Iain MaCkay - Stuart Gulliver - Chairman of Group Management Board, Group Chief Executive, Executive Director, Chairman of Europe Middle East & Global Businesses, Chairman of HSBC Private Banking Holdings (Suisse) SA, Chairman of HSBC Bank Middle East Limited, Chairman of HSBC France, Chairman of The Hongkong & Shanghai Banking Corporation Limited and Head of Investment Bank Douglas Flint - Chairman, Member of Group Management Board, Chairman of Nomination Committee, Chief Executive of Global Asset Management Arm and Director of HSBC Finance Corporation

Jon Kirk - Redburn Partners LLP Leigh Goodwin - Citigroup Inc Alastair Ryan - UBS Investment Bank Cormac Leech - Canaccord Genuity Thomas Rayner - Exane BNP Paribas Sunil Garg - JP Morgan Chase & Co Simon Samuels - Barclays Capital Robert Law - Nomura Securities Co. Ltd. Rohith Chandra-Rajan - Barclays Capital Michael Trippitt - Oriel Securities Ltd. Michael Helsby - BofA Merrill Lynch Christopher Wheeler - Mediobanca Securities 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 belief concerning future events and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those exposed (sic) [expressed] or implied in such statements. Additional detailed information concerning important factors that could cause actual results to differ materially is available in our interim results statement. Past performance cannot be relied on as a guide to future performance. [Operator Instructions]

Good evening from Hong Kong, and a very warm welcome to welcome to our 2011 interim results webcast and conference call. I'm Douglas Flint, Group Chairman. With me are the Group Chief Executive, Stuart Gulliver; and the Group Finance Director, Iain Mackay. Iain is to take you briefly through HSBC's encouraging first-half performance, hopefully, to allow maximum time for your questions. Stuart will start with the highlights. Iain will then run through the financials, then Stuart will finish by looking in more detail business performance. Before I hand over to Stuart, can I just say a couple of words about the geopolitical and regulatory situation? It goes without saying that the current geopolitical and regulatory environment remained a challenging backdrop against which to operate and to plan the business. We are continuing to take our responsibility very seriously, indeed, and are engaging constructively and transparently with national or international assets to improve financial stability and the resilience of the international financial system. At the same time, we're emphasizing the need to maintain and protect the supplied credit to the real economy to preserve the growth agenda. The key point is that we keep wanting to continue to make is that there needs to be an increasingly robust cost-benefit justification for each incremental measure on top of the already considerable aggregate reform program already in place. Those of you on the webcast, could you take a moment to read the usual cautionary words on your screens, and for the avoidance of doubt, all the dollar figures in the presentation are in U.S. dollars unless stated otherwise. Stuart, over to you.

Thanks, Douglas. Solid improvement in financial performance in the first half of 2011, and we've launched a range of initiatives to improve capital allocation, to improve cost efficiency and to grow the business in the right direction. And we've seen an improvement in revenue trends with higher revenues in each of our fast-growing regions, going into the second half and the position of financial strength and with capacity to grow. Reported profit before tax increased 3% to $11.5 billion. Earnings per share increased 34% to $0.51 per share. The dividend in effect of the period were 12.5% higher as we signaled earlier in the year. On the right hand side of the slide, you can see our key financial ratios. Reported return on equity of 12.3% and the cost efficiency ratio for the half year rose compared to the first half of 2010 to 57.5%, but declined from 59.9% in the second half. Significantly, the cost efficiency ratio in the second quarter was lower than each of the previous 3 quarters. Advance-deposit ratio rose to 78.7% from 78.1% at the end of 2010, bringing considerable room for further growth. We continue to generate capital, strengthening our core Tier 1 ratio to 10.8%. Now Iain will take you through the financials.

Thank you, Stuart. I'll start with our headline numbers on a reported basis. There are 4 points I want to highlight. Profit before tax, excluding changes in the fair value of own of debt increased by 16% or $1.6 billion to $11.6 billion. Revenue growth in certain key markets, combined with continuing reductions in loan impairment charges, was partially offset by increased costs. Including the unfavorable change in fair value of own debt, reported profit was up 3%. The tax rate benefited from the non-recurrence of significant taxable gain in the first half of 2010, as well as deferred tax assets recognized in the U.S. during the first quarter of 2011. Underlying financial performance also improved. EBT was significantly up against both halves of last year, 13% against the first half and 20% against the second. On this slide, we've drawn out the notable factors from underlying business performance, taking the income line first. There are number of economic hedges in place to manage interest rates and currency characteristics of senior unsubordinated debt instruments issued by HSBC Holdings and certain of its subsidiaries. These do not qualify for hedge accounting and generated adverse changes of $1.1 billion in the first half of last year with $314 million in the first half of this. Importantly, these have no impact on cash flow or economic performance. Turning to the refinement of our present value of in-force assets within our insurance businesses, we recognized a gain of $243 million in the period. Turning now to expense line notable items. These included $611 million of provisions in the U.K. relating to customer redress programs mainly PPI, a pension being of $587 million in the U.K. as we re-base indexation against the consumer price index as opposed to the retail price index. With $477 million charge against restructuring costs, notably including the impairment of software development costs mainly within suspended One HSBC programs, minding for some $270 million. Finally, you can see the effect of the tax items I've already mentioned. Turning now to one of our major sources of revenue growth. We grew total customer lending by 6%. And the lending was higher in all regions except North America, where we continue to manage down balances in the run-off portfolios and also saw lower balances in credit cards as customer behavior changed. We grew customer accounts by 5% for the group with every region recording growth. So our funding and liquidity position remain very strong. Revenue trends improved. Total gross revenues were broadly stable at $35.7 billion, and the mix improved. Revenues from faster-growing regions accounted for 47% of the total, up from 42% last year. Main growth drivers were strong growth in Commercial Banking, where revenues were $819 million or 12% higher notably in Asia and Latin America and higher sales of Wealth Management products in Retail Banking and Wealth Management notably in Asia and in Europe. Revenues were, however, lower in 3 main areas. Declines that were already signaled in Balance Sheet Management, in credits and rates within Global Banking and Markets following uncertainty in the eurozone and the effect of higher write-backs and legacy positions within structure and credit last year and from the continued runoff of Consumer Finance portfolios in North America as we've mentioned earlier. Loan impairment charges fell by 32% to $5.3 billion, the lowest since the first half of 2006. Most of the improvement was in the U.S. where the runoff Consumer Finance portfolios benefited from lower balances and improving delinquency. Net cards business continued to see households de-leveraging, evidenced by increased balance pay down and reducing delinquencies. This slide shows the significant factors behind the 10% underlying cost growth. We already covered the notable items. Much of the increase in staff costs relates to faster-growing regions. In many of these markets, which are very competitive, we also experienced quite significant wage inflation. As noted, we've launched a number of programs to improve efficiency and capital allocation. These give rise to restructuring costs in the second quarter notably in Latin America, the United States and Europe. These cost efficiency programs are beginning to turn the momentum, as you can see here. In addition to the increased FT and wage inflation, we also recorded a pension credit adjustment in the second quarter, as noted earlier. As a result, while our costs rose by 2% against the second half of 2010, the rate of growth slowed markedly. And in the second quarter, our cost efficiency ratio of 54.4% was lower than in each of the previous 3 quarters. Finally, this slide shows the group's continued capital strength. There was a 6% increase in risk-weighted assets, lower than 8% increase in customer lending on a reported basis. Continued capital generation led to an increase in our core Tier 1 ratio of 10.8%. Now let me turn it back to Stuart.

