Welcome to the Barclays Half Year 2020 Results 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 as we continue to navigate the COVID-19 pandemic. These remain extraordinary circumstances for all of us and the impact of this crisis weighs heavily on our professional and personal lives. Truly the past quarter for Barclays has been a story of two things. The first is the resilience of the bank, underpinned by diversification of our strategy and evident in our performance. And the second made possible by that underlying soundness and strength, has been Barclays continued support for our customers, our clients, our colleagues, and the communities where we live and work around the world. As I said before, the key difference the financial crisis of '08 and '09 and now is that in a way the banks in '08 and '09 were the catalysts for the crisis, while this time we can be a firewall, helping to mitigate the impact of this crisis. I do believe this is in large part driven by regulatory and Central Bank policies over the past 10 years which have aimed at moving the economy from an over dependence on bank balance sheets to much greater reliance on the capital markets to fund economic growth. You can see the evidence of that approach in the Central Bank actions since the beginning of the crisis, particularly in the unprecedented injections of liquidity in huge purchases of corporate debt to bolster the capital markets globally. That strategy has proven to be a very positive shift in terms of the ability of corporate and governments to remain well funded and liquid as this health crisis moves towards and economic one and as we contemplate how to support a sustainable recovery. I welcome the opportunity and obligation for Barclays to help alleviate the social and economic impact of COVID-19 and that effort remains a core priority for Barclays. I've been especially proud of the way our colleagues across the bank have risen to the challenge. Our business touches half the households in the UK. Five months into the crisis, we provided an enormous amount of reassurance and support to many of our customers facing financial challenges and with understandable concerns about the future. In practical help, so far we've granted repayment holidays on 121,000 mortgages and on 76,000 personal loans. We're providing an interest free buffer on overdrafts for 5.4 million UK customers and beyond that we've reduced in half bank insurance. We've waived late payments fees and cash advances for 8 million Barclays customers and granted some 157,000 payment holidays. And we've exercised similar programs across both our businesses in the U.S. and in Europe. 870 branches are open across the UK providing critical frontline banking services, especially to our most vulnerable customers. We have also trained thousands of branch colleagues to help ease the burden on our call centers. These colleagues are helping handle some 200,000 customer calls a week, representing the whole new engagement with customers from our branches. As the economic consequences of COVID-19 begin to bite, it is more important than ever to help businesses get through this period intact and to do what we can to protect and preserve jobs. That's clearly a top government priority and equally a priority for Barclays. We have all seen the unprecedented efforts from the Treasury and from the Bank of England to back businesses in the UK. And we've been playing our part to help get their support for companies that need it. As at the beginning of this week, Barclays has now approved nearly 9000 loans to midsized corporates in the UK at a total value of £2.5 billion. Perhaps even more importantly, Barclays has delivered bounce back loans to nearly a 0.25 million small businesses across the United Kingdom with a value of some £7.75 billion helping to preserve hundreds of thousands jobs. To give you some sense to the relative scale of that, we have historically made that number of loans and of that size over around a three-year period. We delivered the majority of this support in just 12 weeks. Behind those numbers are stories of businesses and jobs surviving this crisis which is what these programs are all about. Take our Karas Plating in Greater Manchester for example, Karas is a 75-year-old company specializing in electroplating, surface coating, and metal finishing. A £250,000 civil loan has enabled them to adjust their manufacturing process to replace urgently needed parts for ventilators, provide electrical connectors to the Nightingale Hospital, as well as continue to supply critical components to the food and power sector. Or take the UK's leading Thai restaurant group, Giggling Squid, our support and delivering a 5 million civil loan has helped safeguard 920 jobs at 235 restaurants across the Netherlands [ph] and [indiscernible] and nearly a £0.25 million Bounce Back Loan to small businesses like jeweler [indiscernible] in London or the Caterer of Papadeli and Bristol have been the difference between survival and failure for companies up and down the UK. We are proudly playing our part in that. With our investment banking activities we've also been a leader in healthy and large businesses to access the Bank of England and Treasury's commercial paper program. So far we've arranged over £11.7 billion of funding for UK corporates, representing some 48% of the total funding access at CCFF scheme. Today across all the government backed programs Barclays has still leveraged some £22 billion in COVID-19 related support to businesses. In around, these programs represent an extraordinary effort by the government to preserve jobs and we are proud to support them in that effort. In relation to our backing for those government schemes, we've also been able to provide significant help of our own to business lines. For example, we waived every day banking fees and overdraft interest for 650,000 of our small business customers. And we've put in place 12 months capital repayment holidays for most SMEs with loans of over £25,000. We are continuing to extend credit to companies and Barclays has maintained billions of pounds in credit facilities for clients around the world to draw from. We are also steadfastly clients globally in advisory and equity and debt capital markets. During the second quarter, we advised on 580 capital market transactions. That collectively raised a total of over three quarters of a trillion in funding. Of note, in the UK we helped listed companies raise almost £6 billion in the equity capital market, including household names such as William Hill, Aston Martin, and Compass Group. There is perhaps no way of stabilizing effects for a company during a time of stress than the injection of new equity and Barclays is the number one underwriter of equities for British companies year-to-date. In the U.S. we serve as lead left book runner on our 1.5 billion term loan and 3.5 billion secured bond offerings for Delta Airlines. The term loan represented the first broadly syndicated institutional term loan to clear the market since the start of the COVID-19 crisis. On the advisory side, we were pleased to act as the lead financial advisor to Dominion Energy and the company's 9.7 billion divestiture of its midstream business to Berkshire Hathaway that was announced earlier this month. So we'll continue to evolve our approach in offering to clients big and small to help them through this crisis. It is crucial that we preserve as many businesses and jobs as we can to aid the recovery. Barclays has 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. We are delivery our core solution programs in communities such as life skills and reasonable impact and connect with work with a particular focus on helping mitigate the impacts of COVID-19. We are delighted that so far we have allocated £45 million of our £109 [ph] community aid package to charities in the UK, U.S. and India to support the people hardest hit by the crisis and providing food to vulnerable families, for purchasing protective equipment for NHS staff. We understand that our fortunes are intertwined with the communities and economies we serve. In times like this more than ever our obligation is to support them and we're going to continue to do that. Before I hand over to Tushar to take you through the numbers in detail, I want to provide some overall thoughts on our financial performance in the first half and the second quarter. As I said at the top of these remarks, the first half has clearly demonstrated the resilience of this bank, underpinned by the diversification of our universal banking model. That diversification has enabled Barclays to deliver a robust operating performance in an extremely challenging macro environment. In the first half income increased 8% to £11.6 billion with costs down 4% to £6.6 billion, resulting in positive jaws of 12% and an improved cost to income ratio of 57%. Pre-provision profit was strong up 27% to £5 billion for the half. Notwithstanding the impairment reserve of £3.7 billion in the first half of this year, including a further £1.6 billion in the second quarter, net operating performance led by our investment bank remained profitable in both quarters. Tushar will talk more about the assumptions we have made about the macroeconomic outlook which are a big part of our impairment build. So we certainly feel that Barclays is appropriately positioned. For instance taking the unemployment rate, a key driver of consumer credit risk, we have assumed a prolonged period of heightened unemployment in both the UK and U.S. that is some way above current levels. Yet despite the £3.7 billion impairment numbers, partly still ended June with a CET1 ratio of 14.2%. That's the highest capital ratio in the Bank's history. In our corporate and investment bank in the first half, income increased 31% to £6.9 billion pounds, driven by a standout performance in our markets business, particularly in the states [ph] up 83% year-over-year and our equities business up 26%. The majority of our market revenue is derived from trading in securities and derivatives and earning the bid offer spreads in today. We also saw an 8% increase in banking fee income through continued momentum in both debt and equity underwriting. The share gains we have made across markets and our performance in banking over the past years reflect high confidence in our capabilities and we are pleased at how well the franchise has done in these volatile markets. While we don’t expect these extreme levels of volatility to continue, the markets business remains attractive. In the first half our CIB performance offset a much more challenging time for our consumer businesses. Income decreased by 11% for Barclays UK and 21% in consumer products and payments in the first half of the year. This is as a result of low interest rate and fewer interest earnings balances, reduced payments activity, and decisions to waive various fees and charges to support customers. This all translated to marginal profitability overall for Barclays UK in the period and a loss of some £500 million post tax in consumer, cards, and payments. Dramatic falls in consumer spending in the second quarter had been [indiscernible]. We are now actually starting to see some encouraging signs of recovery, including strong demand in the mortgage market in the UK and card spend trends on both sides of the Atlantic and payments acquiring [ph] volumes. If that recovery continues further into the third quarter, this should lead to a better income and impairment environment with the resulting improvements in underlying profitability for both the UK and our international cards and payments business. Finally, the investments we have made over the past five plus years in our digital capabilities, has enabled us to serve our customers seamlessly through this period including via the UK's number one banking apps. As you expect when consequent of the pandemic lockdown there has been increased demand for our digital services. So to conclude and in summary, my colleagues and I are today primarily focused on supporting our customers and clients, our communities, and the wider economy to navigate the pandemic. The strength of our business and resilience of our strategy means we can both run this bank safely and profitably and provide that support to our customers and clients until this crisis passes. I'm going to hand over to Tushar to take you through the performance for the quarter in more detail.

