Welcome to the Barclays First Quarter 2020 Analyst and Investor Conference Call. I will now hand you over to Jes Staley, Group Chief Executive and Tushar Morzaria, Group Finance Director.

Good morning, everyone and thank you for joining us today. First of all, let me say that I hope you and your loved ones have been keeping safe and well. It feels like the last time we did one of these calls was a long time ago, and in a very different world. Obviously, an event like the COVID-19 pandemic changes priorities, and inevitably makes individuals and companies like ours focus on what’s really important right now. For us, that means, running the bank safely and profitably, helping our customers and clients to the difficulties they face, supporting the UK economy and the communities where we live and work, and taking care of our colleagues around the world. We’ve been able to do that, because of the underlying strength of our business and the resilience of our diversified model. And I’ve been especially proud of the way my colleagues across Barclays have risen to the challenges of this extraordinary time. So want to start today by taking a few minutes to set out how we’ve been responding to the crisis. Our business touches half to the households in the United Kingdom. We know that some of our customers are facing very real and very daunting financial challenges. And this is a worrying time for the vast majority, regardless of their circumstances. We’ve moved quickly to give them the reassurance and support they need. To give you just a couple of examples. So far, we’ve granted repayment holidays on 94,000 mortgages and on over 57,000 personal loans. We’re providing an interest-free buffer on overdrafts for 5.4 million customers and beyond that, we’ve reduced and capped charges until at least July. We’ve waived late payment fees and cash advance fees for 8 million Barclaycard customers and granted some 87,000 payment holidays. 655 branches remain open across the United Kingdom, providing vital banking services as well our teams are feeling – are fielding around 260,000 calls a week, that’s 44% higher than the typical volume. And I’m really pleased that we’ve been able to proactively identify NHS and key workers among our customer base and move them to the front of call queues as their time is especially precious at this moment. Getting businesses through this period of attack is crucial to give the best chance for the rapid and sustainable economic recovery, and is also in our shareholders’ interest. The UK government has put huge resources into supporting that in vision. And it’s the central topic of every conversation I had with ministers. It is an unprecedented effort by them, and by the Bank of England and we’re committed to playing our full part to help get that support to the businesses that needed. We have now approved some 3,760 CBIL loans for the total value of GBP 737 million. And we expect those numbers to increase rapidly in the coming weeks. Behind those numbers are stories of businesses and jobs surviving this crisis. Take the Titanic Brewery in Staffordshire, a local favorite selling 3 million pints in a normal year to its chain of pubs and beyond. We help them secure a 1 million CBIL loan and put in place a 12-month payment holiday on an existing loan with us, that has allowed the business to keep producing and selling beers online, protecting jobs and allowing them to pay their furloughed workers full wages. Well the Queensberry Hotel & Olive Tree Restaurant in Bath that I’ve been to, this family runs four star hotel that had to shut its doors due to the coronavirus. But with our help, they were able to get a 450,000 CBIL loan quickly. That low means, that they can cover running costs where staff are able to be furloughed, rather than laid off, and they’d be able to retain their hard earned Michelin star which would have been forfeited on closure. Make no mistake, interventions like these are making the difference between survival and failure for businesses. And we’re pleased to be playing our part in keeping them going. We’ve also been central in helping larger businesses to access the Bank of England and Treasury CCFF program, arranging billions in commercial paper for UK corporate over the past few weeks. In addition to our backing for those government schemes, we’ve also been able to provide significant help of our own to our business clients. For example, we’ve waived the everyday banking fees and overdraft interest or charges until June for 650,000 of our small business customers. And we put in place a 12-month capital repayment holidays for most SMEs with loans of over GBP 25,000. And we’re continuing to extend credit to companies. And there are GBP 50 billion of lending limits available to our UK clients. We’re not stopping here though. And we’ll to evolve our approach and offering to clients big and small to help them through this crisis, because it is crucial that we preserve as many businesses and jobs as we can to aid the recovery when it comes. Barclays has its deep roots in the communities where we live and work and I’m proud of everything our colleagues do year round to support their local areas, and never more so than now. That includes going away, above and beyond for our customers to help them in any way we can. Whether that’s our colleague, Glynis Wilson who’s in a contact center in Sunderland, helping a customer in Dire Straits to access charitable support to make any goodwill payment from us to see that customer to a tight spot. Or our colleague you know mystery can hide bringing in vulnerable customers to see how they’re doing and then getting an ambulance for a gentleman who is obviously having difficulty breathing. Or our colleague, Caroline Pearson, in the Harrow and Edgware branch, helping an 80-year old customer and keep a special promise to her grandson by guiding her through buying on his birthday a pair of trainers online. It’s just three small stories and hundreds up and down the country, where our people are working beyond their professional obligations to support customers. We are carrying on delivering our core citizenship programs such as life skills and connect with work, with a particular focus that on helping mitigate the impact of COVID-19. But we’re trying to do even more. For example, where we can, we’re now offering colleagues four weeks paid leave to volunteer to support health and social care work, helping those impacted. And as you saw, we launched GBP 100 million Community Aid Package, made up of GBP 50 million in grants for charity partners in the UK and our international markets and GBP 50 million to match colleague donations. That equates to up to GBP 150 million from Barclays and our colleagues deploy to help the communities and people hardest hit by the crisis, from providing food to vulnerable families, to purchasing protected equipment for NHS staff. We understand that our fortunes are intertwined with those communities and economies we serve. And at times like these more than ever, our obligation is to support them. And we’re going to continue to do that and prioritize that effort throughout this crisis. In recent weeks, we’ve also taken a huge step towards ensuring our broader sustainability, as we laid out in addition to be a net zero bank by the middle of the century. That means, reaching net zero in terms of direct and indirect emissions by 2030 and for the business activities we finance across the world by 2050. We’re going to align our entire portfolio to the Paris Agreement, starting with the power and energy sectors. We’ve also committed to increase our green financing to GBP 100 billion by 2030. This represents a comprehensive and bold package of measures which we are putting forward at the Annual General Meeting on the 7th of May. Finally, and before I hand over to Tushar to take you through the numbers in detail, I want to briefly set out some overall thoughts on our performance in Q1. The impact of COVID-19 came late and what was until that point, a very good quarter. That said, the performance of the business since then has demonstrated clearly the resilience of our universal banking model, rooted in diversification by business line, geography and currency. So while as you’d expect, returns were down in Barclays UK and in consumer card and payments, the corporate and investment bank performed well, producing an RoTE of 12.1%, in particular, via support for clients in a period of extreme volatility in the capital markets, where our FICC revenues and dollars grew 98%. The same cost discipline and positive jaws in our CIB delivered a Group cost income ratio of 52%. That’s better than our target of less than 60% of our time, and our lowest quarterly Group cost income ratio since 2011. Overall, the Group return on tangible equity for the quarter was 5.1%. Given the uncertainty around the developing economic downturn and the low interest rate environment, 2020 is expected to be challenging for our business. That said, we continue to believe that a sustainable group or RoTE above 10% is the right target for Barclays and attainable over time. We’ve taken in the first quarter like GBP 2.1 billion credit impairment charge, of which, GBP 1.4 billion is the result of applying a very challenging forecast through our credit markets – to our credit models, but we think this is prudent. Even after this, Barclays generated GBP 913 million profit before tax in the quarter, GBP 0.35 of earnings per share and attributable profit of GBP 605 million. The Group remains well capitalized with CET1 ratio of 13.1% and we will manage our capital position through this crisis in a way which enables us to support customers and clients, whilst maintaining an appropriate headroom above our maximum distributable amount, it is currently at 11.5%. If you know in response to a request by the PRA, we can’t submit 2019 full year dividend payment. The board will make a decision about future dividends and capital return policies at the end of 2020 when the full impact of COVID-19 on our bank is clear. So to conclude in the summary, my colleagues and I are today primarily focused on what matters right now, which is supporting our customers and clients, our communities and the wider economy to navigate the pandemic. The strength of our business and the resilience of our model means, we can run this bank safely and profitably and provide that support until this crisis passes. And I believe that we will emerge on the other side in a strong position to support the recovery and generate attractive returns for our shareholders. Now, I’m going to hand over to Tushar to take you through the performance for the quarter in detail.