Thanks, Iain. Today I'm going to focus primarily on our first half performance. But first, I'd like to update you on our progress against some strategy that we articulated in May to become the world's leading international bank, recap on this strategy, unmet work covers the majority of world trade in capital flows that provide access and exposure to faster-growing economies, as well as mature economies. So how do we seek to position our business given this context? Well first, within Global Banking and Markets and Commercial Banking, we focused on fast-growing markets and their trade and capital flow connections with one another and with selected mature economies. Second, within Retail Banking and Wealth Management, we focused on the high rates of wealth creation in the fast-growing economies, together with preservation of stores of wealth in certain target mature economies. And of course, we continued to run full-scale retail businesses in the U.K. and here in Hong Kong. In May, we outlined plans firstly, to deploy capital more efficiently; secondly, to improve cost efficiencies; and thirdly, to achieve growth in target markets. We are making progress in all 3 areas. First, we had set up discipline on capital allocation using our 5 sources framework. We've announced the closure of our retail businesses in Russia and Poland, focusing instead on Global Banking and Markets and Commercial Banking connectivity. We have also announced the disposal of 3 insurance businesses in the U.K., Bermuda and Mexico. Much more materially in the United States, we have announced the disposal of 195 branches, sensibly enough to take New York and our progressive Europe review of our credit card business. Second, we are targeting USD $2.5 billion to USD $3.5 billion of sustainable cost savings by 2013. During the start of this year, we've begun operational restructuring in France, U.K., Middle East, the U.S. and Latin America, which will reduce our head count by some 5,000. We also launched detailed plans to reduce the cost of HSBC's global and head office support functions. We have initiated more efficient business operating models for our Commercial Banking and Retail Banking and Wealth Management businesses. Third, we are positioning the business for growth. As the management team, we expect to be judged on growth in both profit before tax and return on equity, as well as cost efficiency. The Retail Banking and Wealth Management, we are expanding in key markets with a substantial growth in sales of wealth products across Asia. In Global Asset Management, funds under management reached a record high at the end of this period. We also grew revenues from cross sales of Global Banking and Markets products to Commercial Banking customers. And indeed, our cross-border referrals between China and the rest of the world grew by 50%, compared with the same period last year. Now let's look in more detail at how we're delivering on our targets in driving growth by business and then by region. First of all, Commercial Banking. Commercial Banking profit increased by 31% to USD $4.2 billion supported by strong lending and therefore revenue growth. We continue to capitalize on our connectivity between developed and emerging markets, growing our trade revenue by 26%. We grew lending fastest in Latin America and Asia in response to customer demands. We also achieved significant positive jaws in this business. Return on risk-weighted assets, 2.4%. This next slide shows how we are repositioning our Retail Banking and Wealth Management business to capture wealth creation, grow revenues and to restructure the retail business. We pooled together our Personal Financial Services, Asset Management and Insurance businesses under one management team headed by Paul Thurston. And incidentally, know that we now report Asset Management here and not in the Global Banking and Markets segment. We're achieving revenue growth. We saw a notable increase in sales in Wealth Management in Asia and Europe with strong growth in mortgage lending in the U.K. and here in Asia. And we've conducted a strategic review, which will result in our exiting 3 businesses with a poor strategic fit. Clearly, the substantial increase in profits in the first half reflected improved loan impairment charges across all regions, notably in the U.S.A. for now. Costs rose as we invested in increased head count in Asia and Latin America to support business growth. As Iain mentioned, we also took provisions for customer redressing the U.K. mainly in respect to PPI. Return on risk-weighted assets in this business, 1.8%. Global Banking and Market performance held up well against what was a very strong first half in 2010, and profits were down 16%. We were actually resilient in the face of difficult market conditions, which led to lower revenues in credit and rates in Europe. And as we signaled previously, we also saw lower Balance Sheet Management income. These factors were partially offset by growth in financing and ATM maintenance and cash management in equities and security services. We've also now viewed our Global Banking and Markets business model as different from our peers. This can be seen perhaps a little more clearly in the first half of 2011, where we have fared better than others. The diversity of our business was a protection in difficult markets as revenues from faster-growing regions rising by 10%, partially offsetting weaker performance in Europe. Return on risk-weighted assets was 2.6%. Now let's turn to the regions starting with Europe. In line with the first half of 2010, profits before tax fell by 39%. Now on an underlying basis, it fell by 28% to USD $2.2 billion. As I mentioned a moment ago, this was driven mainly by lower contribution from Global Banking and Markets. However, Global Banking and Markets remain strongly profitable in Europe. Commercial Banking in the U.K., income from customers using international products grew by 16% and increased growth in new lending to SMEs. We remain on track to achieve our lending goals under the Merlin agreement. We also continue to grow our mortgage book in the U.K. Our mortgage share of new lending rose to 11%. This new lending is very high quality where loan-to-value ratio, 53%. Our costs in the U.K. reflected strategic investment in Global Banking and Markets. But since the period end, we have announced a restructuring in the U.K. and in France affecting around 1,400 jobs. The Middle East and North Africa, performance was resilient. We remained open to business despite unrest in 10 out of the 14 markets where we operate. Profit before tax was significantly higher than the first half of 2010, mainly reflecting the improved credit performance, the strong growth in reported PBT in our 3 largest markets in the region: Egypt, the United Arab Emirates and Saudi Arabia. Costs were higher. However, we announced a restructuring during the period as we focused on improving business efficiency. And as you would expect, revenues remain subdued due to the uncertain political environment. However, it's worth remembering this is a region that's home to 60% of the world's oil, with the 6 of the 10 largest sovereign wealth funds. More so, we've operated here for more than 50 years. We got to remain optimist about the region's prospects. Latin America, our pretax profits rose 23% to $1.2 billion. Overall revenues for the region were up 12%, driven by growth in Brazil. We achieved notable revenue growth in Commercial Banking and Retail Banking and Wealth Management. We continue to restructure our regional head office to improve cost efficiency and where we saw cost growth, which was reflected by wage increases in an inflationary environment and also additional front-line staff recruitments, especially in Brazil. Cost also affected the first tranche of restructuring following the closure of 66 branches in Mexico. North American business achieved profit before tax of $672 million, compared with the loss in the same period last year. We continued to manage down the Consumer Finance portfolio and balances in cards declined. As a consequence, total revenues were lower. It contributed, of course, to the higher cost efficiency ratio but also to considerably lower loan impairment charges, and therefore, to improve profit before tax. We continue to reshape our U.S. business. I said -- as I said earlier, we've announced the disposal of 195 branches, principally in Upstate New York, and they're progressing their review of the cards business. Canada continued to perform very strongly. It is our fifth most profitable country in the first half, with a profit before tax of USD $527 million. At the full year, I emphasize that protecting our leadership position here in Hong Kong was absolutely core to our business in Asia. But it's encouraging to see Hong Kong continue to perform very strongly. We saw balance sheet growth, strong sales of Wealth Management products and mortgages and an increase in trade-related revenues. I'd also note the continuing strong credit quality. Customer loan balances grew faster than risk-weighted assets as we added good-quality lending. Staff costs rose as to support increased business volumes and in response to inflationary pressures. Profits in the rest of Asia-Pacific rose 21% to USD $3.6 billion. We achieved strong revenue growth of 13% overall. So as you can see, it was well spread across our major markets, with particular strength in mainland China. We saw robust lending and deposit growth and widening deposit spreads and the increased sales of Wealth Management products. As in Hong Kong, staff costs rose to support increased business volumes and also reflected inflationary pressures. The contribution from our associates also rose. Together, Hong Kong and the rest of Asia-Pacific produced over half of the group's profits. Finally, allow me to say a few words about the economic outlook. We remain positive on emerging markets and anticipate a soft landing in China and expect the risk of overheating in Hong Kong to ease. We expect continued strong growth in the rest of Asia and Latin America. We remain positive on the outlook for the Middle East. But there are clear short-term concerns. Geopolitical and regulatory backdrop is uncertain and presents challenges for developed economies. In closing, I would add that I'm pleased with these results, which mark a first step in the right direction from what will be a very long journey. Thank you for your time and attention. We'll now take your questions. So if the operator will explain the procedure and introduce our first questioner. Thank you.