Thanks Jes. As usual, I'll summarize the first half results then focus on the second quarter performance. As of Q1 we are facing a period of uncertainty which makes it particularly difficult to give forward-looking guidance. We can now feel the initial effects of the COVID-19 pandemic and where possible I will try to give pointers for the coming quarters. As Jes mentioned, result of the first half showed benefit of our diversified business model. Despite the impairment charge of £3.7 billion, reported a statutory profit before tax of £1.3 billion generating 4p of earnings per share. Litigation and conduct was immaterial, so on this call I will reference the statutory numbers. At the Q1 profit for the half overall was down on last year reflecting the increase of £2.8 billion in the impairment charge, but income growth of 8% and a reduction of 4% in costs resulted in a profitable half and an RoTE of 2.9%. Given the uncertainty around the economic downturn and low interest rate environment, we do expect the environment in H2 to remain challenging. While we continue to believe that about 10% RoTE is the right target for Barclays over time, we need to see how the downturn plays out before giving any medium-term guidance. Net income growth reflected a 31% increase in CIB, more than offsetting income headwinds in the consumer businesses. The cost reduction delivered positive jaws of 12% with an increased cost income ratio of 57%. As a result, pre-provision profits were up 27% to £5 billion. Our capital position is strong with CET1 ratio ending the half at 14.2% up on the year-end level of 13.8% despite dipping to 13.1% at Q1. Strength of the balance sheet was reflected in the rising TNAV from 262p to 284p. Moving on to Q2 performance, income decreased 4%. Continued strong performance by CIB particularly in markets was offset by income headwinds in the UK and CCP. Cost decreased 6% delivering positive jaws of 2% and a 62% cost income ratio. As a result pre-provision profits were broadly stable year-on-year at £2 billion. However we provided a further $1.6 billion for impairment up £1.1 billion to add to the £2.1 billion we provided at Q1. This charge included a further £1 billion net increase for modeling revised COVID-19 scenarios with macroeconomic inputs based on a slow recovery than we had modeled at Q1. We continued to feel limited effects of the pandemic on delinquencies, probably a result of support programs. Net write-offs in the quarter were just £0.5 billion and £0.9 billion for the half. Assuming no further deterioration in the macroeconomic variables we are using, we would expect to report a lower impairment charge in the remaining quarters of the year. Before I go into the performance by business, a few words on income cost and impairment overall. The quarter showed the benefit of the diversification of our source of income across consumer and wholesale businesses. CIB increased 19% to £3.3 billion driven by an increase of 49% in markets, just down just 8% on Q1. Conditions remain challenging for our consumer businesses with reduced balances in a low rate environment as we'll show in the next slide. However, with the recovery in levels of consumer spending, there are encouraging signs starting to emerge. We've highlighted here the headwinds from balance sheet reductions in the UK and U.S. cards and summarized the interest rate developments that have put pressure on income across our lending businesses. We have seen some signs of recovery in consumer spending in both the UK and U.S. through June and into July as lockdowns have eased, but of course there will be some time lag in converting this spend into associated increases in interest earning balances. Spending recovery should have a quicker transition to income levels in U.S. cards due to the higher interchanging we earn on card spend in the U.S. We also put on the slide a reminder of the headwinds in the UK we quantified at Q1. These continue in H2, but following the repricing of deposits, the margin compression may moderate in H2. Looking now at costs, with the 8% increase in income and cost down 4% in H1, the Group positive jaws of 12% and the cost income ratio reduced from 64% to 57%. I would remind you that cost in H2 will include the bank leverage and we expect the additional costs relating to the pandemic to outweigh cost categories, such as travel which have reduced in the short term. Of course our level of cost in H2 will vary with the performance related cost lags in the CIB. Pandemic is also changing the ways in which we work. So our continuing focus on cost discipline remains critical to our performance going forward. I've mentioned additionally impairment charge in Q2. As you can see there was a year-on-year increase across all businesses, but the quarter-on-quarter progression shows an increase in the UK, reflecting a slower forecast economic recovery, but a decrease in CCP. Effect of this slower forecast recovery in the U.S. was offset by lower 2020 peak from employment, and the significant reductions in U.S. card balances. In CIB we had no single name charges then in Q1, but the effect of the slower recovery on expected losses in corporate lending kept the charge in an elevated level. As shown on the next slide, a breakdown of how we built up the Q2 charge and the macroeconomic variables or MEVs underlying the expected loss calculation. Indeed a similar format to Q1 to explain the workings behind the charge. The modeled impairment calculated during the quarter, using the MEVs them as we set prior to running the COVID scenario for the Q1 close generated a figure of £0.4 billion. I think of this as a sort of baseline model charge. In addition to this, we had another £0.2 billion in respect of single name wholesale charges in the CIB. And in Q1 some of these names may have been affected by the pandemic, but the sum of these two is not material of our underlying quarterly rate in previous years of around £0.5 billion. The remainder of the increase reflects the $1 billion net impact from updated COVID scenarios reflecting a deterioration in forecast MEVs and an overlay of £150 million for selected sectors. This book up as I call it compares to the £1.35 billion we charged in Q1. As shown on the slide, some of the key UK and U.S macroeconomic variables used and there are more details in the results announcement. The key changes are that while the peak unemployment level in the U.S. is lower in the Q1 COVID scenario, the unemployment levels of both the UK and U.S. remained high for longer. The modeling is subject to inherent uncertainty with respect to forecasting incremental credit losses, and it is difficult to give guidance from the charts going forward. The levels of defaults flowing through will be a key determinant of the charges for the next few quarters. Extension of support programs may delay visibility as to the ultimate level of such defaults and to the extent that they were already included in the expected loss workup. Taking a step back from the level of the Q2 charts, it's important to look at the coverage ratios to see the full extent of our cumulative protections against downside risk. Next slide summarizes the loan books, impairment builds, and resulting coverage ratios for the wholesale and consumer portfolios over the last two quarters. You can see that our coverage ratio increased at the Group level from 1.8% to 2.5%. Of course, coverage ratio is very material across the secured and unsecured portfolios. The wholesale coverage has increased from 0.8% to 1.4%. Now a large portion of this is in the selective sectors which we consider to be more vulnerable to the downturn, which I'll cover shortly. I would remind you that we are looking at the major risks in corporate lending on a name by name basis, including taking into account assessment of any value of [indiscernible]. The other major area of focus is coverage from the unsecured consumer books, with the ratio increased from 8.1% to 12% overall, but a 23.1% on stage 2 balances, most of which are not past due [ph]. We split out the unsecured portfolios on the next slide. You can see here the increase in the coverage ratio across the UK and U.S. card portfolios at 16% and 13.9% respectively. In coverage on stage 2 balances have increased to 28%, and 24.5%. Turning now to the wholesale coverage on selected sectors. We've shown here our exposure to those sectors, which we feel are particularly vulnerable to the downturn. I won't go through each of them, but you can see that the balance sheet exposure is just over £20 billion, and our overall coverage ratio across these sectors has increased from 2.3% to 4.0% through H1. I'd also highlight that as a result of our cautious approach to wholesale risk management, we have synthetic protection in place, covering over 25% of our exposure. As I've mentioned before, we've been happy to sacrifice some income in order to reduce the downside on credit risk. Before I move on to individual businesses, a few words on payment holidays. We have set out on the next slide the balances in the major portfolios receiving payment holidays as at 30th of June, stating those balances and coverage ratios. As we can see 10% of the mortgage book was on a payment holiday, but these are mainly stage 1 balances and the average LTV is 57%. And UK and U.S. grant [ph] the percentage of balances with holidays was much lower at 5% and 3% respectively. The portion of these that have stage 2 balances is considerably higher, but the coverage ratios on those balances are well above average stage 2 coverage on cards at 43.9% and 35.3% respectively. That means the total uncovered balances on payment holidays across UK and U.S. cards was under $1 billion on 30th of June and you will see in the that next slide, that this is coming down materially in July. It's still too early to draw firm conclusions from the behavior of customers rolling off payment holidays. However, we set out here the evolution of holiday grants and roll offs through to the 22nd of July. You can see that as the first wave of holiday grants has starting to expire, a significant portion have been rolling off payment holidays, and many of these are returning to regular payment schedules, as their payments become due. So there was a marked decline during June in net balances still on payment holidays and this trend is continuing in the first three weeks of July. Turning now to the performance of individual businesses. We mentioned at Q1 some of the income headwinds the UK is facing, and these are reflected in the Q2 performance with income down 17% in line with consensus. Although we