Thanks, Jes. I’ll summarize the results for the first quarter which as Jes mentioned, demonstrate the benefits of our diversified business model. We’re facing a period of great uncertainty which make it particularly difficult to get forward-looking guidance, but whereas possible, I will try to give pointers for the coming quarters. We reported a statutory profit before tax of GBP 0.9 billion, generating GBP 0.35 of earnings per share. Litigation and conduct was immaterial this quarter, but as usual, I’ll reference the numbers excluding litigation and conduct for consistency with prior periods. Profits were down on last year, reflecting a material increase in the impairment charge resulting from the – estimated effects of the COVID-19 pandemic, but the RoTE of 5.1% is underpinned by a strong income performance, which demonstrates our diversification. However, given the uncertainty around the economic downturn and low interest rate environment, we expect 2020 to be challenging. We continue to believe that above 10% RoTE is the right target for Barclays over time, but we need to see how the downturn plays out before giving any medium-term guidance. We grew income 20%, reflecting strong performance in CIB and resilience in the BUK and CCP going into the downturn. Costs are stable year-on-year delivering strong positive jaws. As a result, pre-provision profit increased by GBP 1 billion to GBP 3 billion, however the impairment charge increased by GBP 1.7 billion to GBP 2.1 billion. This increase comprise a GBP 0.4 billion single name charges and GBP 1.35 billion net of IFRS 9 model driven increases, reflecting the effect of running a revised COVID-19 scenario as a basic case estimate and an oil price overlay which I’ll come back to later. The forward-looking nature of IFRS 9 requires that we estimate the expected credit losses. So we have taken a significant additional impairment above that implied by current credit metrics, many of which do not yet reflect the effect of the pandemic. The CET1 ratio was down from the yearend level of 13.8% to 13.1%. This reflects strong pre-provision profitability and the cancellation of the full year ‘19 dividend payment more than offset by higher RWAs as a result of market volatility and increased client activity and the effect of impairment. There’s a strong quarter for TNAV which increased to GBP 2.84, reflecting GBP 0.35 of statutory EPS, and net positive reserve movements of GBP 0.19. Before I go into the performance by business, a few words on income impairment and costs overall. The quarter showed the benefit of the diversification of our income across consumer and wholesale businesses, the increase in Group income reflected 44% growth in CIB, driven by particularly strong quarter for markets, which was up 77%, while our consumer business has showed resilience in Q1, with income declines of just 4% in both CCP and BUK, we expect those businesses to experience further material pressure on income as the effects of the pandemic feed into consumer behavior. On the next slide, I’ll go through some of the income headwinds we have seen across these consumer businesses. You’ve seen interest rate reductions in Q1 in response to the COVID-19 pandemic, which are affecting both BUK and our US consumer businesses. This will result in margin compression and level of contributions from our structural hedges. On spending, as you see on the right-hand chart, we have started to see significant reductions in spend on credit cards and across payments more generally in March. We’ve seen a continued reduction in interest earning lending in UK cards and now also in US card balances, which will feed into lower income, although this may also be expected to mitigate being the risk of increased impairment on extended balances. To all customers in BUK we’ve taken specific actions that will reduce income, notably from overdraft and support for SMEs as well as starting to the field – feel the effects of the lower spending on customer balances. Looking now at costs, with a 20% increase in income and stable cost, the Group delivered strong positive jaws and the cost income ratio which is from 62% to 53%. Given the income headwinds I’ve referred to, we don’t expect the cost income ratio to remain at this level through the rest of the year. There are also additional costs relating to the crisis – excuse me, including the GBP 100 million Community Aid Package, suspension of future redundancy programs and incremental operating costs. On the other hand, travel expenses and marketing for example, will be lower. We have relatively limited short-term flexibility in costs outside the CIB, particularly in the current circumstances. We will be in a position to implement additional cost plans, if appropriate, as you get a clearer picture of the length and depth of the downturn. Cost efficiency certainly remains very important to us, whatever the environment and we continue to target a Group CIR of below 60% over time. I’ve mentioned the significant increase in impairment, resulting from implementing the COVID-19 scenario and from single name losses. As you can see, the increase was most pronounced in CIB as a result of the single name corporate losses and estimated effects of a sustained period of low oil prices. And CCP for the US unemployment assumptions have a significant effect on the ACL build. As shown on the next slide, a breakdown of how we built up the charge. The modeled impairment calculated during the quarter prior to running the COVID-19 scenario generated a charge of GBP 0.4 billion. In addition to this, we charged another GBP 0.4 billion in respect to single name wholesale charges in the CIB, some of which have been affected by the onset of the pandemic. The remainder of the increase reflects the GBP 1.2 billion net impact from using the COVID-19 scenario as our base case, reflecting forecast deterioration in macroeconomic variables. As shown on the Slide, some of the key UK and US macroeconomic variables used, including peak unemployment rates are 17% for the US, and 8% for the UK. We’ve also included in this, net impact, the estimated effect of government support and central bank actions in both UK and US. Finally, we included an overlay of GBP 0.3 billion to reflect the increased probability of a sustained period of low oil prices. The GBP 150 million overlay for UK economic uncertainty held at yearend is absorbed within the COVID-19 scenario. The modeling is subject to inherent uncertainty with respect to forecasting incremental credit losses that are likely to be further elevated impairment charges in the coming quarters, depending on how the economic downturn translates into cash losses. We’ll provide an updated Q2, but it’s difficult to give more precise guidance at this stage due to the level of uncertainty. However, I did want to highlight how the increased impairment provisioning has increased our coverage ratios. This Slide summarizes the loan books, impairment build and resulting coverage ratios for the wholesale and consumer portfolios. You can see that the impairment build in wholesale is largely driven by the effect of the oil price overlay and provisions for stage 3 single name balances. In unsecured consumer lending, however, I would highlight the increased coverage ratios for both stage 3 and stage 2 loans. Many of the latter are not yet delinquent, reflecting our conservative risk positioning over recent years. However, we have provided 19.4% coverage under the COVID-19 scenario and close to 23% on stage 2 balances overall. Carrying now to the individual businesses. The UK reported an RoTE of 6.8% for Q1 with income down 4%. I mentioned some of the income headwinds BUK is facing earlier. Going into a bit more detail on these. In Q1, we saw further reduction in interest earning lending in UK cards and we expect the declining spending to contribute to that trend. In addition, the expected headwind from the change in overdraft pricing will now be amplified by the suspension of certain overdraft charges to support our customers during the pandemic. The recent rate moves in response to the developing downturn also started to affect the latter part of Q1. This is expected to have a negative FX of around GBP 250 million for the full year. I highlighted at Q4, the debt sales in BUK which will concentrate in the second half of 2019, with a total of over GBP 120 million across the year. We have a material debt sales in Q1 and in the current environment, our program of debt sales planned for 2020 may be pushed into 2021. On positive, in Q1, with a continuing growth in mortgage balances up a further GBP 1.8 billion in the quarter and pricing also improved compared to previous quarters. The downturn is obviously having a significant effect on mortgage applications, although we still have a flow remortgage business. Meanwhile, deposit balances continue to grow, maintaining the loan to deposit ratios at 96%. Overall, as I indicated at Q4, NIM was already expected to fall to below 300 basis points and reached 291 basis points for the quarter. We now expect the additional headwinds and further decline in interest earning lending on cards to take our full year NIM into the range of 250 to 260 basis points. Cost in the quarter increased 2%, reflecting higher restructuring spend, while cost efficiency remains important, we have a limited flexibility to reduce costs until we have a clearer picture of the nature of the downturn, and also some additional costs coming in as a result of the pandemic as I mentioned earlier. One of the effects of the current difficulties is to increase digital banking engagement and remain committed to the digital transformation of the business. But we look closely at phasing of investments plan given the income environment. Impairments for the quarter more than doubled to GBP 481 million, reflecting the COVID-19 scenario. Although I reiterate that 31st of March do not yet reflect the developing economic downturn. The charge going forward will depend on the length and depth of the downturn and the effectiveness of government support schemes. Turning now to Barclays International. The BI businesses delivered an RoTE of 6.5% for the quarter, down year-on-year as income increased by GBP 1.1 billion more than offset by an increase of GBP 1.4 billion in impairment. We’re going into more detail on the businesses on the next few slides. CIB delivered an RoTE of 12.1% in Q1 as a strong performance in markets more than offset the increased impairment provision. Income was up 44% at GBP 3.6 billion, but costs are up 4%, delivering positive jaws of 40%. Markets grew income to GBP 2.4 billion, up 77%. This quarter included some net benefits