Thank you, everyone. I don't want to stop everyone from the boisterous conversation that we're clearly really enjoying in the room today, but we'll kick off with the fireside just in the interest of time, but look, thank you very much, everyone, for joining us for the European track of the Barclays Global Financial Services Conference. Delighted to be joined here this morning by NatWest Group CFO Katie Murray. Again, I don't think Katie needs much introduction, to be honest with you. You're a regular at the conference, and we're delighted to have you here, so I just want to say, yeah, thank you, everyone, for being here, and thank you, Katie, for your time. Really appreciate it.
Thank you, very happy to be here.
I just wanted to start top- down, macro. I think this time last year there was a bit of optimism around the U.K. following the general election result, but it's fair to say that growth's been a bit sluggish, and there's some challenges around managing a widening fiscal deficit, which feels like it's dominating focus at the moment. I was interested, given your vantage point, your assessment of the operating backdrop, in particular, if you could comment on t he potential for additional bank taxes in the upcoming budget?
Absolutely. A s we look at it, we've, I guess the way that we kind of receive the narrative is one of sort of cautious optimism. When we look at the numbers, they're not always bleak, I think, as they're often suggested. I f we look at kind of growth, it was 1.1% for the half, a little bit below where our expectations were for the year, but not materially so. If we look at some things like the PMI or the retail sales indexes, they're actually in August they were in July they were at some highs that we've seen for a year.
If we look at the activity of our customers, we can see that retail customers are still at a 10% above a 10% savings rate, but we can also see that they're spending on their credit cards, and they're spending on discretionary items.
So you can kind of see that sort of confidence. You can also see in our loan numbers that we've shared this year already that people are continuing to borrow, and so therefore kind of continuing to invest as we go through. Unemployment is sitting at sort of 4.7%, I think a little bit ahead of where we were. There's a lot of talk of it going to 5%. T hat would still be relatively low in a historical perspective.
It's a number, obviously, we pay attention to very closely as one of the lead indicators for our impairment losses. But at these kind of levels, it's not one that we're terribly worried about. Inflation feels a bit stickier than we'd like it to be.
Obviously, the budget coming at the end of November, you sort of sit here at the beginning of September, and it feels a long way away in terms of the kind of changes that are going through. W hen we think about things like the bank tax, we know, and the Chancellor knows as well, that actually the banks, a nd the economies need strong banks. P art of that is around the investability case. There's been a lot of discussion around reserve remuneration, and it pops up every so often. But Governor Bailey's been very clear it's not something that he believes, and the Chancellor's also in the past written it off quite strongly as well .
So that gives us, kind of some comfort. When we look at the tax specifically, and we look at ourselves as a sector, w e know that we're one of the highest tax sectors that exist. A t the moment, we already have, the bank levy, which for us was like GBP 140 million last year. We're already over 3% surcharge. And just to kind of quantify that, that's about GBP 160 million extra that we'd have paid in, in those, in that kind of tax level. So as you look at us both sort of domestically against other industries or internationally against other banks, we know that we're fairly heavily taxed. I think what I will do is not make any kind of prediction or preferences to what kind of happens.
The Chancellor's clearly got a fiscal challenge that she's trying to meet, but we're very pleased that she also does understand the strength of the importance of a strong banking industry here in the U.K. So we'll see how it rolls through, by the time we get to November.
L et's talk about the business itself then. So you substantially upgraded your revenue expectations for the year. You're now guiding for your '25 revenues in excess of £16 billion. Interested in kind of what's driven this improved outlook, and how should we think about the main drivers from here?
Absolutely. I f we look at it, so we start from sort of 15.3 to 15.7, obviously greater than GBP 16 billion. A few things going on within there really the strength of the first half performance, and that strength is driven from the sort of ongoing growth and lending we've seen, as well as, obviously, the strength in the structural hedge that's kind of come through. When we go from here forward, the things that we think about, there's a mixture as ever of kind of tailwinds and headwinds. So we've obviously got continued loan growth that we'll see coming through.
The structural hedge will also be beneficial to us. Interesting, I'm sure we'll get into that in a little bit more at the moment, but the volatility that exists at the moment is kind of helpful to us. We're probably, we are investing a little bit higher than the rate that we would be assuming for the rest of this year, even since the summer. So that's a nother little kind of positive sort of nudge. And while I always hate talking about this, there's two extra days in this quarter, and that, and it's important, and they always think, "Oh, we're so complicated," but it comes down to the number of days.