saw recovery in spending towards the end of the quarter, as I showed earlier, unsecured balances reduced significantly with interest earning comp balances down 18% year-on-year. Mortgage balances on the other hand were up year-on-year, and broadly flat on Q1, with slightly improving pricing. So the significant increase in business banking lending is $7 billion combined in Bounce Back Loans, and CBILS. Meanwhile deposit balances continue to grow resulting in a loan to deposit ratio of 92%. Overall as indicated at Q1, NIM was down materially in the quarter at 248 basis points from 291 for Q1. We still expect the full year NIM to be in the range of 250 to 260 basis points. Cost in the quarter decreased 4% as efficiency gains were offset by costs related to the pandemic and £25 [ph] million of costs were transferred with our partner finance business from Barclays International. Impairment for the quarter was £583 million, an increase from the key one level of £481 million reflecting the updated COVID scenario that I mentioned earlier. As I noted earlier, [indiscernible] is right at 30th of June, do not yet reflect the developing economic downturn? Turning now to Barkley's International. The BI businesses delivered an RoTE of 5.6% for the quarter, down the year-on-year as a positive jaws from a 3% increase in income and 10% reduction in costs were more than offset by an increase of $0.8 billion in impairment. I'll go into more detail on the businesses on the next two slides. CIB delivered an RoTE of 9.6% in Q2 with another strong performance in markets, more than offset the increased impairment provision. Income was up 19%, or £3.3, billion while costs were down 10% delivering positive jaws of 29%. Market grew income to £2.1 billion, up 49%. The increase was driven by slow trading as in Q1 with increased client activity. The trading business is capturing a good portion of the widened bid offer spreads as a result of the heightened volatility. This was despite sizeable headwinds from hedging counterparty risk, including funding valuation adjustments. Fixed Income was up 60% on last year or up 90% excluding the net effect of the trade web gains. We had a particularly strong performance from slow credits. Equities had a record quarter in terms of Sterling income at £674 million up 30% with particularly strong increases in derivatives, and cash equities. Banking increased 5% reflecting the improved performance in DCM and ECM, but lower advisory revenues. Overall, it was a strong performance by historical standards. We talked at Q1 about the effect of the corporate lending income of mark-to-market moves on loan hedges, and in Q2 we saw most of the Q1 benefit reverse as market conditions improved, with over £280 million negative in total for mark-to-market and carry cost of the hedges. We also had some positive marks on our leveraged loan commitments, totaling a circa 140 million taken through the income line. Cost reduced 10%, resulting in a cost income ratio of 51%. Impairment increased to £596 million driven by the effect of the updated COVID scenarios on some single name charges. RWA is reduced by £3 billion the quarter to £198 billion significantly lower than anticipated. I'll come back to that when I talk about capital progression. Turning now to consumer cards and payments, income in CCP was down 37% year-on-year. This included £101 million write-down on Visa these preference shares. Excluding this, income was still down 28% year-on-year reflecting a significant reduction in U.S. card balances, which were down 18% in dollar terms. In addition to affecting balances, lower spend volumes were also a headwind through the income from cards and payments income. Although the income environment is expected to remain challenging in H2, recent spend data from June and into July, particularly in the U.S. have suggested some recovery in income, if those trends continue. Costs were down 11%, reflecting both cost efficiencies and lower marketing spend in light of the pandemic. While interest [ph] rates have not yet responded to the downturn, we have taken additional impairment provision of £0.4 billion as a result of running an updated COVID scenario with a slower economic recovery than forecasted in Q1, partly offset by lower balances. Turning now to head office. The head office loss before tax was £321 million, up significantly year-on-year and quarter-on-quarter. The negative income reflects the main elements I’ve referenced before, like £30 million of legacy funding costs and residual negative treasury items, while hedge accounting this quarter generated negative income, compared to a positive contribution in Q1, and that is expected to continue in H2. These were partially offset while we had some final dividend of circa £40 million. Q2 also included some multimarket losses on legacy investments in the income line, and the write-down through the other net expenses. These were each of the order of £40 to £50 million. After an unusually low Q1 print [ph], cost of £109 million, were above the usual run rate of £50 million to £ 60 million due to the increase in around half of the community aids program of £100 million we announced at Q1. Moving on to capital. We began the quarter at a CET1 ratio of 13.1% having seen a material increase in RWAs in Q1. We had guided for a slightly lower ratio at Q2 and further pro-cyclical increases in RWAs were expected to more than offset capital generation. As reflected in our announcement a couple of weeks ago, the combination of some beneficial regulatory changes, and lower RWAs have contributed to a higher than expected ratio, and in the quarter at 14.2%. We continue to generate capital, with profits adding 60 basis points of capital, excluding the pre-tax impairment charge. The full impairment charge would have taken 51 basis points off the ratio. This was partially offset by IFRS 9 transitional relief of 35 basis points, which included the benefit of the rule changes in Q2. We've shown how these new rule float in the call outbox, and there's more detail in an appendix slide. The PVA reduction added 10 basis points which includes the adoption of the rule change in Q2. They are also increments from fair value moves and the pension position. I'll say more about the way we are looking at our capital flight path in a moment, but first I'll go into detail on the RWA bridge. Here we've broken down the elements of the £6.6 billion decrease in RWAs. The pro-cyclicality we had anticipated at Q1 only partially materialized. And we were able to take managed actions to mitigate potential increases. We did see some credit RWA inflation from credit quality deterioration, which we estimate a circa £5 billion, however other credit risk movements reduced our RWAs by a total of £7.6 billion. Over half of the March draw downs from revolving credit facilities were repaid in Q2, contributing £3.7 billion to that credit RWA reduction after an increase of circa £7 billion in Q1. Counterparty RWAs reduced by £3.1 billion and in market RWAs management actions we were able to take resulted in a £2.7 billion net reduction in the quarter, a good result given our strong performance in the markets businesses. Our plan for running the businesses do currently assume some sort of pro-cyclical effects materialized in H2. That is why we are saying forecasting the timing of such effects is difficult. Overall, I would expect the RWA cost to be a headwind to the capital ratio in H2. The other headwind I would call out is a potential capital effect of the H2 impairment charge, to the extent it has an increased element generated by defaulted balances, which should not be eligible for the increased transitional relief that benefited the Q2 ratio. This would limit the capital generation from pre-provision profitability in H2. Looking at the next slide at our capital requirement, as shown here, our current capital requirement and how it is reduced to reflect the removal of the countercyclical buffer in Q1, and the recent reduction in Pillar 2A. As a result, our MDA has reduced by 130 basis points to 11.2%. So our Q2 ratio of 14.2% represents a 300 basis points buffer. We also expect some further reduction in our MDA hurdle in percentage terms over the stress period, through some further reduction in our Pillar 2A requirement. With regards to headroom, our capital ratio has strengthened over the 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. I want to look at a 300 basis points buffer as any sort of benchmark, we expect the buffer that we consider to be appropriate to evolve over time, having regard to the expected flight path of both our ratio and our capital requirement. In summary, we are comfortable with our capital ratio, and would be comfortable for it to reduce in H2, particularly to give definitive guidance on the H2 flight path. Finally, a few words about our liquidity and funding. You can see on this slide some of the key metrics showing we are well positioned to withstand the stresses that are developing and to support our customers. So to recap, we were profitable in Q2, as well as for the first half overall despite the effects of the COVID pandemic. Although some income headwinds across the consumer businesses are expected to continue into 2021, we do expect a gradual recovery from the Q2 levels. We continue to see the benefits of our diversified business model coming through with strong income growth in the CIB in H1 and our franchise is well positioned for the future. Costs were down year-on-year resulted in positive jaws for the quarter. The pandemic has increased costs in certain areas, but is also changing some of the ways we work. So our continuing focus on cost discipline remains critical to our performance going forward. We've taken very significant impairment charges in Q1 and Q2. Now the future is hard to forecast. Without further deterioration in economic forecasts, we expect to report lower charges for the remaining quarters of the year. Our funding and liquidity remained strong and put us in a good position to support our customers and clients during this difficult period. Although we may face further headwinds in H2, and improve CET1 ratio 14.2%, it has been a good position to deal with further challenges resulting from the pandemic. However, I won't comment further on the potential future capital distribution at this stage. The Board will decide on future dividend and capital returns policy at the year end. Thank you. I will now take your questions and as usual, I would ask you to limit yourself to two per person, so we can get a chance to get around to as many as we can.

