Welcome to the Barclays Full Year 2016 Results Analyst and Investor Conference Call. During the call Barclays representatives may make forward-looking statements within the meaning of U.S. Securities Laws. They can be identified by the fact that they relate to future events and circumstances and sometimes these words such as anticipate, projected, may, will, seek, continue or aim amongst others by their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and as a result Barclays groups actual results may differ materially from the plans, goals and expectations which they will talk about. Barclays expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements made during the conference call. At the conclusion of the presentation, there will be a period where questions can be asked. [Operator Instructions] Thank you for standing by ladies and gentlemen for the Barclays full year 2016 results analyst and investor conference call. We are now live at the presentation suite at One Churchill Place in London. We'll hear some silence or some background noise until the presentation begins.

Good morning and thank you for joining us today. And welcome also to those that are joining by phone. Almost a year ago to the day, I set out our intention to accelerate the restructuring of Barclays, to refocus our business as a transatlantic consumer, corporate and investment bank, anchored in the two financials capitals of the world, London and New York. To achieve that, we announced a series of strategic actions, including the reorganization of our business into Barclays UK and Barclay’s international. Next, the renewal of our commitment to operate a leading global corporate and investment bank. Next, the reduction of our stake in Barclays Africa over time to a non-consolidated level, and lastly, the acceleration of the rundown of our non-core assets. The bank has made strong progress against this agenda. Barclays UK and Barclays International are doing well. The fourth quarter showed continued progress in those businesses consistent with the full-year numbers. Core income was up 14% versus the same quarter last year, delivering positive jaws, and profit before tax in the core, excluding notable items was up 39%. Our corporate investment bank has solidified its position in both brackets. Our non-core rundown is ahead of schedule and after a successful initial sale of Barclays Africa shares last May, we are now waiting for final approval from the regulators of our overall separation plan. So the weekend began to proceed with the next phase of our sell-down and we'll do that at the appropriate time. We also made great strides on our structural reform plans in 2016, standing up our intermediate holding company in US in July, in preparing Barclays UK to the legal establishment of our ring fenced bank in the first half of 2018. As a result, in 2017 we can begin to move…

Thanks, Jes. I'll spend a couple of minutes summarizing the financial highlights for the full-year and then focus on the Q4 performance across the businesses. We have as usual highlighted notable items, and I'm pleased to say that we haven’t adjusted for anything material in Q4, although we have called out the additional $395 million additional compensation charges that Jes referred to earlier. When I run through performance of the businesses, I'll talk on an underlying basis, excluding notable items. Full year core RoTE it’s below double-digit at 9.4%, but that figure does include the additional compensation charge and reflects a significant increase in equity allocated to the core. The core businesses are showing great resilience in the year of significant political and macroeconomic events, with Barclays UK reporting an RoTE of 19.3% and Barclays International 8%. Our CET1 ratio strengthened significantly to 12.4%., up 80 basis points in Q4 making an increase of 100 basis points for the year. It is strong evidence of our organic capital generation and underpins our confidence in reaching end state capital levels. We've announced that we are closing non-core unit ahead of plan at the 30th of June with RWA is expected to be around $25 billion and also its reducing significantly in 2017, leaving a reduced strive to be absorbed by the core businesses following closure. As we switch to our attention to running the group on a normalized bank - as a normalized bank, we remain very focused on costs, having achieved a 61% core cost income ratio for the year with positive jaws, we are on track to achieve 60% or a sub 60% level for group cost income ratio in a reasonable timeframe. Before I go into the underlying results, a word on the statutory outcome for the year.…

[Operator Instructions]

All right. Let’s start with Ian.

Good morning Ian Gordon from Investec, two please. Firstly on Barclays UK, I take the point that revenues have been held flat against base rate headwinds, but we’ve now had roughly eight quarters of no balance sheet growth, and that's a choice you’re not capital constrained, you're not constrained by effect name on FBR book, so it’s a choice you’ve made, now you use the phrase we may believe in some cash from a table. So my question is what you can to do about it? And my second length question on Brexit to your great credit you’ve not put up a sign like news headlines as you're only a naive about restructuring issues arising from Brexit you’ve also made a comment today that you've seen no deterioration in UK credit since Brexit if you virgin or make sure that would add the word whatsoever to that comment? And a lot of that doesn't reinforce the opportunity for rethink in terms of scale of your balance sheet ambition in Barclays UK your high return business, and secondly could you just please reaffirm your comments around the limited impact from restructuring spaces?