That's worth another GBP 100 million of income, within and of itself. So it's important not to forget that. Then if you look to kind of the headwinds, we think there'll be another rate cut coming through as we kind of move forward from here. We also, you'll see the averaging effect of the other ones that have already come through in the earlier part of the year. N on-interest income is traditionally a bit weaker in the second half of the year. Now, I would say that we didn't probably anticipate there would be as much volatility in the second half as there was in the first.
In reality, the market is a bit more volatile, so we might get a little bit more of a pickup from there as well a nd also some of the charges that we carry in terms of our SRT, our asset sales, that we've got a couple of things in the plan that may or may not come through in the second half, and that would be a little bit of a headwind. So you look at those kind of together, which is what kind of supports the 16%.
If I look to kind of into 2026, a nd it's a very loan growth, the strength of the, the structural hedge kind of coming through there as well, and obviously the, the rate, the final rate cut that we're expecting coming through in quarter one, as well as that non-interest income, which will be a real factor of where we end this year a s well as kind of customer activity into next year, but we've been pleased with the growth we've seen through from that, on that line in the last while.
O ne of the revenue drivers that you've talked about there is loan growth. It's been remarkably strong. Loans across your three operating divisions are up 7% year on year, or 6% excluding the Sainsbury's acquisition. What's driving this growth, and is this a sustainable pace for loan growth at NatWest?
I t's not the history is the best definer of the future, but if you look at our last six years, we've had loan growth of 4% over the last six years. T hat compares to kind of 2% kind of growth overall. So what that tells me is that we can grow more than maybe is happening in the market. So we've got that ability. And I think of what's driving just now, there's a lot of activity going on. I f I look to the retail side, one of the things we've really seen over this last year is the real broadening of our waterfront in mortgages.
So if we look at the gains we've made in mortgages overall, since 2018, we're up 2%. I n the last year, you've seen first-time buyers improve by about 4%. You've seen our share of flow, sorry, not of the total market. And then also buy-to-let is also increased. We've now got an agreement with Landbay, where they help feed us buy-to-let transactions, which are for limited companies.
T hat's another kind of stream coming through. We've expanded our, our product range. W e're quite excited about the new offering we have in terms of family-backed mortgages, and we can see that that's working really well. So you can kind of see that that's our, our mortgage group that's really continuing to evolve f or us to really strengthen the market that we capture. What we've done in credit cards, I think, is being well understood. We've grown t remendously from about 5.5% to 11% in that same period. I mean, that's a really respectable, kind of level of growth, helped, obviously, by our recent Sainsbury's transaction.
And we've also taken personal lending out to the whole of market. Again , just another good kind of sign of the confidence that we feel. And then when you look to the commercial side, again, you can see the real strength that we've had across there, whether it's within CMM in terms of the deepening of the relationship. We know with our unique offering of the regional and national kind of coverage that we have, that we will capture growth as it comes through. And we've also seen strong growth in C&I, so we've continued to focus on sectors that we really are very strong in. So overall, it's been a good picture. We would expect it to continue.
I know you'd love me to give you a number and a percentage, and we've talked about that before, Aman, as to what our views are as to how much it will go, but we're very pleased with the level of growth that we continue to capture, and the business is really focused on that as the first pillar of our strategy.
T his is not a question. This is just an observation. But given the subdued kind of growth backdrop in the UK, it is a remarkable level of volume growth.
Thank you.
On a sustainable basis, j ust to kind of build on that point then, I mean, asset quality often gets overlooked in the UK. I mean, you're guiding for a sub-20 basis points cost of risk this year. I actually estimate your 10-year average impairment charge is sub-15 bps a nd that covers a period where you've had Brexit, COVID, and the cost of living crisis. Ar e you taking enough risk?
I t's a question I think that we look at o ften as we kind of assess where we are in terms of what we're doing. What we can see is we're very comfortable with the terms that we are delivering at the level of risk that we're taking. We can see that we don't believe that we have a need to change our risk appetite overall. What we've done on things like credit cards, personal lending, whole of market, you can see that we tweak i n terms of appetite, where we want to play in different times. a nd I think we could all agree that if you look at COVID and Brexit and cost of living, I think none of our projections would have had our cost of risk as low as it is.