[Operator Instructions] Our first question on the line comes from Joseph Dickerson of Jefferies. Joseph, your line is now open.

Hi, thank you for taking my question. Just the first question is, do you expect any benefit on capital in the second half from the recent changes around the treatment of software intangibles? And then secondly, from a top down standpoint, everything that you're saying suggests that you have reached an inflection point on margins. That sounds like volumes at the system level are picking up both from what we saw from the BoE data today in your own commentary, and then provisions coming down in the second half. It seems like there's a fair amount of earnings momentum available to you in the second half. Would you agree with that?

Yes, thanks Joe. Let me take both of those questions and Jes may want to touch on the operating environment in the second half as well. In terms of tailwinds to our capital with regards to potential rule changes around software intangibles, and to the extent they go through, it's in the order of somewhere around 20 basis points for us. Let's see if it goes through, if it does, that's what it is but, we will see how that evolves. In terms of the operating environment into the second half of the year, in many respects, you are right in the sense that we should see some sort of, if you like mechanical benefits coming through in the second half particularly in our consumer businesses. For example, if you take net interest income for both the UK bank and in the CCP, there'll be the mechanical effect of lower deposit rates just coming through in the third and fourth quarter in the UK. Hopefully just under UK rules. We're not able to pass on lower base rates for a period of time so our deposits actually repriced in July onwards, they get the sort of no effect in the second quarter, but a full effect in Q3 and Q4. In CCP for example, we have dropped our deposit rates in the U.S. from about 1.5% to 1%, but that reduction was very much towards the back end of the second quarter. So you'll see the full effect of that come through in the, in Q3 and Q4. And in addition to that, we've noticed some peers that have lowered term deposit pricing yet again, and, we'll take a look at that. And, there's a reasonable chance we may follow suit, given how strong our funding position is. And I think the other thing on the consumer businesses that's sort of worth bearing in mind is, obviously the decline in income that you saw in the second quarter, that quarter was characterized by both the UK and the U.S. being principally in lockdown for the entirety of that quarter. And that's where you've seen continuing declines in spending and balances as we exited the second quarter, of course, as lockdowns are being reduced. And therefore, we think spending takes off in fact, in the UK spend levels are down only, sort of single digit percentage points from pre-lockdown levels. And we've seen a material pick up you've seen in our slides in the U.S. as well. Another sort of just a data point to tell you sort of how quickly spending seems to be recovering. If you look at SMEs that we have in our acquiring business, less than half were actually open during the lockdown, more than 90% are now operating. So and you know this stuff transmits to income relatively, quickly. And on the back of that, actually, in the U.S., of course, it transmits into income through your transacted balances both from the - on the card interchange, as well as on the UK side on the acquiring fees that we earn as well. If spend continues into the third and fourth quarter as we've seen at the moment, anywhere around these levels, you would expect to see interest earning balances on the unsecured credit side also begin to recover as well, and that would be helpful both to margins and indeed, net interest income. And the final point, Joe just on impairments. Yes, we try to be conservative where we felt it was appropriate. And we encourage folks to look at coverage ratios to give you a sense of how much protection we have against a downturn in credit. Of course, these coverage ratios are principally driven by the provisions we have against non-defaulted credits for these are sort of anticipating losses. And I think if we don't feel the need to increase those coverage ratios any further absent significant changes in the macroeconomic outlook, then you would expect our impairment charge to be lower, but that is a difficult thing to forecast with a high degree of certainty just given, we're just going into a post sort of lockdown environment most of those economies and in the next few months, be critical in that. But absent any changes here are expecting current charges to be quite a bit lower than we had in the first half. I think that's probably all. Is there anything else you want to add Jes - I think hopefully that's helpful, Joe. Yes, that's all.

So that's helpful. I think that you had guided on the kind of roundtable following Q1 for circa. I think we tallied the £5 billion impairment charge for the year. I think the consensus that you all sent around was for around £5.7 billion, which looks like a two bill, kind of incremental charge in the second half. Are you still comfortable with that guidance or what - how would you, I guess, how would you position the current outlook now versus to what you saw coming out at the time of Q1?

Yes, the way I think about that, Joe is, if you think about the charge we had in the second quarter, the three building blocks for that, if you look at the, if you like, the underlying baseline run rate absent any changes or updates to economic forecasts, we called out £400 million. In addition to that, we had single name charges of £200 million, giving you a total of £600 million. That's the kind of run rate that we're experiencing at the moment, absent any changes to macroeconomic forecasts. So, if economic sort of forecasts don't change much from here, let alone improve, then obviously, that the internal chart ought to be a lot lower. If economic forecasts deteriorate, the thing that's most relevant to us is long-term unemployment. And, you see, we've increased the levels of long-term unemployment going into 2021 quite materially, particularly in the UK. The other thing to bear in mind here, of course, is just what happens when the government support schemes come to their natural end, whether that's the furlough schemes or various other things, we'll just have to see how the economy responds to that. But I think all things being equal, as we see today, those kind of underlying impairment levels are running at the moment would be how we looked in Q2 and you can build from there as appropriate.

Very helpful, thank you.

Okay, thanks Joe. Can ee take the next question please, operator?

The next question comes from Jonathan Pierce of Numis. Jonathan, your line is now open.

Good morning Jes. I've got two questions please, the first on impairment, the second on risk weighted assets. The first question on impairment is more qualitative, really and it's the same question I asked in Q1. I'm just interested in how thoughts goals have developed since then, on how these models are going to work. So I guess the general expectation is the general impairments will pick up into the back end of this year and next year, but how do you think the models will react to that the forward looking provisions you've taken so far, you expect the notice to start releasing fairly, quickly as we actually get the pickup in stage 3, or is it going to be this period as almost double counts where the reserves remain elevated, but the stage 3 charges pick up sharply? So I'm interested in how your thoughts have developed on the working of the models into higher stage 3 charges? The second question on risk weighted assets. I'm wondering if we could just press you a bit more on where we may go in the second half, because in Q2 there was obviously a 3% fall in risk weighted assets. So there was lots of big moving parts contributing to that. So maybe if you could give us a feel for your thoughts on the book size and the credit portfolio that's £8 billion in the quarter, but I guess the RCS and the movement sort of level out and credit card balances may level out. So perhaps really they are flat in the second half, counterparty credit risk that was down, I think £4 billion in the second quarter. Should we assume that levels out as well, so that the second half movement in risk weighted assets is really all about pro-cyclicality and maybe give us a feel as to where we could end the year in risk weighted asset terms?

