securities [2][13] - The paper highlights the risks of reduced lending to businesses and households due to the introduction of digital money, particularly during economic stress [3][14] Financial Stability Considerations - The existence of digital money could lead to bank disintermediation, where households and businesses switch deposits to digital forms, especially during banking stress [4][14] - The paper identifies two scenarios for disintermediation: transition to steady state and stress scenarios, focusing on the latter [15][20] - Holding limits are proposed as a transitional safeguard to mitigate financial stability risks associated with digital money adoption [19][22] Methodology and Scenarios - A hypothetical 'severe illustrative stress' scenario is developed to assess the impact of deposit outflows on banks' liquidity and lending capabilities [6][30] - The analysis includes metrics such as the number of banks falling below 100% Liquidity Coverage Ratio (LCR) and the demand for central bank lending [8][35] - The model assumes significant outflows, with uninsured deposits experiencing higher withdrawal rates compared to insured deposits [31][34] Holding Limits Analysis - Different levels of holding limits are evaluated, ranging from £5,000 to £20,000 for individuals and £1 million to £100 million for businesses [7][49] - The introduction of holding limits is shown to reduce the number of firms at risk of falling below 100% LCR and the demand for central bank lending [55][59] - Without holding limits, the potential demand for central bank lending could rise to approximately £250 billion, indicating a significant risk to financial stability [8][49] Usability Considerations - The paper discusses the importance of usability for digital money, balancing financial stability risks with the need for households and businesses to effectively use digital money [9][60] - Analysis shows that higher holding limits could enhance usability, allowing a greater share of payments to benefit from innovations offered by digital money [9][61] - The usability of digital money is measured through the ability to receive income, make payments, and conduct high-value transactions [60][72] Policy Implications - The analysis informs the Bank's policy judgments on holding limits, emphasizing the need for a balance between financial stability and usability [78][81] - The calibration of limits will involve policy judgments that extend beyond financial stability risks, ensuring limits are both prudent and practical [11][78] - The potential impact of business limits on the integrity of money markets, such as SONIA, is also considered [82][84]

Group 1: Financial System Transformation - Standard Chartered CEO Bill Winters predicts a complete rewiring of the financial system with all transactions settling on blockchains and all money becoming digital [1] - The bank has recently launched its spot crypto trading offering, becoming the first Globally Systemically Important Bank (G-SIB) to provide institutional clients with direct access to Bitcoin and Ether in a regulated manner [1][2] Group 2: Trading Services and Market Access - The spot trading service for Bitcoin and Ethereum was launched in July 2025 and integrates with existing trading platforms, allowing clients to trade on familiar Foreign Exchange interfaces [2] - Currently, the trading service is limited to Asian and European trading hours, but 24/5 access is being considered based on client demand [2] Group 3: Regulatory Developments in Hong Kong - The Hong Kong Securities and Futures Commission (SFC) announced changes to connect licensed crypto exchanges with global order books, moving away from the city's closed-loop model [3][4] - SFC CEO Julia Leung emphasized the importance of enhancing market liquidity and business offerings to sustain the growth of Hong Kong's digital asset ecosystem [4] - The SFC will allow trading in virtual assets without a 12-month track record for professional investors and for Hong Kong Monetary Authority-licensed stablecoins [5]

Core Insights - Germany's lawmakers are debating the regulation of Bitcoin, with the Alternative for Germany (AfD) party proposing to exempt it from heavy EU regulations to foster innovation and financial independence [1][2] - The AfD's motion emphasizes Bitcoin's unique characteristics, arguing it should be treated as a distinct asset class rather than a speculative token [2][3] - The proposal calls for a 12-month tax-free holding period for Bitcoin and classifies private mining and lightning node operations as non-commercial activities [2][3] Regulatory Context - Germany has been a leading crypto-friendly jurisdiction, integrating national regulations with the EU's Markets in Crypto-Assets (MiCA) framework [3] - The Federal Financial Supervisory Authority (BaFin) oversees crypto-asset service providers and enforces anti-money laundering and know-your-customer standards [4] - Since the implementation of MiCA in December 2024, BaFin has issued nine licenses, positioning Germany as a key hub for regulated digital asset activities in the European Economic Area [5]