I t's a real credit to the diversification we have within the portfolio a nd also just the real sector specialism when we're looking to where we are on the rising or not. So we're not looking to add risk, but we do, I guess, tweak it by the side as we develop different kind of product approaches as well. But certainly that we were 9 basis points last year, 19 so far this year i ncluding Sainsbury's, as you say, we're comfortable that we'll be below 20 for the year. So it continues to be a benign environment in terms of the credit impact in the UK.
I might take that as an opportunity to turn to the ARS questions. You've got the remote, so if you could please take part, if we could run through the first three of them, that'd be great. First of all, what would cause you to become more positive on NatWest shares? One, better NII. Two, better fees. Three, better cost control. Four, better asset quality. Five, capital returns. Six, better macro. Okay, that's a pretty emphatic response. Better UK macro. I mean, that doesn't feel like a surprise, to be honest with you b ased on the conversation.
I t doesn't, and for me, the better NII at kind of 12.5%, I guess I read that as more assurance of the continued ability to grow both sides of our balance sheet. In the way that we have to kind of complement that structural hedge growth, but no, I mean, I think for the U.K., a lot of the investment we've had in us until today has been because of the strength of that U.K. macro, and what people are really wanting is the stability and predictability of it as we move forward from here.
Let's do the second ARS question, please. So what are you most concerned about at NatWest? Weaker earnings, weaker capital, low distributions, reg risk , political risk, M&A. Political risk. Again, it's a pretty emphatic response.
Very emphatic.
Very much in keeping.
I was intrigued to where this one was gonna go. So, yeah, that one is pretty emphatic.
Okay, can we do number three, please? So how do you expect NatWest's RoTE to develop over the next couple of years? So, for example, 27 relative to this year's. Significantly higher, modestly higher in line, modestly lower, significantly lower. Okay, modestly higher. I don't know if you've got a comment on that at all.
A s we look at that, we obviously, our 2027 guidance is greater than, than 15%. We're guiding you to a greater than 16.5%, for RoTE this year. Look, we are, we are comfortable on the strength of income that we see coming through in the, in the next couple of years. We've also, as we know, we, we do have, RWA growth that's coming in as well, with both CRD IV expected mainly this year and then Basel in the, the following year. But modestly higher feels like a nice challenge, as we move on from there. But, I mean, our guidance is certainly greater than 15%.
Let's turn back to the business, so the structural hedge , it's actually featured quite prominently in the conference over the last day or so.
Yeah, I heard this morning. We're all going back to our roots.
Yeah, exactly. It's obviously a key underpin to your earnings outlook, best-in-class structural hedge tailwind. Yeah, I'm interested. How long do you expect this to be a tailwind for your business?
W hen we look at the structural hedge that we're very mechanistic in our approach in that. We believe that that really is what serves us well over time. We've already confirmed for this year that the hedge income will be GBP 1 billion higher than last year. And we've said in 2026 that it'll be greater than GBP 1 billion. I f we look at our assumptions for where we'll be putting hedges on this year, we're putting one slightly higher at the moment at 3.9%. That continues to flow through into 2026, 2027, 2028 as we put that on.
W hen we look at the 2028 number, which is the one that I know you'd all like me to confirm a bit more closely, when I look at that, 30% of that hedge is written. But that 30% already accounts for more than income, more than hedge income I got in 2024. I t is spectacular. When you look at it, there's no other way to describe it, and we're putting on at slightly higher level, so we do expect that to continue to be a tailwind, into 2028. I'm probably not gonna get drawn on 2029 and 2030 if you don't mind, as I sit here in 2025, so we do expect that, and we've given t he good guidance for 2025 and 2026, but it certainly is something that will continue to add value to us as we go through.
It kind of follows on to the next question around competition. You've seen pretty significant in-market consolidation. I observe that you've got six pretty large incumbent players in the UK, and everyone seems to be targeting market share gains. But not entirely sure that they can all execute on this. But I'm interested in your assessment of the competitive landscape from here, particularly given the kind of strength of tailwinds that a lot of the major players enjoy?
T he U.K., by its very nature, is always competitive. W e talk about how competitive it is any one time, and for me, it just shades of the where we are at that moment, and it would depend whether it's on deposits in the short-term outlooks as to what's happening with people's rollovers, what bits of their balance sheet are they looking to protect, or mortgages. It's also what's happening on the stock curve and where that's kind of moving around. I guess from our perspective, I mean, we've been very focused on making sure that we do continue to grow, but not growth at any cost.
We want to make sure that we're adding value where we are growing and not doing big kind of cross-subsidization from one to the other. So we do expect that to continue to be competitive, but we'll peak at different times depending on what's happening in that moment, and we'll be ready to play within that space, which is why I think that extension of the product range is really important.
