
Financial Data and Key Metrics Changes - The balance sheet remains strong with £424 billion in deposits and £358 billion in customer loans, resulting in a loan to deposit ratio of 83% [1] - Return on tangible equity was reported at 17.1%, with expectations to be at the top end of the 14% to 16% target range by year-end [2] - Total income for the third quarter was £3.5 billion, down 9.4% compared to the previous quarter, with net interest income decreasing by 4.9% to £2.7 billion [6][11] - A net impairment charge of £229 million was recorded in the third quarter, reflecting a normalization of trends [13] Business Line Data and Key Metrics Changes - Gross loans to customers increased by £2 billion to £358 billion, with mortgage balances growing by £200 million [7] - Non-interest income grew by 12.2% to £829 million, with corporate activity improving lending fees [11] - The mortgage book's average loan to value is 55%, with 92% of the book being fixed [14] Market Data and Key Metrics Changes - The company expects a slowdown in deposit migration, with UK base rates anticipated to remain at 5.25% through the second half of 2024 [8] - The competitive market for hedged term deposits is noted, with tight margins affecting growth [10] Company Strategy and Development Direction - The company is focused on simplification, digitization, and using data and technology to enhance customer service [3] - There is a commitment to a 40% payout ratio for dividends, with capacity for buybacks [1][29] - The management emphasizes the importance of maintaining a strong balance sheet while pursuing growth in attractive market segments [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by inflationary pressures and is tightening cost approaches to ensure attractive returns [4] - There is optimism about the company's ability to deliver good performance despite an uncertain economic environment [17] - The outlook for income excluding notable items is projected to be around £14.3 billion, with a cost income ratio below 52% [28] Other Important Information - The common equity Tier 1 ratio was reported at 13.5%, within the target range of 13% to 14% [16] - The liquidity coverage ratio was 145%, well above the minimum requirement [16] Q&A Session Summary Question: Is there a strategic shift regarding capital allocation? - Management clarified that there is no change in strategy around the markets business, and the recent performance is a normalization rather than a shift [22] Question: Expectations for Q4 activity levels? - Management expects Q4 to traditionally have lower activity levels [23] Question: Insights on deposit income and margins? - Management discussed the importance of understanding the margins on deposits and how competition and customer behavior will influence future margins [9][10] Question: Guidance on RWAs and capital management? - Management expects RWAs to increase by around £3 billion due to model updates, with a target of around £200 billion by the end of 2025 [27] Question: Confidence in achieving medium-term aspirations? - Management reiterated confidence in maintaining a return on tangible equity in the 14% to 16% range and a cost income ratio below 50% by 2025 [57][84]