Stuart T. Gulliver - Group Chief Executive Officer, Chairman of The Group Management Board, Member of Management Board and Executive Director Iain James Mackay - Former Chief Financial Officer and Member of Executive Committee

Sally Ng - China International Capital Corporation Limited, Research Division Arturo de Frias Marques - Evolution Securities Limited, Research Division Raul Sinha - JP Morgan Chase & Co, Research Division Michael Helsby - BofA Merrill Lynch, Research Division Ian Gordon - Exane BNP Paribas, Research Division Alastair Ryan - UBS Investment Bank, Research Division Alistair Scarff - BofA Merrill Lynch, Research Division Rohith Chandra-Rajan - Barclays Capital, Research Division Robert Law - Nomura Securities Co. Ltd., Research Division Steven Hayne - Morgan Stanley, Research Division Thomas Rayner - Exane BNP Paribas, Research Division Ronit Ghose - Citigroup Inc, Research Division Christopher Wheeler - Mediobanca Securities, Research Division Michael Trippitt - Oriel Securities Ltd., Research Division Ian Smillie - RBS Research

This conference call and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the group. These forward-looking statements represent the group's expectations or beliefs concerning future events, involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Additional detailed information concerning important factors that could cause actual results to differ materially is available in the HSBC Holdings plc 2011 Interim Management Statements. Past performance cannot be relied on as a guide to future performance. The HSBC Holdings plc Interim Management Statements, HSBC Finance Corporation and HSBC USA, Inc. Third Quarter 2011 Results Conference Call with investor and analyst will begin in 10 minutes. The host for today's call is Group Chief Executive, Stuart Gulliver. Mr. Gulliver will make some brief introductory remarks following which, there will be an opportunity for questions and answers. [Operator Instructions] Good afternoon, ladies and gentlemen, and welcome to the HSBC Holdings plc Interim Management Statement, HSBC Finance Corporation and HSBC USA, Inc. Third Quarter 2011 Results Conference Call with Investors and Analysts. For your information, this call is being recorded. And at this time, I'd like to turn the call over to your host today, Mr. Stuart Gulliver, Group Chief Executive. Stuart T. Gulliver: Thanks very much. So welcome, everybody, to this call. I have Iain Mackay with me here today. We're both in Hong Kong. Though we'll give you a quick overview of the results and then, obviously, go to questions. So as you've seen, our reported profit before tax for the third quarter was USD $7.2 billion, which gives us a year-to-date of USD $18.6 billion, as of which, of course, include around USD $4 billion of movements in the credit spread on the fair value of RM debt. So clearly, therefore, meaningless. Therefore, if we switch the underlying numbers, which is clearly how we all judge the bank, it gives us a bit of a clearer picture of what's going on. The underlying profit before tax in the third quarter is USD $3 billion, which is down $1.6 billion on the same period in 2010. And the underlying PBT for the year-to-date was $14.4 billion, which is down $300 million on 2010. And as you all know, because we all work in the same industry, the industry's faced significant headwinds during the third quarter, not least the eurozone, which has impacted our performance. In fact, there's 3 main factors, which have impacted our underlying profit before tax in the third quarter. First, the eurozone uncertainty, which hit revenues in Global Banking and Markets through the rates and credit line. Secondly, adverse movements in non-qualifying hedges, reflecting a decrease in long-term U.S. interest rates impacted our U.S. run-off book and our U.K. holding company. Our loan impairment charges also increased mainly in the run-off portfolio in North America, although on a year-to-date basis, loan impairment charges are still lower than 2010. Now these factors were also partially offset by increased revenues in most markets in Commercial Banking, which, if you recall, is a business where we have been investing. And notwithstanding the difficult conditions in Europe, in the year-to-date a number of our Global Banking and Markets businesses have made good progress. Actually, revenue in 6 out of the 8 business lines in Global Banking and Markets, which you can see in detail, I think, on Page 23 or thereabouts of the IMS statement, are actually substantially up, so 17% increase in foreign exchange, within which Hong Kong's up 30%, the Rest of Asia-Pacific's up 40%, Latin America's up 50% and North America's up over 35%. Our Equity business is actually up 45% year-on-year, and Payments and Cash Management is up 35%, with particularly strong results in the Rest of Asia-Pacific. The important thing is these are the areas we've been investing in. And if you recall, this was partly why we had expense increases in Global Banking and Markets in previous quarters and negative draws. So it's pleasing to see that we're starting to see some returns on the investments we've made in that business. Now obviously, we've increased focus on strategy during this period. We substantially upped the pace of change, and we've made real progress in implementing what we outlined to you back in May, and I think it's important that I update you on these now. First, under the 5 filters heading, we've announced 14 transactions year-to-date, 11 since the 30th of June, including the disposal of our U.S. Cards business and 195 branches in upstate New York. These transactions, all 14, could release over $40 billion of risk-weighted assets and affect 14,000 employees, of which actually more than 13,000 will transfer to the new acquirers. We will redeploy the capital when it's released to fast-growing markets. Second, expenses. Actually, the cost efficiency ratio worsened in the third quarter, but this time it was due to lower revenues. But what's important is we've actually begun to turn the corner on costs. Operating expenses and FTEs fell since the previous quarter, and headcounts now decreased by 5,000 since the peak in the first quarter of 2011. And then thirdly, growth. We continue to invest for growth in faster-growing markets. We've increased revenues in Asia and Latin America, noticeably Brazil, versus the third quarter of 2010. And year-to-date, we've made good progress in repositioning Retail Banking Wealth Management, and we've grown revenue from our Wealth Management products mainly in Asia. We've also expanded CMB in most markets, with overall revenues up 15% year-to-date versus 2010, within which Asia's up 25%. Latin America's up 35% and the draws are positive. So to conclude, we're pleased with the progress on our strategy, but we recognize this is a long journey that we started in May. The external environment remains challenging, but HSBC remain strong with a strong balance sheet and robust liquidity. And we recognize that many of you hold the stock for the long term, and we remain determined to deliver on our goals by 2013. Now Iain's going to walk you through the financial performance in detail, and then we'll open it up to questions. Iain?