To make sure that we just continue to bring sort of more of the bank to more of our customers so that we're capturing those opportunities between whether it's in our wealth business and referrals into, referrals from there, from retail or what they do for the investment management within retail, or making sure that we're referring customers from commercial, for example, into the wealth business a nd putting the right kind of connectivity between our different businesses to make sure that we can capture all of the right bit of growth in the right place. So we expect the competition to continue, and that's something that we're definitely preparing for.
Kind of concentrate on yourself.
I think that's the best thing to do.
M&A has been a key area of focus year to date. The management have signaled a willingness to do M&A at various points, but also have indicated a very high bar. So I'm just interested in kind of how important M&A is to your outlook from here, and particularly relative to the alternative uses of capital, and I'm thinking particularly buybacks.
Yeah, absolutely. So if we look at kind of where we go from here in our strategic plan, the one thing I would say very strongly is our strategic plan is not, doesn't have a basis of M&A within it. We're very pleased with the organic growth that we've demonstrated. We've got great belief that we can continue t o demonstrate that organic growth and continue to deliver really good quality returns to our shareholders. We've recently done two important transactions, Sainsbury's and Metro. They're not the largest of transactions, but they're important in terms of just actually making sure that we're continuing to add volume where it was necessary.
Sainsbury's was really important for our credit card offering. But also important internally because it actually really demonstrated that actually it was multi-product, multi-customer. How do you bring them in? How do you make sure you don't have huge amounts of client attrition? But we do also see in that M&A world, as people are moving things around, that also gives us opportunity t o make sure that we're kind of capturing customers as they go forward. A s a bank, we generate 200 basis points more or less of capital a year. We did 100 basis points in the first half. So that's, I mean, huge kind of capital generation.
When we're looking at M&A, we do talk about it being a high bar. I would say if we look at the last poll with returns marginally above this year into 2027, that would suggest investors in the room are suggesting the bar is even i ncredibly high. So it's got to be something that's additive to those sort of numbers. So we're very aware of the commitments that we've got out to our investors in terms of those returns.
We're also very aware of the distraction that M&A can cause as well as the value that it can add. So it has to be something that fits very well with us strategically, culturally, operationally deliverable without kind of taking our eye off the ball. And financially, it really makes good sense. And we do always do the balance against what's happening in terms of buybacks at any one time. W e've got a buyback in the market at the moment. It's GBP 750 million. It's going very well. We're happy with what it's delivering.
O verall, you kind of look at the balance of all of those things. T he thing for me is just to re-emphasize that high bar. We're very pleased with our organic delivery, and our strategic plan is not dependent upon an M&A. But you should also assume that we look at things that are in the market. And if it's something that really does make strategic sense for us, we will look at it.
That's great. I to kind of continue this thing or evolve this thing around deregulation, I t's been a key area of focus over the last couple of days. I mean, the UK is on a drive. I guess you had Mansion House in the summer. You had these reforms, a package of measures aimed at reducing the burden on financial services firms. Interested in your assessment on that. And are there any particular areas that you think are impactful for your business?
A bsolutely. T here's a lot of things that are, that have been going, that are going on. We certainly welcome these reforms and the statements in the, in the Mansion House speeches as well. As I kind of work my way through them, we're excited about what could be coming in terms of wealth advice. We think it's a real challenge that so few people in the UK are able to access advice.
If you're given, if you think of our customer base in retail and our abilities within Coutts, we're well placed to be able to enter that space. And we do know that when our customers take advice from us, you get to a better customer outcome. So as that evolves, we think that that's important. We've seen there's been a lot of work going on around the mortgage affordability and whether it's loan-to-income ratios or the stress testing. And I can see the impact of that coming through in my book already.
It's been positive. It's more people being able to access mortgages as they come through. I f we then go to things like the Ombudsman, what they're trying to do is to get the Ombudsman back down to kind of helping people get the right outcomes and making sure the banks are there in the right way to kind of help support that outcome. Again, we're supportive of that. There's the capital reviews that are going on as well. We might get into that a little bit more. Of course, ring-fencing, we've been quite vocal about in terms of there are reviews going on within that. There's some small changes that have come through already.
