Welcome to the Barclays Full Year 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. We all know that 2020 was not a normal year. The pandemic has caused fear and dislocation in societies around the world. And it has caused huge economic harm and uncertainty, with hardship and stress for millions of people. And it has brought tragedy to so many families, including among friends and colleagues. In common with others, it has tested our resilience as a business, and our values as a corporate citizen. While we have faced significant challenges, I want to say first of all how proud I am of the way in which our colleagues at Barclays have responded to an extraordinarily difficult year. Their efforts have been the driving force that has enabled us to step up and play our full part in the battle to contain the damage that this terrible disease is causing all around us. That commitment from my colleagues, and the core resilience of our business, meant that we have stayed profitable in every quarter of 2020. And that strength in turn has allowed us to support our customers and clients, and the communities around the world where we live and work. During 2020 we provided almost 700,000 payment holidays to our customers. We waived around £100 million in overdraft interest and banking fees, and we have committed a further £100 million to charities supporting the most vulnerable, through our Community Aid Package. We've helped our clients raise over £1.5 trillion in the global capital markets, and extended some £27 billion to companies through the UK Government's lending schemes. And we've been able to deliver all of that support while holding our top line steady. Overall, Group income was £21.8 billion, up 1% on 2019.But it is the composition of that income which shows most clearly how our diversified model has worked to absorb the shocks of 2020, and still deliver resilient overall performance. Our consumer operations felt the impact of the pandemic most acutely, with Barclays UK income down 14%, while our Consumer Cards and Payments business was down 22%. But at the same time, in our wholesale business, Corporate and Investment Banking income was up 22% for the year, stabilising Group income at a time of extreme stress. Before provisions, we generated profits of almost £8 billion for the full year, these were heavily tempered of course in the approach we have taken in terms of impairment charges driven by the pandemic. Full year impairment charges were £4.8 billion, to take the Group's total impairment reserve to £9.4 billion, reflecting our cautious view of the impact of COVID. However, we were encouraged that the fourth quarter charge was down 19% relative to the previous quarter, at just under £500 million. And we expect 2021 full year impairment charges to be materially below the 2020 level. Overall Group profit before tax was therefore £3.1 billion, including generating a profit before tax of £646 million in the fourth quarter. The drivers of that performance were in the Investment Bank, where markets and banking both delivered their best-ever income performances, up 45% and 8% respectively. It's important to note that this standout markets performance reflects not only the significant growth in the Global Capital Markets, but also material market share gains by Barclays. We have consistently grown share in markets over the past few years, moving from market share of 3.6% in 2017 to 4.9% in 2020. And growth has been across Macro, and Credit, and Equities. Markets and Banking income together has grown 45% over the same period, relative to an industry wallet which has grown roughly 20%. Together, these data points illustrate the tangible momentum we have built in our Investment Bank, a business delivering improving returns year-over-year, and producing a return on tangible equity of over 13% in 2020, despite a high impairment charge. While Corporate income was down 13%, including the impact of lower interest rates, the CIB as a whole delivered income of £12.5 billion, up 22% year-on-year, and profit before tax of £4 billion, up 35%. Our Consumer Cards and Payments business in Barclays International did however make a loss of £388 million for the full year. This was driven by impairment charges, a fall in income caused by lower credit card balances, margin compression, and reduced payments activity as a result of the pandemic. CC&P did however return to profit in the last two quarters. Barclays UK profit before tax decreased by 47% during the year to £546 million, with performance in the year impacted by a significant reduction in income, and the COVID-related impairment charges we took. We did however see growth in mortgages in 2020, and the business has done a little better since the apparent nadir of the second quarter. We saw a profit in Barclays UK in the fourth quarter £282 million. Lest we forget, Barclays UK is a business which, in the decade prior to 2020, regularly produced high returns, as did Consumer Cards & Payments. These remain good businesses, with strong fundamentals, and I expect to see performance improve in both of them as the economy returns to normal. That said, beyond the immediate impacts of the pandemic, UK retail banking does face some strategic long-term challenges, near-zero interest rates, lower charges for overdrafts and other services, and the provision of many core banking services for free. In response, we continue to invest in our technology platform, offering digitised finance to enhance our relationships and experience for our customers. And we continue to focus on running the business efficiently, so that we can generate appropriate profitability, whilst continuing to deliver support to our customers, clients, and communities. Overall, Group operating expenses, excluding litigation and conduct, rose 1% to £13.7 billion, including roughly £370 million of charges for structural cost actions. This translates to a Group cost to income ratio of 63% flat versus 2019. We remain attentive to costs, and continue to target a Group cost to income ratio of below 60% over time. 2020 Group RoTE was 3.2%, and earnings per share were 8.8 pence. We expect to deliver a meaningful improvement to Group RoTE in 2021, and remain committed to a target of above 10% over time. At the same time as navigating the effects of the pandemic on our business, and working hard to support customers, clients and our communities, we have continued to strengthen Barclays for the long term. In this respect, in 2020 we made particular progress on our approach to climate change, setting an ambition to be a net zero bank by 2050, as well as a commitment to align all of our financing to the goals of the Paris Agreement. In late November we set out a plan and methodology for how we intend to achieve this. Our own operations are already net zero, and our commitment extends to the financing we provide to clients, covering capital markets activity as well as lending. We will ultimately expand this approach to cover our entire financing portfolio. But we have started with Energy and Power, which between them account for up to three quarters of emissions globally. We've also set clear goals to help accelerate the transition to a green economy, including £100 billion of green financing by 2030, and directly investing £175 million in sustainability focused start-ups over the next five years. Barclays' capital position strengthened significantly through 2020, with our CET1 capital ratio increasing by 130 basis points in the year, including 50 basis points in the fourth quarter, to stand at 15.1% at year-end. We anticipate some capital headwinds in 2021 from pro-cyclical effects on RWAs, the reversal of regulatory forbearance applied in 2020, and increased pension contributions. Nevertheless, we remain significantly above our CET1 ratio target of between 13% and 14%, and well above our minimum regulatory requirement, with prudent provisioning for impairments. Given the strength of our business, we have therefore decided the time is right to resume capital distributions. We have today announced a total payout equivalent to 5 pence per share for 2020, comprising a full year dividend payment of 1 pence per share, and we will execute a share buyback of up to £700 million. We expect to comment further on capital distributions when appropriate. So in summary, Barclays remains well-capitalised, well-provisioned for impairments, highly liquid, with a strong balance sheet, and competitive market positions across the Group. I expect that our strong and diversified business model will deliver a meaningful improvement in returns in 2021. At the same time we will remain committed to playing our part in supporting customers and clients, our colleagues, and our communities, as we emerge from the COVID-19 crisis. I'll now hand over to Tushar to take you through the results in more detail.