Okay, yes. Thanks, Jonathan. Why don’t I take a crack at both of them? With impairments, yes this is a really good question. In terms of how the models behave, I think what we'll see is the way I think about it is, the book half that we've taken, if you like, the anticipated expected loss over the cycle of £2.4 billion, if our models are, I guess, two sort of things you've got to believe, one, our models are perfect at forecasting. No models have gone through this particular sort of unusual scenario. So, you have to sort of put a bit of a caveat there. And secondly, that we’ve forecast the economy perfectly as well. We may be too conservative, we may not be conservative enough, again, we'll find out. But on the assumption, we've got the call on the future economy right, and our models indeed are perfect. In principle, we've already taken the loss associated with future expected losses. However, I think your question is a good one, because the timing of that will be important. So typically, what will happen is, you'll have some credits that go all the way through to default and we would write them off ultimately, and some credits won't go through to default and we'll sort of, keel back into lower stages. I think what will typically happen is, the defaults we would be sort of conservative and maybe recognize them sooner while we recognize them mostly as they default, but I suspect they will happen sort of earlier on in that cycle. And we're probably going to be conservative in curing [ph] if you like, those on defaulted credits sort of back into lower stages. So I think the net P&L charges if they’re right is going to be around that sort of level, but you may see sort of a mismatch in terms of timing with defaults happening slightly earlier than keels [ph]. It remains to be seen, of course, you've got government support measures going on here. So that might, delay if you like, those credits that are going to default till, until much later and maybe they gives time for good credits to keel up. But it's a little bit uncertain, but hopefully that gives you a sense of at least how we think about it. On top of the [indiscernible], and sort of guidance prospectively on that, again I'm always a bit nervous to say this now after the first quarter, just shows how quickly things can change. But, things will be very different now to when they did at the back end of April, when, there was quite a meaningful degree of pro-cyclicality and jaws on revolving credit facilities and economies going into lockdown, et cetera. Economies have had sort of asset markets, if you like, have sort of calmed down a bit. You've seen very strong capital markets activity, which is a good representation of that, and we've continued to see for example RCF rules reversed even since the end of the second quarter, so that trend has somewhat continued. And I do expect that, the economy will be - it will be difficult to forecast the economy over the next sort of short to medium term. You have got the difficulty in knowing exactly how governments and economies will respond to if there is another wave of infections. I don't have a crystal ball on that, but that's the level of uncertainty. We've got elections in the, in the U.S., we've got geopolitical stuff going on. So, there may be some choppiness in markets and if there is some choppiness in markets, then there may be some pro-cyclicality that comes through. And we'd sort of be fine with that, with a jumping off level of 14.2%. If we do you get that pro-cyclicality and in capital goes back a bit, I think we would be quite comfortable with that. Absent any sort of choppiness in markets and if it's more of a normal year, then you've seen that we should be continued to hopefully be profitable and that will be reflected somewhat in our capital ratio as well. The other final thing I'd just say Jonathan is, Jonathan that you're aware of the MDA level may move as well. It's an - variable actually in a positive light, because it's sort of a fixed quantum Pillar 2A inside our sort of capital stack. It doesn't mean it gets reset as a percentage of RWAs and so, may go up or may go down depending on where our RWAs are, and of course, you've got the reevaluation of Pillar 2A at the back end of the year, so that will come through as well. I hope that helped Jonathan.

Yes, that sounds really helpful, but because it is extremely difficult from outside to model RWAs and I'm sure it isn't in the bank itself, but would it be as good a guess as any at this stage just to bolt-on another couple of quarters of maybe £5 billion pro-cyclicality to leave this year end at around £330 million, I mean, accepting it could be miles away from that, but is that sort of guess as any?

Yes. It's tough Jonathan. The best I'd say is, if markets are choppy, that the models, the whole framework is designed to be pro-cyclical, so we will respond to that. If markets aren't choppy, then, you've probably got sort of previous quarters that you can refer to as how we sort of normally fare in the second half of the year. I think for me to give a number, it's very difficult to forecast given I don't have a crystal ball on how choppy or not markets may be.

Yes, understood. Alright, thanks a lot.

Thanks, Jonathan. Could we have the next question please, operator?

The next question is from Andrew Coombs of Citigroup. Please go ahead Andrew.

Good morning. If I could ask a couple of follow-ups please, relating to Slide 7. The first question is on, we can send data that you provide. Thank you for that. UK then is back to normal, U.S. is still lagging down 25% year-on-year, interested to see if you are seeing divergence between the northern and southern states within that? And if you could elaborate as to how Barclays U.S. credit card splits out regionally as obviously, the consumer card spend will drive the balance sheet and the revenues from here. And the second question is guess is kind of relates to the right hand side chart on Slide 7, looking at the digital versus branch engagement. The branch engagement is starting to come back. It's still running 14% below where it was, and it may never fully recover. So at what point do you take another look at the branch footprint? When do you review that as a potential further cost save opportunity?

So okay, just to talk about the sort of digital branch footprint and why don't I talk about some of the UK, U.S. sort of spend trends that you're seeing, first thing I would say is that the graph here I'm not sure we've put it in the caption, and we apologize if we didn't, but the UK is a measure of debit and credit spend, whereas the U.S. we've only measured credit here. Now in the UK, what we have seen is a pick-up in debit spend. So as spending has improved, its being more skewed towards debit cards. So that's probably why you're seeing a difference in those two graphs. But coming back to your question on the U.S. and for the differences by states, a few comments from us. One is, obviously you know in our business, we are probably overweight in sort of the airlines and travel retailers. We've been watching whether the spend on our cards relative to industry spend levels is any different and actually, it's been remarkably consistent. We are slightly lower in travel spend itself. So to the extent people are, was looking in the second quarter sort of flights and things like that, because slightly more of a larger spend capital, but only slightly more right to the industry for us, we did see that. But on the flip side on other types of spend, we were bang in line or sometimes slightly better than the industry, so that's very positive. In terms of, by states, individual states, the large economies, things like California, Texas and the Tri-State area, are also important to us and our cause. We're not very, if you like, sort of clustered by state, it's relatively representative. It's more clustered by partner rather than by state. And if we look at our data now we're not, we're not like sort of a nationwide sort of open card type business. It is tied to the retailer. So we don't get a great sort of, if you like index view of the U.S. in the same way we do in the UK. But on our spend at least, we're not seeing any discernible differences between, if you like, those states that are having, higher infection rates and on top of maybe some sort of restrictions coming in, for example, like Texas, versus other states, which are probably not experiencing those level of infection rates. So at the moment it feels quite balanced from our perspective. And, card spending is improving, you've seen it sort of, down almost 50% and recovered quite sharply and looks like it's got some momentum still going into the third quarter and we'll obviously see how the economies perform further into the third quarter. And Jes, do you want to talk more about sort of these, the branches and digital?

Yes, so a couple of trends I think coming out of the pandemic. For sure, the use of digital networks from our consumers and small businesses across the UK has been increasing. And use for instance of cash has been prior to the spending item that has most contracted during the pandemic. And while in the short term that clearly impacts our transactional volume, particularly in the branches, in the long-term the more we can get consumers migrating to a digital offering and using the mobile banking app and online to manage their transaction volumes, the better for us. There's a higher margin way to engage with our consumer. These would be the branches and we were running some 800 branches. Now, we've been, slowly decreasing our branch footprint over the last couple of years. The branches were very important during this pandemic though. You know, a lot of customers and small businesses that are under stress that are concerned about their financial future and having the ability to go in and to talk to someone physically in a branch is very important for the well being of our consumers. And we see it in the engagement scores we have with our consumers. I think the impression that Barclays has remained open for business through its branches has been providing support to our communities where we live are the clearly value there. The other things that we did as response to the pandemic, are the call volumes overall of customers with issues with concerns. Now in some - at some point in time, we're about four to five X what they were this time last year. In order to give relief to our call centers, we actually began to retrain a lot of people in our branches, so that as of now, we are fielding about 200,000 incoming consumer calls every week with our personnel that are resident in the branches. So rather than just being there waiting for someone to walk in the door, we're actually repositioning the branches to do much more than that, take incoming calls, make out coming calls, to keep that engagement with our consumers in the time of this crisis as high as we can. In the longer term as finance increasingly digitizes, I think we will always be evaluating our branch footprint. Now imagine the trend that we've seen over the last couple of years will continue.