[Operator Instructions] And we'll now move to our first question today from Sunil Garg from JPMorgan. Sunil Garg - JP Morgan Chase & Co: So just wanted to understand the increase in loan loss provisions in second quarter versus first quarter. From what I understand, North America seems to be behind that increase despite the decline in delinquencies and charge-offs so at HFC, so I just wanted some color on that. Second, if you could tell us the capital gains that you're likely to book on the sale of the branch network to Bank of Niagara today? And lastly, just some color on your outlook for rates in the FX and the equity's businesses in the GBM, which has done very well in the second -- on a half-and-half basis?

Thanks, Sunil. Iain will take the first 2, and then I'll come in on Global Banking and Markets.

So U.S. gains, Sunil -- and sorry, what your first question was? Sunil Garg - JP Morgan Chase & Co: The quarter-on-quarter increase in provision from 2.4% to 2.8%?

Yes, absolutely. Actually, the main driver behind the loan impairment charges, Sunil, are actually in the line of impairments and available-for-sale securities. We took $65 million against Greek bonds, and there were some $280 million on other impairments within the available-for-sale securities. So that was the main driver in the second quarter. And if you think about what was underlying that, it was principally what we saw going on in the eurozone. So that was it. If you look at the U.S. portfolio overall, the loan impairment charges there were stable. Obviously, we've had a declining trend over the last 7 or 8 quarters in that particular area. And that trend stabilized in the second quarter of the year, although obviously continued to represent a significant decline against the same period last year, as well as the second half of 2010. As it relates to the transaction in the U.S., that transaction priced off the deposits, which will be sold to First Niagara when the transaction closes sometime in early 2012. The premium to those deposits about 6.67%. And once that transaction closes, it's obviously, highly dependent on the deposit base at the time the transaction closes. It will obviously provide a little bit more insight to certainly the accounting gain that will be generated from that. In terms of capital release off the risk-weighted assets that are being disposed, it was about $350 million. And in terms of the overall proceeds, we're going to realize something in the region of $1 billion from the proceeds of that transaction.

Thanks. As for Global Banking and Markets, I think what you're going to do is dig into the various revenue lines within Global Banking Markets. Clearly, we are impacted in line with the market by what's going on in Europe. And you can see that in the credit line, which is actually down year-on-year. But actually in rates and foreign exchange equity security services, we're up because these are already businesses that are based around customers in the emerging markets. Our Global Banking revenues were up 12%. Equity is up 23%, which is really an Asian business now and with some Middle Eastern and Latin American components. Security service is up 14%. Payment to cash management is up 24%. So as we've said often, we have a different mix of revenue SKUs within this business, and I see no reason why we shouldn't continue to see reasonable growth in foreign exchange with Global Banking and the equity piece, security services in PCM. Obviously, to our credit and the fact we are primary dealer in a number of European government bond markets, that credit line will be impacted if the eurozone problems continue to resurface and that's chronic. Remember, we don't have a significant commodities trading business. That was just one of the reasons why I think we've outperformed some of the competition. We never built one, and therefore, we haven't seen a strong reversal in earnings that have come through a number that affect numbers of our competitors. But this kind of reflects a lot of the investment we've made to really develop the customer-facing Global Banking and Markets business. And we're starting now also to see some reasonable traction in ECM and equities here in Hong Kong, which has always been a little bit of our Achilles' heel. We've always been a very strong debt house in Asia, but have some catch up to do. There's still a little catch up to do, but doesn't need some trends/direction information here in that area, which is also encouraging.

Our next question comes from Ian Smillie from RBS. Ian Smillie - RBS Research: Three questions, please, all relating to geographic movements on the balance sheet. Firstly, could you give us a sense as to the contribution to the other ratio risk-weighted assets from the associates? If I may ask, you've got about 1/3 of the incremental group RWA uplift is coming from other Asia, and then RWA to loan mix there is like 20%, heavily distorted by the associates. So some understanding of the contribution to the number there would be very helpful. Secondly, inside Europe, if we could understand why the incremental RWA move is so low given that assets are a very big pick-up in the loan book there, which doesn't seem to be falling through to risk-weighted assets. And then thirdly, inside the strong deposit performance of the group and it's like France is the standout, the geographic contributor. And again, I'm guessing that's coming from GBM. But some color as to what's happening inside there would be very helpful.