Okay for asset growth in Barclays UK just be your first question. Yeah I mean it's occurring very slightly as a volatile it's actually growing much more than assets. And that's kind of interesting just to touch on label we are not come back to us it’s our liability basis going up it’s about £189 billion in Barclays UK soft £20 billion I think. And I think the light of us actually lowering our deposit rates quite significantly, Jes mentioned earlier that a lot of our growth is seen in very much operational deposits for us whether it's in business banking, current accounts, as well as some savings accounts balances. So that's good in sense that even in a low rate environment, which are tracking customer flows operational customer flows into - in the Barclays. On the asset side, yeah absolutely we have some choices around that, margins have definitely been continue to be eroded in the mortgage business and we've been quite cautious around that try not to chase a low margin business all the way down. In fact when I look at in our fourth quarter completion mortgage margin was actually up for the first time in some time for us actually, so we are making that choice of trying to balance maximizing and NII, but not necessarily just chasing banshee growth at low margin business to achieve that. You're right in the sense we're not as capital constrained as we may have been in times gone by, so we do have those choices, but our objective function really is to maximize NII, and that’s a trade of change volumes versus margins and can see a sort of flexing our leaders on that.

With Brexit again I think, we’ve said truly after the Brexit and put up the shot that’s necessarily to an economic shock. And I would say that you've seen a fairly robust reaction by the British consumer post-Brexit vote. On the other hand there is another caution out there, which is what you’ve seen in inflation, into certain degree some of the increased consumers spend in consumer credit numbers that you see is driven by inflation. And there are some signs that consumer confidence is beginning to reflect some of that inflationary impacts, so we need to keep an eye on that, but ultimately we're here to support the UK economy and I think the numbers that we should in terms of using our balance sheet for small businesses, for corporate, for unsecured lending, we will continue to do that, but in the prudent way not with the capital position of the bank.

[Operator Instructions]

[Indiscernible] with the corporate bank is [indiscernible] what you think investment banking which is Barclays at present and Tushar you mentioned in your speech that you think that improve what are the thing they and where do you get in turn.And secondI mean Jes in your comments I think the American’s are gaining market share you said in the tax goes with Brexit you remember half the capital applied to investment banking as the Big American, where would you scale yourself, where would you scale you ambition in investment banking and as we think about how big you want to be you go the capital to make choices? Thank you.

We are running an integrated CIB, so there's no sort of concept internally between your guys work for an idea and you guys work for see and we just I mean it is an integrated business I can't give you that break down it's not how we manage it. And 6.1 on sort of full year bottom line statutory basis. We put everything in through that you can decide yourself whether you want to look through any of those items, we put ourselves through the compensation charge and a couple of other items that we consider more so capital in nature and sort of returns. So we think we're much closer to the double digits. I think what's really pleasing for us is, pocket is going to immense restructuring anything that's on bank and it pleasing for us to see that we’re improving our market share both in markets and in investment banking season we working to the top five in the U.S. dislodging one of the Americans which is being a preserve for them to some use, so we feel very good about market share. We've increased our market share in the UK as well and you’re seeing the improvement in our markets revenues. I still think we have opportunities to sweat the balance sheet harder, you’ve got Tim Close be sitting here in the audience, who is very skilled. And I think you'll - we stand some of that, but I think you know there's still more we can do, particularly as you integrate the corporate and investment banks further, further together I think as opportunities there. Growth in the take sort of point in our cost cycle probably the structural reform cost probably at the TQ having to ring fence in the United States run CCAR for the first time and for those of you that know all about that you can understand how extensive that is. For us are good and pleasing to me if I can see that the improvements in market share are dropping to the bottom line. And even changes in the deferred compensation sort of program will allow us to continue.

I just add you know first and foremost we actually have to run on investment bank which is safe and stable. And we will manage our risk in the investment bank so never threaten the stability of this bank. That aside as we've said since March first of last year the foundation of our strategy is having a balance between consumer and wholesale. And as we showed up there basically our balance right now is roughly 50-50 in terms of revenue, we never want to get that out of kilter. So we want to be a both bracket global investment bank, but within the context of having a balanced business between Barclays UK and Barclays International, our consumer businesses and our wholesale business. It's not balance, which I think gives a particular attractiveness to Barclays as a bank.