We can see ourselves taking advantage of those. We do think there's more that should be done so that we can take away some of the cost and complexity burden of ring-fencing so that we're able to allocate that capital to investing in with our customers. We'd like to see that to continue to evolve. Certainly, I mean, there's many different areas that they are trying to address at any one time. We're very supportive of that and how it can ultimately lead to the kind of strong growth agenda, which we're very aligned to.
We'll do the next couple of ARS questions, please. How do you see potential risks in NatWest capital and dividends from here? One, upside risk on earnings. Two, upside risk on lower capital requirements. Three, downside risk on weaker earnings. Four, downside risk on higher capital requirements. Five, downside risk on acquisitions. Okay, upside risk on better earnings. Yeah, I wanted to ask you about capital then and o ne of the many kind of bodies of work that's taken place is the FPC have committed to review the, the UK capital framework. Y ou have kind of in suggested that if capital requirements were to fall, you could lower your target CET1 ratio. You're currently targeting within the range of 13%-14%. So could you elaborate on this? What timeframe are we looking at?
Is it a realistic scenario that NatWest runs with a capital ratio starting with a 12?
Yeah, so let's have a chat about that. So if we look at it, we kind of welcome the FPC work that they're doing. We also recognize the comments they've made that they think that the industry's adequately capitalized.
Yeah.
So we're not necessarily terribly expecting that that's going to make a particular change. However, there still are a lot of things that are kind of in train. If we look at our most recent SREP letter, which comes out just a couple of months ago,. T hat took 17 basis points off our Pillar 2. W e're sitting there with 140 basis points above our regulatory minimum in terms of that number to the 13%. Let alone the kind of continue to reduce as Basel 3.1 comes in. So that'll be another kind of reduction. We've seen significant increase in the amount of RWAs that we've taken on. T he consequent increase in the capital, but not actually seeing greater risk within there. We see continuing good performance within our stress tests. As a bank, we're very capital generative. I mean, I've mentioned that already, as we go through.
T he period of derisking that we've been through is kind of helpful to that. I would say is I'm not committing to a date or a timeline or anything like that. It is something that we do actively explore through our ICAAPs, through our risk assessment piece. We do continually look at what's coming. And what's also importantly now, I think, is a lot of the changes from the Global Financial Crisis are coming to an end, and they've been implemented w here we are within there. So it's something we'll continue to review. We won't commit to a date or a number today, but you can see there's many different factors in place.
L et's progress through the ARS questions, please. So how do you view significant acquisitions at the group level for NatWest? Very positive, marginally positive, marginally negative, very negative, prefer the capital back. Oh, yep. Okay, so typically pretty positively.
Yep, 72%. I'd take that.
Let's do question 6, please. How concerned are you by the risk of bank taxes? Not concerned, moderately concerned, very concerned. Okay. That's actually, quite a balanced response. Reassuring, actually. I can take this as an opportunity. If there's anyone who wants to ask a question, please feel free to. We've got Mike from there. Otherwise, we'll continue with, yeah, why you guys are thinking we'll continue with fireside chat. Can we talk about costs? You retained your full year cost guidance despite running well ahead of expectations year to date.
We've run well ahead, 2.9 versus 8.1. Yes, well ahead.
I n terms of the year-on-year growth rate, you're doing good. You've indicated a ramp-up in the investment spend in H2. Just interested in what is it? What are you looking to spend money on in H2?
I f we look, I guess, at where we are, w e've seen our kind of cost-to-income ratio come down from 56% to 49%. I mean, that's a great kind of improvement as we've gone through from there. I mean, GBP 3.9 billion in the first half, guiding to GBP 8.1 billion in the second half. There are some natural increases that do come through in the second half. The bank levy is obviously one of them. We also see, in our own organization, pay reviews come in in April. So you get six months versus three months. We also have six months of NIC versus three months as we go through. If we look into the second half, it's also when we do much of the investment and the kind of restructuring.
In as much as you do it in the second half, and then you digest it in the first half, and then you kind of, kind of keep going within that space, so we're very committed to that, that 8.8.1 number, and we'll continue to see the investment in the business, whether it's through some of our technology and the implementation of our investment pool. I look at where we are and the guidance that we've given to the market, we expect to end this year with a high single-digit jaws, which I think is also something we're very, we're very pleased with. I think really important for us to deliver to the market.
T here's, as a management team, you've kind of hinted towards lowering your group cost-to-income ratio over time. I think you've referenced European peer leaders. I know that you've got a bunch of collaborations that you've announced in the last year. There's the notable one with OpenAI, more recently with AWS and Accenture as part of a kind of broad bank-wide simplification model. I'm interested in, like, is there an opportunity to dramatically reimagine the operating model? Is that how you're thinking about that?