Yes, I'll kick off with France and Europe, and then Iain can talk about the associates. So the deposit in France is not coming from global banking markets. It's actually coming from the build-out of a Commercial Banking and Retail Banking and Wealth Management business there and a very deliberate polity to reduce the AD ratio of our French business, where the French market traditionally runs with AD ratios of 120, 130 more towards a group standard. That's quite a deliberate move on the part of our French colleagues to actually win deposits within that market. The RWA impact in Europe is probably due to the growth of actually 2 things. In essence, mortgages in the U.K., which obviously carry low-risk weights. This is the bit I talked about earlier with a 53% LTV. And also, we've done quite a bit of a switch into secured lending from unsecured lending, so growth in trade finance and so on, contribute quite low RWAs. And as for the associates, Iain?

I am actually busy searching for that number, Stuart. But what I can tell you, Ian, is that what we've done with the risk-weighted assets within the associates and the rest of Asia-Pacific, we've -- in fact, an actual fact consistently across the group. But we've allocated them into customer groups to which they relate. As far as the Chinese associates go, the most significant proportion of that relates to Commercial Banking within BoCom obviously, approximately 60% to 70% of the risk-weighted assets, which are consolidated in a proportional basis for reg reporting set within that. I don't have the exact number at my fingertips, but I will get that number to you at a later date if you don't mind, Ian.

Okay, Ian, if you look at Page 29, you can see an illustration of what Iain is talking about. The Commercial Banking, RWAs are actually greater than the Commercial Banking nominals, and that's BoCom. So you can probably make a stab at that yourself. It's why there's an oddness to the fact that the nominals or actually in the case of Commercial Banking lower than the risk-weighted assets is because of the attribution of the associates BoCom numbers into CMB. Ian Smillie - RBS Research: Okay. Great. A hard number, follow -- I'll be -- we'll make sure we have this next one...

Yes. And then we'll with the hard numbers. So Page 29 will give you some directional information. Ian Smillie - RBS Research: Great. One quick follow on, please. The restructuring charges taken in the half, could -- is that kind on a pay-as-you-go basis, or is there some degree of forward-looking for the headcount reductions, which have been talked about?

Absolutely. What's been, if you like, announced in card at this point, Ian, and that's the way in which we are going to move. Ian Smillie - RBS Research: So if these head reductions actually come through, any restructuring charges associated with that will be taken at that time?

Yes, that's right.

That's the case.

Our next question comes from Cormac Leech from Canaccord. Cormac Leech - Canaccord Genuity: One detailed question, please and then a slightly broader one. Just on the restructuring charge, you've given us some allocation of that geographically. I was wondering if you could give us a little bit of color on by customer group how that breaks out. And then secondly I was wondering if you could give some of the reasoning for expecting a soft landing in China.

I'll take the first 2?

Yes, sure.

On the restructuring, Cormac, the -- of the total 477 that was recognized in the first half, 270 of it related to impairment on software development costs a number of -- across a number of suspended work streams within One HSBC show record of about 10 work streams there. We suspended work on 3 as we revisited the business models for Commercial Banking and Retail Banking and Wealth Management. The total impairment there was $270 million. Across the remaining $200 million, that was principally restructurings within Latin America, the Middle East and Europe. In Latin America, which was the larger of the 3 at this point, it's principally within the Retail Banking and Wealth Management space as we restructured 66 branches within Mexico, but also addressed some of the head office structural matters within Mexico as well, but broadly within Retail Banking and Wealth Management. I think as we move through this, you'll find that there'll be a spread across the customer groups, and we'll keep you informed as to how that comes through.

Okay, and turning to China, the slowdown in the economy is part of the policy statement that was made in the 12 5-year plans, where China indicated that it wish to see GDP growth drop to around 8%, and 8% was a sustainable number. And that the 13% number that they've been peeking at was, in their view, unsustainable and that it leads to some social pressures within the country. So first of all, this is not a slowdown that's being done to the Chinese government, i.e., it's the economy and they're responding. It's a direct policy initiative of the Chinese government. Now because China does not have a fully developed money market, its central bank is not simply reliant on official interest rates, i.e., the Fed funds or base lending rate equivalent to try and influence the overall macro direction of the economy. It has a raft of micro prudential levers at its disposal, everything from moving reserve ratios to actually being able to direct through the branches of these state-owned banks, specific lending in specific sectors by city, by province. So the richness of the micro prudential tools and frankly, the technical skills and the technocrats at the center, many of whom I've met and have visited, for over actually 25 years, gives me a great deal of comfort that China actually will manage a soft landing and will not have a hard landing.

Our next question now comes from Alastair Ryan from UBS. Alastair Ryan - UBS Investment Bank: Two, if I may. First, given capital generated by the group is in -- how strongly will your -- metrics are improving, whether we should be using EPS growth as a proxy for your source of that dividend distribution capacity at present because clearly, one is growing meaningfully faster than the other in the first half. And then secondly, just a point of interest, really. Hang Seng pretty much steps on the brakes in the first half. And it looks like Hong Kong Bank in Hong Kong kept on lending at a pretty fair clip, whether there's anything we should read into the shift there, whether that's because of the different mixes of the 2 business. But historically, though, they've often grown in line and actually quite a big divergence in the first half, what we should read into that?

On Hang Seng Bank, I don't think you should read anything into other than the different business mixes of the 2 banks. And don't forget that the Hong Kong Shanghai Banking Corporation, if you like, came off the pace in 2009 when we were doing the rights issue for the group overall, and actually scaled back some of its balance sheet growth at the time when Han Seng Bank did not need to do. So to some extent, you need to look at the fact that the Hongkong Shanghai Banking Corporation underperformed, if you like, and in terms of volume, variant Hang Seng Bank during the period where we were raising capital at the group level. As for dividends and share price performance in EPS, I don't think we see the world in quite such a rosy way as you do in the following sense. Okay, in the first half, we have an ROE that appeared to have gotten inside our target of 12% to 15%. And of course, that's based off a Basel II capital number. If you re-base and recalculate this, which of course, is what we do based on our estimates of where Basel III would be, and that ROE number falls quite dramatically. And to put it into context, roughly estimating on a Basel III basis, we need to have made an extra USD $2 billion in the first half, not $11.5 billion, but $13.5 billion. We've got a 12% ROE on Basel III. So I think if you're working around to share buybacks, et cetera, I think we're a long ways away from that. And, indeed, where are we to get into a situation where we have far too much retained earnings, we deal with it through dividends rather than share buybacks. Iain, if you might want to add anything?

