Welcome to the Barclays Q1 2017 Results Analyst and Investor Conference Call. I will now hand you over to Jes Staley, Group Chief Executive, and Tushar Morzaria, Group Finance Director.

Good morning everyone, and thank you for joining this 2017 first quarter earnings call. The performance we have reported today represents a period of strong progress against our strategy, and it's the clearest evidence so far of what this Company is capable of delivering once our restructuring is complete. We are now just two months away from finishing that work, a restructuring that is creating a simplified Transatlantic, Consumer, Corporate and Investment Bank which has the means to produce high quality returns for our shareholders, and on a sustainable basis. Looking at each of the priorities we set out in March of last year, we have cause for confidence in achieving our objectives. First, our Core businesses continue to perform very well, producing a combined return on tangible equity of 11% in the first quarter. That represents a 110 basis points improvement on RoTE against an equity base that is £5 billion higher than this time last year. Within that, Barclays UK produced another typically strong performance, with an impressive and increased return on tangible equity of 21.6%, driven by income growth and improvements in net interest margin and net interest income. From January to March, we lent some £4.5 billion in new mortgages to families up and down the United Kingdom, including helping over 3,500 first-time buyers get on the property ladder. The number of loans which small and medium sized businesses accessed digitally doubled in the first quarter, as we lent some £800 million to enterprises across the country. We are particularly proud to have supported over 21,000 start-ups in the first quarter. That's the equivalent of Barclays backing 235 fledgling companies in this country every day. And nearly £58 billion of transactions for U.K. merchants were processed through our Barclaycard Payment Solutions system in the first quarter,…

Thanks, Jes. I'll summarise this quarter's good operating performance across the businesses and the progress we've made against our strategic goals. As we indicated previously, we have stopped putting the primary focus on adjusted results, which excluded what we termed notable items. We have to demonstrate going forward that the Group can earn attractive returns on a statutory basis. Of course there still will be material items from time to time that we will call out in order to help you analyse the operating trends. The main non-operating item in the Q1 results is the impairment of our stake in Barclays Africa allocated to goodwill. This reflects the Barclays Africa share price as of 31st of March, and the carrying value in our books, including the separation payments which we outlined at the full year results. The impairment affects the results from discontinued operations, but I would stress the performance of the Africa business this quarter remains resilient. This impairment doesn't affect our capital ratio, as goodwill and intangibles are excluded from CET1, nor TNAV of course. The Core businesses showed further progress in the quarter, with Barclays UK reporting an RoTE of 21.6% and Barclays International 12.5%, both up year-on-year. Overall, the Core reported an RoTE of 11%, which includes the small loss in Head Office, and more importantly the equity allocated to Head Office. This Core RoTE was up 110 basis points from 9.9% year-on-year, and that's despite the £5 billion increase in equity allocated to the Core. Group statutory RoTE for the quarter was 1.8%. However, the Africa impairment had a 720 basis points effect on this number. Group RoTE excluding the impairment was 9%, and you can see the convergence of the Group returns to Core returns as we progress toward the closure of the Non-Core…

[Operator Instructions] Our first question today comes from the line of Chris Manners of Morgan Stanley. Chris, please go ahead.

So two questions if I may, first one is on Barclays UK and it did seem that assets are down, loans are down on the quarter, nice margin from that, could you maybe explain a little bit about how you see the U.K. consumer outlook and whether your stance there is a little bit more cautious than some of the other banks and how you feel about you potentially growing a little bit faster there? And the second question was just on the markets business. I guess it's a weak quarter in macro and equities. Could you maybe give us a little bit of a flavor about how you're seeing market share moves versus this is just a one-off and weak trading quarter due to positioning, and how you see Barclays against some of the bigger players in the industry and your ability to compete?