Thanks for the question, Andy.

Thank you.

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

We have a question from Chris Cant from Autonomous. Chris, please go ahead.

Hi good morning. Thank you for taking my questions, one on cost and then a follow-on RWAs please. And the cost income ratio across the UK and CC&P, I know you've shuffled some stuff between divisions, but if I just merge them together to ignore that, was 67% in the second quarter after adjusting for the preference share impact. I understand that you expect some top-line recovery there, but if I look at 1H, which obviously includes the first quarter when you didn't have the impact of the late tucked-in and COVID was in full flow, it would be 62% across those two divisions, again, adjusted for these. You've still got your target of less than 60% for the Group over time, including head office, which is a drag on CIB, which would normally be above that level. So what do you expect the cost income ratio for your retail facing businesses to be if you think about the UK, CC&P and around what do you expect the cost income ratio to be next year and looking into 2022? And on a related point, the cost income ratio for the CIB of 49% looks unsustainably low. It looks low versus what the CIB divisions at other banks have printed. Could you comment on your comp recorded policy please? What is going on there? Because it looks like you're not really reflecting the very strong performance in the bonus accruals. And I'm just not sure how your year-end conversations with desk heads will go later in the year, given that you're also flagging the strongest ever capital ratios, should we be worried about a 4Q comp catch up again? And just one quick follow up on RWAs please, on Jonathan's question, I understand your reluctance to guide, but it does feel like this is a bit of a random number generator from the outside. First, do you have any more model change impacts in your back pocket to come through in the second half and what's the quantum please? Presumably do you have visibility on management actions? And you said to look at prior periods movements Tushar, last year we saw a £14 billion reduction in the CIB in the fourth quarter, are you’re suggesting we might see the same this year absent a big spike in volatility? Thank you.

Thanks. Let me make opening comments and let Tushar answer the rest of your questions. Well, we stand by our target of a 60% cost income ratio for the bank over time. The first half we delivered 57%, so those are the numbers. Obviously, in an environment like this when spends just literally fell off a table at our two principal consumer businesses UK and U.S., you're going to have a move in your cost income ratio. And also remember, we felt that it was very important that this bank stay open for business and stay engaged with our small business and consumer clients and maintain the employment headcount for us to do that. We also publicly came out and said that we were going to cancel any redundancy moves in our consumer businesses until we get through the end of September. During that moment of crisis like this, it just doesn't seem appropriate to us that we start laying off a lot of people. So I don't think that current cost income ratio in our consumers business at our – at all are reflective of what will be in a normal state and they have been comfortably below 50% in the past and they – I didn't feel comfortably good, get below 54%. In terms of the CIB, that cost income ratio obviously very, very strong in the first half of the year. I would expect that to go up as the market progressed. So you essentially have the – the pandemic creating a distortion on one level in the UK and then creating a distortion to a certain extent on the level – on the CIB to the positive and our anticipation is in the third and fourth quarter, next year you'll start to normalize those cost income ratios and our target remains the same. In terms of accrual for compensation, again, the ultimate decision around compensation will be made at the end of the year and beginning of next year. We are very aware that we are in an industry with competitors and we have to recognize what the industry is doing and we want to pay or compensate people fairly, but also we have a very uncertain economic environment right now and we need to be mindful of that. We are accruing and I think I'm not worried about being able to keep the very talented people that that help us in the wholesale side of our business.

Yes and just around that Chris, I think the other thing I just – I know, probably those that spent a long time looking at our numbers are aware of, but as a more broader comment, our costs have been declining in absolute terms for a number of years now, that we call the four [ph] firms, by sharpening environment that we're operating in, so cost discipline is an important thing for this management team. And then perhaps even more so given some of the uncertainty we have on the top line. And your question on RWA, as I said, in terms of - are there any sort of – I think your question was, are there, we got any sort of model changes or something like that in the back pocket? Nothing I would – nothing I would call out. I mean, as the rule changes it may or may not happen on software intangibles as SME factors that we didn't put through. I mean these are relatively small, and then I wouldn't call them out as sort of big drivers of our capital ratio. I think really what will be the – as we look at it now for the third of a week into July, will be just weather volatility in markets sort of goes back to anything like they were sort of in the March-April period that that will transmit some pro-cyclicality. If that does, RWAs will inflate and we're okay with our capital ratio going back a bit. If it doesn't, then it might be sort of more what we are used to. In terms of the fourth quarter, it does tend to be – it's just the way the – because you've got Christmas and New Year right at the back end, the trading book, settlement balances, et cetera, just tend to be very low at that point in the year. So you do get a sort of an additional, if you like, tailwind if that remains the case this year into the fourth quarter, which don’t think you've seen in most years now. So not much more I will give other than that, Chris.

Thanks very much guys.

Yes, thanks for your question Chris. Can we have the next question please?

Our next question comes from Alvaro Serrano with Morgan Stanley. Please go ahead.

Hi, can you hear me right?

No, [indiscernible] Alvaro.

Is this better?

Yes, slightly better. Yes, go ahead.

Sorry. Most of my questions have been answered, but I had a follow up call – follow-up question on provisions. You've seen quite a lot – I mean, you've done obviously a good effort topping up the reserve build and credit cards, but just qualitatively, your balances in credit cards are down 18% I think in the UK, and surely more than double digit in the U.S. From a qualitative point of view, can you give us an impression how that de-risked your book? What kind of clients are paying down the balances? I don’t know if you have any color on the rating of those clients. Is it good clients that are paying it down or is it across the board? Is it a high balance or small balance? Just something that can you give us a qualitative impression of is that really de-risking the book or the riskier clients are still there? Obviously, holidays have almost reduced to zero, but just qualitative on the balances and related to that in obviously in Q1, you had a big oil sort of reserve. I think it was £300 million. Oil prices now are much better versus your Q1 in your wholesale exposure, what areas of the portfolio you are more concerned about? Would you say retail is now the major concern? And then how do you see the reserve building up in the wholesale in the second half and not just in the second half, but medium term again from a qualitative point of view? Thanks.

Yes, thanks Alvaro, why don't I take both of them. In terms of the balance reductions, I don't characterize it as a vertical slice. We didn't see a particular skew towards more riskier or less riskier credits both in the U.S. and the UK. I think the reduction in balances was as much driven by just people spending less and that finding its way into lower balances rather than those extra 40 [ph] because it is paying off their cards and those that couldn't – were leaving their balances running, we didn't really see that at all. What we did see at a very marginal level was on payment holidays, those that are if you like more riskier credits, having a higher propensity to take payment holidays. But looking at the numbers now, I'd say that’s sort of behind us and leave us sort of in the back in the box if you like, rather than in the sort of a special payment holiday categories you can see in our disclosures. For example, you'll see our FICO scores in the U.S. broadly speaking, what they were sort of before the pandemic. So we haven't really deteriorated there either. In terms of – the other thing I would say just in terms of – just asking everybody to take a look at coverage ratios because provisioning is something that is difficult given that we're sort of making sort of quite long range estimates based on uncertainty around the economics, uncertainty around governance support schemes, customer behaviors, or whatever. What we've tried to do is to be as prudent as is appropriate and have what I would consider strong coverage ratios and some of them are more riskiest parts of the book. So on the retail side, UK cards were at 16% provision rates and U.S. cards at 14%. I mean, these are pretty high by any historical measure – if for those of you that will have this data. The last financial crisis, our UK card business that NPLs, cumulative NPL was 6.9%. So we feel appropriately provided, given the credit profile of the books there. Your other question on wholesale, the areas we’re most focused on we called out on our slide, it's about £20 billion of exposure. And it's in the sectors that you would expect transportation, retail, hospitality, et cetera. We’re 4% covered there. Now, you've got to remember, most of that, again, is non-defaulted for these sort of book classified [ph] provisions. We do see quite a bit of hedging there. We’re 25% synthetically hedged across those sectors. We obviously have collateral levels. Covenant triggers we're insiders to the company and these are much more of a sort of if you like bottoms up name by name assessment of what's the right provision level. So you'll have the numbers there in the slide, but we think we're well provided and relatively modest in terms of exposure to us. So, hopefully, that will give you the qualitative commentary.