I think the other thing to bear in mind, Alastair, is within that return on equity that we reported for the first half, it's obviously got the benefit on the tax line of a not insignificant credit from the utilization of foreign tax credits due to fair tax recognition in the U.S. So if you normalize for that onetime effect, our return on equity comes down to only about 11.5%, 11.6%. And then there's the effect that Stuart talked to in terms of a Basel II versus a Basel III measurement basis.

Our next question comes from Christopher Wheeler from Mediobanca. Christopher Wheeler - Mediobanca Securities: Three questions, if I may. First of all, just confirmation on the U.K. tax, the bank tax. $600 million, I think, was the number you've been suggesting might be at the liability. Can I just confirm that will all come now in the second half, and whether or not you've actually revisited that in any shape or form, given you haven't got a lot more information? That's the first question. The second one, a follow-up on restructuring. Obviously, we are going to see some pretty hefty restructuring charges one must assume over the next 2.5 year or 2 years or so. Again, can you give us any thoughts on perhaps what you could share with us on the sheer scale of those on a half-by-half basis? And whether the $477 million is a reasonable sort of guidance as to where we might be, albeit, I know you had the software charge there? And -- yes, those are 2 questions.

Okay. Chris, I think on the bank levy, as you're quite right, we've pointed out, there's no new information on that front. So I think as you read through, with great delight, the 250-page document that we provide, you'll find that our disclosures in that regard are consistent with $600 million. The accounting for this is so rather odd in the sense that we would theoretically book the whole thing on December 31 once we know the shift in balance sheet on that date. The number has not changed. On restructuring charges, I wouldn't read too much into the first half. As we implement around sustainable saves and consistent business models across Retail Bank and Wealth Management, as that may or may not affect head count or that may or may not affect other items, whether it's in the form of dispositions or closures of businesses, we're absolutely going to try and balance the overall natural attrition that we see coming through head count on an annual basis in terms of how we right size the workforce in each of the key regions around the group. And try and affect that as an efficient a way as possible. So, certainly did not read too much in the $477 million or for that matter, the $200 million excluding the software charge. But we absolutely will do is as we have clarity in each of the measures that we're implementing, we'll provide you with that information on a timely basis.

Our next question comes from Leigh Goodwin from Citigroup. Leigh Goodwin - Citigroup Inc: A couple of questions. One on Balance Sheet Management, the other one on the U.S. Finance Corporation. Just on Balance Sheet Management, clearly, the $1.8 billion, just under for the half. It looks a little bit stronger than, perhaps, your previous guidance for the full year of $2.5 billion would imply. I wonder whether you could give us a Q1, Q2 breakdown of that and also whether you want to take the opportunity to amend your guidance for the full year. And then on U.S., my question is that it looks like the impairment charge ticks up if you take out the first quarter $400 million special provision for the changing economic assumptions. It looks as if there was an increase Q-on-Q about $200 million. And the delinquencies on the secured books look as if they've gone up a little bit. I was just wondered whether you could talk about trends in the U.S. as well then, please?

I'll do the Balance Sheet Management and the delinquency trends. We have unexpectedly, I guess from our original assumptions, seen higher interest rates in a number of the countries in the rest of Asia-Pacific in response to higher inflation actually in Latin America. But actually, we've seen interest rates go back up and actually from quite sort of steep curvature in the yield curve in Latin America and in the rest of Asia-Pacific, which has benefited our Balance Sheet Management numbers. We've also seen at times in the U.K. and at times also in the eurozone, where, obviously, rates are going back up. Opportunities, if you like, to reload our positions where 1- and 2-year rates have backed up to a level against the overnight carry rate. So I think it probably would be appropriate to lift that Balance Sheet Management guidance. So I think we've set the kind of expectation around 2.5% to 2.5% to 3%, but probably not higher than that because actually, a lot of the curves again, particularly in the eurozone, sterling, et cetera have gone back to being incredibly flat and the extent to which we've seen rates rise in the emerging markets, so it's already happened as it were. But I think a kind of 2.5% to 3% number rather than 2.5% is more appropriate.

Talking to loan impairments, certainly, when you look at the U.S. books of business, whether in the context of 2-plus delinquency, continued downward trend in delinquencies across the mortgage services portfolio, which as you'll recall, assuming one-off now since -- during the first quarter of 2007. And as it relates to the Consumer Lending portfolio, which has essentially been in one-offs since the tail end of 2008, absolutely stable quarter-on-quarter. Loan impairment charges in the U.S., and as you quite rightly pointed out, in the first quarter, we took an adjustment for some of the economic assumptions primarily related to foreclosures in that regard. But in the second quarter, they've actually dropped off again, resuming that downward trend that we'd experienced in previous quarters. Perhaps if you look more broadly at loan impairments across the group, one of the effects that you may be picking up is slightly higher impairments in the available-for-sale portfolio in the second quarter as we took the effect of impairments on Greek government bonds, which was USD $65 million, and then the effect of some repricing within the available-for-sale portfolio, which took us about another $280 million of impairments in the second quarter. So, that may be the factor that you're picking up there.

Our next question comes from Mike Trippitt from Oriel Securities. Michael Trippitt - Oriel Securities Ltd.: Two or 3 questions, if possible. And just -- Stuart, you mentioned the 5,000, I think, job cuts on this restructuring so far. I'm just -- what I'm trying to do is just marry up the sort of potential head count reduction. I've seeing different figures mentioned. I'm not sure those some of those are officially in your disclosure or just on the wires, but more like 25,000. I'm just trying to match up the headcount reductions against the $2.5 million to $3.5 billion of cost saves that you see over the next 2 to 3 years. I wonder if you could clarify that. Secondly, looking at the 10-Q for household, you're still at about the USD $6 billion level on capital. And I'm just wondering, is there any pressure to increase that? Or how does that capital move as you continue to run off the balance sheet? And the third thing is there's an FX benefit in the core Tier 1. And I'm just wondering, are you sort of naturally hedged in terms of risk assets and core Tier 1? Or is there any real benefit to core Tier 1 ratio from that FX effect?