First on the U.K. consumer and our NIM and size of the unsecured and secured loan book, and even though like everybody we have seen quite an uptick in consumer credit and consumer spending, I think people have been quite positively encouraged post the Brexit vote in how the U.K. consumer has responded. The only tale of caution out there is our internal surveys are showing that there is a slight weakening in consumer confidence. And so the thing you have to be mindful of is, is this uptick in consumer credit and consumer spending in part is being driven by inflation as opposed to consumer confidence. I think you want to keep an eye on that, if in fact the spending is not reflective of the confidence but actually if the consumers are being slightly concerned by the uptick in the credit. The impairment levels are still very comfortable. So we see nothing there. And the economy is [indiscernible]. We also should add that whilst per capita consumer credit in U.K. now is equal to what it was in 2008, on a GDP adjusted basis right now it's about 18% of GDP whereas it was 22% going into 2008. The other thing that we do, if you do look at the profitability of that business, north of 20% return on tangible equity, net margin is very high, when things are going really well and you can sort of scroll a little bit away in terms of being somewhat cautious, because as we know there always will be a future cycle, I will say that we are on the conservative side, I think that's been a trait of Barclays in terms of dealing with consumer credit for a long time, and I mean it's good to be on the consumer…

So much on that, Jes, let's say, just turning to CIB, I would just remind people not only did the returns go up in the CIB by 100 basis points or so, that was on a higher equity base as well. Equity allocated to CIB was up about 10% as well. And included in those numbers obviously is the continuing effect of the compensation changes that we put through in last quarter. The other thing, Chris, just for your benefit and others on the call, after the U.K. we did have some very small transfers across loans and deposits actually between UK and International just as we are preparing for ring-fencing and finalising sort of fine transfers. So the slight deduction in assets in UK is actually perfectly explained by those very small transfers.

Okay, that makes a lot of sense. Thanks guys.

Our next question comes from the line of Andrew Coombs of Citi. Andrew, please go ahead.

Three from me please. The first, given that [indiscernible] [40 million] [ph] of losses in Non-Core, why did you not felt that you could change your full-year guidance of 1 billion with majority of that frontloaded? Second question would be on the interest margin trajectory. Just can't you jump Q-to-Q, you're now 369, you're guiding [indiscernible] to your previous range to be 60 before. So that implicitly implies that the declines from here. Is it a linear trajectory downwards? Are you expecting to exit closer to 3.5 or is it a case of a step-down in Q2 and then stabilization? And then finally, Slide 27, and thank you for including the details on the balance transfer card portfolio, you say less than 30% of the balance transfer book has 0% value, but if we see the entire Bank's transfer portfolio including the low fee balance transfer, what portion would that be? And then your [EIR] [ph] assumption, is that prudent, could you just tell us exactly what the number is?

So three questions, Andrew. Okay, I'll take all three. In terms of Non-Core, we have always guided to about 1 billion slightly loaded to the front half of the year. I think that remains our guidance. We may do better than that. We'll see. But I still continue to sort of guide to that in our models. We are somewhat dependent on market conditions, and as you go lower and lower into Non-Core decreases of course, it gets harder and harder to move the stuff. So, that's just the feature of that business. But we are really pleased with the performance. We probably did a bit better than we expected in the first quarter both in the cost of exit as well as the amount of exit, but I wouldn't extrapolate from that yet. In terms of NIM guidance, we are pretty pleased with the upgrade in NIM guidance. Most of that really came through from the liability re-pricing that we put through the back end of last year. So I think of course liability balances themselves with the increase and that's in really high quality areas like our [current campus] [ph] which continues to attract more balances. The asset margin do remain under pressure. We are speaking to what we know well, particularly in places like mortgages where we operate slightly lower down the LTV spectrum, very much in the re-mortgage space. We like that business a lot. We want to continue to grow that business. But we are seeing some competitive pressure. So although we had a 369 net interest margin in the first quarter, I think you'd expect a little bit of asset moderation as the year goes through. And finally in terms of balance transfers, you are right to call out that less than 30% of our book is in the zero balance transfer component. And of course we probably have the largest credit card business in the U.K., so considerably below the industry average there. Our effective interest rate for that product is less than 5% and I think that will be at a prudent range of where the industry is as well. So hopefully that gives you some color as to how we are positioned.

That's very helpful. Just to follow-up, you talked about asset margin pressure as the year goes through. So you are thinking more of a linear trajectory and that's why an exit run rate that is a little bit below the 360 for the full year. Is that so?

I think, Andrew, it's pretty hard to sort of guess that far into the future of where asset margins will go. We sort of, in my scripted comments, I did mention that we are trying to ensure that we protect returns. So we won't necessarily take margins down, but as a part of the credit spectrum we like a lot and it is quite competitive. So I don't give the value judgement on any exit rate, just that I do expect to see some moderation really as asset margins evolve over the course of the year.

Your next question today comes from the line of Jonathan Pierce of Exane BNP Paribas. Jonathan, please go ahead.