Thanks.

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

The next question on the line comes from Rohith Chandra-Rajan of Bank of America. Please go ahead. Rohith Chandra-Rajan: Hi, good morning. It’s Rohith.

Hi, Rohit. Rohith Chandra-Rajan: Just to follow up question on Alvaro’s question on just in terms of sort of behavioral activities that might give us some indication of credit quality going forward. I think the comments on the cards book and the payment holidays were helpful. Are you able to expand that at all in terms of I guess the corporate business? You referred earlier to what your sort of acquiring businesses is telling you about SMEs opens for business? Is it much there on activity levels? What type of activities for SMEs? And then presumably on the large corporates the fact that primary market – capital markets have been opened, presumably is helpful in those large corporates being able to refinance. Sort of first one just in terms of any lead indicators on credit quality? And then the second one was just to be UK NIM sort of guidance reiterated for the 250 to 260 NIMs for the year as a whole. It looks like a spread of 230 to 250 in the second half, just wondering what the uncertainties are that will drive that sort of 20 basis point range in that margin for the second half, please?

I mean, I can start and give some color on your first question and Tushar will pick up on the second one. And on the consumer side, I think what was a little bit of a surprise to us on receivables was – I think historically going into an economic downturn, you see consumers and small businesses actually increase their reliance on short-term credit in order to maintain a lifestyle or to keep a business functioning. And then as you come out of recession, they more normalized. In this event, what clearly was driving consumer and small business behavior was fear. And so people who have good credit quality and even those businesses that stayed open, use of short-term credit declined and they wanted to get their balance sheets in shape less worried about their own personal income statement. And you also see that in this - in the payment holidays, you see this very interesting move where we've done hundreds of thousands of payment holidays. In the mortgage payment holiday portfolio, we're actually seeing a slight uptick and requests for extensions of payment holidays as the holiday periods come to an end. In the card side as we showed, people are not asking to expand or roll their payment holidays. So the consumer is acting rationally in terms of – okay I will roll my debt which has got a very low interest rate number to it, like a mortgage, but I'm not going to continue the payment holiday on something that's got an interest rate in the high teens. So they're acting rationally and I think it is – it's resulting in a book which is maintaining its overall credit quality and we’ll expect the thing to come back as we see spend numbers come back now. And for sure, so then on the corporate and the SME side, what we're seeing in merchant acquiring one [ph] is a pretty dramatic recovery in spend. And so, at the trough of this crisis, spend was often anywhere 30% to 40%. You take away cash spend and spend numbers are almost getting back to where they were a year ago this time, which is quite a reversal and that's very encouraging in terms of what we see for SMEs. And then on the SMEs and positions [ph] the corporates as well, two phenomena or two things we are having, a market impact on our credit risk to SMEs and corporates. And those are the government programs. We put £21 billion into a quarter of a million small businesses and large corporations that are government programs, providing liquidity and funding at extremely attractive rates. We've done close to £11 billion pounds of commercial paper issuance in the UK through us through Treasury and that’s a lot more attractive funding than going to a bank revolving line of credit. So both, corporates and the SMEs have been actively using government support mechanisms for credit and that's clearly had an impact on the credit profile of Barclays. And then, as you said, following an unprecedented injection of liquidity into the capital markets, as well as central banks around the world using their balancing – their balance sheet to actually buy credits in the capital markets, those markets reopen with an extraordinary amount of volume. And, this morning, we participated as a manager in three quarters of a trillion dollars of debt issuance, around the world, most all of it in the second quarter. That $3 trillion of funding for corporates that is not going to find its way back into a request for our balance sheet. So, on the one hand we are open for business. We believe it's an obligation of this bank to keep our balances open and to have those facilities available to our customers between the government programs and the robustness of the capital markets quite frankly, the demand is out there.

And your question on NIM, Rohith, I mean, that's the trickiest thing to gauge there of course is balances, I mean just how quickly recover and it is quite early on in sort of post lockdown environment and quarantines and what else, but they are – I think we've seen a plateauing, we’ve seen – of balances that is we're seeing a fairly decent recovering spend levels. I think if those spend levels stay anywhere where they are at the moment, let alone continue to recover, you ought to see balances that have come after – growing shortly thereafter, but there is some uncertainty there. We don't have much to model this stuff off – only a small number of weeks post lockdown and applied over sort of a broad-ish range. Rohith Chandra-Rajan: Okay, so it's really about loan mix in terms of – in terms of the BUK NIM uncertainty. So I guess you – I guess you have a – so you have a clear understanding of what the deposit impact is, but it's the asset side of the balance sheet, which is the uncertainty.

Right. Yes, and you'll probably see mortgages continue to grow and but it is the unsecured card balances how quickly they come back is a little bit harder to pull off. It's good signs, but when you see that momentum continue. Rohith Chandra-Rajan: Okay, thank you very clear on both. Thank you.

Okay, can we have the next question please, operator.

Our next question comes from Guy Stebbings, Exane BNP Paribas. Please go ahead, guy.

Good morning. Thanks for taking my questions. First, actually just a quick follow up on the UK and then a question on CC&P. And I just wanted to check on the Barclays partner finance move, weather that was then captured in the Barclays consumer line if that's the case and balanced through the income line, how can the next line change from 30.60 [ph] at the first quarter. So underlying declining balances are roughly sort of double the industry level. So then the call out there, which obviously feeds into the prior question on the NIM outlook? And then on CC&P revenues, you talked to gradual recovery and some of the better spending trends in the U.S. more recently. So I'm just trying to gauge what your expected gradual recovery will look like and how we achieved some pretty sight here today, having delivered just £1.7 billion or just at £1.8 billion in the first half. If we add back the Visa headwinds, and the balance is down to 33, then we need to see quite a strong recovery to get back to market expectations for the £3.9 billion this year, and north of £4 billion thereafter. So should we assume a fundamentally different outlook to find market expectations given the environment or whatnot, what sorts of revenue margin expansion and balanced growth are you targeting? Thanks.

Yes, thanks Guy. Let me tell you the second one first and I'll come back to your first question on the UK. Yes, we – there are three things on CCP that I think will be tailwinds into the second half of the year. I talked about net interest margin on the liability side, you know, talked about sort of 50 basis points margin pickup towards the back end of the quarter on our liability balances and we may drop deposit rates again, so that is a tailwind. You know, quite obviously very different from where we were in Q2. Second thing is payments. The transmission effect on payments is relatively quick. You've got mostly in our acquiring business, now has been the bulk of those businesses are actually open and you've seen spend level especially in the UK where acquiring businesses is most important almost back to pre-COVID levels that quickly transmits back into sort of fees. And in the U.S. for the interchange fees, it's still quite attractive the spend recovering the U.S. which will sort of translate back into fees there pretty fast as well. And then the harder one to gauge is balances really, particularly on U.S. cards. If spend levels continue, then balances will follow, but there is a delay effect there. And I think that's a little bit dependent on obviously, how the economy has perform in a post-lockdown period, did they continue as they are at the moment. And you know, in all intents and purposes, even though there is a lot of concern around infection rates and whatever, we're not really seeing any tail off in consumer strength at the moment, at which point we would expect to see balances and card openings increase. So look, I can't give you numbers on that. It's a bit too early in the quarter to start extrapolating. But those are meaningful sort of tailwinds that we'll have from this point on. And we've talked about a sort of a steady recovery, we'll see how strong that is, as we go further into the quarter. Just to answer your first question, just to help with the geography. Yes, the Barclays partner finance business is recording the first in banking line. And if you want to sort of just make sure you know, where we're calling what outwear then it creates [indiscernible] behind the scenes, has been since over the time just to point you into the right places into the disclosures that we've got.