from hedging counterparty risk, but the increase was driven by flow trading with increased client activity and the trading businesses capturing a good portion of widened bid offer spreads as a result of the heightened volatility. Client focus continued at healthy levels in April, while it’s too early to guide for the quarter or indeed comment on the outlook for the rest of the year. Our revenue run rate for markets is well above that as the second quarter of last year. Both macro and credit had a strong quarter, we think income roughly doubled last year, equities increased 21% driven by flow derivatives, which benefited from high levels of volatility. Banking increased 12% reflected – reflecting improved performance in DCM and advisory despite a lower fee pool. Looking forward, the industry deal flow in banking overall has reduced as the downturn has started to develop. While there are some areas such as investment grade DCM remain active. I’ve talked before about the effect of mark-to-market moves on loan hedges on the corporate income line. This quarter, we have had significant positive marks on hedges, but also significant downward marks taken through the income line on our leveraged loan commitments. Overall, marks on the leverage commitments were GBP 320 million negative, while marks on the hedges were GBP 275 million positive, both these elements are likely to be volatile over the coming quarters. So I’ll highlight them when material. The increased a 4% in CIB costs included an appropriate role for performance costs. Impairment increased to GBP 724 million, driven by single name charges and the effect of the scenario as modeled, including the low oil price overlay. RWAs increased by GBP 30 billion in the quarter to GBP 202 billion, reflecting a stronger dollar on both increased client activity, including drawdown of loan facilities and the effect of market volatility. I’ll come back to that when I talk about capital progression. As a result of this, average allocated equity for the quarter increased to GBP 27 billion, which generated significantly improved our RoTE. Turning now to consumer cards and payments. Total income in CCP was resilient in Q1, down just 4% year-on-year, the significantly increased impairment charge resulted in a loss for the quarter. Us card balances were down 5% in dollar terms, while effect of the downturn is uncertain as reduced spending trends emerging in March, it is unlikely that balances will grow over the coming quarters, and the income environment is expected to remain challenging. Costs were down 10%, resulting in positive jaws and a reduced cost income ratio of 52%. However, if further income weakness develops, with a limited amount of further cost flex we can implement in the short-term. While arrears rates have not yet responded to recent sharp increases in US unemployment. We have taken a very significant additional impairment provision up almost GBP 700 million as a result of running the COVID-19 scenario as a base case, including a peak unemployment rate of 17%. I’d also remind you that 84% of our US card balances are above our 660 FICO definition for prime lending. The payments businesses experienced a reduction in income, following growth in recent quarters as a result of the reduced spend levels principally in the UK. Turning now to head office. The head office loss before tax of GBP 99 million was down on the Q4 loss of GBP 167 million and down significantly year-on-year. The negative income reflects the main elements I’ve referenced before, GBP 30 million of residual legacy funding costs and residual negative treasury items, but the hedge accounting this quarter generated significant positive income, as we expect it to turn negative again in Q2. Q1 also included some mark-to-market losses on legacy investments then we have the final dividend will come into Q2 rather than Q1 this year. Therefore, there’ll continue to be quarterly fluctuations, but the negative income run rate is likely to be clearly higher than in Q1. Costs of GBP 11 million contrasted with the usual GBP 50 million to GBP 60 million run rate driven by provision release related to the historic sale of a non-core portfolio. Going forward, we’ll also be accounting for the GBP 100 million Community Aid Package within the head office cost line, which will take costs above that run rate in certain quarters. TNAV increased in the quarter by GBP 0.22 to GBP 2.84. This reflected profits of GBP 0.35 despite the very significant impairment build, plus positive net reserve movements of 0.19. The strengthening of the dollar contributed to a GBP 0.06 movement in the currency translation reserves, while the combination of lower interest rates, but wider credit spreads, the positive FX on the cash flow hedge and pension reserves. The fair value reserve was affected negatively by the fall in the Absa’s share price and the rand. On capital, we began the quarter at a CET1 ratio of 13.8% and had guided for a key one move towards our previous targeted level of around 13.5%, to be driven by the seasonal increasing client activity in the CIB, because the quarter at 13.1%. As the expected seasonality was enhanced by the higher than anticipated client activity, both in market and in drawdown of credit facilities and the effects of market volatility under the Basel rules. Impairment at 69 basis points of the capital ratio, that’s a transitional relief from the chart for the quarter was limited and the rate of transitional relief on applicable impairment stock reduced from 85% to 70%. The downward pressure on the CET1 ratio was partially offset by the cancellation of the full year dividend, which added 35 basis points to the ratio. We expect pro-cyclicality of our RWAs to affect us further in Q2, and I’ll say a bit more about the way we are looking at our capital requirement in a moment. But first I’ll go into more detail on the RWA increase on the next slide. Here we’ve broken down the elements of the 130 basis points effect from the increasing RWAs. Lending in March, including drawdown on revolving credit facilities added GBP 7.2 billion to our RWAs accounting for 33 basis points of the ratio decrease. But we’ve seen immaterial further drawdown so far in April. Counterparty and market risk RWAs each increased by around GBP 8 billion, respectively, from a combination of normal seasonal pickup and the pro-cyclical effects for the Basel framework, plus some currency effect. The overall FX impact on RWAs is broadly matched by the effect on CET1 capital. We expect some further pro-cyclical effects in Q2. Looking at our next Slide at our capital requirements, and how we are thinking about utilization of buffers through the developing stress. As shown here our current capital requirement and how it reduced to reflect the removal of the countercyclical buffer by the Bank of England in response to the COVID-19 pandemic. As a result, our MDA has reduced to 11.5%. So our Q1 ratio of 13.1% represents 160 basis points buffer currently. As I mentioned, we expect some further pro-cyclical increases to RWAs in Q2, as the downturn develops, which will take the CET1 ratio to below 13% in Q2. We also expect some further reduction in our MDA hurdle in percentage terms over the stress period through some reduction in our Pillar 2A ratio requirement. With regards to the headroom, our capital ratio has been strengthened over recent years to put us in a position to absorb precisely the type of stress we are now experiencing. In this environment, we will manage our capital ratio through this stress period to enable us to support customers, while maintaining an appropriate buffer above the MDA. We are comfortable operating below our previous CET1 ratio target as the stress evolves and we’ll continue to manage capital have in regard to the servicing of more senior securities. Our UK leverage ratio at the end of Q1 was 4.5% on a spot and daily average basis, well above our UK leverage requirement, which is currently just under 3.8%. I would note that we expect the advanced implementation in Q2 of CRR II rules on treatment of settlement balances provide a meaningful benefit to our leverage position, which pro forma would have increased our Q1 ratio to 4.7%. Finally, a few words about our liquidity and funding, which position as well to withstand the stresses that are developing and to support our customers. Our liquidity metrics are strong and in the quarter with an LCR of 155% close to the yearend level, with a liquidity pool assets of GBP 237 billion, which represents 16% of the Group balance sheet with 66% of the pool held as cash at central banks. Our loan to deposit ratio reduced further to 79%, with growth in deposits more than offsetting loan growth. On the loan side of the balance sheet, the main increase was in corporate lending, including drawdowns on credit facilities, particularly in March. Deposit base continues to reflect our diversified sources of funding, with most of the growth being in wholesale deposits, including some deposits by corporates, following draw down on those facilities. Our funding profile remains in good shape with diversified sources and reduced reliance on short-term funding. We have issued GBP 2 billion equivalent of MREL debt in the year-to-date, although spreads reflect the current economic environment, we still plan further issuance of roughly GBP 5 billion to GBP 6 billion across the current year subject to market conditions. Our MREL is at 29.3%, close to our expected end requirement. So to recap, despite the initial effects of the COVID-19 pandemic, notably the elevated impairment charge of around GBP 2 billion, reported an RoTE of just over 5% for the quarter. The performance from the markets business drove a 20% increase in Group income on a stable cost base, resulting in strong positive jaws. Given the uncertainty around the economic downturn and low interest rate environment, we expect 2020 to be challenging. However, we continue to believe that above 10% RoTE is the right target for Barclays over time, but we need to see how the downturn plays out before giving any medium-term guidance. Our CET1 ratio of 13.1%, reflected the initial effects of the downturn, and we expect some further pro-cyclical increases in RWAs to reduce the ratio further in Q2. We plan to maintain an appropriate buffer above our MDA, because it built the stress caused by the pandemic. Our funding and liquidity remains strong and put us in good position to support our customers and clients during this difficult period. Thank you. And we’ll now take your questions. And as usual, I would ask that you limit yourself to two per person so we get a chance to get around to everyone.