Thanks, Jes. I'll comment first on the full year results, then summarise the fourth quarter performance. Our priority during the pandemic has been to support the economy, serving our customers and looking after the interests of colleagues and other stakeholders. It's been a very challenging year, but the pandemic has shown very clearly the benefits of our diversified business model. Despite the effects of the pandemic, we reported a statutory RoTE of 3.2%, or 3.4% excluding litigation and conduct. Litigation and conduct was just £0.2 billion, but we had a large PPI charge in Q3 last year, so I'll still reference numbers excluding litigation and conduct. The impairment charge of £4.8 billion, up almost £3 billion year-on-year, reduced PBT from £6.2 billion to £3.2 billion. However, as you see from this bridge, the increase in CIB income of 22% more than offset the 19% decline in consumer and other businesses. With income up 1% overall we delivered neutral jaws, and a cost income ratio of 63%, slightly in excess of the group's target of below 60% over time. TNAV increased from 262 pence to 269 pence over the year. Our capital position is also strong, with the CET1 ratio strengthening further in Q4 to reach 15.1%, up 130 basis points over the year. Under the temporary guardrails, which the regulator announced in December, our statutory profitability allows us to distribute 5 pence in aggregate, by way of dividend and buyback. We plan to launch a share buyback of up to £700 million by the end of Q1, which is attractive for us from a financial point of view at current share prices and is equivalent to 4 pence per share. In addition, we are paying a dividend of 1 pence, and reaffirming our intention going forwards to pay dividends, supplemented, as appropriate, by share buybacks. The level and form of distribution was determined by the current circumstances and you shouldn't read anything particular into the level of the overall payout ratio, or the mix chosen on this occasion. We'll update the market further on distributions at the appropriate time. A few words on income, costs and impairment for the year, before moving onto Q4 performance. This slide shows the split in the 1% income growth, with the 22% increase in CIB, more than offsetting declines of 14% and 22% in BUK and CCP respectively. In the CIB, our share gains in markets, and the momentum across the businesses, position us well for the future. However, conditions remain challenging for the consumer businesses, with reduced unsecured balances and a low-rate environment, as we show on the next slide. We've highlighted in the charts on the right the continuing headwinds from balance reductions in UK and US cards. We saw some signs of recovery in consumer spending in both the UK and US in Q3, but further lockdowns hit spending over the Christmas period, and this is continuing in Q1. As a result, credit card balances were down in Q4 in the UK and flat in the US in dollars, rather than seeing the usual seasonal increases. We've also put on the slide a reminder of the specific headwinds that the consumer businesses are experiencing. Although customer support actions affecting BUK fall away in 2021, the effect of low unsecured balances and interest rates is continuing. Looking now at costs. Full year costs were up 1% overall at £13.7 billion, due to an increase in structural cost actions to around £370 million, but underlying costs were flat year-on-year. The bank levy increased, but is expected to be lower in 2021, with decreases in both the rate and scope of the levy. The COVID pandemic has resulted in additional costs for the Group, for example building out the teams to help customers in financial difficulty, and these will remain elevated in 2021. However, the Group will continue to drive cost efficiencies, while investing in the franchises where appropriate. You're already familiar with the increase of £2.9 billion in the impairment charge. This has been driven by deterioration in the economic outlook as a result of the pandemic, and has led to significant increases in the charges in each business, as you can see. However, this book up in provisions in Q1 and Q2 has not yet been followed by material increases in defaults. As you can see much lower charges for Q3 and Q4 in the second chart. We've shown the charge for each quarter, split into Stage 1 plus Stage 2 impairment, mostly relating to balances which aren't past due, which I refer to as book ups, and the Stage 3 impairment on loans in default. As you can see, most of the elevated impairment in Q1 and Q2 was from book ups, while most of the Q3 and Q4 charges were on Stage 3 balances. We've shown on the next slide the macroeconomic variables, or MEVs, we've used in the expected loss calculation. We've updated the MEVs slightly in Q4. However, I would emphasise that with the reduction in unsecured balances, and given the ongoing level of government support, the models on their own would have generated a significant provision write back in Q4. However, there is significant uncertainty as to the level of default we'll see as support schemes are wound down. We have therefore applied significant post-model adjustments, totalling £1.4 billion, as you can see in the table. The increase in our total impairment allowance by £2.8 billion to £9.4 billion, which broadly maintains our increased level of coverage, as you see on the next slide. Based on forecast unemployment levels, we would anticipate an increased flow into delinquency in 2021, but given our level of provisioning, we would expect a materially lower charge for 2021. Unsecured balances have come down significantly from £60 billion to £47 billion through the year, and coverage has increased from 8.1% to 12.3%, with even higher coverage in the credit card books. The wholesale coverage has almost doubled over the year to 1.5%, and a large proportion of this is in the selected sectors which we consider to be more vulnerable to the downturn. We've included in the appendix the usual detailed slides on unsecured coverage, selected wholesale sectors, and payment holidays. Turning now to Q4 performance. Q4 income decreased 7% year-on-year, as continuing strong performance in CIB, in both Markets and Banking, was offset by the income headwinds in BUK and CCP. Costs increased to £3.8 billion, including Q4 structural cost actions of £261 million and an increased bank levy charge of £299 million. Impairment decreased £31 million to £492 million year-on-year, of which £444 million was for Stage3 defaulted loans. Despite the headwinds, Q4 was still profitable, with a PBT of £0.7 billion and a RoTE of 2.2%. Turning to Barclays UK. The headwinds we've referred to in previous quarters continued to affect BUK, with income down 17% year-on-year. Unsecured balances reduced further in Q4, with gross card balances down from £16.5 billion to £11.9 billion, a decline of 28% over the year. Mortgage balances on the other hand were up £5.1 billion year-on-year, with a net increase of £1.9 billion in Q4, and pricing continues to be attractive. There was a significant increase in BUK business banking lending over the year, as Bounce Back Loans and CBILS reached roughly£11 billion in aggregate. Loan balances grew by almost £12 billion in total to £205 billion. Deposit balances also continued to grow, resulting in a loan to deposit ratio of 89%. Q4 income included higher debt sales, which contributed to the increase in income compared to Q3. Q4 NIM was up on Q3 at 256 basis points, but we expect a clear reduction in 2021, as secured lending continues to grow. This is expected to take full year NIM to around 240 basis points, absent any changes in base rate. So the income outlook remains tough, with low demand for unsecured lending and the headwind from the structural hedge, despite an expectation of continued mortgage growth. Costs increased 11% year-on-year, as COVID-related costs, and increased structural cost actions, more than offset efficiency savings. The cost increase includes around £30 million of quarterly costs in our partner finance business, which was transferred from Barclays International earlier in the year. Impairment for the quarter was £170 million, down slightly year-on-year, and well below recent quarters. Arrears rates continue to be stable. Turning now to Barclays International. BI income was stable year-on-year at £3.5 billion, reflecting the strong performance in CIB, offset by lower income in CCP, and RoTE was broadly flat at 5.9%. I'll go into more detail on the businesses on the next two slides. The Corporate & Investment Bank delivered an RoTE of 6.2% in Q4, traditionally the weakest quarter of the year, up from 3.9% last year, with strong performance across markets and banking. Income was up 14% year-on-year, at £2.6 billion, on a flat cost base, delivering strong positive jaws. Markets income increased 19% in sterling, the best Q4 level since 2014, when the investment bank took its current form, and up 22% in dollars. The full year markets income of £7.6 billion was also a high since 2014. FICC increased 12%, with a particularly strong performance in credit. Equities income was up 33%, with strong growth in derivatives and cash equities. Banking fees were up 30% year-on-year, with good performance across debt and equity capital markets and advisory, following some weakness in advisory earlier in the year. Corporate lending this quarter wasn't distorted by the volatile mark-to-market moves we had in earlier quarters. The reported income of £186 million reflected limited demand for corporate lending, with further paydown of revolving credit facilities. Transaction banking income remained depressed at £344 million, with further increases in deposits more than offset by margin compression. CIB costs were flat, reflecting tight cost control, reducing the cost to income ratio from 80% to 69%. Impairment increased slightly year-on-year, but was well down on the previous three quarters at £52 million. We've started the year with the investment banking franchise in good shape, and are optimistic about the future. Turning now to Consumer Cards & Payments. Income in CCP was down 25%, principally driven by US card balances, which were down 22% in dollar terms. In addition to affecting balances, lower spend volumes were also a headwind for interchange in US cards, and for payments income. In the payments business, although volumes were down, e-commerce accounted for over 50% of volumes. Card balances in the US ended the year flat on September in dollar terms, rather than seeing an increase from Thanksgiving and Christmas spend, so the income growth we were hoping for in 2021 is going to be tough to achieve, in the absence of significant improvement in economic conditions. Costs were down 4%, resulting in a 64% cost income ratio. Impairment was £239 million, well down on levels of Q1 and Q2, reflecting lower balances, with arrears rates slightly up in the quarter, but still well below the level our provisioning assumes. Turning now to Head Office. The Head Office loss before tax was £416 million, reflecting one-offs in both the income and cost lines. The negative income includes a Q4 expense of £85 million relating to the repurchase of half the outstanding Tier 2 Contingent Capital Notes. This will roughly halve the £100 million or so of annual legacy funding cost in Head Office we had guided for in 2021 and 2022. The other main income elements, residual negative treasury items, and negative income from hedge accounting, will continue in 2021, and are expected to be at similar levels to the past. That would suggest around £300 million negative income in total, in the absence of a resumption of the Absa dividend. Q4 costs of £222 million were above the usual run rate of £50 million to £60 million due to around £150 million of cost actions and the inclusion of a further £22 million of the community aid programme we announced at the start of the pandemic. Moving onto capital. We finished the year with a very strong capital position. The CET1 ratio was 15.1%, up materially from 13.8% at the end of 2019, and an increase of 50 basis points in Q4. This reflected capital generation from profits across the year, regulatory support, and cancellation of the full year '19 dividend at the start of the pandemic. The strengthening of the ratio was achieved despite the increase of £11 billion in RWAs. You can see the elements broken down in the bridge on the top half of this slide. IFRS9 transitional relief didn't move significantly this quarter, as the bulk of the impairment charge didn't qualify for relief. In Q4, the main contributors to the increase were profits, and 30 basis points from the new regulatory benefit for software assets. We're expecting this software benefit to be reversed at some point this year by the PRA, and I'll say more about the flight path for capital on the next slide. We're happy with the headline capital ratio of 15.1%, but I wanted to remind you of some factors which will reduce the ratio in 2021, particularly in Q1, and why we are comfortable to run at a level materially below 15.1%. We've shown at the start of this bridge a couple of easily quantifiable factors that will affect the ratio early in the year. The proposed buyback of £700 million is not reflected in the ratio and would reduce the year-end ratio by 23 basis points. In addition, the temporary PVA relief brought in last year was reversed on 1 January, and the IFRS9 transitional relief reduces. So you could think of a rebased ratio at the start of 2021 of 14.7%. This is still well above our target range of 13% to 14%. I would remind you that our MDA hurdle is currently 11.2%, and we've included the usual slide in the appendix showing how that is calculated. Our target range is designed to allow for fluctuations in the MDA, for example if a UK counter-cyclical buffer is reintroduced. Going forward we remain confident of generating capital from profits, although I'm not going to forecast a precise level of capital generation. We've shown here a number of additional headwinds to the ratio that we are aware of, on top of the expected reversal of the software benefit. The two that are most difficult to forecast are the migration of impairment into Stage 3 defaulted balances, which will not qualify for transitional relief, and potential pro-cyclicality which could inflate RWAs. This didn't materialise during 2020 in the way we had expected, but we are likely to see some effect from credit migration during 2021. Nevertheless we are confident that the balance of these elements will leave us with sufficient capital generation to continue distributions to shareholders, and be comfortable in our CET1 target range. Both spot and average leverage ratios were at or above 5%. Finally, a slide about our liquidity and funding. We remain highly liquid and well-funded, with a liquidity coverage ratio of 162% and our loan to deposit ratio of 71%. This positions us well to withstand the stresses caused by the pandemic, and to support our customers. So, to recap, we were profitable in each quarter of 2020, generating a 3.2% statutory RoTE for the year, despite the effects of the COVID pandemic, which led to significant reductions in income in the consumer businesses, and an increase of close to £3 billion in the impairment charge. I've summarised on this slide the various comments on the outlook we've made. While the income outlook for the consumer businesses is challenging given the economic environment, the CIB is well placed for 2021 and beyond. We continue to see the benefits of our diversified business model coming through, allowing us to take a measured approach to costs, and continue to invest in the future of the group, despite the difficult economic environment. We have taken very significant impairment charges in 2020, but with £9.4 billion in balance sheet provisions, we expect a materially lower charge in 2021. We're distributing the equivalent of 5 pence per share, by way of dividend and share buyback. Although we expect a reduction in our CET1 ratio in 2021, our starting point of 15.1% should put us in a good position to pay attractive capital distributions to shareholders going forward. 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 round to everyone.