I want to add on that. We put other side quite deliberate as we get back, I think for three years, we showed core returns some capital allocation we thought in the core, extract about 10% average quarter-by-quarter we've actually not that much variability, you think about banks and things coming in and out, but as being quite stable. That’s quite important for us, but stability, but it's on the back of the profits growth because the XTB and allocating the cores track top. So if feel that we really kind of achieve that continue to track that profit growth to generate an approximate double digit return with a capital allocation we've got, and obviously you know you’ve seen that stability come through in Barclays as an overall group. And sometimes consumer bank business more than wholesale businesses I’m sure, that will be true at sometime different in the.

I got to decide that now, and I'll come back, yeah.

Good morning. Chira from Bernstein. Two questions, one instead of putting it in the investment banking side the split between the geographies UK and the U.S. now lots of people very excited about the U.S. recovery both in the new consumer side as will the mid-market and investment banking side. So the question to you Jes is, if the U.S. actually clocks at 4% GDP and we see the enthusiasm play out in the next two years. Will you be willing to move capital from the group incrementally into the U.S., how should we think about capital allocation and the way you think about movements. I understand the 50-50 split between to get some color on the geography. And the other thing as you showed 35% of income from the U.S. and Tushar what percentage of the tax base is the U.S., Israel that would to be great to have that number given of the tax regulations of that?

And I think you would [indiscernible]. I think you know we have been very clear that we like the balance of our portfolio and being a transatlantic bank is a core of our strategy. And we will always look at profitability and return on equity and allocating capital, and we said our receivables and our U.S. card business now exceed our receivables in the UK card business. We put in investment and to get America Airlines portfolio, last year we will continue to pursue opportunities like that. So it's our obligation as management to apply capital in a way that gives the best returns for our shareholders. We think at the end of day we are British Bank. We were anchored here in the United Kingdom. We think there are great opportunities here, and we want to keep that balance. So hopefully if there is an economic engine come in the United States that spreads and has a global impact and we benefit from it globally. But we won’t see as get our balance. We're not going to be you know we're not going to chase a model line opportunities because for a short period of time it's got nice returns.

On the tax rate, I mean we don’t break out, I mean that’s the question and we haven't broken out on a call like this. But it's interesting for us we are profitable in U.S. dollars you can see that also with the current status and see for the pretax profits. So any improvement in the tax regime in the United States will be very, very helpful for us, but there’s going to be in a detail that is all things being to meet it and too much speculation to really side what's going to happen and when it's going to happen.

Yeah, Jonathan.

Thanks very much. It's Jonathan Pearce from Exane. Can I ask you two questions? The first is the simple one on the FX guidance which exceeds or thing were about £300 million in the year, it's not it's entirely in core, where about in core does it say it is it all head office or somewhere else?

Are you getting into the weeds of it? That’s right, even in the all clients. So most of the FX guidance - and he has that’s the funny thing. Mostly FX guidance are really for us treasury operations, so yes, mostly through our core business, yes.

Okay, thanks. The second is a broader question on the capital trajectory for this year. I mean it's a couple of things obviously happening and see already redeemed one of the prestigious things ten basis points the next one the final big one looks to sit down 20 basis points which given your comments and that’s coming this year as well. Good thing to do obviously but not the 30 basis point headwind in total. On top of that I just try to understand the asset, the pension fund, because now the retirement fund is pretty much breakeven, looks like you’re going to have to contribute £1.25 billion this year, which will create a surplus, but that will be taken asset capital, rollover see that the cash and that's in a research is 40 basis points headwind to the capital. Presumably some assets rate, so can you confirm that those two things together could provide headwind this year maybe 70 basis points. The next detail one and maybe just framing the question in terms of the dividend as well. What's your current thinking on the resumption dividend growth?