Can I just, I've got two questions but I just wanted to clarify something quickly on this 369. Has that benefited from transfer pricing mismatches, because it was a big negative net interest income in the Head Office, so was the 369 really 369 in Q1?

Yes, it was. Our head office, if you look at it, it sort of swings around the [indiscernible] virtually alternating quarters to a negative or a positive. So you do get a little bit of noise in those numbers, but the guidance upwards is really on the back of liability re-pricing flowing through on the back of higher liability balances, just so to remind people, that 13-14 driver. And why it will sort of I think drift down from here a little bit will be asset margin pressure rather than just residual transfer pricing sort of flowing through around the Company.

Okay, thanks for that. And then just two quick ones. Firstly, I was interested in your comments on consumer credit space and increasingly great caution I guess to some extent there. If I look at your UK revolving retail book, it's about 20 billion of drawn but it's about 50 billion of undrawn facilities. Are you starting to wind those undrawn facilities in a little bit in light of what you're seeing and particularly in light of what's coming on I FRS 9?

Do you want to ask your other questions, Jonathan, and we'll tie them together?

The second one was a slightly more techie question on capital, because obviously there's a few things that are dragging on capital, the pension contributions, potential I FRS 9 hit. Can I just clarify that because you've fully used up your DTA allowance, that any pension contributions and any IFRS 9 hits will receive no tax shield when it comes to calculating [indiscernible], is that correct?

Why don't I handle the techie question and Jes, you want to – I'll do that first and then Jes can cover the piece on revolving credit corporate. You are right that, I mean you are very familiar with the rules that when your DTA balance goes over a certain quantum, any DTAs over and above that are just a straight deduction. We have sort of hovered around that level. Sometimes we're a bit below it, sometimes we're a bit above it. So it really depends as and when we get there. What I would say though is, as you know there are so many sort of technical moves going through the capital line, either through the reserve line or sort of deductions computations, whether it's DTAs, TDA adjustments, et cetera, and we sort of look at that all in around, and just sort of manage through it collectively. So there is nothing I would sort of draw your attention to whether the pension contributions are getting anymore harder to absorb or any less [indiscernible] get to absorb, and we've got our capital trajectory set through with the assumptions that we've made around all of these things and feel pretty good in our ability to manage through that.

Are you going to be in a position to tell a little bit more about IFRS 9 at the interims like some of the others?

I'm still thinking about it. We will of course update the market on IFRS 9. I haven't decided yet whether we'll do it at the interims or at some point then, but I'll be sure to keep you posted.

Okay, thanks.

And about the question on the consumer credit side, we are still completely open for business as you see in that £20 billion number. That being said, as I said, we feel that we are taking the appropriate decisions vis-a-vis managing our risk. And if we believe that we should be a little more concerned about our underwriting standards, we'll take the decision at the right time.

The next question comes from the line of Claire Kane of Credit Suisse. Claire, your line is open.

Two questions please. Can I follow up on the markets underperformance? I think last quarter you referred that you're much more geared to volumes and we shouldn't expect you to give out outperformance as much as peers, but could you tell us how maybe you have changed any with tolerance levels in the business and whether we could expect more volatility going forward in some of these markets lines? That's my first question. And then the second question really is on the U.S. cards business. I think on Slide 26 you show an uptick in this retail CRL, yet the absolute impairments in the consumer cards business are down. So just really what's your outlook there? And also just if you could comment on how much of an impact on the revenue line we had from the sale of that 1.6 billion portfolio in the quarter?

Why don't I take the question on cards, Claire, and I'll ask Jes more about sort of volume sources risk in markets. In the card business what you're really seeing there is in terms of impairments coming down, it's just sort of a rebalancing of the portfolio, which will happen over time, it's not an instantaneous thing, but to probably a higher quality risk mix, defined really from two things. One is the American Airlines portfolio is coming on. It's probably a larger partnership, it's probably one of the highest quality parts of our book. And as that switches back on, it sort of has a more dominating effect on the risk profile of the book. And you're beginning to see that already in sort of Q1 to some extent with the impairment charge coming down. The asset sale that we referred to was done right at the back end of the first quarter, so really no effect in the first quarter. This is really again housekeeping from our perspective. We do think about this from time to time both in the U.K. and in the U.S. We feel pretty good about this particular transaction. There was a lot of chatter in the market earlier in this week with some of the other U.S. card business reporting an impairment ticking up there. So we think this is good housekeeping as a risk management activity for us. In terms of the actual underlying U.S. credit delinquencies, they [indiscernible] so much on CRL, which I think you'll see change over time because of the American portfolio coming on and the low-quality book going out. Delinquencies are pretty benign at the moment. As a relative matter, down slightly year-on-year. They are up on sort of sequential quarters. But still on an absolute basis at quite low levels and we continue to like this business a lot and we'd like to continue to grow this business in a very selective and controlled manner here we see good opportunities. Jes, you want to handle markets?