[Operator Instructions] The first question on the line comes from Alvaro Serrano of Morgan Stanley. Please go ahead.

Good morning. Thanks for taking my questions. I’ve got a one on provisions and another one on capital. Obviously, the provision taken in the quarter is a very credible and sizeable provision. But I was just asking if for some help about how could we think about the next few quarters about the total provisions we might see this year? I don’t know from here, if you can give us a bit of color of how the payment holidays are evolving, and is this a metric we should look at in terms of as a leading indicator of what provision might look like? Or should we look at unemployment? And also one there on the oil price overlay provision, what oil price are you assuming? And the second question on capital. Obviously, you’ve said that you’re going to dip below 30% in Q2. During the quarter, we’ve had quite a lot of exceptions given by the PRA in markets, RWAs on wild breaches. There’s also the IFRS 9 transitional sort of benefit. Can you help us quantify what the benefits was and when I think about this – the RWAs going forward, is there a risk that some of this mitigation comes back? And is 13.5% still your – and when I think about beyond this year or at your discussions you might have at the end of the year round capital distribution is 13.5% still your – you would want to build and get close as to 13.5% before you distribute capital? Thank you.

Yeah. Thanks, Alvaro. It’s a two-shot here. Why don’t I take both of those questions? So, on provision first and then I’ll come on to capital. I mean, obviously it’s a very uncertain we’re only at sort of a month or so into this crisis. So you know, these are difficult to forecast paths. But I think if we – if our assumptions are correct around the economy, as you’ve seen on one of our Slides, I think Slide 15, if that holds to be true, I think in terms of where we should go from here. I’d first of all start with our current sort of pre-crisis existing run rate of impairments and that was running at about GBP 400 million to GBP 500 million a quarter and think of that as sort of cash losses in any one quarter. You know, we feel sort of IFRS 9 provisions, up sort of a BUK of GBP 1.4 billion. I think that’s a probably a reasonable proxy of additional cash losses that we would expect to have of the remainder of the year, if our forecasts are right. So what does that mean? That means sort of our run rate in provisions would be somewhere, I don’t know, GBP 800 million to GBP 1 billion something in that sort of zip code. Now, I’d caveat that quite heavily. One is, you know, none of us know whether we’ve called the economic forecast correctly. The – we do have governments here acting to provide all sorts of measures of support. And you know, we don’t know sort of the effect of them and how they’ll play out. And of course, there are different programs in the United States and in the UK and across individuals and businesses. So, lots and lots of caveats, but you know, if we’ve miraculously forecast this all correctly, that hopefully gives you a sense of the run rate from this point on. In terms of metrics to look at, I think unemployment is probably the most important metric for us, again, complicated because of the government support and furlough schemes here. Payment holidays are important and payment holidays in our unsecured books, which is probably where it’s most relevant are about 3% so far. So we’ll see where that goes. I would say that actually in our unsecured books, spending, of course is down. You see that in the GDP numbers, but alongside that, card balances are actually down. And that trend seems to be you know, quite prevalent in April. Not that greater income, but obviously helpful for in fact, now that may or may not change as a consumer behavior change – sort of adapt. And the final thing, Alvaro, you mentioned oil. We’ve assumed a 50% chance of $20 oil remaining for the rest of the year. And we sort of took that assumption based on where we look at futures contracts in probably around the mid April or something where the future strip was comfortably above that level. Obviously, that’ll fluctuate as the quarter goes forward. In terms of capital. Yeah, in some ways you know, we’ve got to be, you know, we’re pleased that our capital ratio was above 13%. Obviously, there’s a lot that went through our capital ratio, the impairment build itself was 69 basis points, lot of the RWA inflation, revolving credit facilities and so forth. I think as you said, we will expect to go below 13 – I think you’ve seen the bulk of the pro-cyclicality happened in Q1, there’ll be some follow through, but it’d be much more modest. And you know whether that’s the low point in terms of our capital ratio, again, it’s somewhat driven by the economic path that we may be following down. But you know, we’ll see where we go from there. I think if things go back to normal, then 13.5% sort of probably feels like the right level again, because on the basis that countercyclical buffers and so forth that sort of reset back to where they are. I mean there’ll be a natural sort of flow back in RWA. I guess the countercyclical buffer that fades back in some of the RWA inflation that we’ve experienced and we’ll naturally have a way as well so there’ll be a sort of a calibrating effect back there. But at all times, I think that remain, you know, very – you know, very appropriate levels well above our MDA levels over and see ourselves going anywhere near that at this stage. So thanks for your –

Very clear, thank you –

question, Alvaro.

Thank you.

The next question, please, operator.

The next question comes from Jonathan Pierce of Numis. Please go ahead.

Good morning. I have two questions as well. And actually they’re again on provisions and then risk weighted assets. On provisions, just want to understand this transitional relief or absence of transitional relief in the first quarter, I think the stock at stage 1 and 2 two having fallen below the IFRS 9 add back, then there was a true up as you went through Q1 and that’s why you didn’t get any substantive relief. What’s the additional true up that’s needed before we start seeing any transitional relief coming through whether to be to the stage 1 and 2 builds in the coming quarters? And that’s question one. Question two on risk weighted assets. I guess the equity tier 1 dropping below 13% in the second quarter is probably pointing to, I don’t know, maybe another 4% to 5% increase in risk weighted assets over the next three months or so. You sort of alluded to this in an answer to the previous question, but is that the right sort of ballpark we should be thinking about, so maybe you can talk a bit more about the quantum of credit risk pro-cyclicality, specifically within that? Thanks very much.

Yeah. Thanks, Jonathan. Why don’t I take both of them? The transitional relief for IFRS 9 as you’re probably previously familiar with most, Jonathan. This is a devilishly complicated and calculation. There’s a few things going on here. You know, the – in some ways, we got very little as you rightly pointed out transition relief in Q1. And I set the way to calculation sort of falls for us, and obviously stage 3 as you know, get no transition relief. And then stage 1 and 2, you had two effects going on there. You had the stock of stage 1, 2 provisions, transitional relief falling from 85% to 70%, and then as you pointed out, there’s various thresholds in there. We’re not called out sort of how that may play out in Q2, because you know, there’s such an interplay between the various stages. And actually, it’s sort of more than one threshold as you’re familiar with your FPGA and various other things like that playing around this. So I don’t think I can give you sort of just a single number that will be helpful, Jonathan. But I don’t think we’ll – you know, it sort of depends on the part, but you know, I wouldn’t be expecting a whole load of transitional relief going forward, if that does any help. And in terms of RWA inflation. Again, very, very tricky to glide to this one for the second quarter, simply because it’s such an uncertain path that we’re going through. All I would say though is, we will definitely have some pro-cyclicality flow through into the second quarter. I would say it will be much more modest than we’ve experienced thus far. And of course, the other thing that I think we should also point out is our MDA levels are probably likely to go lower as well, even though our capital ratio is going to dip below 13% you know, over the course of this year, I think you’d expect to see another step down in our MDA. And that’s just as you’ve seen in the Bank of England’s stress testing framework, the MDA levels get recalibrated in times of stress, and I’d expect the same again over the course of this year. So I can’t give you unfortunately, Jonathan, a sort of a precise quantification into Q2, but hopefully it gives you a sense of qualitatively where we should be going.