Thanks, Stuart. You've seen the statement. So I'll cover a few of the key points in more detail. As Stuart said, the reported PBT for the third quarter and year-to-date are up, driven by movements in the credit spread and fair value on debt. Underlying profit before tax for the third quarter was $3 billion, down $1.6 billion in 2010, and is driven by a number of key factors. The decrease in revenues and Global Banking and Markets, as Stuart noted, adverse movements in the fair value of non-core fund hedges, and this represents in the quarter an increase of $700 million over the same quarter last year and an increase in loan impairment charges mainly in North America, an increase in $700 million over the same period last year. This is partially offset by an increase in revenues in Commercial Banking globally of some $500 million. Underlying profit before tax for the year-to-date was $14.4 billion, down $300 million in 2010 and reflects lower revenues in Global Banking and Markets, $1.9 billion combined higher cost, which I'll go into in greater detail in a moment of $2.1 billion, offset by significantly lower loan impairment charges of $1.8 billion, principally in North America, and growth in Commercial Banking revenues of $1.3 billion. A little bit more detail on revenues. Reported revenues for the third quarter, up $4.6 billion on the same quarter last year and for the year-to-date basis, up $4.7 billion, and both cases driven by movements in the credit spread on fair value on debt. Underlying revenues were lower in the third quarter and year-to-date than in 2010. The main factors include impact of the eurozone sovereign debt concerns, depressing credit and rates revenue in the European area. Lower revenues and legacy credits, this is the ABS SIC CIBS [ph] portfolio, lower revenues when compared to the same period last year, lower Balance Sheet Management revenues as previously indicated, again, reflecting the maturity of longer-term maturities and the ability -- inability to put paperback on at similar yields and the ongoing run-off of the U.S. Consumer Finance portfolios, which you'll recall is a relatively high-yielding portfolio on a net interest income line, but obviously high cost from a credit standpoint also. Revenues increased in Commercial Banking in the third quarter and year-to-date compared to the same period, in part reflecting investment in this business with higher net income driven by strong growth in consumer loan balances. A disappointing third quarter of 2011 reported revenue performance in credit and rates offset a strong performance also in Global Banking and Markets. As Stuart remarked, 6 business segments posted 3 quarter revenue growth of approximately 19% or more on the same quarter in 2010 with Global Banking and Markets benefiting from diversified client-driven business models, with significant exposure to the faster-growing markets. The underlying revenue was down against the second quarter, again reflecting eurozone concerns, and notably, this is an important point, an adverse movement on non-qualifying hedges in the third quarter of $1.3 billion when compared to $300 million in the second quarter of this year. Turning to loan impairment charges. We saw an increase of $700 million during the third quarter when compared to the same quarter last year. This came mainly in our run-off portfolio in North America, and reflects a significant increase in delinquency, deteriorating roll rates and an increase in severity, so increasing loss, given default, if you like, and higher cost to obtain and realize collateral due to delays in the foreclosure activity. These are -- this effect is offset by lower balances and when compared to the second quarter, loan impairment charges and other credit provisions rose by $1 billion, again mainly in North America. Despite the increase in the third quarter and our year-to-date basis, loan impairment charges declined, primarily reflecting lower lending balances in the North American portfolios and improvements in delinquency trends and collections in the United Kingdom. Turning now to costs. Our underlying cost efficiency ratio was worse in the third quarter than the preceding quarter because of declining revenues. And year-to-date, our cost efficiency ratio worsened from 54.4% to 59.1%. Notwithstanding this deterioration, we began to see the benefits of our strategic programs beginning to deliver sustainable savings in the third quarter. Despite restructuring costs of $200 million in the quarter, reported cost and headcount were lower than 2Q '11, FTEs down 5,000 since the peak in the first quarter of this year. Year-to-date operating expenses increased by $2.9 billion in 2010. This includes several notable items previously reported, customer address programs, mainly the PPI provisions in the U.K. in total some $600 million on a year-to-date basis, restructuring costs of some $700 million, litigation expense of some $200 million, partially offset by a credit and defined pension benefit obligations in the U.K. of some USD $600 million. Excluding these, the primary driver of the increase in 2010 was higher staff costs due to strategic investment and wage inflation in faster-growing markets. Turning to capital position. Risk-weighted assets remained broadly unchanged with a decrease of $9 billion. The exchange differences, reducing risk-weighted assets by around $25 billion, partly offset by an increase of about $16 billion in risk-weighted assets from loan growth, mainly in our associates in Asia. We continue to generate capital from operations. However, as a result of strengthening in the U.S. dollar against a number of other currencies in which we operate, the core Tier 1 ratio reduced to 10.6% as of September 30 when compared to 10.8% at June 30. With that, let me hand it back to Stuart. Stuart T. Gulliver: Thanks very much, Iain. So we'll now take questions, and the operator will just explain how the process works.

[Operator Instructions] We'll now take our first question from Alastair Ryan of UBS. Alastair Ryan - UBS Investment Bank, Research Division: A couple for me. First, I'm looking at the balance sheet, quite a big step down in trading assets and a big rise in central bank balances. Clearly, consistent with what HSBC's done in past times. But is that done? Or is there more of that to come given the environment remains difficult? And was that move material to the P&L in the quarter? I mean it feels like it ought to be. Secondly, Iain, your description of what's going on at half sell [ph] it doesn't it feel like a one quarter event. It feels like that long trend of declining P&L impairments is probably reversed for some time. So if you could give us a sense of how much sort of catching up or getting ahead there was in the quarter versus underlying deterioration. That's probably it for now. Stuart T. Gulliver: Okay, Alastair, on the change in trading assets and the increase in balances of central banks, yes, it does reflect risk aversion, and you've seen it before with us. But it doesn't necessarily explain the logic of the P&L move. So the markets business in Europe shows up in the rates line, which you can see on Page 23 of the IMS. Obviously, has -- was impacted by the volatility that took place in eurozone markets. We're a primary dealer in 11 government bond markets in Europe. We've obviously reduced our exposure, you can again see that on Page 21 of the IMS. So our exposure as to European sovereigns on these particular ones has gone from $8.2 billion to $5.5 billion, within which we cut Italy from $4.6 billion to $2.5 billion. But we remain primary dealers, and we remain primary dealers with obligations in respect of the sovereign nations. And therefore, it's exposure to the eurozone that shows up in the rates number. The credit number in Global Banking and Markets is partly a primary market shutdown. So therefore, the ones with all the customer business we could be doing, and partly there it's the absence of a positive from the previous year. And the previous year in the credit number, we had large revenues from ABS, which didn't repeat this year. But what -- so therefore, the trading assets is, yes, risk aversion. The increase in central bank balances is frankly the difference between -- it's partially the difference between having an AD ratio of 75 and your combined credit appetite for banks results in you leaving exposures with central banks because essentially, you don't have the appetite to recycle it into the Commercial Banking credit risk market. Alastair Ryan - UBS Investment Bank, Research Division: Just rolling on that, Stuart, is there more of that to come? I mean, as things carry on, is the slice, the 30th September, in the midst of you doing something, so we'd expect that to be carrying on? Or is 30th September representative sort of position you're reasonably comfortable with? Stuart T. Gulliver: It's probably representative of the position I'm reasonably comfortable with, except that we haven't seen a large inflow of deposits this time. I think because governments have put in place depositor insurance. So there hasn't been a significant inward migration. If there was a substantial inward flow of deposits, you would see an increase in those central bank balances, because by definition, if they're coming in, I'm cutting my lines and therefore, I'm getting a lower AD ratio, and I need to manage it. And of course, this does have a negative NIM impact. But clearly, the judgment we're making is we'd rather see a NIM compression than take principal risk.