[Operator Instructions] The first question today comes from Joseph Dickson of Jeffries. Please go ahead, Joseph.

Hi. Good morning, guys. Thanks for taking my question. I guess just a couple of things. So on the capital distribution, the PRA was pretty clear in their December document that you could move away from these. I think they use the word temporary guardrails and return to more normal levels of Board decision making in respect of the half year. And when I look at where the pro forma CET1 is, in addition to the fact you generated 81 basis points of capital in 2020, with a £4.8 billion impairment charge, it suggests on a fairly conservative basis, you've got somewhere between £1.5 billion plus of excess capital. I mean, is that something you could seek to use for buybacks in respect of the half year? I guess, how should we think about the timing of further buybacks, given that your shares are meaningfully below book, that's quite accretive? And then secondly, I guess just on the Card outlook both in the US and the UK, you gave a great deal of precision around the outlook for the UK NIM, but a lot of that is linked to card spend and lend. And I guess what's the outlook there, because you said you would need to see, I think Tushar you said in your comments, significant improvement in economic conditions. But we're starting to see that, if you look at the US retail sales data coming in for January at 5%, versus 1%, and the stim checks being dropped into people's bank accounts in January, it seems like there's - you know, the setup is quite primed for recovery in spend, but you sound a bit more cautious. So I'm just wondering what the - what the delta is there? Thanks.

Yeah. Thanks, Joe. Good to hear from you on that one. And why don't I take both of those questions. In terms of capital distribution, I mean, hopefully you've seen this morning that it's very important to the Board here that we are in a position to return as much capital as we can into shareholders hands, consistently. And hopefully, the actions we've taken this morning or announced this morning are a good demonstration of that. I think I'd also agree with you that, we feel very comfortable with both our starting capital position, albeit, as we've called out some natural headwinds, you know, you can even see that as you pro forma for some of this numbers that we can quantify it, we're still in a very strong capital position. And we are capital generative. We expect to be more profitable this year than we were last year. And that will no doubt help. In terms of announcements for further buybacks or dividends or anything, I think that's probably something to talk about at the right time. Today, I don't think we're in a position to make any announcements on that. Of course, the guardrails are in place, the PRA will do their reverse stress testing. They will come up with, you know, their conclusions, their role. But either not agree with you that getting capital back into shareholders hands is a priority for us. And the actions that we've taken today demonstrates our sort of focus on that. And we have a very strong capital position to be starting from, in our view. In terms of card balances, UK and US. Yeah, I think, look, I think you're right, in the sense that spending, I think a spending recovers, that will be helpful in the US in the sense that we start benefiting from the interchange fees that are available there. And also, actually, even in the - in the CCT segment, we do include much as acquiring business as well. And of course, that will respond very quickly to the increases in spend level. I think that the growth in card balances themselves may lag that a little bit. Obviously, folks have been saving and acting very rationally, and remains to be seen just sort of their propensity to take unsecured credit on while they're still recent large cash in - on deposits in bank balance sheets. So look, I think it's a very sort of difficult judgment. We've tried to be sort of cautious, we'd expect us to be cautious. But, you know, there's - you know, as the world moves on and vaccines have their desired effects quicker than perhaps was anticipated and spend levels recover, that ought to be a benefit, of course, yeah. But it's difficult to be precise in that judgment, just given where we are at the moment.

That's fair. Would you agree that the recovery and spend and connecting that to lend is probably driven more by improvement in –mobility and reopening as non-essential spend picks up where there's probably a greater propensity to revolve a balance, is that kind of…

Yeah…

Kind of the typical goalpost [ph] that we would look for?

Yeah, definitely. Joe, I mean, you know, usually on essential spend that tends to be driven more by debit card transactions, and non-essential spend tend to be more where credit cards are deployed. But I still think that's a good lead indicators, economic central [ph] spend pick up, there's more propensity for that to improve card balances, so it's a good lead indicator.