Let me start with the jobs. So we've confirmed that there are 5,000 job cuts took place in the first half, which were made up of 700 in France, 700 in the U.K., 1,700 in Latin America, 1,400 in the United States, which is totally separate from any disposals and 300 in the Middle East. And we've also said, and I said in answer to the questions earlier today, is that I expect to make a further 25,000 job cuts between now and the end of 2013. This is in addition to the 5,000, so a total of 30,000. So this is a very approximate ratio. But if we're looking to kind of take 10% out of the cost basis of France, it's not all fairly surprising that there's about 10% of the head counts in the firm. What I've also said there, Mike, is that these are gross numbers. So therefore, given that we are in parts of the world that continue to boom, it is quite possible that the net head count number is not minus 30. It could be a smaller number because we've added people. It could also be a bigger number because we've been successful into saving the businesses because these head count cuts have not include head count that would leave the firm as a result of selling a business. Michael Trippitt - Oriel Securities Ltd.: That's very clear.

As it relates to capital in the finance company, as we run down the portfolio, as you would quite naturally expect, there would be some release of capital as we reduce those risk-weighted assets. However, at the same time, as there are some changing characteristics in the portfolio with respect to either probable default or loss-given default, there is some upward pressure in terms of risk-weighted assets in that regard. But overall, the finance company is capitalized at a level with which our supervisors are happy. As to the extent that we release capital as we run down those portfolios, that capital will be released certainly within the North American environment for redeployment across other lines of business in terms of being able to distribute it from North America back to parent for allocation elsewhere. That's somewhat the gift of the U.S. supervisors at this point. And as is well documented in the press, a U.S. supervisor is less inclined to allow banks to do such things. But overall, certainly, we're at the level or above the levels of capital with which the U.S. supervisors are happy at this time. In terms of the FX effects on the capital ratios, broadly -- well not broadly, specifically speaking, we're generally hedged across our subsidiaries and branches just by the composition of the balance sheet, which tend to be naturally matched in the currencies within the businesses in which we're doing work. So we don't carry significant unhedged positions within the capital base and generally, the capital base is not that susceptible to significant movements within our businesses. Michael Trippitt - Oriel Securities Ltd.: So the core Tier 1 and the RWAs would have moved in a lock step so that there shouldn't be a benefit to the Tier 1 ratio itself?

Not significantly. There are some structural FX positions that we hold. But generally speaking, it largely matched.

Our next question comes from Tom Rayner from Exane BNP Paribas. Thomas Rayner - Exane BNP Paribas: Can I just ask you about the seasonality in the cost income ratio quarter-by-quarter? Because obviously, second quarter, I think, looked a lot better than first quarter. But if I look at the sort of first half from first half trends, even adjusting for sort of numerous one-offs and the U.S. runoff, revenue was pretty flat. Costs were sort of high single digits. So it's kind of going in the wrong direction at the moment despite pretty good volumes, and I think a better BSM outturn in the first half. So I just wondered if you could give us any thoughts on whether the sort of move into second quarter is more reflective of what's really going on, or I think we're going to have to wait a bit longer, possibly, for the improvements to come through.

The second quarter, I think, is probably more directionally indicative of the journey we're on. Don't forget, we -- and we only had the Investor Day on May 11. The meeting took over on the 1st of January, this 300,000 roughly staff in 87 countries is quite a large ship to turn. What's quite pleasing within the first and second quarter numbers is there was strong revenue growth actually in Commercial Banking and Retail Banking and Wealth Management. So actually, the revenue line actually picks up first and second quarter, and I think looking around at some of the comparative results reporting so far, that's actually quite unusual. But I'll let Iain just cover any of the technical cost numbers that are running through it. Maybe, as you'll appreciate, Tom, there's a raft of sort of one-offs flowing through these numbers.

Yes, Tom, I have great fun trying to explain our cost numbers just because of all those one-offs. But I think, obviously, the focus for the business over the last few months has clearly been delivering again some of the sustainable cost savings that we laid out in strategy there at the beginning of May. We're clearly beginning to build some momentum in that regard. We would expect to continue to build that and deliver on some of those sustainable saves during the second half of the year. And -- but as Stuart quite rightly points out, there are any number of programs that we've got underway in this regard. We're certainly on a good trend, but there are some, I think vagaries, if you like, in some of the revenue lines that we saw in the second quarter certainly with respect to some uncertainty in the European area, which we'll keep a very close eye on and then adjust course within the cost lines as we see the revenues coming through. If momentum is good, and I think generally, we're on the right glide path to get to the sort of cost position that we want within the group. Thomas Rayner - Exane BNP Paribas: Okay. Could I just have one quick follow-up, I think, unrelated? Just on the impairment you've taken on your Greek bond exposure, what percentage -- sorry, of the growth exposure did that represent?

I think against the carrying values that we had at June 30, it was just over 30% in the available-for-sale portfolio and... Thomas Rayner - Exane BNP Paribas: Was that marked down? Would that have been marked down to market levels?

Yes. It runs at about 30% deduction against the available-for-sale within the Greek bond portfolio at that time. So it was -- we have about $200 million at that time. Thomas Rayner - Exane BNP Paribas: Okay. So sorry, the carrying value of this -- we've got mark -- that would have been mark-to-market already and then you've taken in a 30% impairment on top of that, or will that be total impairment?

No, that's mark-to-market. Okay? So we, in effect, mark-to-market an available-for-sale security at June 30.

Our next question comes from Rohith Chandra-Rajan from Barclays Capital. Rohith Chandra-Rajan - Barclays Capital: A couple, if I could, please? One on sort of operating trends and a couple of slightly related actually on broader strategic issues. And just on the operating trends, you signaled at the 1Q IMS that you were looking at margin stability. Margin for the first time in a number of years seems to improve in the quarter, so up from 252, I think, in the first quarter to 256 in the second. You talked previously about stabilization, certainly, on the deposit side in terms of liability spreads. I wonder if you could give a bit more color as to how you're thinking about the margin going forward. And then secondly, sort of more broadly on the strategy, you highlighted in a statement progress on the strategic review of the credit card business in the U.S. That obviously handles about $60 billion of RWAs. So much more significant versus the $350 million of equity that you highlighted in the branch disposals. And so I wonder if you could give a bit more color around that. And also coming back to comments on costs, just wondering in terms of the initiatives that you've announced so far, how far in terms of run rate that might get you to the $2.5 billion to $3 billion of targeted cost reduction?