I cover for the capital things and just may want to put the word on capital distributions. But we're not going to comment on whether we're calling any other or any other liability management exercises, but the math you right, it’s a math it all very much depend on the currency rate providing us to what cost it would be to redeemed that particular transfer that something which is to do. I mean of course the waterfall of things we can do with any capital that we have, I mean you seen a stake real estate actions, you seen a stake liability management exercise, you see this change deferred compensation. The part of the business we think we can invest for franchise amount, so that the waterfall of things we can do and you'll see us you know cover of all of those actions some are only available to us at certain point in time like real estate some of their every single sort of quarters you like an element. In terms of the pension fund you're right you're going back to the deficit recovery plan from the last try and you win the current negotiations of our current trial to me nothing changes and you're absolutely right. We have a contribution to make. As you pointed out and given that we're in roughly flat at the moment and slight surplus I mean that will be straight of that capital a totally within our capital projections for our own capital plans how we get to our own state capital position, we’ve taken all of that into account. And of course, we have to make a whole bunch of assumptions on other stuff that we don't know like how our first lines going to be handled by regulators and whatever try to be prudent in all of our assumptions and we feel we get there quite well.

In terms of the evidence you know obviously the dividend policy of the purview of our board now [indiscernible] day. Right now we gave guidance for 2016 and 2017 add three pans obviously we’re accelerating non-core and I think at the right time we’ll be talking to our shareholders about the dividend policy going forward.

Next question [indiscernible].

Good morning Jes, good morning Tushar. Two questions if I may. The first one is, maybe if you could give us a little bit of an updates on where you are with the DoJ and the RMBS suites and where you are on PPI and if you can sort of taken of loss charge can you give little bit of color on the litigation side? And the second one is as we understand that the new administration states is quite keen to hear from banks as to what types of funds regulation they don't like what changes could be made and I just wanted to you maybe ask you what piece of U.S. regulation don't you like and what you preferred to be changed? Thanks.

Well on the DoJ and our general counsel is here, obviously we would not reach a settlement that at the end of last year, I think the only public comment that we've made is what we want to do is be treated fairly with respect to how the U.S. banks we're treated and leave it at that. On PPI, I think we feel that we are properly reserved at this level and lets you see how the PPI issues and for over the next couple years, right now, I think we have the right levels of reserves. Usually U.S. regulation, clearly the banking system is significantly safer today than it was going in the financial crisis. I think the banks are performing reasonably well within the scope Dodd-Frank, and the side that we're not going to comment on any specific part of that of that legislation. But overall we are encouraged by how the banking system is significantly, we are counterparty to all the major banks, and so having a safer banking system helps Barclays as well. Yeah, Michael.

Thank you. It’s Michael Helsby from BOAML. I’ve got a couple of questions, first on the incentives, can you tell us how much of the £1.5 billion resides in CIP and whether it is now we can work out next year is impact whether you'd expect the compensation relative to income to be broadly stable be helpful?

Yeah I’ll cover that now. It’s actually in the REM report and the annual report, so it’s just under £1900 million.

And you mentioned the future incentives, future headwinds on capital IFRS 9. Jes I think your own comfort in September you were asked, what you think is the biggest headwinds of capital for the industry or for European banks and you said, IFRS 9 was your part. So we bear in mind if it was brought into today I’m sure you run the numbers what you think and would be for Barclays in terms of capital and book value? Thank you.

I look at you know and disclose that, but it look it's the thing we don't know is, it is whether it's going to be any transitional framework as it comes and the accounting not it's definitely coming in. And that will take book value and I won't call it a number, because I mean we're still a year away from putting a change through. So I suspect like other UK banks and probably other European banks before we get to the end of the year. We’ll update everybody on that. In some ways the most interesting thing process the capital effect because just the one thing we just don't know. You’ve seen in the CRR 2 draft legislation as talk of a sort of transitional phasing in approach whether that makes into the final registers text remains to be seen in order something the Bank of England too keen on and other folks processing that we're sort of most closely watching. In our own assumptions we've taken the most prudent case and run our projections and will manage on that basis and told otherwise.

I think the regulators are recognizing our extraordinary process IFRS 9 would be in its current form.