I think when we look at our tech and data and AI investments, what's really important is it works across all three aspects of the strategy. I f I look at the growth agenda and what we're kind of delivering there, it enables us to get products out to customers much quicker. We're able to give better insights into our customer base. We're able to react real-time to things like credit limit changes because of the fluidity of those kind of tech investments. And then also on the if I look at the kind of risk and balance sheet management side, it's how do we bring things like AI into kind of real active risk-making decisions.
That kind of investment works across all of the strategy, but it particularly works in the simplification area there. T he AWS and Accenture work is very much about getting, making sure that our data's in the right place and that it's in cloud and it's easily accessible and that you don't have people kind of creating data models over here which aren't the same as the models over there. So it's really about making sure you've got the right firm base on it because that's also which is what will then enable our AI and k ind of investment to kind of really deliver on.
W hat we've done with both OpenAI and also some of the really senior recruitments that we've brought in that are real kind of AI specialists within the organization, we can see t hat how we can take what's already been a strong AI journey for us and things like Cora, how we can take it to the kind of next level. One of the areas that excites me is around on the tech, the tech side, as I see them working with AI, t he number of engineers. And we've really increased their engineering capability from 3,000 last year to 5,000 this year. And across sort of Python and Java, they're 30%-40% of that first-level coding is all done via AI. So you've got more engineers.
You're lifting up their abilities by getting the first level done by AI. And that just enables you to increase your delivery and the throughput that you're doing out to the customer base. So we see it as really important and something that really drives the simplification of the bank and really helps us kind of work with our both for our colleagues but also for our customer, the customer base. So we're quite excited about what it could bring a s we move forward from here.
I'll just open the floor again if anyone has any questions for Katie. Please feel free. W e've got one on the front here.
Thank you, Katie. I just wanted to hear a little bit more about the competitors' dynamics. There's obviously quite a bit of debate around some of the fintechs, the neobanks, that are taking share on the current account side. But also names like Chase obviously are very prominent and interested to hear if you've got any further color on that and on maybe certain products as well.
Yeah, no, absolutely. Look, I think it's very important to be aware of who your competitors are and what they're doing. W hat we can see is that level of competition has lifted the U.K. banking industry tremendously over the last number of years, not just for choice of customer but also the offering that we all give. So we do see competition in that. And we see the change, the changes in terms of whether it's in deposits as the impact of the kind of ring-fencing rule change comes through and as people are just gently building their deposits up. So we see just a gentle kind of impact on that. It will take time for people to get to those numbers.
We do look a lot at what the activity is of our current account customers and what they are using elsewhere and why. And I think historically we always talk about you always sit in one relationship on your current account. And if you had more than one, then that was, like, a bad thing. I think the reality is actually what we've got to work with on the retail basis, how do we manage the multi-bank to make sure that actually who are the customers that are really valuable to us out of our 19 million base of customers? And how do we make sure that we're really embedded within them?
T hat's also, if I think back to my AI question of a moment ago, that's actually where we make sure we're getting the right prompts out to the right people and reacting really at speed as we go through. We do see it is a very competitive market, the U.K., and will continue to be so. We see that competition kind of coming off across different product ranges by different people. We're very mindful of what's going on across the market at any one time. Thank you.
Are there any other questions? If not, I have one on targets. We touched upon RoTE beforehand. You've got a greater than 15% RoTE target. You are well ahead of that at the moment, and I think in most reasonable, plausible scenarios, set to comfortably exceed that level of return on tangible equity over the coming years as well. Is there any scope to refine your targets and guidance to reflect?
A s we look at the targets as well, and we've talked already this morning around the 2025 and the 2026 kind of NII growth that we see coming through and also on the structural hedge that it continues to be a positive, and we're where we are on that. So, but it probably won't surprise you if it's not something I'm going to get into too deeply this morning here. As we go through, I mean, we'll talk in February more about 2026. W e'll look at 2027 if appropriate. What I would remind you is our target is greater than 15.
Great.
Greater than a 15% kind of target. There are some dynamics around extra capital and things which has an impact on that, but it is something we'll continue to monitor and look at as we move forward.
G reat. All right. I think we're just about on time. So with that, we'll bring the session to a close. And I just want to thank everyone for your time and Katie.
Lovely. Thank you very much indeed. Have a good day.