Well, Alastair, on the loan impairment charges in North America, what we -- there are 4 factors here. We saw increased delinquencies in the month of September. Now we've always experienced seasonality in this portfolio through the years. I think what the increase we saw in delinquencies in September was more pronounced than the normal seasonality that we would expect to experience after the summer holding period in the U.S. The continuing decline in U.S. residential property values, which we certainly see in our portfolios, but it's more broadly documented, example, in the K shore [ph] index that's published every month, is therefore, an aspect of our reserving. So it's loss given default as that builds up then, obviously, reserving requirement of properties that were in default would be foreclosed upon, and then sold on as an impact of in-card loss that's reflected in our reserving. Another aspect which came in the third quarter, and there is an aspect of year-to-date catch-up is this, is the cost of perfecting our collateral in the U.S. has gone up significantly. One, the foreclosure process takes a heck of a lot longer than it did a couple of years ago. Two, what customers stopped doing when they stopped paying their mortgages, they stopped paying their property taxes as well. And as you know, property taxes are key feature of the U.S. property market. So to perfect our title before we can then sell that property on, we have to pay the bank property taxes. So in terms of increasing legal costs and increasing back property taxes, that was a significant component of increased reserving in the third quarter. The other element here is just the amount of time it takes to foreclose on properties to the extent there's any foreclosure activity going on, which is still really quite limited, affects the timing at which we would receive cash flows. And therefore, there's a discounting factor within IFRS, which, again, factors into the reserve. So we've got basically a 1-month step-up in delinquencies here. If I reflect momentarily on the October data, that would indicate a stabilization and slight improvement, but it's 1-month's data. So I think it's a little bit early for us to call any particular trend either whether it's just sustained deterioration or whether it's a one-time reflection. So I think, Alastair, although I'd love to be able to give you more at this time, there's no more to give you. So as we work through towards the year end at the end of Feb, we'll be able -- we'll have a number of months' data, and we'll give a much better understanding of what's going on at that time hopefully. Stuart T. Gulliver: Alastair, going back on the trading assets, just one other point of clarification. So the move from $474 billion down to $415 billion, about $17 billion of it is FX, and a balance of about $41 billion is the change that I described.

We'll now move to our next question from Christopher Wheeler from Mediobanca. Christopher Wheeler - Mediobanca Securities, Research Division: I have 3 questions. The first question is just on the fair value adjustment on your loan debt just a minor technical point really. It appears $3.1 billion is in Europe and about $1 billion is in North America. That seems a somewhat different mix than the normal sort of 50-50 or 60-40 in favor of Europe. I just wondered if there's any particular reason for that. That's the first question. The second question is on the global market's revenues. Obviously, very good in equities and security services. Credit, probably as expected, but the rates number looks a little bit weak compared to your competitors looking over how they've done in Q3. Any particular reason that you'd attribute, perhaps, underperforming in that area? And then finally, if I look back at what the U.S. retail banks have disclosed in terms of delinquencies on credit cards, consumer loans in their prime books in the third quarter, they've actually been on a downward curve. Now you were kind of a forward indicator of the problems in the sub-prime market. Do you think that what you're actually seeing, what you've shown us today, which are quite marked upticks is perhaps a warning to the rest of the sector, not just in your segment, but across the whole board in the United States? Stuart T. Gulliver: On rates and global markets, I actually think if you dig into the numbers of some of our competitors, you'll find that they've used AFS routing for a lot of the mark-to-market stuff that we've taken directly through the trading P&L. I'm reasonably satisfied that we're not an outlier in terms of our performance in rates in the eurozone when you actually look at the totality of the performance of European banks and look at how they've accounted for it. And on fair value of own debt and the delinquency point, Iain will now answer comprehensively.

Yes. My favorite topic. Christopher, the fair value on debt, you've got the split more or less right, but it's very consistent with movements both positive and negative that we've seen on fair value on debt over the last 5 or 6 quarters. So there's nothing odd going on there. Now the underlying, obviously, is where we put the principal issuances of debt, and that's obviously the European market, supporting principally global banking markets activities and then, obviously, the finance company in U.S., which was historically and continues to be funded by wholesale paper. So there's nothing particularly odd as we look back over the last 7 or 8 quarters in terms of proportionality of the movements. On the U.S. Bank comps, a couple of things to bear in mind here. If you look at us and U.S. mortgages, we have $50 billion of sub-prime mortgages in run-off. We're originating no new paper to those portfolios and have not been since early -- since the first quarter of 2009. We don't -- we were trying to dig in to what other U.S. Banks are seeing, but I think the key feature here is that all the other principal players in the U.S. have a broad-base of super-prime, prime Alt-A home equity sub-prime loans. And at least in the super-prime, prime segments, they continue to originate new paper presumably at the higher end of the credit spectrum. So the picture, we can shine a very clear light in our sub-prime portfolio because it's pretty much all we've got, and the trends are, therefore, very clear. With the others, it's obviously a blended picture of new originations, a broader mix of credit quality within the portfolios. But I do think if you sort of sift through the press reporting as some of the American banks came out, there's some indications that they're seeing some of what we see. But I wouldn't necessarily call us the Canadian in the coal mine here, but what we see, I think, is certainly reflective of some stresses in the sub-prime portfolio, and recognizing that some of our peers in the U.S. have fairly sizable sub-prime portfolios. It might not be a terrible shock if we see some of this later in the year. But again, the quarterly disclosures are fairly limited in this regard.

We'll now move to our next question from Michael Helsby from Merrill Lynch. Michael Helsby - BofA Merrill Lynch, Research Division: I've just got a couple of questions. Firstly, clearly, third quarter's been very disappointing for most banks, and it's very comforting that you're sticking to your medium-term targets. I guess the question is, given the revenue outlook has clearly deteriorated, should we think of the trajectory of that recovery as being somewhat different from maybe what you've anticipated in May? And whether would it be reasonable to think that the overall delivery of your targets could be delayed beyond 2013 at this point? I guess the second question is on the U.S. and I think it's clear from looking at the presentation that the deterioration has come from the old branch originated loans for all the reasons that you've just said, but the Cards business delinquencies ticked up. I was just wondering if you could give us a comment on what you're seeing in credit cards. And if the situation deteriorated further, whether there's any get-out clause for Capital One if they chose to re-neg on the agreement to buy that business. Stuart T. Gulliver: Okay, Michael, I'll take the first strategic question, and Iain will deal will delinquency and credit cards. Yes, obviously, the external environment has deteriorated sharply since the May Investor Day, but I think you can see that we're continuing with tremendous intensity to execute on reshaping the firm. And as to the financial targets that we set out there, to be honest, I want to stick by them, but I think we're going clearly be at the softer end of the targets. So when we said 12 to 15, it's kind of going to be 12 and where we said 48 to 52, it's going to be 52. So where I want to flex it is in moving to the end of the ranges, not in abandoning them, okay? Because if you look at it in another way, we've been doing this since May. So it's only like 5 months and we've run into a very difficult quarter that's primarily due to elevated LICs in the kind of household business and the eurozone crisis. You can put aside the non-qualifying hedges. I don't think we should be shaken off our strategic intent because there's some -- a difficult operating quarter. I've got to reshape this firm. I intend to still do it, and we set ranges, frankly, to give us this kind of flex. So yes, as we sit today, I still want to get a 12% ROE on an underlying or a reported basis, though not using the fair value of our own debt to sort of reduce it, and I still want to get a 52 cost efficiency ratio.