Good morning. It’s Martin Leitgeb from Goldman Sachs. Can I can also have two please. The first one, is on USIHC and if I read your latest filings there, they show that you have injected around £1.4 billion in capital, half of which roughly equity, half of which in form of 81, which puts your leverage ratio, a ratio in U.S. to 5.7 at a quarter one ratio at the 11.2, if I compare this to U.S. peers a total select European peers such UBS and BNP the capitalization of Barclays IFC at this point in time seems meaningfully below that of those peers. And I was just wondering if you could set a bit of light in your capital plans there what kind of capital levels are you targeting and do you want to grow there by the tenders and which kind of time period or should we expect to further injections over there? And the second question is on your fixture revenue line for the fourth quarter, and if you look at it in terms of U.S. dollar are you up 9% year-on-year and this obviously compared to the U.S. peers up 43% and the 9% actually is quite identical with set of one for European peers for which there were considerable counterparty risk concerns over the quarter. Could you just sort of reply what held you back in the fourth quarter, and how we should think of performance going forward? Thank you.

Yeah, all right. So let me give you three questions. I think when we compare ourselves to the other folks that reported, on the few things to stand. I think we have a higher risk weighted assets than state and many other Europeans, and I think uniquely we're profitable which in the peer that the others as well. So with that in mind and for so with our own capital projections you'll see us get to the - what we consider to be the right capital level to ensure that we are appropriately capitalized in advance of the 2018 CCAR run. And we feel pretty good about getting this. So I'm not going to sort of quote a number out there that's not guidance we need to get, but we know where we need to get to we know what we need to get to the CCAR process and pretty comfortable get there in the time.

[Indiscernible]

We make profits and we have the ability to inject capital, but I cannot enter into any more detail than are you see the quarterly is a very common 193 report. So that's pretty confident we'll get there in good time, and we're running a private CCAR this year actually and that will give us a lot of feedback if we need to make any amendments to the plan to return having price which already of course shared with the appropriate regulators. The banning constraint and I see will be the CCAR process, so we have that plays out. In terms of the thick revenues in the fourth quarter as we’ve said, all during the year 2016 we run actually very light market risk part of U.S. in our investment bank, and I think to be relative to some other, but that doesn't mean that we are - we have less data, I think in our - I’d be than many of the other competitors, so when you see the direction in the markets like you saw on the first quarter of last year head south on a relative basis, we did extremely well. When you see a recovery of data in the fourth quarter, we're going to lag those some of the people that put more capital on the stand we do. We like in a capital that we have deployed in investment bank, likely where we are positioned right now, and we'll take those swings in kind of have less data and more asset to our portfolio which we are comfortable with.

In the second quarter as well, when you saw the asset price sort of risk on environment, the people that run larger inventory positions and we do we’ll see that in their income. But a stability of our revenue I think is something where we find quite interesting relative to others, particularly if you look at this last year eventually every quarter season markets or almost within a £100 of each other which is quite consistent with observe bit more up and down with asset price market news. Okay. Andrew and then I’ll go back to the side.

Thank you good morning. It’s Andrew Coombs from Citi. Two from me, one on U.S. cards and then one on structural hedge; on the U.S. cards portfolio you have elevated Q3 provision due to the cheer up Q4 so you look to quite elevated in certain mix shift in the portfolio, obviously you could elaborate on how much is mix shift versus how much of the underlying trends. And also on that note you talked about a robust trend in 2017 in terms of mix shift again obviously you could elaborate. And then second questions, structural hedge, you net structural hedge contribution actually kicked up slightly I think £0.1 billion, so interested to that was driven not a nominal was going to the place to the rate, so if you could just provide more detail on the outstanding book and then also current rate that is what you will be investing it? Thank you.

I’ll take them. So on the U.S. card portfolio, yeah the business mix of something that we economy was coming in a second half of the year one of our larger portfolios in the U.S. business with the American Airlines portfolio had it was sometimes a very seasoned portfolio. And of course, that came up for renewal and there was discussions with American Airlines I mean we have the U.S. Airways component obviously Citibank, American Airlines, so it’s a full three way negotiation. So the result of that the production origination in that portfolio just slowed down. For the rest of our book of course continue to grow and we've got the similar some marquee brands whether it stuff we've all heard of. But the American Airlines portfolio is sort of super prime so just by having our production slowed down and it being a reasonably meaningful component of our business our mix just naturally shifts without really doing anything else. So underlining delinquencies have ticked up I think you see that across some other U.S. banks I think across the sector delinquency trends have ticked up, it is quite small. So these are off low levels as well. So I think we should be in a careful to extrapolate at this stage as to whether something more going on there. We're on greater or lower than any real small tick up. For us we kicked up slightly more than other banks only because that mix shifted more and more appreciably than others. Returns with great with very, very happy with the risk profile that we’re running, but I think as we see the American Airlines activity come back on, because it's a sizeable portfolio, the mix will shift again for the culture higher credits scoring mix if you like…