And sorry, just one more thing, just to - just to make sure that we both agree with the PRAs said that you can return to more normal level, more normal board level capital decision making in respect of the half year unless and with normal caveats around the economy not falling apart, et cetera?

Yeah, look, I - yeah, we'll talk about more of that when the time's right, I think - let's get through this season. Let's get through, you know, whether the reverse stress test and various other things. But look, getting capital back to shareholders hands is a clear objective for the board here. And hopefully our actions this morning are a good demonstration of that, where we distributed, I think the maximum that was allowed under the existing guardrails.

Great, thanks.

Okay. Thanks, Joe. Can we have the next question, please, operator?

Sure. The next question comes from Jonathan Pierce of Numis. Your line is now open.

Morning, all. Two for me as well please. Hi, Jes, Firstly, the NIM and the UK bank, could you give us a sense of the trajectory of the NIM as the year goes on, if you [ph] were just stepping lower and lower through the year such that we'd probably exit below 2.4%. Would that be correct? And maybe as part of that, can you give us an idea of what you're thinking on mortgage margins as the year goes on, I noticed you're leading the charge back down in terms of some of your headline rates? The second question is on just a technical one, I guess on capital headwinds. In the first quarter, you've got so quite a big unhedged bond portfolio and looking at the report and accounts, 25 basis points shift up in yield to [indiscernible] by £4 million or £500 million, which is capital as well. So is - based on where curves are at the moment, given a big move up in the last few weeks? Is there another headwind coming in Q1, maybe 15, 20 basis points from the bond portfolio revaluation? Thanks a lot?

Yeah. Thanks, Jonathan. Why don't I take both of them as well? NIM trajectory? Yeah, it's actually quite a difficult one for us to forecast. Because you've got a few moving parts on there. You've got the yield curve itself. Now, that's obviously been steepening in recent times, that probably wasn't put into, you know, when we were sort of running our own projections. And who knows if that continues to steepen or flattens out. again, we don't know. Obviously, steepening is helpful to us, probably more helpful in DLTs. But we'll have some benefit in current year. Front foot mortgage margin is, of course, another one that's going to have to be driven by sort of dynamics of supply and demand in the mortgage market. It's held up actually reasonably well. And some of the headline rates that you see, and people do scan and pick up just got to be careful that he correlates that to where most of our production has been, and is likely to be. So we do expect in the forecast, we're getting some moderation to front foot mortgage margin. But it actually probably held up kind of okay, actually a bit better than perhaps we might have forecast. Now, again, we - that the real thing, here will be what happens on the other side of the stamp duty holiday, if you like, that the chancellor announced what his plans are around that at the March budget. So I think we'll have a better picture then as well. And volumes also, I guess, is another one that's not that straightforward to forecast, again, in an uncertain year. Mortgage volumes have been actually getting pretty robust. So I think that's probably helpful. And you know, the earlier question, Jonathan, on the recovery in unsecured loans, of course, it's a very high margin product, if there is an increase in non-essential spend, then, you know, you'd probably see an earlier recovery in unsecured balances and that may be helpful in the margin. We've tried to be cautious in all of these and, you know, things have moved pretty fast in yield curve. Speaking a lot probably since when we were doing this and quite frankly, the pace of vaccine rolled out is probably surprised us a little bit as well. So yeah, let's hope that, that optimism continued, but we shall see.

So starting here today, the message then actually, you think all else equal based on what you see right now, you could do a bit better than 3.4%?

It is possible, of course, it's possible. The brave person sitting here in the sort of sixth week in February forecasting the next sort of, you know, 46 weeks or something of NIM. But yeah, at the moment look, the dynamics are probably marginally helpful. I'd agree with that. In terms of - in terms of just the other point, Jonathan, on what is the trajectory? No, I wouldn't expect us to be below or well below 240 basis points at the end of the year, and will be sort of continue to gradually grinding down on current projections, but not sort of going well below 240. Your second. Yeah, your second question, is there another headwind due to sort of a AFS or fair value of OCI? Not really, it's not significant. If it was, we'd then called it out. And, you know, the other thing, of course, is when you have significant moves in currencies and yield curves, typically that's a reasonable trading environment for the other side of the businesses. And that's a very important part of our opportunity set here. So no, I wouldn't call that a headwind.

Okay, thank you.

Thanks, Jonathan. Can we have a next question, please, operator?

The next question comes from Jon Peace of Credit Suisse. Your line is now open.

Yeah, thank you. So my first question is, could you help us maybe size the material improvement in impairments you're expecting for 2021. A few European banks have suggested that the impairment level might come back close to a through-the-cycle rate. If I analyze your second half 2020, that's probably similar, a little bit above your through-the-cycle rate. I mean, could you think you could sustain that H2 2020 run rates in impairments. So this next year is, as you think about things? And then, if I could just ask a little bit about the investment bank, and how have you started the year in 2021? I think you mentioned, you were well-positioned. A few of your peers have talked about revenues being up here year-over-year. Has it been the same to you? Thank you.

Yeah. Thanks, Jon. Jon Peace and Jonathan Peace, will obviously going to be a tongue twister for me. But, hi, Jon. The impairment and where we are? Yeah, I mean, you're right to point out, we've also been running at relatively low run rate, both in the third quarter, in the fourth quarter. Really, the big wildcard here is when or if do we get to see the defaults that our models are forecasting, and we were not seeing it yet, you could make the case that there's going to be plenty of government support out there, in which case, we don't get to see those levels of unemployment or that in - that degree of consumer stress, and we may end up being over provided. But we're trying to do this as straight as we can. So we've actually even pulled out in our flight this morning, have we just let the model to run by themselves, we would have had a lower impairment balance as a result of that by about £1.4 billion, we've taken up, what's called a post-model adjustment to supplement where the models were. And that's really because, you know, the models just can't cope with this sort of very unusual sort of economic picture that we're in at the moment with sort of, you know, big fluctuations and quarter-on-quarter in economic data. But look, at the moment, it's fair to say that the impairment picture, the underlying credit picture looks incredibly benign, you can see that in our corporate. For example, the fourth quarter tends to be the highest quarter for corporate defaults. And you can see we only have £52 million in the fourth quarter. And that's extraordinary when you think about all the headlines that you're reading. Reiterate, haven't really budged on our unsecured credit policy looks. It looks pretty benign. But we I think we need to wait and see when we're on the other side, if you like it, the economies reopening. And Jes you might want to add anything on that?

Yes. On your second question, Jon, about the IB [ph] in the first quarter, we don't comment during a quarter. But I would say a couple things. One, last year was a very robust market for the capital markets. We underwrote about £1.5 trillion worth of debt for sovereigns and corporates. That's in the public inventory now. And the corporate bond market itself grew by 40% over the last two years. And then that drove a lot of the secondary market activity, underscoring the market's performance last year. Also, we grew our market business last year about 45%, whereas the overall industry grew about 20%. So we continue to capture market share. I'm sure you saw the commentary this morning from Credit Suisse and Deutsche Bank. So I'll sort of leave it there.

Thanks for your questions, Jon.

Yeah, the next question, please, operator.

The next question comes from Alvaro Serrano of Morgan Stanley. Please proceed with your question.

Good morning. Thanks for taking my questions. Just one follow up question on the NIM guidance in UK please. The 240, so is that 16 basis points reduction versus the Q4 level. Can you maybe around if you could bit quantify in terms of your assumptions in the way you think about the guidance? How much of that reduction is structural hedge versus consumer sort of lending mix? So we can maybe sort of draw our own conclusions around the recent steepening and views? And second, on the cost outlook. In the past, you've given more specific cost guidance, I realized you've taken some restructuring charges. And you've also called out the COVID expenses will remain elevated, I think is the word to used. Maybe you can give more - a bit detail is easier to get detailed by division. I don't know if you can comment on BBK [ph] outlook versus the overall volume? Thank you.