On the credit cards, Michael, looking at the trends there, there's a very, very, very slight uptick in delinquencies in the third quarter in credit cards, and that is essentially the seasonality that I referred to that we've seen year-after-year, both in our credit cards, as well as our mortgage portfolios. The difference here is that the U.S. customer is very much focused on maintaining the utility of their credit cards because, I think, there's an aspect of moral hazard around the ability to stop paying and not being foreclosed, but we will dig into that and update more later. On the disposition of this credit cards business, this is a very tight contract. There is no get-out clause. I think our -- the perspective of quarter, Cap One really like this portfolio of business. It fits very nicely into their set up, and the underlying performance of this business, strongly profitable, very attractive cost-efficiency ratio, good returns on invested capital and equity. So a very slight seasonal tick-up in delinquencies here I don't think it's going to scare them away. Michael Helsby - BofA Merrill Lynch, Research Division: Can I just ask one more question? Could you just pull out for us what the underlying loan growth was on an annualized basis in the third quarter? So adjusting for the FX movements and the obviously, you've you reallocated the U.S. business. And I think everyone's read your comments, Stuart, about the Asian credit crunch reported in the FT. I was wondering if you could just give us a little bit more color on what you meant. Stuart T. Gulliver: Yes, sure. I mean, while the guys get to those numbers here, so look, we -- obviously, our research team out here has done a bit of work, and bank credit to GDP in Asia is back to the levels it was in 1997. So bank credit, as a percent of GDP, is kind of back up to the levels of leverage that we saw pre the Asian crisis. So that's point number one. Against that, Asia's got effectively a structural AD ratio as a community as it were that's actually probably at about 85. So probably the amount of savings in this part of the world could actually fill that gap. But within that big jump in bank credit to GDP, the biggest contributor to it is European banks. The European bank lending into Asia has increased massively in the 2004 to 2010 period. So what I was essentially saying is given that we've reached the original peak, because, of course, it fell really sharply after the '97 financial crisis, but now, it's mostly made up of European banks. Is there a vulnerability there? And the reason I can't actually sort of definitively say there's a vulnerability is we can't get under the data to see if that European bank lending in Asia is to Volkswagen i.e., European company, or it's to X, Y, Z property developer in Hong Kong or Singapore or wherever. So my point, therefore, is if the eurozone crisis results in a number of European banks having to withdraw to their national sovereign borders, which as we saw in 2008 is what banks do if they're in need of support from their governments, funny enough, the tax payer, the voter wants them to extend loans at home not overseas, there could be a vulnerability in Asia. There is no sign of it and it could be much less pronounced if either A, that represents then either Volkswagen; or B, the large surface that exists in Asia is recycled effectively through local insurance companies back into the credit markets through fixed income. But that was the point I was making. Michael Helsby - BofA Merrill Lynch, Research Division: Okay, very clear.

So Michael, to come back to the loans and advances, if we strip out the foreign exchange effect and the reduction in repo activity, our loans and advances customers are down about 1% when compared to the June 30 closeout, okay? And if you then go across the customer accounts, I mean, we're maintaining a growth trajectory overall in customer accounts, which is partly the explanation for improvement in the AD ratio. But the other, as you've noticed, is the re-class of the assets in the North America portfolios that are held for sale now. Michael Helsby - BofA Merrill Lynch, Research Division: Okay. So is that a shift in your risk appetite on a forward-looking basis, given everything that's going on from a -- so should we expect quite a sharp slowdown given you've grown loans, particularly in Asia, extremely rapidly in the last 18 months? Stuart T. Gulliver: Well, what we've done in Asia basically for the last 3, 4 months is to start to write business on the assumption that we will see a normalization of loan impairment charges because they've been abnormally low. And therefore, we also have assumed that, therefore, internal credit risk ratings will deteriorate. So we've started writing business, effectively stress test, for a couple of notch downgrade, assuming that the business will still hit our ROE thresholds. And that, by definition, will slow the growth. It also means that we'll only be writing profitable business and probably to the best credit. So I wouldn't see it as abrupt stop by any means, but we clearly have slowed the pace, having done it at a very, very fast clip. But there will still absolutely be growth in places like Latin America, Hong Kong, the Rest of Asia-Pacific, but I've basically tightened the lending criteria, and I've tightened the return criteria about 3 months ago.

We'll now move to our next question from Ian Gordon of Evolution. Ian Gordon - Exane BNP Paribas, Research Division: Could I ask you just to add a comment on the Hong Kong revenue performance? I note your comments in the script on market valuation changes on insurance, but more specifically, can you also comment on the asset margin developments, especially given your comments on your change in risk appetite in that region? And then just a couple of other housekeeping points. Apologies if I have missed it. But have you said anything new on the Basel 2.5 impact at year end? And I noticed Balance Sheet Management revenues held up reasonably well as you guided to the half year. Any update on your outlook for that line?

Yes, it's Iain. If I take the net interest margin first. I mean, in Asia-Pacific, we've actually expanded net interest margin in the quarter. Part of that's reflected in asset repricing. But also, we've had a little bit of help from the liability side of the balance sheet, where we've seen policy rates in a number of countries in which we operate pick up and help us on that front. But we have been able to expand margins on the asset side. And as a net result within the Hong Kong Bank Group, we've expanded net interest margin year-over-year by some 6 basis points and quarter-over-quarter by about 9 basis points. So I think that's sort of the story on the net interest margin. On the rest of the stuff in Hong Kong, yes, there's a change in insurance accounting. There's also the fact that the stock market fell in the third quarter quite considerably, which basically then has a kind of depressive effect on Wealth Management revenues in Hong Kong. The Hong Kong Wealth Management business is very geared to the equity market as, of course, is the retail broker, the institutional broker and the sub-custodian business. So there's kind of the 3 or 4 levels of exposure to the same effect. And then we've also seen a specific loan impairment charge on the Commercial Banking customer in Hong Kong and the start of normalization of loan impairment charges generally because they've obviously been running at abnormally low levels. Balance Sheet Management, yes, it has -- it's done slightly better than we guided. I still think that the guidance for 2012 should remain $2.5 billion because I'm not optimistic that we will see rates move up at all. And of course, what we're doing is we're taking advantage of any curvature that appears from time to time, but I can't predict when that curvature will appear and how quickly it will disappear again. So I think $2.5 billion, which is what I've been guiding for some time, is the right kind of level to have in the model for 2012. Ian Gordon - Exane BNP Paribas, Research Division: And so just the other one just about Basel 2.5, was there any change?

Right, sorry. No, in terms of what we talked about in some detail back in May, Ian, there's no real update at all. I mean, we're obviously revisiting this on a continuous basis. So there's nothing of significance to update in that front.