Maybe two [indiscernible] Claire. One is, if you go back over the last five quarters and write down our markets revenue each quarter, this [indiscernible] team actually is how consistent they are. And I would ascribe that to our revenue numbers being much more a function of volumes than market direction or even market volatility. And I think that's a positive thing. That being said, given the volumes that we saw particularly in the U.S. rate business, we would have expected to trade better than we did. So no, I'm not going to dodge that either.

The next question comes from the line of Christopher Cant from Autonomous. Christopher, please go ahead.

I just had one really around ring-fencing. I noted that your [indiscernible] in the slides is slightly higher than it was in the annual report, it's gone up to 4% from 3.9%, and you stated target range of 12.5% to 12.8% is below around 13 you mentioned, Tushar. I'm just wondering whether as we go through the process of restructuring the bank for ring-fencing, you are expecting to see some inefficiencies around the allocation of Pillar 2A between the ring-fence density and the non-ring-fence density. In particular, I'd be thinking about the allocation of the portion of Pillar 2A arriving due to pensions risk, which I guess will attach more prominently to the ring-fence bank, and whether that's going to actually put up its pressure on your Group capital requirement?

There's nothing actually significant in the Pillar 2A. It's probably just the proportion of the fee income on a different RWA base than anything else, so no change in Pillar 2A from the full year. But the second part of your question in just of how Pillar 2A will manifest itself in a ring-fence/non-ring-fence, we will be noted by the book to a component to our ring-fence capital requirements. So that's come through and we'll share that at the appropriate time. Having said that, when I look at what I think will be the capital stack requirements for both the ring-fence and the non-ring-fence, firstly I think they'll both actually be quite similar in Africa. The components will of course be different, one will have a [GSIP] [ph] for example, the other one will have a [DSIP] [ph] or whatever the equivalent is, and Pillar 2A will be different across the two. But I think the overall stack will actually cumulatively look quite similar and I do think they will look similar to the Group requirement as well. Now I can't give you precise details of how each one will look. I do think as a Group requirement matter, we think we'll probably be running the Company somewhere around 13% of the upper end of the range that we have guided to. The future awards will still need to make their way through the system and complete structural reform. So I think it's just prudent cost to be at the upper end of that range. But we have designed [indiscernible] such that all three coincidentally will probably look similar from an overall stack requirement.

Chris, maybe on the back of that question, I could take the opportunity to put the cost to income ratio with that as a light or having gone from 76% first quarter last year down to 62% for the Group in the first quarter, we are in the belly of the cost of setting up the ring-fence bank, and historically this bank would break out SRP and CPA and other things. We don't know, they are in the group numbers, we own them, we are at the high point of expenditures to get the ring-fence bank to set up. We are also very encouraged that just a couple of weeks ago, as you all know, the Bank of England granted us the new banking license, which I think is reflective of the progress that we have made in getting Barclays UK setup.

If I could possibly just follow up on that, in terms of sort of overall stacks for the two entities being broadly the same, would it be reasonable to assume that you're ring-fence density given that it will have the support to the broader group could run with a lower management buffer than the type of buffer you are guiding to for the Group as a whole? I'd also assume that it will probably stress a bit [indiscernible] given that the majority of your profits or a higher proportion of the profits relative to RWA do come from ring-fence bank.