Yeah, that’s helpful. Thanks, Tushar. Sorry, can I just come back on the first question, or the answer too is, you’re saying this, even if there was a further sizable increase in the stock of stage 1 to provisioning, maybe I don’t know, GBP 1 billion plus, let’s say, over the course of the rest of the year. I mean that’s not your assumption, but were that to happen, we wouldn’t get any transition or related size on that either?

No, that wouldn’t go. No, that definitely wouldn’t be as black and white as that. It’s – it very much depends on the scale of 1, 2 provision builds, stage 1, 2 provision build as well as interplay of various thresholds. So I – it’s not a straight, but if it was a reasonable build, then I do think we would get some transition relief, if that modest builds, probably not so much.

Okay, great. Thanks a lot, Tushar.

Okay. Thanks, Jonathan. We’ll take the next question, please operator.

The next question is from Joseph Dickerson of Jefferies. Your line is now open.

Good morning. It’s Joe. Just a quick question on costs. So you’re analyzing at GBP 13 billion of costs pre-levy in Q1. I guess what are the moving parts around that as we go through the rest of the year? Just trying to dimension where we think you could be at the full year? I mean, you’ve said some limited flexibility outside of variable comp, so just trying to dimension that, but then a very good performance from the card piece. And then just on the regulatory capital ratio, I mean, I suppose given the commentary that you plan to dip below 13% in Q2, that is – should we assume that has troughs in Q2, given you know, you’ve called out in the several areas that you expect the maximum pressure economically to occur in Q2?

Yeah, okay. Thanks. So, why don't I start with the question on capital, then I'll say a little bit on cost. And I think Jes to let him comment on costs as well. On the capital ratio, Joe, it is – you know, it is difficult to forecast simply, because of the uncertainty around the economic path that where we may or may not be embarking, and also sort of, you know, the way in which impairments will play through as well. But anyway, on the assumption that we’ve sort of called it absolutely correctly, then I think it’s a reasonable assumption to assume that, you know, the – once we get to whatever capital ratio we get to in Q2, you know, we should be hovering around about those levels and perhaps even building up again over the rest of the year. But I’ve put lots of caveats around that. It really does depend on so many factors. On costs, there’s various sort of puts and takes. Look, I think, first and foremost, you’d expect us to be as responsible as we can in terms of helping everybody get through very difficult circumstances. So, you know, to the extent we were going to make future redundancies and sort of workforce changes, we will obviously delay that. We would expect ourselves to have lower attrition levels. I think some operating costs will increase, I’m sure Jes will talk about this. But you know, you guys will be very familiar with this. But keeping sophisticated financial institution running and virtually everybody’s working at home from consumer-facing customer outreach to you know, just even capital markets activity when we’re trying to do a capital markets raises and actually sales force’s traders and investors all over them. It’s incredibly complicated. So that probably has a degree of cost associated with. Now on the flip side, we’re not travelling obviously, we’re not going to be marketing as much. So I think there’s various put some takes. So at the moment look I don’t think there’s anything new to sort of say on cost from perhaps where we are. But Jes is there any more comment you want to add on to that?

Just you know, obviously in the first quarter we landed the cost income ratio of 52%. So that should underscore a certain degree of prudence you know, well below where we were last year. But I think that the one thing I would repeat is, we took a decision not to reduce our headcount, even though we had the opportunity to do that. I just don’t think at the stage in this current environment, we should be running down, putting people out of work just to drive your cost down. So I think you should look at a roughly flattish number for the year.

Thanks, Jes.

Thank you. So we have the next question, please operator.

We have a question from Rohith Chandra-Rajan of Bank of America. Please go ahead. Rohith Chandra-Rajan: Hi, good morning. I wondered if I could ask a couple around the cards and payments business, and particularly in relation to the travel industry. So I guess firstly, US cards. A lot of the co-branding is with airlines, which you talked about in the past, I was wondering if you remind us how much of the US cards business balances with is with airlines? And also a comment on what you’re seeing in terms of volumes in the volume outlook and credit quality there? And then the second was really on the acquiring side. So a lot of travel firms and airlines are now for cancellations are now offering re-bookings or vouchers rather than refunds. And anecdotally, customers are now looking to get charge backs on their credit cards as a result to recoup the cash rather than taking the voucher. So just wondering what you’re seeing there in terms of that sort of anecdotal evidence? And what the impact is, I guess particularly from an acquiring perspective?

Yeah. So on the travel side in our US card, you’re right, we’re you know, we’ve got very strong co-brand relationships with American Airlines and JetBlue and Hawaiian Air and whatnot. So clearly, you’ve got the issue of the consumers spending dramatically less money, our receivables going down and we are connected to the airline industry. It does however these programs continue to be extremely important for the airlines. So on that side, you know the – we are as a partner is elevated. Also you may have seen you know it’s because of the race with the airline industry that we do GBP 1 billion equity raised for United last week. very involved in the delta financing as well. But you’re to point out, I think the US card it’s in a struggle. The flip side, because we had that concentration in the airline industry that gave us – one of the highest average FICO scores of any credit card company in the US. So I think the sort of a balance, I think we will be less hurt on the impairment side that probably more hurt on the revenue side.

Yeah. I’d just add to that, Rohith just to spot on that and see the FICO scores or the book, you know, we saw that I think the standard definition of prime in the US is 660 and you know, 84% of our book is greater than a 665 code. So although it’s going to be really tough times in the economy that scores compelled to. The other thing I’ll say is, you know, credit metrics, of course are evolving all the time as we go through the crisis. And we have seen a pickup in delinquencies, both in UK and US cards quite modest about 10 basis points in UK card delinquencies and 20 basis points in US cards, but towards the back end of April, we’ve seen that level off. So again, remains to be seen, but although it’s ticked off and it’s leveled off already. Again, I don’t want to sort of say that that’s what’s going to be the case for the rest of the quarter, we just don't know, but hopefully that’s at least some additional color –

Maybe at 70% unemployment rate through three quarters, you know that’s, can’t get much more conservative than that and taking that provision in the first quarter, we shouldn’t lose sight of that. Rohith Chandra-Rajan: Thank you. And on the sorry, on the acquiring side. The chance of the risk from charge backs.

Yeah, on the acquiring side, I don’t think there’s anything specifically to call out on charge backs. There’s nothing sort of is coming through in our metrics that that stands out as anything particularly unusual. Obviously, current volumes are obviously dramatically down the GDP numbers sort of give you a good sense for that. But in terms of other risks outside just lower volumes, this is nothing that I call out. Rohith Chandra-Rajan: Okay, thank you.

Thanks, Rohith. We have the next question, please then, operator.

Of course. The next question comes from Guy Stebbings of Exane BNP Paribas. Please go ahead.

Thanks for taking my questions. The first one was just on thoughts that UK and the new NIM guidance. You’ve obviously given a lot of color on the different headwinds to get there. But could you give us a sense of the phasing? I mean it sounds like quite a lot will get coming in Q2 given the actions taken to support consumers and obviously the timing of the base rate move rather than sort of a steady decline. Is that fair? And I don’t know if you could give us a sense of how much that decline is coming from those consumer actions which hopefully should reverse next year, perhaps? That’s the first question. And then secondly, I just want to ask on the COVID business interruption scheme and some of the economics, in particular, the sort of risk rates on average you might have against those loans on either the 80% guaranteed or the 100% guaranteed loan scheme. And from a leverage standpoint, presumably you have to recognize all the exposure, but if you could just kind of find that’d be great? Thanks.