Hi [indiscernible]. Obviously have questions on to start here year other investment banks have talked about going off to an incredibly good start, I just wondered if you wanted to make a comment and also run in terms of credit, which was incredibly strong in 2016 whether you see that as a repeatable number?

We won't comment on January, February. In terms of credit, yeah obviously we are very pleased with what we did on our credit business last year. Obviously leverage finance as well. We made terrific envelop last year with the sponsors community the Blackstone et cetera, so like that space and one of the advantages credit is to certain extent you can there is a four window one of reality bond that they mature, and generally people have to remove them. And so you can get up fairly active forward calendar maturities and that’s going to I think allows for stability to the credit markets. We have a great training as there, is very strong. So we like that business and we like our position and business and there is instability, I think the credit cycle would some of that asset classes don’t have.

Thank you, Tom Rayner from Exane. Can I have two please? The first one just staying on the U.S. card book, just wonder if you give us any color on what sort of risk adjusted margins you see under different sort of blips within there and whether as delinquencies deteriorate a little bit you can actually maybe keep that margin stable bar for pricing just to sort of understand the dynamics there please? And then the second question was just on the change in methodology on deferrals. I guess we wait long enough whatever you do all washes to become neutral, but when you originally move from low to a high percentage that was I think it probably understates the true cost of running the business, I just wonder if what you've done today is maybe just reversing that now and actually now reflecting more of a genuine cost of running the IP lot of and then anything else you do?

I think on a second one yeah absolutely. I thought of towards is little bit of a mortgage in the future. It's definitely more real time accounting environment accounting just timing it's cash at the end of the day, it's just making the timing differences on accounting matching revenues and costs more real time, so I think you get a more clearer picture of what's really going on so I think you’re right on that. In the U.S. card portfolio risk adjusted margins I mean risk adjusted margins really attractive for us and I think what our business as work out so well for us, is really good pricing discipline particularly with the partnership business, which is the strong point of ours. So we are in partnerships that priced at very attractive levels on a risk adjusted basis. So when you see impairment charges go up just because there's a shift in mix delinquencies I mean the margins on those businesses are incredibly attractive and there is definitely pricing capacity there. So depending on you know rate environment changes and any other changes and there is ability to flex pricing, and the thing business it's on a pretty good job of being able to do that. When American Airlines its production is already up and running, now you're just see that naturally normalize again overtime, I think.

We're talking to shareholders through last year about the investment bank or in sales deeply frustrating us, if you gave me a business model which you knew had volatile revenues, but had a fixed cost number. I've never been our business. And the truth is what this decision is take and don’t work in fourth quarter, but I will be in a business where you have variable revenues and five variable class underneath that which I can use to protect my margin. And I think that essentially starts what we did in the fourth quarter.

Okay thank you.

Okay. Three questions on this side. So I will take all three, yeah.

Hi there its [indiscernible] from Credit Suisse. Couple questions on costs please. So the core number for 2016 was quite good the ID compensation I guess there some debates around how much of the non-core cost will lingered when we you sold it back in so maybe you could talk around how comfortable you are about taking out those cost longer term. And so how long a reasonable timeframe is to get the group to 60% cost income. And then my second question is partly related to Barclays UK, can you see much need for investment in the technology platform do you think your mortgage offering platform side as a bit as a service and ability to take flow?