So we'll now move to our next question from Ian Smillie of RBS. Ian Smillie - RBS Research: Two lines of questions, please. The first one in GBM. For the quarter-on-quarter, the revenues were down just over $1 billion and costs were down by just less than $100 million. So, I guess, the question is could you give us some sense of what bonus accrual was taken inside Q3? What prior period amortization was taken inside Q3, and what stock of unamortized deferred comp is still sitting on the balance sheet to come through in future quarters, please? That's the first line of thinking. And then on the second one, if we look back at the run-off portfolio P&L impairment in the U.S., it looks like of the $1.8 billion P&L impairment taken in 3Q, there's about a $0.8 billion reserve rebuild of the credit loss reserves. So the question is when looking forward, would you encourage us to think about further credit loss reserve rebuild on that shrinking book and, therefore, the $1.8 billion is kind of the new level to think about? Or was that a one quarter event and the underlying $1 billion be a better number to think about going forward from that book, please?

Okay, Stuart, do you want -- I'll take the bonus and... Stuart T. Gulliver: Yes, okay.

And so on the bonus front, Ian, the -- what you see coming amortizing through in terms of previously deferred periods for compensation is consistent quarter-over-quarter, and I think we've talked about it across the piece. It's been somewhere in the range of USD $240 million to USD $250 million for the group. When you look at the effect of declining revenues on our accruals in the third quarter, as you can imagine, we reduced the accruals significantly. The goal overall from a payout perspective will be to maintain reasonably consistent payout ratios based on the level of profitability when compared to last year. And as you know, we tend to be at the lower end of the payout when it comes to variable compensation within our Global Banking and Markets business. So we're maintaining the very same principles that are deferred components within the compensation, and it is absolutely linked to the level of profitability generated within the business, and the payout ratios, broadly speaking, will be consistent. So as a consequence of third quarter performance, you can imagine that the accruals came down quite significantly. From a loan impairment charge perspective, I'm not sure I would add anything more to the answer that I provided a little bit earlier, Ian. As you quite rightly point out, we had an uptick of some $800 million in terms of loan impairment. In terms of the build on the reserve, that was a direct reflection of the factors, which I've highlighted in the response to earlier question. And in terms of whether it's a sustained uptick or whether it's a one-time event, I think the same story. There is an aspect within which we did in the third quarter around costs to obtain and perfect collateral, which was more of a catch-up. But the other aspect, I think, it's too early to say. We -- in the month of October, we saw very much a stabilization, a slight improvement. But having had a long history in this business, I tend not to get carried away with 1 month's worth of data. So September was clearly a difficult month in terms of delinquencies. October represented some improvement. But as you can well imagine, we will keep a very close eye on what we're seeing in this regard. And once we get a couple of more months of data under our belt and as we talk about this at the end of February and our full year results, we'll hopefully be able to provide you a much clearer picture. I think what concerns us is the fact that there is still not an agreement in place with the 5 major U.S. banks around foreclosure activities. And I think until that is reached and as a consequence of that foreclosure activity gets going again, we believe that what we're observing is an aspect of moral hazard within the customer base. But it's too early to draw conclusions at this stage.

And I'll move to our next question from Steven Hayne from Morgan Stanley. Steven Hayne - Morgan Stanley, Research Division: Two questions to start with please. I don't know if I'll get time for any more, but question number one, you alluded to a changing insurance accounting. And I can see from the 3Q number that the insurance claims at the group level decreased significantly. So it was running at $3.2 billion in the second quarter and dropped to $1.6 billion in the third quarter. I'm just wondering if you can guide us as to whether that is a more sustainably lower level or that was a somewhat of a one-off? That's question number one. Question number two, on the core Tier 1, it went down marginally. I understand there's some FX in there, and I was just wondering if you could expand on that point? Because as I understood core Tier 1 was that you hedged both sides, so it shouldn't affect -- you shouldn't expect anything on the regulatory capital due to FX, but we have had this quarter.

Okay, Steven. Equity, sorry, the insurance impact -- this relates to insurance contracts with discretionary participation features in them, principally within the Asian markets. And the liability and claims line is directly linked to the movements within the equity market. So as the value of those funds go up, the degree of participation by the policyholders goes up with it. So our liabilities and claims goes up in line. As the equity markets go down, there are 2 aspects for us. So on assets under management, we earn lower fees. There's less participation in terms of equity gains. But by the same token, that proportion, which then reverts to customers with discretionary participation features, goes down as well. So that's the main movement that you see going on in the insurance lines over the course of this quarter. So it's very tightly linked to the movements in equity markets. On core Tier 1, to go through some of the key elements in that, in the quarter, we continued to generate capital from operations to the tune of some 20 basis points. The dividends net of script picked up about 13 basis points of that. However, within the capital base, our capital is expressed in the currency, the functional currency of the main subsidiaries around the world, and that's obviously not all in U.S. dollars. And generally speaking, the risk-weighted assets in those same businesses is denominated in a corresponding functional currency. However, what we do have in a number of our principal operating subsidiaries are, let's say, take Mexico for an example, we've got a broad-base of business in the Mexican peso, but we've also got a fair bit of U.S. dollar underwritten business. The same happens to be the case in the eurozone, where we've got the functional currency being the euro or sterling, but the business is written in U.S. dollars. So within a number of our books, we have a degree of mismatch, if you like, between the structural FX position, which reflects our investment in that subsidiary versus the risk-weighted assets within that business. And as a consequence, we are somewhat subject to movements in both up and down in the capital base as a consequence of some of that mismatch. This is something we monitor very closely in a monthly basis through our ALCO committees. And if you track back, you see that we will have benefited as well as had some of the deterioration in the capital ratio. And that's one of the reason that we carry buffers. But from a systemic standpoint, we try to match the investment with the underlying risk-weighted assets closely and where we don't and where the opportunity and early warning, if you like, is there, we try to hedge it with FX forward.

Your next question is now from Ronit Ghose from Citigroup. Ronit Ghose - Citigroup Inc, Research Division: Stuart, I just wanted to follow up on your interesting comments about loan growth in Asia. You said a lot of that was driven by European banks. Do you have any data or color as to whether these are French banks, German banks or even if they're U.K. banks? And that will be question number one. Related question on the Hong Kong loan book and tied into your earlier comments, the corporate and commercial segments seems a small dollar decline in loan balances. Is this a seasonality or this is part of the kind of slowing down of the tightening up of the credit quality we discussed? And the other question is, again, tying to what Iain just said on insurance. I saw, as to the last question, the insurance claims and liabilities line half, the negative half. I'm just wondering is there an offset in the net income from other financial instruments line that the liabilities -- the liability negative goes down, but there's also an asset negative change as well? Stuart T. Gulliver: On the first one, in terms of the nationality of the banks, I don't have that to hand. But what I will do is I'll get the macroeconomic guy, who did the research for me, in contact with you.