A couple of things, Chris, on that. One is that, look, I don't think we'll run with a different management buffer. Both banks need to at least in my mind have appropriate management buffer to deal with all eventualities. So I don't see that at all. I think on stress testing, there what I would say is that Barclays International is a much more diversified bank than Barclays UK. I think sometimes it's worth just stressing that again. If you look at Barclays International, it's got our U.K. corporate business in there, it's got our Transatlantic Investment Banking business in there, our U.S. card business in there, it's got our private bank in there, it's got our merchant acquiring business in there, it's got our point of sale financing business in there, it's got a commercial card business in there. So it really is a much more diversified bank than the UK which is really geared principally to the UK credit cycle. So I'd like to think actually that the diversification benefits of Barclays International will probably make it more resilient in a stroke. Now of course you can always find stresses that accentuate draw downs in either one of those two entities, but I think you have to do something quite unusual to really find a stress point for Barclays International because again you have to just do such a diversified downward stress. Then in such a take, I suspect the U.K. bank would be equally impacted. So we'll see how that evolves as stress testing develops in U.K., but that's how I see it.

Your next question from the telephone line is from the line of Fiona Swaffield of RBC. Fiona, your line is open.

Two questions. Firstly on Core costs, the operating expenses number, do you see the Q1 base as the run rate for the rest of the year or should the compensation drag stop to reduce sequentially? The second is on the RWAs where you didn't have any business growth impact. Should we expect RWAs to stay at this low point or do you think there is scope to put on more risk over the year?

In terms of Core costs, you're right to point out that the unwind is the deferred compensation arrangements we'll reduce actually over the course of the year. So it's a little bit front-loaded, some of because of [indiscernible] put the charge through in the fourth quarter last year, so that will accentuate the fourth quarter difference, but also just the shape of the way the accruals rolled in tend to be more in the earlier part of the year. But having said that, I'm not guiding towards an explicit or absolute cost measure, just more an efficiency measure, and we are very much ready to driving that down to around 60 or below, and feel pretty good about our ability to do that. In terms of risk weighted assets, we are interested in growing our business of course. We like the US card business. Where we see good opportunities, we will take advantage of them if pricing is there. And UK business, I think you will see modest growth that will grow somewhat geared towards where the UK economy will go. But if that continues to grow, we should do a little bit better than that. I think there's reasonable cases to say there's modest upticks in RWA where we see good areas for growth. You shouldn't forget of course that we have got the continuing wind down of Non-Core. So, as we combine the two sort of parts of the Company to a single one, you'll see these, you'll have the capacity crisis where you won't see so much of the capacity created out of Non-Core part of the [indiscernible] remained into growth as we see opportunities.

Fiona, on the back of your first question, maybe I have one other point, which is given the confidence that we have in our glide path to our end-state capital levels, [indiscernible] we made decisions like reducing our real estate footprint in [indiscernible] by a third, that had quite a cost to us. As we have seen, it completely changed the accounting for our compensation program which allowed us connect variability and banking results variability and compensation. That had a cost to it. And then of course in the first quarter, we repurchased $1.4 billion worth of preferred equity. If we hadn't done those three things, which we think are prudent management, our CET1 ratio today would be north of 13%.

The next question comes from the line of Joseph Dickerson of Jefferies. Joseph, please go ahead.

Just a quick question on the liquidity book and the 20 billion increase in the quarter. Can you give any color as to how much of that was the TFS drawdown? I'm just trying to reconcile the quarterly build. And just related to that, do you think that 140% LCR is – I guess what justifies the rationale with running on a 140% LCR at this point?

If we go back and look at our LCR historically, we've been sort of in the 130% I think since the backend of 2015. So it's a little high, a little ebb and flow. There are some as we kind of probably all got a bit too used to macro uncertainties around, so we have always preferred to run a little bit long liquidity. It doesn't cost us much to run that long liquidity and we're very commercial about it. So we think it's just a good balance to have. In terms of within I think the direct question, do we draw down any of the term funding scheme, and we have. We have taken £4 billion. So it's very sort of modest drawdown, very small. You've seen our sort of funding base of over 0.5 trillion, so about £4 billion of notes on the TFS. We really drew down on it because it's just [indiscernible] diversified source of funding at of course pretty attractive levels, and we like to keep sort of an open line of all sort of diversified sources of funding available to us, whether it's continued growth in deposit, wholesale, MREL and TFS now. So, nothing more than that.

The next question comes from the line of Edward Firth of KBW. Edward, your line is open.