Financial Performance and Key Metrics - The group reported a statutory profit after tax of £3.3 billion for the first nine months of the year, with a return on tangible equity (ROTE) of 11.9% [5][17] - Excluding the motor provision, ROTE was 14.6%, and the full-year expectation for ROTE is around 12% or 14% excluding motor [6][18] - Year-to-date net income reached £13.6 billion, a 6% increase year-on-year, driven by growth in net interest income and a 9% rise in other operating income [6][11] - Operating costs for the year-to-date were £7.2 billion, up 3% year-on-year, in line with expectations [7][13] - The closing CET1 ratio stood at 13.8%, reflecting strong capital generation of 110 basis points year-to-date [19] Business Line Performance - Group lending balances increased to £477 billion, up £18 billion or 4% year-to-date, with retail lending growing by £5.1 billion [8][9] - Year-to-date deposits grew by £14 billion or 3%, with a quarterly increase of £2.8 billion in Q3 [9] - Net interest income for the first nine months was £10.1 billion, up 6% year-on-year, with a Q3 margin of 306 basis points [10][11] - Other operating income (OOI) reached £4.5 billion year-to-date, up 9% year-on-year, with Q3 OOI at £1.6 billion [11][12] Market Data and Key Metrics - The retail business saw growth across cards, loans, and motor businesses, while commercial lending balances increased by £1.3 billion in Q3 [8][9] - The insurance, pensions, and investments sectors experienced steady growth, with approximately £3.3 billion of open book net new money year-to-date [9] Company Strategy and Industry Competition - The company completed the acquisition of Schroders Personal Wealth, now rebranded as Lloyds Wealth, which will enhance its wealth management capabilities [4][35] - Significant advancements were made in the digital asset strategy, including partnerships to deliver tokenized deposits and FX derivatives trades [5][41] - The company aims to integrate Lloyds Wealth into its broader offerings, enhancing customer propositions and driving shareholder value [35][39] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 guidance despite the recent motor provision charge, indicating strong underlying business performance [4][20] - The company anticipates continued growth in net interest income and margin expansion through 2026, driven by structural hedge contributions and lending growth [27][29] - Management acknowledged potential headwinds from mortgage refinancing but maintained that guidance for net interest income remains unchanged [54] Other Important Information - An additional £800 million charge was taken for potential motor commission remediation costs, bringing total provisions to £1.95 billion [4][15] - The company is committed to maintaining cost discipline while investing in strategic growth areas [13][20] Q&A Session Summary Question: Regarding motor finance provisions and potential FCA outcomes - Management indicated that the current provision of £1.95 billion is based on scenario analysis and that the FCA's proposals are heavily weighted in their provisioning [25][26] Question: Expectations for net interest margin (NIM) growth - Management expects NIM to increase in Q4, driven by structural hedge contributions, and anticipates continued margin expansion into 2026 [27][29] Question: Insights on the wealth management strategy and potential inorganic growth - Management expressed satisfaction with the acquisition of Lloyds Wealth and emphasized focusing on organic growth and integration before considering further acquisitions [35][39] Question: Updates on non-banking funding costs and other operating income trends - Non-banking net interest income is running about 10% ahead of last year, with growth driven primarily by volumes rather than rates [71][72] - Other operating income trends show divergence, with retail performing well while insurance appears to be tapering off [70][72]

Core Insights - The Bank of England (BoE) is navigating the transition to digital forms of money, including stablecoins and central bank digital currencies (CBDCs) [1][8] - There is a divide in opinion regarding stablecoins, with some viewing them as a threat that necessitates CBDCs, while others prefer the private sector to lead [2][8] Group 1: Historical Context and Development - The BoE began exploring digital money implications in 2014, prior to the launch of the first stablecoin, USDT [3] - Early research warned that private digital currencies could lead to uncontrolled inflation if issuers printed more money than they held in reserve [4] - By 2020, digital currency became a major research theme for the BoE, leading to the development of the digital pound concept [6] Group 2: Current Discussions and Challenges - A 2022 House of Lords report indicated that a retail CBDC might create more challenges than it solves, although a wholesale digital pound was seen as more compelling [7] - The BoE's CBDC advisory group has raised concerns about stablecoins, suggesting that risks need to be mitigated, including a proposed cap on holdings [8]

Core Insights - India's financial landscape is undergoing a transformation with the potential adaptation to stablecoins, as highlighted by Finance Minister Nirmala Sitharaman, who emphasized the need for nations to adapt to new monetary architectures or risk exclusion [3][4][7] Regulatory Environment - Historically, India's courts and financial regulators have aimed to suppress cryptocurrency activities, with the Reserve Bank of India (RBI) opposing digital assets and warning against the risks posed by stablecoins [1][4][5] - The RBI has expressed concerns that stablecoins could fragment India's financial infrastructure and weaken the existing digital payment system [4][5] Central Bank Digital Currency (CBDC) and Tokenized Deposits - The RBI is actively piloting its Central Bank Digital Currency (CBDC), the e-rupee, which has been in a large-scale pilot for three years, covering both retail and wholesale transactions [6][7] - The RBI's latest initiative involves commercial banks exploring tokenized deposits, which are seen as a middle ground between stablecoins and CBDCs, being privately owned and fully backed by bank deposits [6][8]

Core Insights - The stablecoin market is experiencing rapid growth, with issuance volumes increasing from approximately $200 billion at the beginning of 2025 to $280 billion as of Thursday, prompting Citi to revise its 2030 forecast for stablecoin issuance to $1.9 trillion in the base case and $4 trillion in the bull case, up from previous estimates of $1.6 trillion and $3.7 trillion respectively [1][2] Group 1: Market Growth and Projections - Stablecoins could facilitate up to $100 trillion in annual transactions by 2030 under the base scenario, potentially doubling in the bull case, reflecting a significant shift in digital currency adoption driven by blockchain technology [2] - The issuance of stablecoins is part of a broader transformation in financial infrastructure, with various forms of digital money, including stablecoins, bank tokens, and CBDCs, expected to coexist and serve different purposes [4] Group 2: Competitive Landscape - While stablecoins are growing, bank tokens, such as tokenized deposits, may see higher transaction volumes due to corporate demand for regulatory safeguards and real-time settlement, with potential turnover exceeding $100 trillion by the end of the decade [3] - The U.S. dollar remains the dominant currency in on-chain finance, driving demand for Treasuries, although regions like Hong Kong and the UAE are emerging as experimental hubs for digital finance [4]