And looking at Hong Kong, I mean, there's a number of segments in which we continue to grow the book. However, within the Commercial Banking segment, we saw a reasonably marginal decline, particularly, as it related to trade-related lending balances, which is both a reflection of the change in appetite that Stuart talked about a couple of questions ago, and also a reflection really of a somewhat slowing effect in terms of growth, which I think is some reflection of what we see in Mainland China. Stuart T. Gulliver: There was also a technical aspect to it because there was a lot of letters of credit being written against RMB borrowing, which the HKMA then basically ruled against. So there was a whole trend going on of effectively cross-border financing, in which the HKMA sort of pay to [ph]. So you'll see that across the sector, and that actually explains a large amount of that move. Ronit Ghose - Citigroup Inc, Research Division: Okay. And the loss was on insurance?

Yes. Ronit Ghose - Citigroup Inc, Research Division: The net insurance claims line that half the negative from 3.2 negative to 1.5. Is there any offset in the line item that goes from 103 to negative 1.6?

Yes. Ronit Ghose - Citigroup Inc, Research Division: So we should consider those 2 line items together, right?

Very closely correlated, yes.

Our next question is from Robert Law from Nomura. Robert Law - Nomura Securities Co. Ltd., Research Division: Can I ask 3 brief questions, please? Firstly, there normally is some cost increase seasonally for you in Q4. Would you expect that to happen again? Stuart T. Gulliver: No, I'm going to be really, really watching that because we can recognize exactly the same phenomenon that you're saying and clearly, if I'm signaling, I think we turned the corner on cost. We're going to do everything we possibly can to make sure that, that kind of, frankly, padding that may have taken place from time to time in our shop doesn't take place this year. Robert Law - Nomura Securities Co. Ltd., Research Division: So if we look at the near $10 billion you reported this quarter, that could be a representative number we could use as a base? Stuart T. Gulliver: Yes, I would hope so. To be honest, Robert, I mean, I'm acutely aware of exactly what you're saying, and clearly, I'm trying to turn rather a large ship here. But yes, I'm determined that this has signaled the turn of the cost base. Robert Law - Nomura Securities Co. Ltd., Research Division: Great, okay. On non-qualifying hedges, could you enlighten us to how we sort of think about that? I mean, is there an offset in the revenue line? Should we granularly strip it out? Is it a non -- almost like own debt in that sense?

Well, I think you should absolutely strip out, Robert. I think you should add it back to the revenue. No, I think what we've got here is an accounting asymmetry. And as you probably know, the NQH are in 2 broad categories, one which is hedging the extension of tenure in the U.S. mortgage books because it runs off. And the second is on debt issue that the holding company in eurozone sterling has swap back into our reporting currency, the U.S. dollar. The most marked effect is in the U.S. and that -- the principal affect that you see of $1.3 billion in the quarter is, I think, a reflection of project or program twist or whatever they called it, which was the flattening of the longer term of the U.S. yield curve. So interest rates presumably can't go negative. They're pretty much where they are. So this is something that from an economic perspective, the underlying assets, which are -- the underlying economics of what's being hedged is an accrual amortized cost basis, Robert. It is the non-qualifying hedge that's clearly a mark-to-market. We've got a bit of an asymmetry in the accounting, but one of the things that we review every single month is the continued effectiveness of these hedge from an economic perspective, whilst recognizing that we've got to deal with some of asymmetry in the accounting. But we're very satisfied that we've got that economic hedge in place, and that it's working effectively. Robert Law - Nomura Securities Co. Ltd., Research Division: Okay. And the final thing was could I ask you to expand a bit on the comments you reported in May certainly on press-wise, about the dollar cycle and the ICB? I mean, are you effectively saying that if the costs continue to look as they now appear to you of $2 billion to $2.5 billion that you essentially have no alternative but to move the domicile? Stuart T. Gulliver: What we're saying, Robert, is that first of all, we don't know what the -- whether the government will actually implement the plaque recommendations in the ICB report as they're currently configured. And until we know exactly what the government intends to do, we can't really get drawing on a decision because we don't have enough facts to make the decision with. What we're also saying, however, is that the board is acutely aware that its fiduciary duty is to its shareholders. And really, we're trying to make those 2, if you like, quite separate but, obviously, somewhat linked points. And I can't go beyond that because I don't know what the legislation will say by the time the legislation's introduced. I mean, I fully expect the competition stuff to be there, that's fine. We operate in Hong Kong, where there's 186 banks for 7 million people. The competition is fine. Ring fence would not be, frankly, our first way of tackling this issue. But if that's where the U.K. goes, that's probably fine, although, I doubt if it will show a cracking ROE against its cost of equity. But the plaque is difficult for us because it's kind of odd. We've got an AD ratio of 75. In our view, that gives us an incredibly strong conservative balance sheet. But because we've got incredibly strong conservative balance sheet, we need to go and leverage it up by issuing $55 billion of senior bonds we don't need or don't want, so then go and buy $55 billion, probably, of guilt that we don't want. And obviously, the carrying cost on that is about 400 basis points, 300 on the issuance side, 100 on the other side. On $55 billion, that's where you get to the $2 billion to $2.5 billion number I'm talking about. And actually, clearly, there was -- possibly, what was done within the ICB report and you need to talk to Bill Winters and so on about how this came about. It's very helpful if you're JPMorgan and, clearly, all fits to JPMorgan's balance sheet, and it's very helpful for those banks that have AD ratios over 100, which, of course, in the U.K. is everyone other than us and Standard Chartered. So we do feel actually that there's an unfortunate consequence to this. We don't know that whether this will become law. If it does become law, all we're signaling is that the board is absolutely aware that its fiduciary duty lies with the shareholders, and I don't want to get drawn more than that because I don't know where this goes for the time being. And what we have also said, Robert, is we're, therefore, not going to make a decision at the board meeting at the end of November, which is where we would typically have the tri-annual review of where the headquarters is. We just don't have enough data points to make an informed decision. So we'll add that to our board meeting at sometime in the future. It might not even be 2012, depending on how quickly this thing moves ahead.

And we'll move to our next question from Raul Sinha from JPMorgan. Raul Sinha - JP Morgan Chase & Co, Research Division: Just a couple of questions. Firstly, on the plaque, can I assume that your -- the estimates that you cited are basically assuming that the plaque applies group-wide rather than to the U.K. sub? Stuart T. Gulliver: Correct. That's correct. Raul Sinha - JP Morgan Chase & Co, Research Division: And then secondly, if we look at the trends within household, I mean, not only were impairments up significantly, but also the revenue was negative in the quarter. I mean, is that sort of because of the high legal cost that you talked about? And should we kind of expect -- are there any big one-offs within that? Should we expect that to continue?

The revenue effect is the NQHs. It gets booked in net trading income role. So you clearly have declining revenues as that book of business runs off because it's a fairly high-yielding book of business. But the significant one-off negative was the non-qualifying hedges. That's the principal effect here. And in terms of the underlying LICs and trends, there's nothing really I can add to what I've already said. Raul Sinha - JP Morgan Chase & Co, Research Division: Right. So just to clarify. The negative 109 in your consumer and other, which is basically the Retail and portfolio within the U.S., includes this impact of non-qualifying assets? Stuart T. Gulliver: Yes, it does.