Could I just ask a little bit about profitability and how we should expect to see that trajectory move going forward? And I'm not talking like in the next quarter. I guess I'm talking more in the next two to three years. Because I see you're quoting an 11% return on tangible for the Core, but you've got 290 million of one-off disposal gains in there. And if I look at your allocated equity, you're allocating about 13% I think of equity, which would be a Core Tier 1 of only about I guess 10 or 11. So you're probably – I mean if I did it on a sort of Group level, it's probably more like a 7% to 8% return. And you highlighted that revenues are pretty stable I guess in the Investment Bank and have been now for a number of quarters. Where should we – I mean if we're going to get from the 7% to 8% to the sort of 10%, 11%, 12%, which I guess is a bit more interesting, where would we see those numbers move, what are the sort of line items that you would expect to see a big delta?

You are backing out the disposal gains. So again, if we were to go back to how we used to accounting, you'd be backing out SRP, you'd be backing out all sorts of other things. I think one thing is we've had a significant increase in our level of capital and you can see that, 5 billion increase in capital just this quarter alone. Despite that increase in capital, we've been pretty consistent in our core numbers of generating between 10% and 11% return on tangible equity really since the last five quarters. And also, as we spoke to, as we close Non-Core, the convergence is Group is getting to Core, not Core getting to Group, and we've narrowed that gap from 600 basis points last year to 200 basis points this year. Our intention is to manage the business and manage the cost of the business in such a way that we get to that 60% or better cost to income ratio and we move towards the convergence of our core returns on tangible equity, which we believe should be north of our cost of capital.

Yes, that's [indiscernible] I would answer that. And hopefully you will see, as Jes pointed out, the track record hopefully we are able to demonstrate growing the absolute profitability in our core business and what you've seen on the losses in Non-Core and this trend we expect to continue across all of our divisions.

It's really Page 7 of Tushar's slides I think, highlight the consistency of our returns even though we are improving the capital base of the Bank.

Okay. So in terms of the sort of difference between equity to risk weighted assets and Core Tier 1 to risk-weighted assets, you are not anticipating there is going to be a set of big reduction in those deductions somewhere? I mean I guess there will be some through IFRS 9 but you would expect that spread to be broadly stable going forward?

Yes, I mean if you look at sort of, [indiscernible] talking about the capital ratio, I mean of course you've seen us accrete over 100 basis points pretty much every year, [indiscernible] and probably before that as well. If you're looking at tangible equity, it's hovering at around 48 billion to 49 billion. I mean we'd like to grow tangible book value, so being very focused on the ratio for now. I think there will be a time once we are at the right state from our ratio that we'll prioritize the compounding tangible book and you will hopefully see that come through as well. I mean that, since we started, Non-Core tangible book has gone up while we've been unwinding the losses in Non-Core and saying there is conduct litigation items from yesteryear out. So I think we'll hopefully get a bit of a track record in our ability to grow tangible book while we're doing the restructuring as well.

There's also the tailwind we're going to have, whether it's the last remaining tranche of the preferred flight path $2.25 billion at over an 8% interest rate. We do have some securities issued during the height of the crisis that will fall off in 2018 and 2019. That's also a nice tailwind in terms of upping the performance of our RoTE without any change in revenue or business mix.

Okay, great. Thanks so much.

The next question from the telephone line comes from the line of Fahed Kunwar of Redburn. Fahed, please ask your question.

Just as a couple of quick questions, just one back on the margins, I think for the full year 2016 you had 10 basis points of deposits, your deposit cost was 10 basis points. So can we assume now there is no more potential to deposit cuts going forward, and so any assets prejudice falls straight through on the margin? And the second question was just on the consumer book. I know you talked about transfer between the International and UK books is helpful, but your consumer book has been basically steady in the UK at about 16 billion for almost two years now. At the same time, the growth in UK consumer has been kind of 7% or 8% and the returns that you allocate to that, you say the 30% return business. So I guess for the last two years, I'm just wondering why you haven't been growing that consumer UK book. I know there's current worries about inflation and there's stuff like this. It seems like it's been going on for a while now. If you could give us some detail about, that would be great. Thank you.