Okay on non-core how much costs will for linger and time to get to the 60% group cost income of share. We think over the course of the next calendar year you know it’s about a billion pretax loss half in costs half in income sort of front loaded if you like so when you see the group Re constituted a little less than half that run right you should see flow through 2017 and then lesser getting 2018. So I think you'll see a study-study march down. When you look at cost income ratio, we haven't put a clock on it, but reasonable time frame isn't for the way under an aspiration I think it is quite realistic if you can actually take you know one work back into and you've probably done this already if you look at core income or £22 billion was excluding the visa going to £22 billion, £13.2 billion in cost to get a 60% cost income ratio. And you can back in from the £16.2 billion of the group that we had to take other PPI charge like a litigation sort of core tier what I think non-core look like you get into sort of the high 13s very quickly in fact the mid-13 on my mind. So it's not a long way to go to get the one assuming you know nothing else going on around the company. I mean what's really important isn't just my touch on this as we do want the capacity to reinvest as well we just can't keep on reducing costs without reinvesting back into nothingness probably the cost of your second question. So by already being relatively close to that 60% cost income ratio on a sort of underlying basis it allows us to continue to invest for the future.

In terms of technology and Barclays UK, Ashok is here and he's done an extraordinary job on the front end of using technology for our consumer goods, we have you know 5.7 million customers now bank with Barclays through this. And if you add who's transacting with just thought the internet that’s the eight million customers I gave you before. We have millions of consumers making payments through the app, so we think technology is a big part of our consumer offering across the UK. I’d also say one of the things sort of going back to our core operations and technology that we talked about earlier is some of that I find is very compelling about Barclays here is in UK we go from the consumer to the small business to the corporate to large institutions. We go across the product offerings, and if you believe in stents act or if you believe in that you know banks are increasingly pick technology companies with a balance sheet, the ability to use technology innovation across the entire financial platform in the fifth largest economy in the world, is a huge interest in asset I think Barclays is going forward. I do believe and the technology front particularly consumer we have been in the front of that. The other important thing is to use a technology to improve the customer experience and one of the data points that I give me sort of comfort as we look our business is on average every day 60,000 consumers across the UK get an SMS message from us, saying you're about to go overdraft, that is 60,000 SMS messages to decrease our revenue line, but to increase the customer journey with Barclays.

Hi it’s Chris Cant from Autonomous. I just want to come back to your comments about UK mortgage growth or some pick up in completions in the fourth quarter. I think you've said in the past that your UK deposit costs are now very close to zero obviously we've seen some from big spread compression again in terms of new mortgage pricing in recent months. I'm just trying to think about how much growth you can actually put on while staying within your 350 bps to 360 bps. Margin guidance for next year, I can’t imagine it's too much given the limited room for maneuver on the liability side just wondering if you can flesh that out?

Yeah on that one that's been very clear that we think completion margin actually take up a little bit, so its again its balancing which one to make as much NII as we can the returns are quite attractive, but we're trying to just like that the big most profit that we can, it’s balancing volumes versus margins at the moment you know we have played that going quite well for us where we keeping our margins held up as best as we can all see in the in the face of quite competitive pricing front from others. Operating in a part of the mortgage spectrum that's our core strength it's probably towards the lower end the risk spectrum probably more in the remortgages space rather than in the sort of the new mortgage space. And that's just pretty well. And we feel it's a good business for us and we’ll continue to play in that. We gave a 10 basis point range 350 to 360, if you think about just sort of quoted earlier we printed £19 billion of new mortgages this year, the books started £120 billion of course you've got redemptions and thing coming off. So you need to be printing an awful lot of brand new mortgages a very, very low rates, so I’ll taking our entire stock of NIM down dramatically. And so it does give us plenty of capacity to flex up and down as we said.

Thanks. And just following on what is your deposit rate on the UK right now?

Deposit rate, on the back you mean our savings book?

Yeah savings book.

Five basis points, we can assign you offer a deposit account if you're interested.

Don’t want unfortunately, I'm just on the non-core…

Define you offer a nice one.

On the non-core, top of the cost line coming down to question earlier, but on the negative revenue side you might have an idea of the maturity in that book. How long does it take to that negative revenue to go away and we’re talking a decade and considering how long tail that derivative book is?

It's kind of less static, so I mean there you could of course get rid of if you unwind every single transaction instantaneously some of them are quite long dated in nature. I think it's asymptotic so it will sort of continue to stress down more steeper at the front end of that timeline and shallow out. And you’ve kind of seen that was taken a lot of that steepness already, and it will be able tail once it's folded back and you should think of non-core it’s a little bit of a tail wind into Barclays International, because even if nothing else changes for the last before tax of the non-core that falls back in well most of it will fall back into will diminish over time, in a reasonable timeframe. And then you get to the point where you want to stop talking about it, because there are other things in there that you know every business or something that isn't carrying as well as you like and everything else.