Yeah. Thanks, Alvaro. Why don't I take both of them? In terms of NIM in the UK, I mean, the first thing I would say is just to sort of contextualize this, of course, you know, one of the comments that you've probably picked up from our releases this morning in a slide where is net interest income for Barclays is somewhere around 35%, 36%, 37% for the group of the UK net interest margin is only a portion of that. So, you know, it's a relatively small part of our top line, and the bulk of it is in sort of fee and other types of activities, but nonetheless, of course, an important area. In terms of the mix of that and structural hedge contribution, I guess, two comments I'd make on that, as I mentioned a little bit earlier, Alvaro, we haven't captured in sort of latest yield curve moves. And probably that's what's prompted your question. So you know, the steeper curve, how much of that might influence. The only thing I'll do is there's a slide in our appendences, which I'll get the IR team to point you, if you haven't already come to it already, where we've given a sort of a sensitivity slide to and an interest income for upward shift in the yield curve and downward shift in the yield curve. Now, these are - be careful with these, because, you know, we're assuming parallel shifts, and you know, it's very complicated stuff, leading slides of stiffening and shallowing. And, you know, various other strengths, but at least it gives you a sense of the sensitivity. The [indiscernible] more the LTUs, but there will be a, you know, there's a steepening as we've seen and it stays or continues to steepen, it will have some benefit into this year as well. I'll probably leave it at that. Although the other thing that may be helpful actually, is from our margin disclosures, you'll be able to see the notion or the studies that we run and the contribution that the gross fixed locales, so you'll get a sense of the yield and, and, you know, you can make your own assumptions as to what that might refinance and model that accordingly. The final comment I'd say is, you know, we do expect balances to grow this year, interest bearing balances to grow, and they did grow last year as well. So NIM, of course, is one part of the equation for an interesting combination. I know you guys know all this, but just for the fear of stating the obvious, you know, you did need to take a view on balances as well. And then we do expect a decent growth in the mortgage business. And we'd like to see growth in the unsecured business. We haven't seen that yet. To the earlier question from Joe, I think it will really be predicated on when non-essential spend returns and how quickly they're transmitting to - into revolving credit demand. Costs. Yeah, in a structural sort of cost actions is a way of life for us. And we, you know, we don't call it restructuring, we don't put it below the line, it's something we do every single year. We've given you some comparisons in the past. We will do some more again, in 2021. And we'll include it in our overall cost line and not try and, you know, be clever about reporting things above and below. So you can see the full effect of that. I think, you know, the good news is, given the diversification of the top line, particularly some of the strengths we've seen in the CIB and you know, we're optimistic about that, as we go into 2021. That'll give us the capacity to, first of all continue to in some of our consumer franchises, we really like those businesses. We'd like to diversify. For example, our US card portfolio, we're very excited about the UK, mass affluent wealth proposition. We like transaction, banking was incorporated position there. And the diversification of top line does allow us. In addition to the efficiencies that we will naturally create and capacity we will create and our cost line every year to continue to invest. I haven't given guidance by division. And I don't think we'll do that at this stage. It is, again, it's an uncertain world. And I think it's difficult to give precise guidance because look, we don't really know when economists are coming out of lockdown and what the economy's on the other side of lockdown. We're probably feeling more optimistic than we were when we were probably, you know, writing a lot of this. But it's sort of a fast-moving picture. So probably more to come at the right time.

Thank you.

Thanks, Alvaro.

Can we have the next question, please, operator?

Your next question comes from Benjamin Toms of RBC. Please go ahead, Benjamin.

Good morning. Thank you for taking my questions. The first is on the CIBs, is performed well this year and the market share has materially increased. Do you see yourself continuing to take the same market share gains in the IB or is there a lot harder work to win share from here? And then secondly, just on real estate optimization, which you've spoken about before, there's not much detail about that in the slides is that because it's a 2022 thing, is now not the right time to get faster and harder on branch reductions? Can you just give some more color around real estate optimization, please? Thank you.

Yeah. On the market share side, obviously, we have good momentum in the IB through every quarter of last year. And, you know, across equities and macro and credit. So yeah, we can - we hope to continue to gain market share. And also, you know, we do expect the size of the market to continue to grow. And that supports the financial performance of that business. In terms of branch closings. You know, the consumer in the UK is definitely moving to interactions with Barclays, through our digital channels. Our sales through the internet, and our payments business were up over 30% last year, and the usage of our mobile banking app, for instance, also was growing at a very robust pace. So as that transition happens, and our consumers engage with us, digitally, and we advance our digital offering practice is useless. And, you know, we're going to be very prudent in how we deal with branches. We still have over 700 in the UK, but I think you gradually see that number go down as we have in over the last couple of years. So yes, I mean, there will be further branch closes.

Thanks for the question, Ben. Can we have the next question, please, operator.

The next question comes from Rohith Chandra-Rajan from Bank of America. Please go ahead. Rohith Chandra-Rajan: Hi, thank you. Good morning. My first one sorry, it's another follow up on the UK NIM. The slide that you mentioned before on the structural hedge rate sensitivity would suggest something like that potential £100 million outlets from the move-in rates that we've seen in recent weeks. So I just wanted to check that that's roughly the right ballpark. And in that 240 guidance for being UK, what are you assuming in terms of count balances, I guess, on average through this year? And then the second one was on CCMP? I guess there are obviously two parts of that business. So in your - in reference to an earlier question, I think you suggested that the payments part of the business should sort of track spending trends. Is it fair to assume that the mix of the cards business probably means that that lags the broader trends in the US, in US card balances, given the sort of bit more exposure to travel and leisure?

Yeah. Thanks for your questions, Rohith. Why don't I take them? In terms of the structural hedge potential upside from the sort of recent steepening in the curve, I don't want to sort of, quote too much around whether it should be £100 million. The reason I say that is, you know, the slide you're referring to is sort of parallel shift rather than steepening. And, you know, five-year rate and 10-year rates. So it's directionally positive, but I'm reluctant to give you a sort of precise number on that. But it's, you know, it's a positive and obviously, that brought it. And the 240 basis points NIM guidance, we actually assumed UK card balances would be flat to maybe even down slightly. Now, that's sort of the - when we're making all of these projections, you know, the world moves so quickly, that may be too cautious. And, you know, maybe economies recover quicker and normal central spend picks up quicker. So you know, we'll have to see. I mean, it is, as you know, right, it's a sort of - it's a twofold thing that is, first of all, you've got to have the spend sort of in the right categories, the demand if you like, and then the credit appetite as well. So we'll see how that goes. But we were rather cautious in our forecast expecting card balance to be flat to maybe even slightly down a little bit. In CCP segment. In terms of the US card balances, yeah, I mean, it will follow spend. And so again, in some ways, the good news about the US market is people value these rewards. And they're not just spending because they need unsecured credit, they tend to value these. It's a very slightly different dynamic. And of course, the cards that we have are very much non-essential spend, you know, travel, entertainment, hospitality, leisure, et cetera. So if spending in those categories were to come back and you know, case we made that it will start coming back over the course of this year, then you will see some benefits flowing through, probably in the second half of the year, rather in the first half year, you know, there is a timing sort of thing when sort of people start booking their travel and holidays and all that, by the time it ends up when your card balance is - there's some sort of lag. But probably be a bit more quicker to see that recovery in the US just the nature of the business in the US and our partnerships in the US relative to the UK.

The payments business in the UK, you know, we've made a significant investment in the technology, which runs the merchant acquiring business. And we're starting to see that have an impact, particularly, as I said, through internet sales, and whatnot. We're also connecting all of our applications that run our small business banking group, with our merchant acquiring group. And that will also have, I think, an impact on the growth of our merchant acquiring business, particularly in the small business space, which is where the profitability really lies. Rohith Chandra-Rajan: Thank you. Can I just clarify on the UK cards balances, when you say factor down year-on-year, are you talking about year-end position? I presume you're talking about the year-end position?

Yeah.

Yeah. So by the time you get to point two point, 31st, December, 30, September, we thought would be flat, maybe marginally down, and [indiscernible] Rohith Chandra-Rajan: Thank you very much.