On the margins, you are right in the sense that we don't have much capacity to re-price deposits in our everyday state of account, which is the main deposit account in the UK. We take [indiscernible] this point. I guess you could make it zero, but there's not much anyway. I think there's a little bit more like 30 or 40 basis points and that's sort of more consistent with the way the rest of the market as well. You are missing one thing of course though, which is liabilities have continued to grow actually, and that increases NII and actually improves [indiscernible] on the asset side. And that's what you've seen really in the first quarter of this year. And it's something we don't really talk about too much. Though assets haven't grown that quickly, liabilities have grown, and these are really high quality liabilities, particularly in our current accounts business, so probably the most profitable liabilities and the ones with the highest liquidity value of course. So I hope it gives you a flavor of how margins may work prospectively. In terms of the UK unsecured credit book, we saw it rotating in and out of products there of course. We haven't grown the book very aggressively in absolute levels, but actually profitability levels are doing quite well. Zero balance transfers was a very popular product. We were market leaders in that product. In times gone by, you have seen we have sort of lowered the emphasis on that product. The combo product, I think we're probably one of the leaders in that. It's a much shorter dated product in terms of offer period which has all sorts of different sort of customer benefits. As we sort of change our emphasis away from zero balance transfer, just probably being the biggest growth product on the market, into more of a combo product, that's actually quite a good effect to us in terms of our profitability. And the UK Bank profitability continues to grow nicely at modest levels, but that's what we would expect for given our market share.

Could I just ask what your current account growth was in the quarter?

We haven't called that out. So I'm not going to say on this call, but I would say that it's probably growing quicker than the market, at least the way we measure it, and has been for some time.

Perfect. Thank you very much.

I think we can take one more question and then we should probably wrap up. Can we have one more question please operator?

Your final question, Tushar and Jes, is from the line of Tom Rayner of Exane BNP Paribas. Tom, please go ahead.

Might as well use my allowance of two as I'm last. Just you've touched on a number of the items around sort of Barclays UK and the revenue outlook. Most of the comments in the release sort of year-on-year comparison and you mentioned balanced growth and margin expansion, the deposit [indiscernible] has sort of outweighed the sort of asset margin pressure. Just looking at the Q1 numbers annualized and the transfers may be make it slightly harder to read, but it looks as if the loan balances are sort of flat to maybe small down and the deposit balances have actually shrunk in the quarter ex the sort of the transfers, and your margin guidance as well for the rest of the year we're going to see a sort of decline, and other comments suggest that deposit re-pricing opportunities may be running out now. So I just wondered, is this building a fairly cautious sort of view of where revenue can go in the UK business or was I over-interpreting what you've said?

[Indiscernible] your other question as well, then we'll get to that.

I'm just wondering if you'd be in a position to give us an update on where you are regarding the sort of U.S. dollar [traps] [ph] ? You've obviously called several tranches. There's one sort of large one outstanding. I wondered if that was something that you can give us an update on or whether that will have to wait until we have more clarity on some of the capital issues out there?

Nice try. I don't think we can declare the redemption of the dollar now, but anyway asking the question. With the management on the liability side of our business, and just may want to [indiscernible], we have various opportunities and you have seen us spend capital judiciously over the last few quarters to take advantage of them and some things is a continuing scene, but we're [indiscernible] much more precision than that. So I covered the…

Tom, I want to talk to book value of [indiscernible] with you to pay it back.

That's no forward guidance. So back onto sort of our outlook for the UK, I think unfortunately it does make it a little bit complicated from the flight point transfers between International and UK and we can sort of cover it maybe offline to help you out a bit more, but net-net I think what you'll see on the asset side is broadly flat and an increase on the deposit side. I don't know if we can spare the time we need to say. You can triangulate that to yourself. In terms of looking from here, in terms of NIM, we may be able to grow our liabilities further. We'll see and say current accounts have been a good story for us and in fact continues to grow, then there is upside potential to our NIM guidance, but it's difficult to predict that. On the asset side, I think we're just a little bit cautious because you've seen typically mortgages. It's still a very competitive market. There are banks putting out some fairly competitive bids out there. But we'll stay in the spectrum of credits that we like and we find it very profitable and we'll continue to defend market share and defend returns. So I do think there's every chance that we will continue to sort of protect NIM and grow revenues, but I wouldn't overstate that as well. I wouldn't sort of say where anything other than sort of modest growth, that's what you'd expect from us. Anything else you want to add, Jes, in UK?

No.

Okay, thank you very much everybody. I'm sure we'll see you on the roads in the next few days. Again, Kathryn and her team are available for anyone and appreciate all the work that you guys do around the quarter end. Thank you, operator.

Ladies and gentlemen, that does conclude the Barclays First Quarter 2017 Results Analyst and Investor Conference Call. This call has come to a close and you can now disconnect your lines.