Yeah, thanks Guy. Yeah, in the UK, I would say you’ll start seeing the full effect of all sort of, I guess, three possibly four components of revenue headwinds come through in the second quarter. We’ve got obviously, the impact of rates coming through. So what happens there is, our assets reprice pretty much immediately, the deposits weren’t repriced until I think from memory July and just the standard protocols we have in the UK of writing to customers and giving them advanced notice. So in actual fact, you’ll probably see NIM if most in Q2 and the recovery again in Q3 and Q4, everything else being equal. We are spending, if you like, discretionary amounts for ourselves, just to help customers through difficult periods. We think that’s about GBP 100 million for this year, and then over and above that, as along with many other banks waiving various fees and charges, we think that’s about another GBP 150 million. I think in terms of next year, again it remains to be seen as a sort of a brief call on, you know how the world will look next year, which is a quite hard thing to forecast when you’re amounting to this one. But, you know, there is a, I guess, a view you could take which is the temporary suspension of fees and charges will not apply next year as well as some of the more discretionary things that we’ll do. But in terms of just for your own models, I hope you came through my scripted comments, but just in case, not, you know, we would expect NIM in Q2 probably to dip again quite sharply simply because of the right actions and then to recover again over Q3 and Q4, probably for a blended average over the full year our NIM rate of something like 26 – sorry, 250 to 260 basis points is probably about the level to be thinking about. On CBILS, I’ll hand over to Jes.

You know on the COVID-19, whether it’s the 80% guarantee program or 100% guarantee program, there’s a lot of discussion going back and forth and I must say that the British Government I think is really trying, you know, they’re doing virtually they can to make these two programs successful as are we. And I think everyone realizes that you know that guarantee is real and therefore the calculation of risk against that component of these loans are extended sort of in the PRA is looking at that, but I think you should consider that it’ll have a very, very low risk weighted assets to it.

Could you clarify from a leverage point of view, as generally following up would you still have an offset for leverage?

Yeah, I mean the numbers here are quite modest if I say. If you think about how much we’ve extended through the CBILS program, I think Jes will probably have literally the real time number, but it’s something like –

Around GBP 737 million.

There you go. So GBP 737 million. So it’s pretty modest in terms of scale on the balance sheet. I mean, these are obviously relatively small individual loans. I think it’s like 4,000 SMEs that these have gone out to. And for the larger corporate, where numbers can get much bigger. We’ve been very active in getting people to the commercial paper program run by both the UK and the US government. And I don’t think we’re allowed to give precise stats, but we’re comfortably the largest participant in that program. And I don’t know what’s the latest government published stats are, but you know, we’re going to be the largest –

I think we were very active in opening the investment grade capital markets from the $19 billion bond issued by for the T-Mobile-Sprint merger to 8 billion for the World Bank, et cetera, et cetera. And all these big capital market trades are also decreasing, because it’s much cheaper borrowing that going to your revolver. So and one of the issues that you would want to look at in terms of our leverage, et cetera, is how much are revolvers being used and with the opening of the capital markets as robustly and we saw last month, some of the most highest levels of issuance that we’ve seen in decades, if not ever, that’s taken a lot of pressure off to draw on our revolvers which was pretty much been flat lined and so that will also take pressure off our risk weighted assets.

Okay, very helpful. Thank you.

Thanks, Guy. Could we have the next question please operator.

Your next question comes from Edward Firth of KBW. Your line is now open.

Good morning, everybody. I just had two questions. The first one was just bringing you back to the CIB performance and in particular, the FICC revenue. And I guess, just tried to compare and contrast the revenue and the cost performance. And I know you said in the call, you felt it adequately accrued compensation related to that revenue. But the revenue was absolutely startling. I mean, even if you compare it against peers, nobody produced anything like that in terms of revenue performance. So I just wondered if you could talk a little bit more about, you know, what was driving that? And perhaps, you know others one-offs in there? Is there a reason that you don’t have to pay the people who delivered this revenue? And perhaps how we can imagine that might be going forward? And then I had a second question, so I’ll go straight ahead with that.

Yeah. Do you want to ask both of them? And we’ll –

Yeah, sure. Just back on the CBIL question, but you know ant not just that you know, both programs and the micro one. If I compare what’s happening in the UK with, say, or particularly the US, but also in Europe, that the take up has just been incredibly low, and incredibly slow. And I can’t imagine it’s because our small businesses or our business communities finding that any easier say than the US or anywhere else. And obviously you guys have been taking it, but you know not you personally, but the fact has been a little bit of incoming about delayed approvals and being difficult. Well what’s your steer on how that’s going now? And perhaps, you know, the GBP 330 billion total is the sort of top line number? I mean, are you imagining that over time we will get to something like that? Or are we really going to be talking about something the scheme is going to be GBP 10 billion and most for the sector we could broadly ignore it?

I guess I said, why don’t I quickly say something on CBILS and then I think Jes can add some more comments on that and talk about FICC performance –

Sure.

And I think we’ll have to correct your statement about, we don’t intend to pay the people that we’re generating that performance that I’d like to go through that. On CBILS, I – the only comment I’d make is, you know, first and foremost, I’d say, you know, the banks that speak for ourselves, I’m sure I’m speaking for the banks though, are a 100% committed to make these programs work. We are doing everything we can to help extend credit, even in advance or sort of sometimes going through, you know, the full plethora of checks and balances and consumers’ credit act provisions and content, you know, these are very complicated programs to administer. And it will feel a lot of pressure on the government to once we’ve approved an application for them to turn it around as well. So, first of all, I’d really stress that, we are over a 100% committed. We have people processing these things non-stop talking to clients. And remember, you know, we’re not in our headquarter building anymore, everybody’s doing this in a distributed way, in different parts of the country with compliance officers were moved away from bankers that are doing the underwriting from risk management that are approving the loans, et cetera, et cetera, et cetera. No doubt there’s been, you know, some glitches in the operational efficiency of getting these done, but I think you’re seeing the pace of program really picks up and it’s getting quicker and quicker and quicker. Final thing I’ll say then I’ll hand over to Jes, is the GBP 330 billion sort of headline number, I don’t think is just because I understand it’s just people’s I mean, it’s a full sort of suite of what with the commercial paper program we’re building and you know, furlough schemes and various other things like that. And, you know, one thing that we’re very instrumental as in terms of making those payments on behalf of HMT for furloughed workers and all that, actually that the Barclays we’re the bank for HMT on that. So that’s actually working remarkably well in terms of administering those payments. But why don’t I hand over to Jes to finish that and talk about FICC.

Yeah. There’s a tremendous amount of dialogue you know, between myself and the chancellor and Head of the Bank of England that are going through. How do we evolve these programs to make them more and more effective and more and more efficient and this is a very new frontier? So it takes us a while to get there. GBP 330 billion and I don’t think – a first stated indicative number, but I think it’s pretty clear if you read what the British Government is up to, they’re willing to go well beyond that. So that Tushar is right, you know, we’re all in this all of us together and we shouldn’t underestimate the economic commitment that the government is making and we need to partner with that. These will be –

There just – sorry, just to clarify that on the CBILS, say, in the context of the UK economy, you would expect that those sort of three guarantee programs to end up being material in the context of the total UK economy?

Yeah, but I don’t ignore that commercial paper program as well, which will be sizable and you know, that’s not to give that number out, but that’ll be a sizable number. Yeah, I think this will make a material impact on the economy should run for good times. But as Tushar said, don’t underestimate the economic impact of the furlough program, the economic impact of giving money to local municipalities to deal with the leisure sector and the – so you know, as I said in the press call this morning, what we’re seeing is two tsunamis hitting yourself at one time, you get the tsunami of extraordinary economic contraction with a tsunami of an extraordinary government response.