Thanks. Rohith. Can we have the next question, please, operator?

Sure. The next question comes from Ed Firth of KBW. Your line is now open.

Yeah. Morning, everybody. Just a quick question on the capital headwinds, with the two areas where I was just wondering that, one is pretty cyclicality. I think in the past you - did you talk about £5 billion or something at the half year as a sort of proceeds to the orders of magnitude number, is that if I remember that wrongly, that was the first one. And then secondly, you highlighted in your words, regulatory forbearance that would be coming back this year. Can you - could you just remind me roughly what we're talking about in terms of numbers for that as well? Thanks.

Yeah. So on the second part of the question, Ed, regulatory forbearance, that's a good example is PVA, which was sort of granted in the - it might be in the first quarter of last year, and reverses on the 1 of January. So that's one example. I think software capitalization, I probably put is a similar example where PRA have been quite, quite straightforward in saying all along that they never considered it to be good capital. So they'll no doubt reverse it and looks like they'll do that during 2021. So those are probably the two clear examples that come to mind. I think all in all, though, Ed, I'd still sort of come back to the broader point there. You know, I just wanted to be - help you with the modeling, there are headwinds out there. But you know, we're still well above our stated sort of guidance in terms of target ratio, and we expect to be generating capital, net capital over the course of the year. So just probably in the round, we're still pretty comfortable with everything.

And it's a pro-cyclicality numbers, if I remember that correctly, I'm not saying that I want to put that in my model or anything. But just to get a…

Yeah. We put out the - the number we called out was £10 billion of pro-cyclicality that we've seen in 2020. I can get the [indiscernible] sort of just pointing to the right direction of the table, the RWA table will probably maybe get into the disentangle that and getting get to that number. What it will be for this coming year, crikey, that's a tough one to forecast. It's actually surprises on the downside. A lot, you know, I've guided to this sort of pro-cyclicality kind of coming in Q2, Q3 and Q4. I guess I'm going to stop guiding at some point because it hasn't happened yet. But, you know, if you believe sort of conventional thinking that at some point, the stress in the economy results in default, you ought to see some pro-cyclicality, but you know, it hasn't happened yet. And it's not happening in the near term play that way.

Sure. Okay. Thanks so much.

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

The next question on the line comes from Jason Napier of UBS. Please go ahead.

Good morning. Thank you for taking my questions. The first one, I guess for Tushar, just coming back on the commentary around costs, you've retained your sort of medium term 60% cost income objective, and I guess where consensus is now is that costs are going to be broadly flat this year with revenues down 5%. I would have thought that coming into 2021, with probably a higher headcount than planned and, you know, those strategic costs for last year and COVID costs in the base that better than flat would have been consistent with what Jes has said in the past about delivering a sort of a stable cost income ratio and CIB over time. I just wonder, you know, whether you might give a bit more concrete guidance on the direction of travel for cost in aggregate, it doesn't seem sensible, unless there was an awful lot of investment that didn't happen last year as a consequence of COVID. Not to have better flex and costs if revenues are going to be down as consensus expects. So that's, that's the first one. And then secondly, as you've already highlighted, the risk overlays that you had to apply throughout the last, through the second half of last year are mammoth. And everyone continues to be positively surprised on the lack of movement into stage three. I just wonder, the coverage levels you've got are huge and rising still? How confident are we given how long this has been going on? Perhaps that the stage splits are right, you know, if we can be sure that stage two is as big as it ought to be, then perhaps we can think about, you know, what prevision releases might be sensible into the second half? Do you have a good handle on which of your customers are, you know, and recipients of further aid and so on, because clearly, the payment holidays are almost all gone now? And yet, things continue to proceed really, very strongly from a credit perspective. So I guess if we could just talk to confidence around staging splits and coverage, that'd be helpful.

Yeah, I'll do them in reverse order and take them. So on terms of staging splits, you know, on many of our customers, they do have current account relationships with us, of course, for those customers, we have a lot of insight as to this to for the specific situation, and for the high conviction on sort of staging. Of course, there's a - it's an open market product that we have in our unsecured books. So you don't have to be a current account customer to have a credit card with us. And if you're not, obviously, we have less visibility in your specific sort of circumstances. I would say, though, I think at the end of the day, we don't have any historical sort of data to calibrate this to either. So we are being, I think, in our words, appropriately cautious. And you can see that in the words you used, the risk overlay. If this turns into a relatively smooth adjustment, and I think the real unknown here is, of course, the involvement of governments and the fiscal response and what will happen here, there's, you know, a think tank that I think announced their report this week, talking about staging out furloughs and things like that to kind of make a smoother transition as possible. If that was to be the case, and unemployment levels really don't go anywhere near where our met - are currently being modeled, then, you know, there's a case to say, we may be over provided, you know, we'll knowing the time, but we've tried to be as transparent and as open as we can. I mean, the other thing, I think that's in there as well, that is, again, a very hard thing for the models to pick up is the glut of savings. So consumers are in - you may have higher unemployment levels, but you've got a lot of cash sitting in deposit accounts. And you know, that may lessen the stress and balances have fallen as well. So, I think this is all surprised to sort of, you know, look at the sort of Q3, Q4 and even into Q1 how benign credit is looking. It's something surprising, but, you know, we'll be on the other side of the lockdown and feel like soon enough, and then we'll know for sure. On cost. Yeah, I think for us Jason, is we - you know, the cost income ratio is an objective for us. And it's something that we manage sort of not trying to rush to get to any one particularly, and we try and manage the company for the medium term. And so it is important that we continue to invest. And, you know, cost income ratio is as much a function of income as it is costs. And we have some areas of growth on the top line that we are very excited about, you've seen that in the CIB. I think in terms of market share, pick up there, there's potentially more to come. We're doing really well in some of our electronic trading capabilities, doing really well in securitized products with relatively small products that prosper growing extremely quickly. In equities as well, is taken probably the last six months of the year, probably our performance in our equities trading line, which has been quite interesting for us. Equity capital markets is another really interesting area for us in building out that franchise, that's doing really well at the moment. And in the consumer businesses, we'd like to diversify our costs portfolio, AARP, the American retirees, portfolios coming online this year. Jes talked about some of the investments we're making into our payments business. So I think it's important for us to continue to invest and focus on the top line, as well. And with the way we're able to do that is because we can generate capacity for our ongoing efficiencies during the course of a year, like last year, in a year, like this year, to sort of fund that without expenses sort of climbing. You know, in a way, that doesn't make sense. But that's how we think about it. And ultimately, to get to a direct sort of shape of the company, we've got to think about the top line and not just the cost line, when we look at cost income ratios, that including - you want to say on the Jes?

Let we just add another line of growth that I think we'll start to articulate more explicitly relates to our point-of-sale financing. You know, we have a terrific partnership with Amazon in Germany, that's their second largest market. They have 40 million consumers that regularly use Amazon online. We have a great partnership with Apple. In the UK, we found all of the iPhones and tablet sales on an installment basis. And those are just two examples. We are rolling out our point-of-sale financing, as we build out the payment space. Thanks for the questions, Jason.

Very much. Thank you. Can we have the next question, please, operator.

Your next question is from Guy Stebbings of Exane BNP Paribas. Please go ahead.

Good morning. Thanks for taking the questions. First, I just wanted to come back to costs. And then I had a question sort of longer-term consumer banks outlook. And son on costs, just focusing firstly on the CIB, costs were broadly flat this year, despite the very strong revenue performance. And I know in the past, you've talked about your cost base being less variable on the CIB than some of you peers. But even so, one might expect to the high costs. If consensus is right, for 2021 and CIB revenues are markedly lower in 2020 - in 2021, on 2020, appreciate that might not be your view. But if that was the case, should we expect a reasonable drop in costs, especially given some of the FX movements as well? And I appreciate it's hard to guide on cost income this year, given the uncertainties on top line. But to the previous questions on sort of efficiency gains, perhaps structural costs charges that's flat or down this year, on last year, perhaps the levy should be lower. I mean, I think that the absolute cost base should be near 13.5, or perhaps lower, in 2021, in consensus somewhat higher? And then the second question was just on consumer balances longer term mean, I mean, we've seen your UK consumer assets declined over 30% since the start of 2020. They're still declining, and not a similar situation in the US. And as we look further ahead, it is to get your views on how many years that takes recover those balances. Would your central assumption be that we just model, the low mid single digit as the recovery takes hold per year, which would take you know, 10 years to get back that balances or given the very unique nature of this crisis, it could rebound much sooner than that? Thanks.