Just following on from Jes’s comments on the UK consumer and the outlook and the delinquency trends been pretty good in this quarter. How do you think about the risk in that UK consumer book and have you been taking actions now to offset any potential what will be probably a way to squeeze in UK? Thanks.

Yeah so we haven't changed our risk appetite really since probably the turn of the last cycle since the last crisis I guess, so and we've operated in that we we've kind of one of things we haven't done is chase high margin business to protect margins for example you know vital that or and are trying to increase market share in first time buyers or it's like that, so I think quite disciplined in our pricing. And so I don't think our risk profile I look at for example even commercial real estate I mean you can see how small that as you can look for in our credit closures in the annual report you'll see how small that is. So I don't nervous about anything on our balance sheet that that sort of rally are and of course if we're going to UK recession and it's not a great place to be in UK banks, but I don't think will to do with anybody else thinking about the like and would probably outperform in a down cycle with the relative manner.

Thank you.

One more question or we do have one question on the phone line.

We have a question in the telephone line Joseph Dickerson of Jefferies. Joseph, your line is open.

Thank you gentlemen for taking my question. You've already touched on these areas maybe looking for a bit of clarity on a couple. On the first if you could just talk about the portfolio makes you seen in cards. Is this what we've seen of some of the other U.S. issuers whereby the 2015 vintage where a lot of players want a little bit further down the credit spectrum this vantage is now seasoning and driving the impairment higher is that the type of portfolio mix you're referring to or is it something else. And what would you attribute the pickup in DQs to in the U.S. given the unemployment trends are still robust in that market any color there would be helpful. And then secondly Jes on the ROE in the investment bank if I kind of back out the comp deferral change in 150 million real estate expense earlier in 2016. I'm getting about a seven kind of 7.5% ROE if I backed up the bank level and probably get a little higher, I guess how do you drive that and are there any further investments that are required is that seems to drive it seems to drive that higher you need to move away from float fixed income. So other investments that need to make and for U.S. ECM M&A any color there would be greatly appreciated? Thanks so much.

Yeah I’ll do the card and then - for the portfolio mix I mean some of it is that for the seasoning as you pointed out for 2014, 2015 vintages sort of seasoning so you get to picking payment levels for the card business about two years in, and of course we did bring on a lot of portfolios at around that point, and you see that's where the growth of balances has gone up. But having said I think what's more important for us is less over sort of seasoning it's more so just the fact that one of our larger portfolios just exhibited relatively less growth than the remainder of the book, and that particular part of portfolio was kind of like super prime as a relative matter to the rest of our book. So that little bit of both, but I wouldn't say it was more driven by the seasoning than it was by just the fact that our portfolio mix changed accompanied by some seasoning of those 2014 portfolios.

Joe I think how you bracketed the CIB is good. I think 2016 taking out things like you say were not used 7.5% to 8.5% ROE range and obviously we like to get a higher number to cover the cost of capital. I think we are competitive that's where most of the other players in the industry were in 2016. The three commoditize that we focused on is, one cost, and a lot of what we're doing around the core architecture and technology that Paul, Crompton and others are focused on is the desire to reduce the cost of running the operating platform for that investment bank and we do think that there is room there to go. That shouldn't be lost anyone for three years now and in a row we have increased the profitability of the investment bank and taken on the bones for all of three years. So for those that wanted a compensation response to profitability rather we like to have I think management has demonstrated we’re willing to do that. And the third one is our stock line growth and I think we showed that in 2016 and make a couple of things, a couple comments there. One is an important part of our European IV platform is still new. I mean we are on a large amount of brand new to the business and Europe and I think there's there are there is room to grow there on the top line and we encouraged by our IVCs being a record year in 2016 but we have more room I think to go there. And also you know we do have a new management team in part coming with Tam and I think our hope is that we can refine and prove relative use of capital across the CIB to improve to increase profitability there.

Thank you.

I think with appreciated everyone coming down to Canary Wharf for that. We look forward to and also we appreciate the stock can go down 8% this year. So we look forward to talking you later. Thanks.

Thank you ladies and gentlemen, that concludes today’s conference call. And you can now disconnect your lines.