Okay.

And then vis-a-vis FICC, you know I’ve – we’ve talked about that a lot this morning. I was very pleased with our – with how the team did, our numbers are not a function of going in with one position or not, is very much driven by how we stay very much engaged across all the asset classes with all of our clients. Obviously, you know, what happened for a period of time around our liquidity and what that did with the most liquid markets from US rates to currencies was extraordinary to them and the liquidity response from the governments and how that led to the buy side rebalancing their portfolios, it’s again led to an opening in the capital markets. And as I said, you’ve had some historically high numbers and we’ve said also that, you know, the first three weeks of April, we’ve continued quite a strong trend versus last year. But I always say, you know, everyone here is committed to make sure that this bank is a firewall as we go through this economic crisis and that we’ll look back in time and be very proud of what we’ve done. And you know the bank – you know bankers do things and not just for compensation. So and we’ll deal with that issue at the end of the year.

Thanks, Ed.

Thanks very much –

We have the question – we have the next question, please, operator.

The next question is from Chris Cant of Autonomous. Please go ahead.

Good morning, both. Thank you for taking my questions too, please. If I could just round out the discussion on the Barclays UK piece, just crunching through some numbers very simplistically here, your 250 to 260 inclines for the full year, if I apply that to your 1Q average in Sterling assets in the UK that points to a NII number of about GBP 5 billion, which is obviously down very material last year. Can I just confirm that that’s the number that you’re looking for there? And if I’m trying to round things out, you’ve given us these numbers in terms of the different impacts from regulatory change and rates and things like this, I guess some of that is into fee line. How much revenue pressure do you expect to see in other incomes, specifically in the UK, please, I’m just trying to get a sense of how much further that GBP 6.9 billion consensus revenue number needs to come down? And then if I could follow-up the previous brief discussion on leverage, please. You’ve talked about being comfortable to run below your previous CET1 target. And in the past, Tushar you’ve talked about expecting to run with something like a 5% UK leverage ratio, I think in some of the analyst meetings. So you just printed 4.5% that you’re concerned or you consent for that to fall further? How low are you willing to go there, please? Thank you.

Yes, thanks, Chris. Why don’t I take both of those questions? In some way I – I’d let you sort of, and everybody else do the math as, however your models are set up in terms of projecting just the split between NII and other fees. I – I’ll give you the building blocks for that which hopefully according the script, but you know, just in case others may not have. I think you’re probably a little bit low in the way you’re doing that arithmetic. I think and I would be a little higher than GBP 5 billion, but let me give you the building blocks that’s probably more direct. The way we think about it is that for the rest of this year, assuming the rate curve is where it is, we’d expect about another GBP 250 million of headwind on the top line just coming from rates. We’d expect about another GBP 150 million headwind coming from, if you like, the temporary suspension of overdraft fees, charges, business banking fees you know, penalties for taking out cash from fixed deposits, all that kind of stuff. And then probably another GBP 100 million coming from other discretionary things that we’re doing for our customers. So I think you know, in terms of the NIM’s shape as I mentioned, the fee probably at the low point in NIM, probably in the second quarter and recovering again in Q3 and Q4 as deposits reprice. Hopefully that’s helpful, but I think the way you get to GBP 5 billion is probably a bit lower than I would sort of guide you to probably be a bit slightly above that. But –

Just in terms of the GBP 5 billion, I’m just taking your GBP 195 billion of average customer assets for three months and applying you 255 or 250 to 260 NIM guidance. Am I misunderstanding something there in terms of how you calculate the NIM?

Yeah, Chris, I won’t go through the arithmetic in how you’re doing it, but hopefully by giving you all the individual components of, I think the income headwinds and letting you know, that I think NII itself would be a little above GBP 5 billion is of enough help there. On leverage, Chris your other question. Yeah, you’re right. I think and if you like, in normal circumstances, somewhere around a 5% UK leverage ratio sort of felt right to me, you know – approximating to – sorry, accompanied with a 13.5% or so CET1 ratio. And as you pointed out, we’re running at about 4.5% now on a daily average basis, the same as we were in Q4. So our leverage ratio actually is on a daily average UK basis has been pretty stable, both Q4 and Q1 of the CET1 ratio has gone backwards. I think you don’t suffer as you’re more than familiar with, but you don’t suffer the level of pro-cyclicality as you do in CET1 as you’re doing leverage, obviously, our balance sheet has got larger, but a lot of that’s just a function of things like low rates rather than, you know, sort of asset inflation in a more traditional sense. And so I think somewhere around four half - 4.5% probably is the level that we’ll continue to run. Again, I put huge caveat on that, you know, we are living in a difficult forecast sort of path. So it may bounce around that. You’re probably also familiar that there is probably an accelerated change coming through the UK leverage ratio with respect to settlement balances that will improve the ratio marginally on a like-for-like basis in Q1 and will be helpful for us in Q2.

Okay, thank you.

Thanks, Chris. Can we have the next question, please, operator.

Of course. The next question comes from Andrew Coombs of Citi. Your line is now even.

Hi. Good morning. Two questions, please. And the first in your opening remarks on payment holidays, I think that 94,000 for mortgages, 57,000 on personal loans. Could you just give us an idea of what proportion of the book that is? And also to what extent those customers were up-to-date with payments prime prior to taking the holiday, I’d assuming the vast majority that if you could just confirm? And then second, a broader question on strategy. You’ve always talked about the benefit of business diversification different parts of the banks performing differently in different parts of the cycle. So do you think with current corporate indicate your argument and you remain happy with the size and shape of the respective divisions? Thank you.

Yeah. Thanks, Andy. Why don’t I cover payment holidays and I’ll ask Jes to talk about the diversification and whether, you know, the current quarter of indication as you put it on the strategy. Just in direct response to your first one, for mortgages, payment holidays represents about 10% the vast majority of those were paying customers. So I think you’ve just seen a just a big rush forward for people just to take a three month holiday. And we’re not overly concerned on that one yet. And you know, I mean, I don’t be too sanguine about these things, but that one I don’t feel so nervous about. On cards, which is perhaps a slightly more sensitive one. It’s about 3% on cards which may be helpful. I mean, the reason why I’m sort of a little bit more sanguine on mortgages is of course, our – the amount of sort of over collateral in our mortgage which is very substantial. So, you know, we’ll see where house prices go. But you know, any forecast that we’re seeing at the moment will be substantially over collateralized on our mortgage book and part of it slightly different. Jes, do you want to talk about diversification and –

You know, Andrew, I think having many of us have lived through a number of economic cycles, at least what we witnessed before that there is a certain kind of cyclicality between a consumer business and a wholesale business and we talked about that in March 2016, when we rolled out the universal banking model that we wanted Barclays to pursue, and we’ve been a defender of that ever since. What you’re sort of seeing here is you’re seeing a radical economic cycle happened in about a month. But who knows? I mean, there’s a lot, you know, there's a lot of in front of us. But yeah, well I think we very much are happy that we have this diversification. And I do believe that the wholesale business will continue to offset to a certain degree, but we’re probably going to face in our consumer business for the rest of the year.

Yeah, I think Jes is right and to just remind people, you know, in Chris’s question earlier you know, there are definitely income headwinds on the consumer businesses that I called out and you know, on the sales and trading top line, at least, you know, we think or we state – we stated in our formal outlook, that April’s running at a level much better than Q2 last year. So I think you’re seeing sort of the offsetting effects going on there, at least for the moment.

Thank you –

Thank you, Andy. Could we have the next question please, operator.

Your next question comes from Robin Down of HSBC. Please go ahead.