Yeah. Why don't I kind of start off. Cost in the CIB, of course, there is flex there in terms of the bonus pool. And we've made that given the sort of framework that we're operating in the sort of the bonus cap framework here in, you know, I guess, still, for us in the UK, as flexible as we can, we made some changes. I think when Jes first arrived just to give us that. So there is some flex there, and there will be judicious about the pace of investments and all that. But let's go back to your earlier comment Guy, we probably do have a different view of the income outlook, then you may have and then not used specifically, but then, you know, others in general may have. And I think the investments that we've been putting into the CIB have been rewarding us quite well. And so, you know, we'll continue to balance that appropriately. In terms of consumer balances, I can't imagine it's going to take that long to recover, I think, you know, we live in very, sort of a weird sort of contraction, that's been very dramatic. I don't think you'll see sort of steady sort of multi-decade build up, as we've seen in the past. I think the other thing as Jes mentioned, you know, unsecured balances, cards are important, but, you know, point of sale finance, you know, customer behavior is changing, the younger customers much more into the sort of installment financing at the point of purchase. It's great business for us, Jes mentioned the Apple partnership in the UK. You know, we've got a tie up with Amazon in Germany, and there's various other things that, you know, we'll talk about the right time. So I think it'll be a more rapid recovery than that will be, you've got to see an economy that sort of, you know, back to a sort of a more quote, normal level, whatever that is, these days. Now, I think you'll see a relatively quick recovery. I think, you know, when they reverse the lockdown, and all the shops and restaurants and stores across United Kingdom open up, I think the spring back and spending is going to be to the upside. So I would echo at to short said that this is not going to be a sort of low single digit, grind it out over a decade, I think the response to the pandemic being over, given how aggressive the fiscal and monetary policy has been, is going to be - it's going to be strong. And we'll feel it in our numbers I again, I go back as well. You know, for the last decade, both our consumer businesses in the UK and in the US were generating consistently, mid-teens, a high teen returns on capital. I think that is more a reflection of the fundamental strength of those two businesses and what's happening in a once in a century pandemic. And going back to the cost income ratio, whatnot, we get any sort of recovery to where those businesses look like in 2018 and 2019. And we hit our financial targets.

Thanks for your questions, Guy. Can we have the next question, please, operator.

The next question comes from Robin Down of HSBC. Please proceed with your question.

Hi. Yeah, I just wanted to come back on the impairment side. I am bit confused, if you like as to what you've done, because you've increased the macro or you move the macro assumptions more positively since Q3. And then you've also changed the weightings of scenarios, towards the upside scenarios away from the downside scenarios. And yet, at the same time, you've applied a £1 billion for the amount in overlay, it just feels somewhat inconsistent. I suspect we're not going to get the answer to this. But are there any particular trigger points that you're looking at? Because I can't help but feel that as we come and run out, have come out of lockdown running through this year, that we should be looking for that release to come through at some point the second half? So that was just one question. If there's any kind of particular trigger that you're looking at in terms of that, because I can't really see why you put the extra billion aside? And then same question on structural costs. Apologies, this was asked earlier on, but any kind of view as to what those look like in 2021 and what the payback might be from? Thank you.

Yeah. So Robin on the first question on impairment, more technical point of weightings on the scenario. Actually, it's a function of GDP actually. So the way these models work is they will take economic outlook and a baseline economic outlook and then project scenarios either tied to that, to up to down and these are model driven weighting. So it's just a function of the model, that models based on historical data and how economies and the sort of confidence level, all the different projections, baseline to actual worked out but, that's purely just mathematics if you like behind the scenes. The PMAs what that indicates is that, it's a view of trying to - the challenge we have at the moment is, the way the models are written was calibrated on previous sort of business cycles, previous business cycles, you never had such a rapid expansion and contraction in economic data. And so what you tend to have is a model just exaggerate those moves. So when unemployment starts growing it massively overshoots. And when unemployment sort of stops, and starts falling, it just thinks the recession is over. And it just releases everything immediately. And I think we'd all probably say at the moment, but it's just hard to know, for certain how the economy will adapt to a sort of post-lockdown world. I think we're close to that point, the early signs are that credit looks incredibly benign, and governments are looking to do their best to smooth the transition. Well, that's to be the case, then we probably won't see the levels of unemployment that sort of the models are working off, and we may be able to provide it. But you know, we'll know in good time, we've tried to try to be somewhat transparent about these and how the models are currently working, and what we're having to do to try and counteract the exaggerated moves the models may have. On costs, we haven't called out specific sort of structural cost reductions for 2021. We do this every year. If there's anything sort of meaningful and important, then we'll call it out as we go along. But nothing, nothing to say, specifically at the moment. Going back to the impairment, you know, when the crisis began, we wanted with the financial resiliency, that the bank was showing in the level of capital that the bank was accumulating, we wanted to be, you know, prudent in the impairment line, and obviously got our impairment reserves to, you know, £9.4 billion, which, given the size of our balance sheet is in a very strong position to have and, then I think all of us are positively surprised by the degree of the government's, both here and in the US, and in Europe, indeed, response to try to maintain the economic damage being caused by the pandemic. And that is encouraging. And if we are coming to mass vaccine rollout that we've seen in the UK, that's going to make the credit picture much brighter for us.

If I could just come back, and I appreciate fully that you want to be prudent. And I think, if we were all in charge apart, because we'd be doing the same thing. But the reality is, you know, if the economics of outlook is as you forecast, and we forecast and consensus forecasts, it just feels like you've defaulted away another £1 billion that you didn't need.

Well, Robin, I mean, we tried to do what we think is the right level of provisioning for what, we - we think we have it right. But you can certainly make the case that credit will turn out better than its forecast. And I'll probably bet others judgment. You know, we think we've got it right. But look, we're all looking at crystal ball that we've never had experienced before.

And you saw all the - you know, almost all the US banks released in the fourth quarter. And that's why because they got it wrong in the first quarter of last year. It's just they're reflecting what they're seeing on the graph.

Yeah, okay. Thank you. A - Jes Staley Can we have the next question, please, operator.

The next question is from Chris Cant of Autonomous. Your line is now open.

Good morning. Thank you for taking my questions. I had a bit of a couple of - couple of point in costs and then on FX, please. So the 60% cost income ratio target has been a medium-term target for a while now. What's the timeframe to hitting that? And in terms of the mix of the business, how do you see the shape of the group in terms of profit splits going forwards when you're thinking about that 60% cost income ratio, because if I look at controllable costs and income, so talking litigation conduct in the levy, in 2019 two consumer divisions generated £5.5 billion of pre-provision profit, and the CIB was 3.3. And for 2020, those numbers have basically flipped on their head and it's now £3.4 billion for the consumer facing businesses, and £5.8 billion from the CIB, in your commentary it doesn't sound great in terms of the consumer outlook. And so, what are you assuming there in terms of the longer-term structure of the group because the CIB cost income ratio in 2020 was at the very low end of the industry, 55% for the full year, I think it was so, you know, is that actually sustainable, that you've never delivered that in the CIB in any previous year, it would seem necessary to assume that you can maintain that cost income ratio to be able to get the group below 60, if the mix of the businesses is now so skewed towards the CIB? And then in terms of FX, you've talked in the past about 40% of revenues being in dollars, that was back in 2019. I think that remark, what was that number in 2020, please, given the skew towards the CIB? And related to that how much of your cost base is in dollars? I'm just trying to think about the FX headwinds you're facing for 2021, which looks like it's going to be about a 7% to 8% year-over-year dollar headwind? Thank you.