Okay. On net interest margin, there is a number of moving parts on the net interest margin number. I mean, obviously, we continue to run down that very heavy margin business in the state household, which obviously has resulted in the contraction of net interest margin. In the other direction, we are starting to see actually the ability to reprice credit actually in places like Hong Kong and China because interest rates and reserve ratios have increased a number of times. On the other hand, in the rest of Asia-Pacific, we again are seeing deposit margin increases and interest rates have gone up in a number of countries, same in Latin America. But here in Hong Kong, there's actually deposit compression partly caused by a significant amount of money having moved into RMB out of U.S. dollars and Hong Kong dollars creates a little bit of kind of shortage in those currency. And then in the U.K., there's also deposit margin compression coming out of the competition for deposits from the Hang Seng bank that need to repay the special liquidity beginning with the Bank of England by December of this year. It's reasonably mixed. But the encouraging bit is that we're actually starting to see some ability to reprice credit across the piece in Asia-Pacific. So there is some signs of everything balancing out. Again, just on the negative, we have deliberately started to move the book into secured from unsecured. That, of course, has a lower run rate. On new strategy, we've got nothing to report today on the credit card portfolio in the United States, other than that the process continues to run. Once we have got something to report, we will come back to you at that point in time. You're entirely correct that this one is the one that has a material amount of RWAs and would make a material difference in terms of capital released. But it's a work in progress at this moment. As for the costs, I think we're only in the foothills of the restructuring that's required to deliver the $2.5 billion to $3 billion. There's a lot more to come. Rohith Chandra-Rajan - Barclays Capital: And I guess sort of your comments earlier just on the costs, sort of 10% head count reduction is sort of consistent with the 10% reduction in the cost base. I mean, is that the case based on the 5,000 to date, would that be a fair assumption?

No, that's based on the 30,000, the 25,000 plus the 5,000. Rohith Chandra-Rajan - Barclays Capital: Sorry. So if I use the same assumption based on the 5,000 to date versus your comments on the 30,000?

Now look, but clearly -- I think the thing to understand is I'm not managing to a head count target. I'm managing to a cost efficiency ratio target that we set out. And then #1, we'd set out the sustainable cost saves, it also did not say that you'd be able to deduct $3.5 billion from the cost base of $37.8 billion and find that we were operating at $34 billion, able to create capacity. Equally, as we remove a chunk of jobs, we're clearly going to try and remove the biggest amount of costs we can. But it's not really about head count, but the head count has become a focus for a number of the press commentators in the last sort of 48 hours. But it would be fair to say that one of the significant inputs to that $2.5 billion to $3.5 billion were only one, is clearly reduced head count. The other thing to bear in mind about this is the 25,000 plus 5,000 takes no account of what the ICB may require us to do or indeed, we may decide to do as a result of whatever the ICB recommends. And again, it's impossible for us sitting here this evening to say whether that would reduce -- would result in a reduced head count beyond the 30,000 or actually an unchanged head count. Rohith Chandra-Rajan - Barclays Capital: Okay. And I appreciate you sort of highlighted the uncertainties around all the number of different drivers around the margin. Is your expectation still stability going forward?

Yes, I think it is, actually. I mean, I think, it -- that again, we have got this big portfolio running down. And also, if we are success in selling our credit card business, that's clearly a very high-margin asset business. And so you also need to factor that in. In a way, the net interest margin of the group has been flattered by a couple of business. One of which actually has very high revenue number, but on extremely high loan impairment charge and write-off number. And therefore, a disappointing PBT. The other, which has had a high return and actually a very profitable experience for us, but which is non-strategic. But don't forget, if we do succeed in disposing of the credit card business, it will be negative for the net interest margin at kind of first flush. But it is not a business that strategically, we think, makes sense for us. And we think that if we're able to do that and release a chunk of capital, we would do much better by of our shareholders to redeploy that into faster-growing emerging markets, which in assets with much should lower risk weights than where it currently sits.

Our next question comes from Michael Helsby from Bank of America. Michael Helsby - BofA Merrill Lynch: I've just got a few questions, if I can. Firstly, on a loan growth. Across the regions, I think you've seen a slowdown as you flagged in Q1 in the first half versus year-on-year. I know you've got a bullish outlook on emerging markets, soft landing in China, et cetera. I was wondering if that level of growth now has reached the level that you feel quite comfortable with, so you're quite happy with that type of balance sheet growth from a risk appetite whilst you look forward? And second question on sort of volumes and trading. I was wondering if you could give us any comments if you've seen any contagion in the -- or disruption in the market in Asia as a result of all the noise that you're seeing coming out of the U.S. and also Europe? And attached to that really, but just thinking more about your fixed income businesses. I was wondering if in a developed market perspective whether you can relate to the sort of revenue declines that peers have been seeing. So in FICC, people have had sort of down mid-20s Q-on-Q? I appreciate you've not got the same business mix.

In terms of loan growth across Asia-Pacific, we are reasonably comfortable with the loan growth that we've seen. We have not, in any way, loosened our credit underwriting standards. And we're comfortable with the credit risks that we're taking. We continue to have a very low advanced deposit ratio, continued across Asia-Pacific to have an AD ratio of 59%. We have a lot of liquidity. We've grown our deposit base, as well as growing our loan growth. The RWA growth in Asia was about 8.5%. The loan growth was about 13%. So we're booking good quality assets. So we're comfortable with these kind of run rates. I see no real impact from what's got -- what has gone on in the United States, and what's gone on in Europe to our business in either Latin America, the Middle East or indeed, Asia-Pacific. And that, of course, explains in a large part why our Global Banking markets business is down 16% and others are down by much more. We have a very business model. It's much less proprietary trading, and we never build a commodity business up. So we don't have the now negative swing of the commodity business. And we have a business that's very much rooted in the customer base and in a customer base where GDP growth is very high. Asia and Japan GDP growth we forecast at 7.5% in 2011. That's obviously much higher than where Western Europe, the U.K. or the USA sits, right? So I think that's what will be fair to say is, if you look at our credit business in Europe, which is the biggest like-for-like rate across to where we're a European primary dealer, we do have similar declines in our profitability to what you've seen other European primary dealers have. But as I say, that's quite a small proportion of the Global Banking and Markets business. So it's really been built around 7% or 8% revenue streams, all of which make over $ 1 billion in the U.S., and is geographically diversified to the emerging markets.

Our next question comes from Jon Kirk from Redburn Partners. Jon Kirk - Redburn Partners LLP: I just got one question actually, one area, which is on -- in Hong Kong and particularly, on this issue of Hong Kong dollar liquidity tightening up. Could you just give us your view on what that could mean for Hong Kong margins going forward? And also, where do you think that could end up constraining Hong Kong loan growth? And then finally, whether actually, given your quite low AD ratio in Hong Kong, whether that is a Hong Kong dollar AD ratio, but also whether that will put you at some sort of competitive advantage of Hong Kong dollar liquidity continues to tighten?