Good morning. I think it’s still good to get around. Two questions please. Can I come back to the RWA question? I think you said this more pro-cyclicality in Q2. But I guess just looking further out to the second half, I’ve seen that we’re not anticipating greatly on loan – greatly loan books might even shrink. And I assume that the market volatility which bring the ease in the second half of the year. So are you kind of anticipating that risk weighted assets might peak in Q2 for this year? That we could sort of finish at lower level at the end of the year? And then the second question, just apologies if I’ve missed this somewhere in the statement but I couldn’t obviously see it. From the oil perspective if I think back to your disclosures in your ESG report, you have a relatively modest drawn exposure for the fairly substantial undrawn exposure to well, and until you’ve had some quite big draw downs at the end of March. So I just wondered if you could give us the kind of updated picture as to what the actual drawn oil exposure was at the end of the quarter? And if I could – sneak in the third one. Likewise, the leverage loan positions, I think you said you took a GBP 320 million have marked there. Could you just give us the size of the leverage loan positions?

Yeah. And so why don’t I answer those ones, Robin. In terms of pro-cyclicality of RWAs and yeah, we will see some follow through into Q2, many of the models are sort of based on a rolling average. So as much as you’ll see some follow through from Q1 into Q2, you know, it doesn’t necessarily sort of reverse back very quickly as well. It will vary much depend on, you know where markets go in the second half of the year. So I don’t think I would sort of say there’ll be an immediate sort of a deflation of RWAs in the back half of the year. But I don’t think you’ll also see, if you like, in inverted commas, “the excessive pro-cyclicality” that we picked up in Q1, I think would be much, much more modest into Q1. And, you know, we’ll see where we go in the back half of the year, but I don’t expect –

But I was speaking more in terms – of it might start to shrink –

Yeah, I think –

Pro-cyclicality of them.

Yeah, look I – it’s very hard to guide on that, Robin. I know the temptation is to think you know, everything will go back to normal and the averaging will sort of you know, start unwinding. It’s quite hard to go just you know, so far away from that, and because it’s – there’s so many different components to this and the averaging sometimes is actually not just on a sort of rolling three months, some of these are 12 month averages and what have you. So it’s quite hard to guide on that. But what I would say is that, the amount of pro-cyclicality you’ve seen in Q1, I can’t – I’d be surprised if you see anything like that coming through, certainly not in Q2, I’m not expecting or even beyond that. So I think we’ve seen that the bulk of it, because it flows back maybe, but I think it’s a bit too early to guide to that. The one thing I would say though, actually, is the, you know – we’ve seen it on our bridge, revolving credit facilities did build up quite rapidly about 33 basis points, if anything we’re seeing sort of net – negative revolving credit, we’ve seen then in a marginal pay downs actually in April. So you know, I think that gives you some comfort that at least that component won’t be there. In terms of oil, we actually have something in the appendix, we have a slide on our drawn and undrawn oil exposures were GBP 3 billion drawn and we’ve got some commentary as to where that’s coming from. And most of that’s with oil majors investment grade and of course, some of the – and such a decent amount of the drawn exposure is also secured against various assets as well. And of course, we’ve taken, you know, an overlay in our IFRS 9 provisions assuming a likelihood of a $20 oil price. So like we feel reasonably well provided that. Leverage loans, we haven’t given a slide on that, but you’re, that we took you know, GBP 300 odd million of marks and almost entirely offset by hedges that performed well. So again, if anything, when I look at April, and Jes you may want to comment on this, the leveraged loan market has probably calmed down quite a quite a bit and capital markets are certainly much more functional than they were, when we were closing the books at the end of March. So I’d say the risks are probably subsiding rather than increasing there and, in our books, well contained.

And you see, the high yield market has reopened quite comfortably and the equity markets have reopened. And so I think the risk of the leverage loan markets that we may have seen about a month ago that has definitely subsided and we feel very comfortable with where – with the book that we have.

We have the next question, please, operator.

The next question on the line comes from Martin Leitgeb of Goldman Sachs. Please go ahead.

Yes, yes. Good morning. I was just wondering one broader question, if you could comment how severe a credit cycle you would expect to unfold from here, just looking at your assumptions in terms of the COVID overlay of GDP contraction that seems more severe compared to prior cycles we had, on the other hand, the recovery seems to be faster and the holidays government guarantees the schemes in place and support schemes in place. If you take all of this into consideration, how severe a credit cycle would you expect?

Martin, that’s a difficult one to answer. I mean we’ve tried to give you our, you know, what we’ve used to our own forecast in terms of GDP and unemployment and what have you. You know, that’s what we’ve assumed. It’s out there on one of our slides. You know, whether that’s what it turns out to be, you know, it’s only one month into this. So we’ll see. I would say that reason why, but it’s so hard to sort of really accurately forecast this as Jes mentioned, we’ve seen an enormous amount of government actions stepping into do everything they can to backstop what they can and, you know, we’ll see how successful they are. I think you’ve got to believe that you know, if there’s a will, there’s a way when governments are involved so you know, we’ll see if that plays out. But it’s not much more I think we can add then other than say, the data that we’re basing our assumptions off. And so thanks for your question, Martin. Operator can we take one more question, and I think we’ll wrap up the call then. And so it’s the final question, please, operator.

The last question we have time for today comes from [Fahad Kumar] [ph] of [Red Bank] [ph]. Please go ahead.

Hi, Tushar. Hi, Jes, thanks for taking the question. Just a couple of points of clarifications question. And on clarification, Tushar you said you’re looking at kind of GBP 800 million to GBP 1 billion run rate for impairment so important I know how extremely hard that to forecast but so is that kind of on that number a GBP 5 billion impairment number based on all the uncertainties that are around right now is that how to read that? And the second question of clarification was on costs. I think Jes you made a point saying costs were flat. And is that flat on the Q1 run rate or if that’s [technical difficulty] [13.6] [ph] been extra levy. Is that an okay number we should be thinking about? Or was it more in Q1 run rate? So I think it’s kind of low 30s. And then the question I had was on the US credit cards, I think everything you said on the UK credit card. On the UK credit cards facility and are they being used substantially and should we be quite optimistic that all you’ve said in the corporate side and the credit card books are being used that much, I thought we’ll use a lot more or is it too early to be in a particularly optimistic on this, because of the level of government support we have right now? Thank you.

It’s on the costs number. What I say is, I would look – well I was speaking to as flattish more towards 19, but make sure you take the FX adjustment to it.

What is the FX adjustment that of interest, sorry?

Well –

You know we have –

You know, but those are just were to retranslate on a constant currency basis, but you know brought it into the last year, you know, and we’ll update guidance as we go along. But you know, it’s still early on. And, you know, we’ll see how this plays out. We’ll keep you posted. And on the impairments. Yeah look, I mean, it’s so hard to forecast. But, you know, I think, you know, if you add on the GBP 2 billion plus what I guided to, you’re getting into that sort of GBP 5 billion zip code. You know, we’ll keep you posted, but that arithmetic sort of works. And in UK cards, yeah, it’s the same thing. We have seen a meaningful drop off in spend. I mean, that’s no real big secret that you’ve seen in payments data or around payment data, but also in sort of GDP type revisions. What’s more interesting is, we have seen a drop off in card balances that is adding further down and down, you know, but in income good for our impairment and that’s sort of somewhere in the income guidance that I gave earlier. But obviously got for impairment does that rebound? In some ways, we sort of hope it does rebound, but we hope it does rebound as the economy recovers, because then sort of gets back to more of a normal environment. But I think it’s very early to forecast that, and you know, we haven’t even come out of this particular lockdown and how consumers behave. And you know, how everybody gets back to work, I think is very unclear at the moment.

Yeah fair enough so it’s kind of a good cost to rebound, a bad cost to rebound, so to speak. That makes sense.

Yeah. And we’ll you know, we’ll know more. I think we’ll know a lot more in future obviously. Okay. Thank you very much Fahad –

Thank you very much, Jes – A - Jes Staley: Fahad. Thanks for everybody for joining us. Appreciate it. And there’s a lot going on. And although we won’t be able to get to meet in person over the next few days and weeks, hopefully we’ll a chance to speak again. But I’ll close the call now. Thanks again.

Ladies and gentlemen, this does conclude today’s call. Thank you for joining. You may now disconnect your lines.