Okay, perfect. And if I could just push you a little bit on the CC&P revenues, if those three items all talk, do come through and the balance I appreciate it's hard to gauge, but if that was to come through nicely, over the course of the half year, are you hopeful we can get back to a £1 billion type quarterly run rate revenue?

Yes, look I know you're keen on sort of trying to get me to get to a range. And I'm reluctant to do that, only because it's quite a fair old extrapolation. All I would say is, we would be disappointed if there isn't, a pretty recovery into the third quarter that has momentum into the fourth quarter and beyond, it's a momentum business. So once things start moving in the right direction, they'll be sort of follow through. Is that - how strong that follow through is, we're pretty okay at the moment, spender rules are improving, margins are improving on the liability side, if that will continue, then I think we're cautiously optimistic, but it's just early days in a post-lockdown economy to give you too much precise guidance.

Okay, great. Thank you.

Thanks Guy. Can we ask the next question, please, operator.

The last question we have time for today comes from Edward Firth of KBW. Please go ahead.

Yes, good morning everybody.

Good morning.

Hi, can I start you or bring you back to cost, because if I look at your - I think it was your second slide Tushar, you're talking about income up 8%, and cost down 4%. And I guess, I followed around banks for a while, I mean that those numbers are almost unbelievable. And I guess looking at the share price reaction today, I'm not alone in that concern. So, and if I look into the second half consensus, you're looking - I mean, consensus seems to be looking at revenue falling something like £2 billion and yet costs actually going up a little bit. So it only felt there is a complete disconnect between what is happening to your costs and what is happening to your revenue. So could you help me a bit with that? And in particular, I'm not asking for a number, but I mean, if the revenue environment stays very benign, should we expect costs at the current level, should they grow quite substantially from here, and also if we see a big fall off in investment banking revenues, have you got flexibility could that minus 4 be minus 6 or minus 8 to the full year. So, I mean, what are the sort of levers you can pull and what sort of comp up can you give us on that?

Yes, so why don’t I start and Jes may want to add a few key comments. And but I think, first of all, the backdrop I'd start with is just, because just look at the trend over the last two or three years. We have been reducing our cost base in absolute terms regardless of size, shape, the company and the economy we're operating in. So cost discipline is very important to us and that's something that's the constant focus of this management team. And I'd like to think that we've got a track record of every year reducing our costs year-on-year. This year, obviously much more complicated because, as Jes sort of mentioned earlier on in the call, when we went into lockdown, plans that we had in place, we put on ice. Like for example, we were very public that we wouldn't lay anybody off until at least September. People that we did lay off actually, before we went into lockdown, we actually gave them even though we had this is completely discretionary on our part, but just to try and do the right thing for people, gave them the same terms as those that were on government furlough schemes, but paid for by ourselves. So now that comes at a cost on attrition levels fall quite meaningfully, job market sort of then dries up. So we got a higher headcount and both levels, lower attrition and sort of staff reduction programs that we didn't implement. And then of course, just the cost of keeping businesses open with social distancing requirements and deep cleaning and all the various other things that go alongside that. So, it is an unusual cost shape, but I think as we go into - if you like normalized operating environment, whatever that is in a post-lockdown environment, we will absolutely re-examine, examine all the new ways of working that we've learned. One of the other things that I think is absolutely eye opening in lockdown, there's some things we've been able to do as an industry and certainly as a bank that we thought unachievable previously. I'll give you an example, some of the largest capital markets transactions that were done quite early on in lockdown, you had the issue of working from home, you had the investors working from home, you had the research analysts working from home, that indicates that the traders, the sales people. I mean, even the settlement and the folks that are driving even the mechanics that are settling these trades, everybody at home, and yet we were, as Jes sort of mentioned, something like just for ourselves three quarters of a trillion dollars of capital markets issuance, right. None of us would have thought that would be possible on the first of March. So that's a really interesting new way of working that we will examine and understand and also take the benefits from, but that's probably more sort of looking into next year and beyond in terms of opportunities. For this year is just a slightly unusual year that we had good momentum in the back end of 2019, that's come through in the first half. But obviously, we put on ice a lot of the plans that we would have otherwise had. That will be a slight headwind going into the second half. But cost discipline is super important, tools are very important to us. Cost income levels are very important to us. And that's something we will be focused on. Jes, anything else you want to say?

Again, putting in rank order the sort of priorities we focused on in this unprecedented medical crisis, leading to pretty much an unprecedented economic crisis leading to an unprecedented government and central bank response, first and foremost is the financial integrity of the bank. So tracking the liquidity profile of the bank, tracking the capital level of the bank, and making sure if at all possible to remain profitable each quarter, which and we think accomplished all three of those in the first half of the year, record level of capital, record level of liquidity and profitable through each quarter, and then that profitability story, there is a 27% improvement in pre-provision earnings year-over-year. Now, we take a hard look at that and we are encouraged by the sort of move forward led by the CIB. But then the next thing you look at is what can we do to give back to our communities and now we have 85,000 employees, we can move that employment number up and down as we – when we got here four and a half years ago, we were about 120,000 employees. So we will make the moves when we need to make it. We used to have when we got here, 1400 branches, now we're running 800 branches. So can manage our costs, but we're going to do it with a focus on the challenges that particularly the UK is going through, and we're going to be there with payment holidays and overdraft fee waivers and banks fee waivers and keeping people employed. So you're going to have for sure distortions in an environment like this, which will settle down I think. As the economy starts to settle down, we hope to see that in the third and fourth quarter. So, yes, big positive job movement led very much by a markets business, which hit all sorts of records, but we have our pulse on what is going on in the bank. We're serving the communities and the consumers that we need to. We're partnering with our regulators and the central bank and governments. I think the bank is in a good place and so I guess that would be my comment.

Sure. Could I just come back quickly on that, and I know I'm running out of time, but a lot of the things you highlighted from the first half are things that I would have thought have increased your cost not decreased them, you're stopping redundancy, relocating people et cetera, et cetera. And so, it's still a struggle to me to see why people seem to be expecting a big fall off in revenue in the second half, but actually costs to beat it up slightly. And I'm just trying to think is that a sensible type of forecast? Is that, do you feel that that's the right way of looking at it or what?

Yes, the only thing I'll say is, we had - we were on a declining cost trajectory as we came into 2020. You've seen the momentum in the first half. That momentum will be frozen a little bit by deliberate actions that Jes called out and we've done, so don't have the same momentum going for second half. That's just the way it is for all of the good reasons we talked about. But there are new ways of working and new ways of doing things that none of us thought were - was that possible. That's really interesting opportunities that we'll start examining and see what that means. So it's probably more a 2021 conversation. Income wise, look, we'll see where the CIB goes like, you know, you talked about expecting the consumer businesses to start recovering. You know, so there'll be some different trends in the different businesses there.

Just two anecdotes. The technology spend of moving 60,000 people to work from their kitchen tables where we have compliance, where we have controls, where we have insights into what our systems are, that dispersed around the world. You know, that's a lot of money to set all that up and track it. And, we gave pretty much [indiscernible] to our technology people to allow us to work as remotely as we have. Now the flip side of that, are a whole lot of people jumping on air planes right now. So our travel and leisure expense absolutely collapsed in the first half of the year. It was incumbent upon Tushar and myself as the economy begins to normalize, we look at the spend and technology and ops and as we bring people back into offices, is that decrease, and do we think about rationalizing the real estate footprint. And on the flip side, we'll probably start to let people to go out and visit a client every now and then. So I think – and we will keep our hand on those cost levers to ensure the financial integrity of the bank, the profitability of the bank, and the capital strength of the bank.

Great, Thanks so much.

Thanks, we've gone past our allotted time. So sorry to keep you on a bit longer, but hopefully we'll see you virtually in some way or another over the next few days and weeks. With that, we'll close the meeting here. Thank you very much.

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