That's correct. Stuart T. Gulliver: That's correct. That's what makes it negative. Raul Sinha - JP Morgan Chase & Co, Research Division: Right. Just one final question. Can you comment on the underlying loan growth of the group, x associates?

X associates, quarter-over-quarter, excluding the effect of a declining repo book, we're actually down about 1% quarter-over-quarter and year-over-year -- No, actually is it that one here? We'll come back to you on that one, okay?

Our next question comes from Tom Rayner from Exane BNP Paribas. Thomas Rayner - Exane BNP Paribas, Research Division: Tom Rayner here. Just like to go back quickly to the reserve build against the run-off book in the U.S. The cover ratio, if I'm correct, at 72% does look conservative for what is still primarily a mortgage book. I know the quality of those mortgages is questionable, but at 72%, it does seem quite conservative. I'm just wondering if moving the reserves to this level indicates some other concern? And your comment about changing customer behavior interests me. Are you expecting any change in behavior, which causes a big spike up in delinquency from here? Or is there something else within that comment that I should be looking at? Stuart T. Gulliver: No, Tom, it's a good question. I wish I could say more than I've already said on the previous questions. I mean, we saw an uptick in delinquencies. We've always maintained a conservative reserving position with respect to this one-off portfolio, principally in reflection of the difficulties in the U.S. property market and the fact that foreclosures are potentially affecting payment behavior. We've got to keep an eye on this, and we'll give you whatever we've got, and it will be great. It will be more detailed when we report out for the full year in February, okay? Thomas Rayner - Exane BNP Paribas, Research Division: Okay. And then just on the revenue point. When you strip out those hedge effects on the revenue, it's still down on the quarter, I think, 7%, 8%. Is that pretty much in line with your expectations? Or was anything affecting the revenue as the book runs off versus pre sort of budget, if you like? Stuart T. Gulliver: No, it's the run-off of the book. I mean, you need to remember, we have high-yielding assets that then were entirely taken out by the loan impairment charge before they hit the bottom line. So as those book runs down, that revenue will run down. Thomas Rayner - Exane BNP Paribas, Research Division: Yes, sure. And then just finally for me, the comments you've made, Stuart, on European banks possibly pulling out of Asia, do you see this as a risk or an opportunity? Stuart T. Gulliver: It should be an opportunity for us. It should be an opportunity. I think in this phase of, I guess, what is now a 4, 5-year-old crisis, I think that the opportunity for market share gain is likely to be in global banking markets and Commercial Banking. Because governments are provided depository insurance, it's unlikely that we'll see a massive inflow of retail deposits as we did in 2008. I think the opportunity now will far more be in Commercial Banking, Global Banking and Markets.

And I move to our next question from Rohith Chandra-Rajan from Barclays Capital. Rohith Chandra-Rajan - Barclays Capital, Research Division: I'm just wondering if I could very briefly just come back to the volume discussion, particularly Rest of Asia-Pacific, where the dollar balances were flat, but the commentary talks about continued underlying growth. Wonder if you could kind of scale that particularly with reference to the sort of mid-20% annualized growth we saw in the first half? And then more broadly just at the group level, any comments that you have on the group margin? You talked earlier about some policy of moves in the Asia region. Just wondering what you're seeing at the group level.

In terms of the underlying in the quarter, it was up 5%, right? Yes, so in terms of continuing growth within loans and advances of customers within Asia, we're up 5%. But again, reflect on what Stuart mentioned. Stuart T. Gulliver: You've got really big FX moves as well in Rest of Asia-Pacific. Don't forget, the Indian rupee's weakened a lot, so has the Sing dollar. And of course, all of this is -- so has the Philippine peso. All of this is translated into U.S. dollars. So in local currency terms, there is growth. So the PBT and the comments about growth is not inconsistent with what you're seeing. What you're seeing is a dollar translation of local currency. Rohith Chandra-Rajan - Barclays Capital, Research Division: So sorry, the plus 5% in the quarter was on a dollar basis or a constant-currency basis?

Constant currency. And that affects the FX, okay? Rohith Chandra-Rajan - Barclays Capital, Research Division: Yes. And then just on the margin?

In Asia? Rohith Chandra-Rajan - Barclays Capital, Research Division: No, you talked about Asia before. Just the group level, any commentary?

Sorry. Yes, gladly, one second. From a net interest margin perspective overall for the group, quarter-over-quarter, pretty much stable. We're down 2 basis points, actually up when compared with the first quarter, flat with the fourth quarter of last year. So, overall, on a group basis, we're more or less flat over the last 3 quarters. We're down a few points when compared to the same period year-to-date last year. That's characterized by some compression in the U.K., particularly in the liability side, expansion in Hong Kong, the broader Hong Kong and Asia as we discussed earlier. North America holding reasonably sound on a declining high yielding book of business, principally because the cost of funds is extremely well managed at a low level. Middle East, pretty much flat and then in Latin America, down ever so slightly. Rohith Chandra-Rajan - Barclays Capital, Research Division: Okay. So the main moves really are the U.K. and the Asian businesses?

Correct. Stuart T. Gulliver: They're the big volume balance sheets.

Our next question comes from Arturo de Frias from Santander. Arturo de Frias Marques - Evolution Securities Limited, Research Division: Two quick ones, please. One on GBM and one on retail. On GBM, I know we spent a lot of time last May talking about resizing the business and rethinking the overall size of the group, including GBM, et cetera. But as you said at the beginning of this call, things have changed quite substantially and the outlook of the environment has -- is now much more complex than what it was last May. So my question is are you kind of rethinking, particularly taking into account the losses in rates and credit, et cetera, do you feel you need to rethink again the size of GBM or... Stuart T. Gulliver: No, I don't. I still think that the GBM business for us should be between 30% to 40% of the PBT of the group through the cycle. And I think that we have such a unique set of geographic footprints, which has formed this strong growth in FX, equity, payments and cash management and securities services, which I think you'll find it hard to see it in other global banking markets businesses that we need to keep with that end aim of 30% to 40% of PBT. Now that's not to say that we might not do some fine-tuning within the European space. I mean, by definition, if there's going to be a single European bond market, then by definition, there's 11 primary dealerships that won't be as necessary in the future if Europe's just going to issue bonds in Europe. Clearly, as a Spanish person, you may have a better feel for me whether that's physically ever likely to happen. Arturo de Frias Marques - Evolution Securities Limited, Research Division: No, I don't have, but... Stuart T. Gulliver: Neither do I, but -- and I don't -- and then also, I don't want to change my strategy because it's been a quarter of difficult markets. So on retail? Arturo de Frias Marques - Evolution Securities Limited, Research Division: Yes, on retail. Obviously, most of the weakness is U.S. but there is also a clear weakness on Europe, in Europe and in Hong Kong. Europe retail is down around 30% year-on-year PBT. I mean, Hong Kong retail is down also around 15% broad numbers, PBT. Is this -- how much of this is structural? If you want, how much of this is more created by the current environment? I mean, do you think -- do you see, particularly taking into account that rates will be low for much longer in consumer confidence and lack of growth and de-leveraging and so on and so forth, do you think this weakness, which is I think pronounced, in Europe and Hong Kong retail will continue?