I think there's actually ample liquidity in the market, but prices are going up. Those banks that have been reliant on private banking sort of wholesale funding are heading up to attract deposits. There has been this kind of skew in the Hong Kong market created by enormous take-up of offshore RMB. So I don't believe that actually there's a systemic problem as yet. And we have a very low AD ratio, 52% in Hong Kong. So it probably has little impact on us at this moment in time. And we've always had deposits as the sort of center of our funding strategy as you know. So I think what you're actually seeing is probably an increase in margins caused by effectively a slight supply-demand imbalance, but that's not across the marketplace. For those banks that have substantial retail deposit bases, this is probably an opportunity. For those banks that have been reliant on wholesale funding, their margins are now being freeze. Jon Kirk - Redburn Partners LLP: Okay. So you said this might slow loan growth in Hong Kong or indeed, I don't how regulators feel about this either if there's any pressure coming from regulators?

Regulators are still certainly showing some concern at an individual bank-by-bank level as they rightly should do as prudential regulators. But we're not privy to those individual conversations that they're having. The HKMA wrote to all of the bank CEOs reminding them of the need to grow their deposit bases to match their loan growth. I don't think that there's some indication as well that some of that high loan growth was due to -- effectively may have been borrowed in Hong Kong, going across the border into China. And given that time there is in essence somewhat slowing its economy, some of that pressure has also gone away.

Our next question comes from Robert Law from Nomura. Robert Law - Nomura Securities Co. Ltd.: Could I have 3 areas, please? Firstly, on the expenses, could I ask you whether the second half of the year is likely to be higher than the first as it normally is? And just to clarify, on these restructuring charges you've taken, what's the head count associated with the restructuring booked in the first half? That's the first area.

As first half versus second half, Robert, I think you're looking for a forecast again. So I'm probably not going to dish those out to you. I'd probably revert back to some of the earlier comments that Stuart and I made around, certainly, building momentum around sustainable saves, that being at the early stages of that, we'll obviously continue to focus in the second half and through to 2012. When you think about the restructuring charges, $477 million in the first half, $270 million related to software impairments, the balance of $200 million or so, certainly to the extent that those restructurings affect head count, and we've talked about 5,000 through the half-point then clearly, those restructuring charges cover any head count effect from that. But if you think about this in the context of the Russian disposition of the Retail Bank Wealth Management that was actually sold to Citibank, the restructuring charges that we took them out of the guard but absolutely de minimis. The most significant element of that $200 million actually related to the restructuring of some branches and regional head office in Mexico in the first half. But certainly, that $200 million addresses the -- included within that is the head count component of any restructuring in the first half. Robert Law - Nomura Securities Co. Ltd.: Secondly, in terms of the roughly 10% reduction of head count that you're looking at on a gross basis, and that equivalent reduction in expenses or certainly again, on a gross basis, what kind of revenue impact do you think you would have with that?

I think, Robert, to the extent -- I mean, the $2.5 billion to $3.5 billion, remember, is very much focused on sustainable saves within retained operations. So to the extent that we look at removing ourselves from certain Retail Bank Wealth Management businesses around the world, as Paul and the team refocus that business model, then there would be to the extent we dispose any of those business or closed them, there would be a revenue impact. I think if you reflect back on some of the pages we shared with you at strategy date, the PBT coming from those businesses within Retail Bank are being focus on are -- is absolutely de minimis. So at this stage until we get into a little bit more of the execution beyond that, which we've already announced, it's probably not appropriate to sit and talk about revenue impact. Robert Law - Nomura Securities Co. Ltd.: Okay. And then the final area was a broader area as we approach the ICB publication. Can I ask what thoughts you have from overseas regulators as to what approach they might take post ring fencing if it comes in, in the U.K. or what thoughts you may have as to what that implication has for businesses outside the U.K. for you?

I'll ask Douglas to answer that.

Thanks, Robert. I'm really not aware at the end of the day who's thinking of following the U.K. on a ring-fencing approach. I mean, it's pretty clear talking to the major universal banking centers Germany, France, the United States, China that they continue to see the universal banking model as core to their banking systems. I suspect there will be interesting observation at whatever proposals were put out just to analyze and to see whether there is something other people have missed. But the feedback that we're getting from others is that this was not a route that they are contemplating because they believe the aggregate impact of everything that's been done so far is fairly comprehensive. But of course, it's all hypothetical because we don't know what the ICB will recommend. Robert Law - Nomura Securities Co. Ltd.: I mean, as a follow-up to that, what I was really driving at is whether regulators are taking -- may potentially take a different approach to your businesses because there's a reduced and an effective support from the U.K. government as they ring fence only a proportion of the activities?

I don't think so. I mean, I think rating agencies used to give in small amounts of credit to a group structure and looking at the rate of those subsidiaries. They stopped doing that explicitly quite a time ago and basically, everyone stand on their own. And I think that is the frame that regulators around the world now very much adapt up to. They want to see how the capital will support in the local country. If there is a parent, that's okay. But I don't think that they'd take an enormous amount of additional comfort from that anymore.

Our final question now comes from Simon Samuels from Barclays. Simon Samuels - Barclays Capital: Simon Samuels of Barclays Capital. Just a quick question really on the fact that your total balance sheet grew by about 10% in the first half of the year, and your risk-weighted assets only by 5% or 6%. And it looks like the big kind of area of difference with North America, and I think there was an earlier question where you commented about sort of the high proportion of mortgages where the average risk weighting has come down a lot. So my question really is, is this kind of disconnect going to carry on, do you think? Do you think the RWA growth will now lag the balance sheet growth going forward?

Simon, I think, as it relates to the one-off portfolios in North America, it's unfortunately, the opposite factor that we're experiencing that as we run down the portfolio, we're not at this stage seeing the same reduction in the risk-weighted assets as there's some adjustment to loss given default and probability of default as we update for some of the economic factors coming through the models. I think that will turn over the course of the next few quarters, but there's a little bit of a disconnect at that level. But I think what you do see more broadly across the portfolio is the fact that as Stuart mentioned to -- as it relates to net interest margins, that we're mixing away from some of the unsecured products into secured lending across a number of the regions. And certainly, overall, the quality of the assets that we're putting the balance sheet, whether it's in Hong Kong, other areas within Asia and Latin America, has been maintained and continues to have very tight focus around the quality of new business that we are writing. Whether it's the loan to values on U.K. margins, Hong Kong margins, again, are underwritten at very low LTVs. So I think overall, it focuses on -- obviously, putting high-quality assets in the book and focusing very strongly on the impact that, that has on risk-weighted assets and consequent effect on returns.

Okay. Thank you, all, very much. Thanks very much for joining the call. We look at this first half as a first small step in the right direction in a very long journey to execute the strategy we set out on May 11, clearly, with much more to come. Thank you for your interest in HSBC.