Thanks, Chris. Why don't I take them? Look the 60% cost income objective is something we've had, as you say, some time, I think we were getting towards that, that sort of zone in 2019. In fact, we were million miles away in 2020. But we'll see 2020 was the year that none of us forecasted would be what it was. We feel we have the diversification in the company. We obviously seen a fairly sharp decline in the consumer facing businesses and a big tick-off in wholesale, you know that no doubt, we would expect to see an improvement in the consumer facing businesses, as economies recover, and you know, we'd like to continue to think that we can consolidate and continue to improve even the contribution that our wholesale businesses have. With that mix in mind, we still believe we have a path to a 60% cost income target. It's very hard to be precise on you know, it only works if you've got this percentage in consumer, this percentage in wholesale, you have to manage it on a sort of a variety of outcomes. And we believe we can do that. We can't give you a year on it. Obviously, you know, this is a - it's a very uncertain world we live in. So I think it's very difficult to forecast with any degree of precision at the moment. But we still feel that's an achievable objective for the company in a reasonable timeframe, we won't give you the sort of the precise timeframe at this point in time. In terms of foreign exchange. Yeah, you're right, that we pulled out approaching something like 40% of our income was in dollars, two years back or so. It's been a mixed bag this year, of course, the investment banks done real well. And our cards business in the US, of course, it has come off as balances have come down. So there's still pluses and minuses there. It's fair to say, you know, a stronger pound is a headwind for us, because we are profitable in dollars. And that is just who we are. So, you know, we don't give a sort of a cost breakout dollars, because we obviously have folks in India, we have folks in all sorts of different parts of the world. So it's not quite as straightforward as that. But yeah, it's a headwind. The other sort of, I guess, if you're going to model FX across all lines, creates impairment as well, I guess we want to be a tailwind. The - obviously the consumer cards and payments a lot of that's US card driven and even on the investment banking. So the credit portfolio component of our credit books are very dollar denominated as well. So, you know, net, net it's a headwind.

And we're going to keep the diversified model, Chris. And, again, of the pandemic will get behind us and the consumer business will start to grow again, and we'd like to keep that balance between the investment bank and our businesses. And in a normal economy, I think the 60% cost to income ratio is very achievable given that we delivered 63% in a very abnormal economy.

If I could just follow up on the FX point, please. Could you help us out with that, it does feel like quite a big effect for you year-over-year, you're not willing to comment on the outlook for CIB revenues. You don't want to comment on [indiscernible] costs, it would be really helpful if you could give us some breakdowns in terms of allowing us to get a sense of the currency effects. I mean, is it more than 40% of revenues in 2020 in dollars, I suspect it is. And I guess the percentage of cost is higher than the percentage of revenues given that you're a UK domiciled bank with a group center cost base which is going to be presumably more in Sterling. Meaning am I alone the right lines there, is it sort of 45% revenues, 50% costs?

Chris I'm not going to comment on your numbers on there, we haven't disclosed that, I don't want to be disclosing stuff like that, on a call like this. But suffice to say that, you know, we are profitable in dollars. And a stronger pound is a headwind. But I'm not going to give you any more color than that. Maybe in the future, we'll maybe breakout, the geographic splits or something like that. But that all we'll say at that moment…

Okay. Thank you.

Can we have the next question, please, operator.

The next question comes from Rob Noble of Deutsche Bank. Please go ahead, Rob.

Morning. Thanks for taking my questions. And most of them have been answered. So just one quick one, you highlighted, it'll be tough to grow into the CCP, do you think you have to grow non-interest income in the UK this year? And how's the lockdown experience in January, February in terms of betting on interest income then compared to last year? Thanks.

Yeah, I mean, real brief for - Ron, sorry. But we'd like to think so. I mean, again, it's a little bit of a call on economic activity. But you know, we'd like to think so I mean, you know, focusing on some of our fee generating opportunities is important to us. We've given you some of the ideas where that is, certainly in the world of payments, certainly in the world of some of the wealth activities that we have. So yeah, I think I think we - it's a priority for us. Yeah. And depending on this with other our economic circumstances, there is possibility we could do that. Yes.

Thank you.

Thanks, Ron. Can we have the - I think really one question that's on the queue. So we'll just take the last question, please, operator.

The final question we have time for today comes from Martin Leitgeb of Goldman Sachs. Please go ahead.

Good morning. Firstly, could I ask on your market, your ambitions in Barclays UK. And this is related to cards and mortgages. And on cards, Barclays UK card balances were down more than that of peers and more than that of the system in 2020. And equally since 2016, there has been a deemphasizing of cards growth in the UK. At Barclays UK, how should we think going forward? Should we think you're kind of market share and credit cards to stay roughly stable? Or should that increase or decrease from here, given up the title and opportunity? And related to that and similar question, and for mortgages, it seems like you are - you're growing your flow shares slightly ahead of the structure in the UK. I know that - the comparatively high exit deposit base now within Barclays UK, does that give grounds to maybe faster grow and then share gains in mortgages going forward? And second question is on a more broader, just on the regulatory framework in the UK, post-Brexit? How should we think on a kind of a medium-term basis, the regulatory frameworks to evolve? We have seen software and tangible treatment being slightly tougher compared to some of the other regulators? Is that the direction of travel? or could they equally be items and elements where the regulatory framework could make things easier from a Barclays perspective? So I don't know ring fencing, or is anything other way around? Is there anything you would wish for which would change in terms of regulatory framework going forward? Thank you.

Yeah. Thanks, Martin. I think in terms of market share of our consumer businesses, cards, and mortgages. Cards, you know, we've still affected quite openly that actually, this is going back a long way. But from the time as the Brexit referendum that we were taking a very cautious approach in UK credit, so we're probably a little bit early, but glad we were cautious sort of leading up to a pandemic, which of course, none of us forecasted, it probably does turn into a better net P&L outlook for us, because late vintage lending is where you typically take most of the pain. I think, from this point on, now we're on a different part of the cycle, I think you'd expect us to predict and possibly even lean into risk, you know, as you sort of go into an upswing. So I certainly wouldn't expect our market share to administer anything, we'd be focused on increasing it again. Mortgages is likewise, we are running, you know, a natural stock of mortgages. We're running well above that at the moment. And I think that's something we would be minded to continue to do. As long as the return to there, you know, we're very focused on the risk reward balance at the moment. I think it's a very attractive business from our vantage point. So we'd like to increase market share probably in both, but probably slightly different reasons mortgages, we're probably already doing that. And I think for unsecured credit, I think we're at a point in the cycle where we'd want to be leaning into that. And, again, I just mentioned in the past, it's not just cards, that unsecured credit can take different forms, different forms of lending. So we would look at that in the round as well.

I'd also add that, you know, if you look at the challenger banks, and the digital banks, they clearly have headwinds and challenges. And I think that always makes our market share more defendable. And I think you'll see that that happening over the next couple of years. Thanks for the question, Martin. And I think that's all we have at the moment.

On regulation.

Oh, sorry. Okay. Real brief on regulation. I'm not sure it's much info I can give you on that Martin. The PRA was very involved in, I think, influencing the European rulebook. So I think, a lot of what they would want to see probably made into the rulebook and the bits that they probably didn't agree with, for example, software, capitalization, they've been pretty open and straightforward about. So, you know, I'm sure things will evolve over time. And I think there is very sophisticated, very, extremely responsible and balanced regulator and I expect they'll be continuing that thing, but I don't have any sort of greater insights to any big changes that they will do or not. I am not sure I've got anything to comment on that.

Okay. With that, thank you all, everybody. I am sure we'll get the chance to speak to some of you over the video, I guess in the basic round. With that, we'll see you right there.

This presentation has now ended.