If you look at the European retail bank on an underlying basis, we've actually progressed the profit before tax when compared to the same period 3 quarter 2010, 3 quarter 2011. And what underpins that is a pretty robust performance by our bank in the United Kingdom, both with respect to Retail Bank, Wealth Management and Commercial Bank. So I think in Europe overall, the trends within Retail Bank, Wealth Management and Commercial Bank are fairly sound. Looking at Hong Kong, and I think we've addressed this a little bit earlier, the effect in Hong Kong was largely driven within the Wealth Management space. As we saw the values of equities come down, clearly, our fees for assets under management come down with that. Some of the profitability through the insurance businesses and gains in investment come down with that as well. So it's very much related to equity movement. And again, the Hong Kong business on an underlying basis continues to be pretty strong. So for example, quarter-over-quarter, again, we continue to generate more than $2.2 billion worth of profit before tax.

We now move to our next question from Sally Ng from CICC. Sally Ng - China International Capital Corporation Limited, Research Division: Just a very quick question. A number of the U.S. and major European companies actually disclose the growth in exposure to project [ph]. I was just wondering, I suppose your disclosure here is growth exposure. I was just wondering whether you could touch a bit on how much would that will have been brought down by the collateral and the hedges? And I guess, a related question is how you see the current Italian bond euro situation, where you see that going? Stuart T. Gulliver: I mean, I honestly don't have a view that I would want to share on this call as to where Italian bond yield is going and what's happening in Italy. I mean, since I've been on this call, the Italian markets also stalled off dramatically since we started the IMS process. And to be honest, sorry, for the last 4.25 hours, I've been in this room. So I don't know what's been happening with the Italian bond market this afternoon. And I don't think it will be helpful for me to, therefore, kind of wing an opinion to you. On terms of net positions and growth positions.

Yes, I mean, we generally have not disclosed that information. I mean, we've obviously provided the detail of net exposures to governments and agencies within -- on Page 21 of the IMS. And obviously, have moved those exposures down significantly over the last 90 days from $8.2 billion down to $5.5 billion. I think that's the broad extent of our exposures and are therefore managing to that risk position.

We now move to our next question from Mike Trippitt from Oriel Securities. Michael Trippitt - Oriel Securities Ltd., Research Division: Just a quick question back on these non-qualifying hedges. I'm just trying to think of the mechanics of it now as we go into Q4 and beyond. Should we look at the Q3 adjustment as a sort of a one-time reset based on how the yield curves moved, and going back to your point in about sort of program twist to what that did to the long end of the curve? Or if we stay in this position, do we continue to see negative impact on that line going forward? Is it a sort of one-time adjustment, or is there a recurring impact?

It relates directly to movement in long-term interest rates on those hedges. So if you go back over the last 7 quarters, we've had veeringly 5 quarters of negative movement, sorry, 6 quarters of negative movement and 1 quarter of incredibly strong positive movement. So it will relate directly to the movements in the underlying long-term U.S. interest rates. If rates remain largely where they are, you'll see very little movement. And if I talk about what we saw in October, we actually saw a positive movement on the NQHs as it relates both to our North American hedge mortgage portfolio, as well as the holdings debt. So this is a number, which it would be unfair to say that we view it purely as a non-relevant item, but we do revisit the effectiveness of the economics of the hedge and deal with the volatility in the accounting. So I'm not sure I can actually say a great deal more than that. Michael Trippitt - Oriel Securities Ltd., Research Division: No, but, I mean, just -- you've answered it and hypothetically, if the yield curve doesn't move, then effectively, the NQH doesn't move either. It's now going to be on subsequent moves? Stuart T. Gulliver: That's right. As the other way to think about it, Mike, is if rates continue to go down, it will continue to be negative. We'll get a bigger negative number until, of course, rates hit the 0 bound, when it can't get any worse. I think the other direction it could go up and create an enormous profit, which you should also ignore.

Alistair? Alistair Scarff - BofA Merrill Lynch, Research Division: Just a very quick question relating to asset quality across the APAC region. We're seeing some disappointing numbers coming out of the Indian banks, concerns on the Thai, Indonesia. It does seem that the inflection point has happened. Could you give some color as to what you're seeing within your portfolios since you are, obviously, a broad footprint across that. That'll be great. Stuart T. Gulliver: Sure. So far, we have not seen any significantly elevated trends. What we are seeing is there's 1 or 2 specific impairments, one in Hong Kong in Commercial Banking, one in Singapore in Global Banking and Markets. But aside from that, what we're seeing is really is a normalization of our loan impairment lines back towards kind of levels that we probably saw in 2010. But we're not seeing anything that at this moment in time would give us the canary in the coal mine type of signal at all. Alistair Scarff - BofA Merrill Lynch, Research Division: Great. So in terms if we're looking at India, given you highlighted it's a key growth area that you'd like to be bigger in, the recent numbers and trends over the last 2 quarters, which has given, I guess, our concerns on Indian banks, a bit of a shock. You're not seeing that within your portfolio at this stage? Stuart T. Gulliver: No, our Indian numbers actually look pretty good. In fact, we've seen lower LICs in Retail Banking, Wealth Management in India. Clearly, that -- if you remember, we had a problem with the Card business there a couple of years back, but that continues to go well. And actually, the PBT of our Indian business is pretty good over the first 3 quarters this year. It's very strong. So we haven't seen this at all in Global Banking and Markets, in Commercial Banking or in RBWM. Okay, if there's anyone left on the call, what I just want to do is just to recap. So look, the third quarter's been pretty difficult for the industry and, obviously, has for us as well. However, despite these headwinds, we've increased our focus on our strategy. Clearly, we've upped the pace of change, and I think we've made real progress in implementing what we outlined to you back in May. Now we've announced 14 transactions year-to-date, 11 since the 30th of June. We have begun to turn the corner on costs, operating expenses and FTEs have fallen in this quarter from their peaks earlier in the year. We continue to invest for growth in the faster-growing markets. Remember, this strategy is not just about cost cutting. You can see in Commercial Banking and in numbers in the Rest of Asia-Pacific, actually in the Middle East and in Latin America, actually results coming home on those investments. And also, as we said a few times, the 6 businesses within Global Banking and Markets, which represented the big investment spend, are starting to actually return. Clearly, conditions for us actually showed some improvements in October. But the outlook for the global economy remains challenging. However, we honestly believe that faster-growing markets clearly offer significant growth potential and attractive business opportunities for HSBC. And we believe that China will make a soft landing, not a hard landing. So we're pleased with the progress on our strategy, but we recognize that this is a long journey, but we are determined to deliver on our goals by 2013. Thank you, all, for your interest in HSBC.

That will conclude today's conference call. Thank you for your patience. You may now disconnect.